Susan Kennedy
About Susan Kennedy
Susan P. Kennedy, age 64, is Chair of the Board (since Feb 2022) and Chief Executive Officer (since Jan 1, 2024) of Cadiz Inc.; she joined the Board in March 2021. She is a former California Public Utilities Commission Commissioner, Chief of Staff to Governor Arnold Schwarzenegger (2006–2011), Cabinet Secretary/Deputy Chief of Staff to Governor Gray Davis (1999–2003), and founder/CEO of Advanced Microgrid Solutions (acquired by Fluence in 2020). She holds a B.A. in Management from Saint Mary’s College of California .
Under her leadership in 2024, Cadiz increased revenue to $9.6M from $2.0M in 2023 while remaining pre‑revenue on core water assets (net loss $31.1M), and the pay-versus-performance table shows a $135 value for a hypothetical $100 TSR investment in 2024 (up from $73 in 2023) .
Key 2024/early-2025 execution milestones include contracting 85% of Northern Pipeline capacity (21,275 AFY), forming Mojave Groundwater Storage Company LLC to fund ~$800M of facilities, and securing an option to purchase 180 miles of 36" steel pipe for project construction .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Advanced Microgrid Solutions | Founder, CEO & Board Chair | 2013–2020 | Built California energy storage startup; company acquired by Fluence (NASDAQ: FLNC) in 2020 . |
| State of California – Office of the Governor (Schwarzenegger) | Chief of Staff | 2006–2011 | Led statewide policy and operations; high-level executive government leadership . |
| California Public Utilities Commission | Commissioner | 2003–2006 | Oversaw regulation of investor-owned electricity, gas, telecom, and water utilities; water reliability and rate oversight . |
| State of California – Office of the Governor (Gray Davis) | Cabinet Secretary and Deputy Chief of Staff | 1999–2003 | Senior policy leadership across major agencies . |
| California Bay-Delta Authority | Senate-confirmed Member | Early 2000s | Helped oversee $8B, 10‑year Bay-Delta ecosystem restoration and multi‑party water agreements . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| California Bay-Delta Authority | Member (Senate-confirmed) | Early 2000s | Statewide oversight body for major water ecosystem restoration . |
Fixed Compensation
| Component | 2024 | 2023 | Notes |
|---|---|---|---|
| Base Salary | $368,407 | $300,000 | 2024 reflects CEO appointment and amended contract . |
| Cash Bonus | $500,000 | $0 | Includes $350,000 for 2024 Chair performance and $150,000 for 2023 Chair performance recognized in 2024 . |
| All Other Compensation | $11,052 | $9,000 | Primarily 401(k) match . |
| Total Fixed + Reported | $879,459 | $309,000 | Totals above exclude stock awards line (shown below). |
Notes: In April 2024, Kennedy’s amended employment agreement set base salary at $400,000 and a target annual performance cash bonus equal to 100% of base salary (subject to goals) .
Performance Compensation
- 2024 Stock Awards (grant-date accounting value): $1,400,655 .
- 2024 equity program (April 2024 amendment): 1.6M RSUs/PSUs granted, replacing a prior 450,000 PSU award cancelled in April 2024 .
Equity Award Structure and Vesting
| Award Type | Quantity | Vesting / Performance Conditions | Status/Notes |
|---|---|---|---|
| Time-based RSUs | 700,000 | Vests over 2024–2026 (three-year period) . | Unvested portion as of 12/31/24: 400,000 RSUs valued at $5.20=$2.08M . |
| Milestone RSUs (project execution) | 600,000 | Multiple MGB milestones: CEQA completion (Northern Pipeline) 50k; project financing 100k; FLPMA ROW 75k; NP delivery contracts ≥25k AFY 50k; SP delivery contracts ≥12.5k/25k AFY 50k/50k; storage contracts 25k AF 75k; CEQA/NEPA completion for storage 100k; first Northern Pipeline delivery 50k . | Unvested portion valued at $3.12M at 12/31/24 ($5.20/share) . |
| Price-hurdle PSUs | 300,000 | Price hurdle $15 for 20 consecutive trading days (stock price $2.15 at grant) . | Cancelled in March 2025 by mutual agreement to reallocate shares to employees/consultants . |
| 2024 Cash recognition | $350,000 | 2024 Chair performance . | Paid in 2024 . |
| 2023 Cash + Stock recognition (paid in 2024) | $150,000 cash + 150,000 shares | 2023 Chair performance . | Granted April 2024 . |
Performance Metric Table (Incentive Design)
| Metric / Milestone | Weighting | Target | Actual/Payout | Vesting Mechanism |
|---|---|---|---|---|
| Northern Pipeline CEQA Binding & Unappealable completion | N/A | Completion of CEQA review | Unvested milestone RSUs; vests if achieved | 50,000 RSUs vest on achievement . |
| Northern Pipeline project financing | N/A | Close financing | Unvested milestone RSUs; vests if achieved | 100,000 RSUs . |
| FLPMA ROW issuance (Binding & Unappealable) | N/A | ROW for federal lands | Unvested milestone RSUs; vests if achieved | 75,000 RSUs . |
| Northern Pipeline supply contracts | N/A | ≥25,000 AFY | Unvested milestone RSUs; vests if achieved | 50,000 RSUs . |
| Southern Pipeline supply contracts | N/A | ≥12,500 AFY / ≥25,000 AFY | Unvested milestone RSUs; vests if achieved | 50,000 RSUs each . |
| Storage contracts at Cadiz | N/A | ≥25,000 AF | Unvested milestone RSUs; vests if achieved | 75,000 RSUs . |
| CEQA/NEPA completion for storage | N/A | Binding & Unappealable completion | Unvested milestone RSUs; vests if achieved | 100,000 RSUs . |
| First delivery via Northern Pipeline | N/A | First delivery under binding agreements | Unvested milestone RSUs; vests if achieved | 50,000 RSUs . |
| Stock price hurdle | N/A | $15 for 20 consecutive trading days | Cancelled Mar 2025 | 300,000 PSUs cancelled . |
Design observations:
- Incentives are tightly linked to development milestones (permits, financing, contracts, first water delivery) rather than near-term GAAP metrics, reflecting pre-revenue project stage .
- 2025 cancellation of the $15 PSU and 10,000 RSUs reduced price-hurdle exposure while preserving shares for broader retention grants (retentive tilt) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 646,921 common shares (excluding unvested RSUs/PSUs) . |
| Ownership as % of outstanding | Less than 1% of 81,864,926 shares outstanding as of Apr 17, 2025 . |
| Unvested equity at 12/31/24 | 400,000 time-based RSUs ($2.08M at $5.20) and 600,000 performance RSUs ($3.12M at $5.20) . |
| Cancelled awards (2025) | 300,000 PSUs (price hurdle) and 10,000 RSUs cancelled Mar 2025 . |
| Anti-hedging/pledging policy | Hedging prohibited; margin/pledging prohibited unless approved; insider trading/windows and pre-clearance required . |
| Clawback | Dodd-Frank compliant clawback adopted Sept 2023; applies to current/former officers; covers time- and performance-based incentives upon accounting restatements . |
| Director ownership guidelines | Company encourages director stock ownership via compensation mix; specific executive ownership guidelines not disclosed . |
Implications: With significant unvested milestone RSUs, achievement-driven vesting can create episodic insider selling windows upon vest, but anti-hedging/pledging and pre-clearance mitigate risk of hedging or margin pressure .
Employment Terms
| Term | Detail |
|---|---|
| Effective agreements | Original executive officer appointment (Feb 4, 2022) and Amended & Restated Employment Agreement (Apr 16/26, 2024) reflecting CEO role . |
| Base salary | $400,000 per year (effective 2024 amendment) . |
| Target bonus | 100% of base salary, based on goals . |
| 2024 cash awards | $350,000 for 2024 Chair performance; plus $150,000 cash and 150,000 shares recognizing 2023 performance (granted 2024) . |
| Long-term incentives | 1.6M RSUs/PSUs granted Apr 2024: 700k time-based (2024–2026), 600k milestone RSUs, 300k PSUs ($15 price hurdle; later cancelled) . |
| Severance (no cause / resignation for Co. breach) | 180 days base salary ($200k) plus benefits continuation (~$11k), if terminated without cause or resignation for Company material breach . |
| Death/Disability | 180 days base salary . |
| Change-in-control (termination following CIC) | 1 year base salary ($400k) plus benefits continuation (~$11k) if terminated by Company following a CIC . |
| Tax gross-ups | Company states no excise tax gross-ups provided in these benefits . |
Performance & Track Record
| Area | Evidence |
|---|---|
| Commercial traction | 2024 agreements for 21,275 AFY of supply via Northern Pipeline (≈85% of 25,000 AFY capacity) . |
| Project financing strategy | Established MGSC (Dec 2024) to fund ~$800M facilities via equity (non-binding LOIs/agreements up to $425M as of Mar 2025) and potential grants/JPA bonds . |
| Cost management and growth | Revenues rose to $9.6M in 2024 (ATEC $7.9M; alfalfa $1.3M), but company remains loss-making (net loss $31.1M) as core water assets are pre-revenue . |
| Capital formation | November 2024 $23.4M registered direct offering; March 2025 $20.0M offering; March 2024 $20M new secured convertible tranche with Heerema (7% rate) . |
| 2024 TSR | Pay-versus-performance table shows value of $100 TSR investment at $135 in 2024 (vs $73 in 2023) . |
| Key 2024 milestones | 85% contracting of Northern Pipeline capacity; pipeline materials option (180 miles of 36" pipe); permitting steps and path to change-of-use filings in 2025; ATEC growth . |
Execution risks remain around permitting, financing, and construction timelines (company enumerates regulatory and funding risks) .
Board Governance
- Roles: Kennedy is both Chair and CEO; she has no Board committee assignments (committees composed entirely of independent directors) .
- Independence: Board affirms independence of all non-management directors; lead independent director (Winston Hickox) role in place since 2021; independent directors meet in executive session at each scheduled meeting .
- Committees and chairs: Audit & Risk (Chair: Courter), Compensation (Chair: Hickox), Corporate Governance & Nominating (Chair: Echaveste), ESEJ (Chair transitioning post‑2025 meeting) – all independent .
- Attendance: Board held 5 meetings in 2024; majority present at the 2024 annual meeting .
Dual-role implications: The Chair/CEO combination can centralize authority; mitigants include a lead independent director, fully independent committees, regular executive sessions, and published governance documents/charters .
Director Compensation (for context; Kennedy is employee)
Non-employee directors received $75,000 cash retainer (quarterly) and $25,000 in annual RSUs; option to take cash in stock . Kennedy, as an employee director, does not receive separate director fees .
Compensation Structure Analysis
- Mix shift and retentive tilt: In 2024, the prior 450,000 PSUs were cancelled and replaced with 1.6M of RSUs/PSUs emphasizing time-based and milestone RSUs; the 300,000 price-hurdle PSUs were later cancelled in 2025 to reallocate shares—reducing pure price-contingent pay and increasing operational milestone orientation and retention .
- Pay positioning vs peers: Committee found 2024 CEO base salary in bottom quartile and total targeted direct compensation approximating median of selected peers (land/real estate development oriented) .
- Anti-hedging/pledging and clawback: Policies align with investor preferences (hedging/pledging prohibition and clawback in place) .
- Equity plan capacity: Management is seeking shareholder approval to increase 2019 EIP reserve from 5.2M to 7.2M shares; as of 4/17/25 only 109,022 shares remained available, with 1,440,963 unvested outstanding—implying potential future dilution from expanded grants .
Equity Ownership & Security Holders (selected)
| Holder | Shares/Notes |
|---|---|
| Susan P. Kennedy | 646,921 shares beneficially owned; excludes 350,000 time-based RSUs vesting over next seven quarters and 590,000 milestone RSUs (as of 4/17/25); less than 1% ownership . |
| Heerema Group/HHC $ Fund 2012 | 25,695,300 common shares plus 4,278,998 shares issuable on loan conversion and 1,000,000 warrants at $5.00; ~35.54% including convertibles as disclosed . |
Say-on-Pay & Shareholder Engagement
Company states it met with holders representing ~80% of shares outstanding during the year and considers feedback in program design; 2025 proxy includes an advisory vote on NEO compensation (no vote results yet) .
Risk Indicators & Red Flags
- Regulatory and financing execution risk for Mojave Groundwater Bank; pre-revenue core water assets with continuing net losses .
- Dilution risk from equity plan expansion and ongoing capital raises .
- Governance mitigants (lead independent director; independent committees; anti-hedging/pledging; clawback) in place .
Investment Implications
- Alignment: Kennedy’s pay is heavily milestone‑based around permits, financing, contracts, and first water delivery—directly linking value creation to vesting; extensive unvested RSUs provide retention but could create selling pressure upon vest .
- Execution leverage: 85% contracted Northern Pipeline capacity, MGSC structure for ~$800M buildout, and pipeline materials option establish a credible path to cash flows if permits/financing close as planned; incentive design should motivate hitting these catalysts .
- Governance: Chair/CEO dual role is balanced by a lead independent director and fully independent committees; anti‑hedging/pledging and clawback reduce alignment concerns .
- Risk/Reward: With core assets pre‑revenue and material capex/permit risk outstanding, payouts are back‑loaded; investors should monitor milestone attainment (CEQA/NEPA completions, FLPMA ROW, financing close, first delivery) that would both vest awards and de‑risk the equity story .