Wouter van Kempen
CIVITAS RESOURCESAbout Wouter van Kempen
Wouter van Kempen (age 55) is Interim Chief Executive Officer of Civitas Resources (effective per employment letter dated August 6, 2025, amended November 2, 2025) and has served as Independent Chair of the Board since February 2023; he holds a Masters in Business Economics from Erasmus University Rotterdam . Company performance context: in 2024 Civitas generated ~$839 million of net income, ~$3.7 billion Adjusted EBITDAX, and nearly $1.3 billion adjusted free cash flow, and returned >$920 million to shareholders; cumulative TSR value per $100 was $282.31 in 2024 (company method) . Governance: Civitas has separated the Chair and CEO roles (as of the 2025 proxy), with van Kempen serving as Chair; during his Interim CEO service he is an executive officer (implications for independence noted below) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| DCP Midstream GP, LLC / DCP Midstream, LLC | Chairman, President & CEO; COO; business unit leadership | CEO/Chairman 2013–2022; COO 2012–2013; earlier roles 2010–2012 | Led large U.S. midstream operator across gathering/processing and marketing/logistics; extensive operational and development leadership . |
| Duke Energy | President, Generation Services; VP, M&A | 2005–2010 | Oversaw generation services; led M&A at a major utility, adding transactional expertise . |
| General Electric | Staff executive, Corporate M&A | 1999 | Corporate M&A leadership in diversified industrials . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Engine No. 1 | Lead Director; Non-Employee Operating Partner | Lead Director since Nov 2024; Operating Partner Jun–Nov 2024 | Public-company board/activist-investor platform experience . |
| GPA Midstream; Coloradans for Responsible Energy Development | Director/Chair (former) | — | Industry and public affairs engagement . |
| DCP Midstream GP, LLC; DCP Midstream, LLC | Chairman | 2013–2022 | Board leadership of DCP entities . |
Fixed Compensation
| Component | Details |
|---|---|
| Interim CEO base salary | $1,500,000 annualized during the Interim CEO Term (per 8‑K employment letter amendment dated Nov 2, 2025) . |
| 2024 Director cash retainer (as Board Chair) | $125,000 cash for Board Chair responsibilities (paid quarterly) . |
| 2024 Director equity | Annual DSU grant with ~$300,000 grant-date value (company 30‑day VWAP methodology); 2024 proxy table shows $283,871 ASC 718 grant-date fair value . |
| Director DSU vesting/settlement | DSUs vest annually; vested DSUs do not settle until departure from the Board . |
Performance Compensation
Civitas executive incentive design (as disclosed for named executive officers; structure expected to govern CEO pay):
- No STIP: Executive officers do not participate in a cash short-term incentive; 100% of incentive pay delivered in equity .
- LTIP mix: 70% PSUs and 30% RSUs (2024 awards), with PSUs tied to 3‑year absolute TSR and RSUs vesting ratably over 3 years .
PSU metric design and payout schedule:
| Metric | Performance level | 3‑yr annualized TSR | Payout as % of target |
|---|---|---|---|
| Absolute TSR | Maximum | ≥22.5% | 225% |
| — | 20% | 200% | |
| — | 15% | 150% | |
| — | 12% | 120% | |
| Target | 10% | 100% | |
| — | 5% | 50% | |
| Minimum | 0% | 10% | |
| Below threshold | <0% | 0% |
Vesting/acceleration terms:
- PSUs cliff-vest after 3 years based on absolute TSR; RSUs vest in three equal annual installments .
- Double-trigger equity acceleration upon change in control if awards are not assumed or upon qualifying termination within 12–24 months; outside CIC, pro‑rata vesting/eligibility on certain terminations; death/disability full vest (PSUs at target) .
- Clawback policy compliant with NYSE/SEC 10D; separate recoupment policy for “Detrimental Conduct” .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 9,774 shares/units beneficially owned by van Kempen; <1% of outstanding . |
| Director DSUs outstanding | 9,774 DSUs outstanding/deferred as of Dec 31, 2024 . |
| Ownership policy (executives) | CEO required ownership = 5x base salary; direct reports 2x; CAO/SVPs 1x; 5‑year compliance window (post-promotion, 2 years for higher level) . |
| Hedging/pledging | Prohibited for directors and officers under Insider Trading Policy and ownership policy . |
Implications:
- DSUs do not settle until board departure, reducing near‑term selling pressure; CEO ownership guideline implies a potential need to accumulate shares over time if he remains CEO beyond the interim term .
Employment Terms
| Provision | Interim CEO Amendment (Nov 2, 2025) | Baseline Severance Plan (Tier 1) |
|---|---|---|
| Term | Interim CEO Term continues through consummation of “Change in Control” (as defined in 2024 LTIP) . | Ongoing; plan adopted Jan 21, 2022 . |
| Base salary | $1,500,000 annualized during Interim CEO Term . | — |
| CIC treatment at end of term | Termination at end of Interim CEO Term treated as termination without Cause within 12 months following CIC; eligible for Tier 1 Severance Obligations . | If Qualifying Termination within 12 months post‑CIC: lump‑sum cash severance = 3.0x base salary; COBRA reimbursement up to 24 months; equity per award agreements . |
| Non‑CIC severance | — | If Qualifying Termination not in CIC window: cash severance = 2.0x base salary, paid over 24 months; COBRA reimbursement up to 24 months; equity per award agreements . |
| Equity acceleration | Per award agreements; see double‑trigger CIC provisions noted above . | Per award agreements . |
| Restrictive covenants | Employee Restrictive Covenants Agreement: non‑compete scope tied to oil & gas within 25‑mile radius, non‑solicit post‑termination; confidentiality and non‑disparagement . | |
| Clawback | Applies to incentive-based compensation for financial restatements; separate recoupment for detrimental conduct . |
Board Governance
- Role and independence: van Kempen served as Independent Chair and member of the Compensation Committee and Nominating & Corporate Governance Committee as of the 2025 proxy; during Interim CEO service in late 2025 he is an executive (no longer independent) .
- Structure: Separate Chair and CEO roles (2025 proxy); all committees comprised entirely of independent directors per NYSE standards (as of proxy) .
- Committees and activity: Compensation Committee (Chair Willard; members include van Kempen); Board held 15 meetings in 2024; most directors attended ≥96% .
- Merger governance (SM Energy): Post‑merger “New Board” expected to have 11 members with equal committee representation by each side; Civitas Board Chair designates chairs of Governance & Sustainability and Compensation Committees; SM Energy Chair designates Audit Chair .
Director Compensation
| Component | 2024 Amount |
|---|---|
| Board Chair fee (cash) | $125,000 . |
| Annual DSU grant (equity) | $300,000 program design (30‑day VWAP); reported ASC 718 grant‑date fair value: $283,871 . |
| DSU mechanics | DSUs vest annually and settle only upon separation from the Board; dividend equivalents paid in cash upon vesting/settlement . |
Compensation Structure Analysis
- Pay-for-performance emphasis increased: 70% PSUs tied to absolute TSR (0–225% scale), 30% RSUs; no executive STIP → greater long-duration equity exposure (alignment with TSR) .
- Shareholder support: 2024 LTIP approved with >98% support; 2024 Say‑on‑Pay ~98% approval—low external pressure to modify design .
- Clawback and no gross‑ups: NYSE‑compliant clawback; no excise tax gross‑ups; anti-hedging/pledging in place (strong governance posture) .
Equity Ownership & Alignment (detail table)
| Metric | Amount/Policy |
|---|---|
| Beneficial ownership (van Kempen) | 9,774 shares/units; <1% of outstanding . |
| DSUs outstanding (director program) | 9,774 DSUs . |
| CEO ownership guideline | 5x base salary; 5 years to comply (2 years to meet higher multiple upon promotion); unvested time‑based RSUs count; PSUs do not . |
| Hedging/pledging | Prohibited . |
Employment & Contracts (retention risk)
- Interim CEO tenure tied to change-in-control closing; end-of-term treated as CIC-related termination with Tier 1 protections (3x salary lump sum, COBRA up to 24 months, equity per plan) .
- Restrictive covenants (non‑compete/non‑solicit) and clawback reduce risk of value-destroying behavior and protect the company post‑employment .
Performance & Track Record
- 2024 results: net income ~$839 million; Adjusted EBITDAX ~$3.7 billion; adjusted free cash flow nearly $1.3 billion; shareholder returns >$920 million (base/variable dividends + buybacks) .
- Operating execution: 2024 TRIR of 0.25 (< industry average); operational milestones in Permian and DJ; carbon neutrality leadership in Colorado with Permian path by 2025 .
- TSR context: company’s “value of $100” TSR metric = $282.31 in 2024 (company methodology) .
Compensation Peer Group (benchmarking)
Peer group used for 2024 compensation decisions included: Callon, Coterra, Chord, CNX, Devon, Diamondback, Marathon, Matador, Murphy, Ovintiv, PDC, Permian Resources, Range, SM Energy, Southwestern—indicative of pay calibration vs. E&P peers (note: SM Energy is also the announced merger counterparty) .
Say‑on‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay approval ~98% .
- 2024 LTIP approval >98% .
Board Governance (dual-role implications)
- Prior to late 2025, van Kempen served as Independent Chair and sat on Compensation and Nominating & Corporate Governance committees (fully independent committee composition) .
- As Interim CEO (late 2025), he is an executive; independence status for committee service would need to align with NYSE rules and company guidelines—Civitas’ governance framework emphasizes independent committees and separation of Chair/CEO roles (pre‑merger), and merger terms contemplate committee chair designations and equal representation on the “New Board” .
Investment Implications
- Alignment and retention: Interim CEO package is cash‑light beyond $1.5M base and relies on equity program design that ties outcomes to TSR; Tier 1 CIC treatment (3x salary and equity acceleration per plan) lowers retention risk through the merger closing but creates meaningful CIC‑linked cash outlay on termination .
- Selling pressure: Director DSUs settle only upon board departure; anti‑hedging/pledging policies reduce forced selling risks; if he remains CEO beyond interim term, ownership guidelines (5x salary) may require incremental share accumulation, a potential positive alignment signal .
- Governance watch‑items: Interim CEO + (former) Chair duality raises independence optics; however, Civitas’ disclosed governance emphasizes independent committees and the merger agreement prescribes balanced post‑deal board/committee leadership—monitor committee compositions and any role changes through closing .
- Pay-for-performance: With PSUs tied to absolute TSR and no cash STI, equity outcomes are highly sensitive to stock performance—outperformance could lead to high realizable pay (up to 225% of PSU target), while underperformance compresses payouts, aligning with shareholder returns .
Sources: Civitas DEF 14A (filed Apr 21, 2025) and Form 8‑K (filed Nov 3, 2025) including Employment Letter Amendment for Interim CEO. Specific citations embedded above: ; 8‑K governance and employment terms .