Scott A. Stepp
About Scott A. Stepp
Scott A. Stepp, 47, is Chief Financial Officer of CKX Lands, Inc., appointed effective May 9, 2022; he has also served as Chief Investment Officer of Matilda Stream Management, Inc. since 2014 . In 2024 CKX generated $1,521,124 of revenue (+2.4% y/y) and $250,224 of net income; the company’s three-year TSR (value of $100) tracked 104.57 → 136.21 → 132.42 for 2022–2024, providing context for pay-versus-performance disclosures that attribute most “Compensation Actually Paid” to market-based equity fair value changes rather than cash pay . CKX has only two part‑time employees (the President and CFO), and disclosed a 2024 year‑end material weakness in internal control over financial reporting (classification of cash equivalents/short‑term investments) with a remediation policy adopted in Q1’25 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| CKX Lands, Inc. | Chief Financial Officer | 2022–present | Appointed CFO May 9, 2022; equity-only compensation structure (RSUs/PSUs) during contract term; contracts expired July 15, 2024, continuing without written agreement or compensation . |
| Matilda Stream Management, Inc. | Chief Investment Officer | 2014–present | Private family office/holding company (≈100,000 acres managed), administrative/accounting services provided to CKX for no compensation . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Cascade Varsity, LLC | Board Member | as disclosed 2022 | Listed among other business interests in employment agreement exhibit . |
| St. C Investors, LLC | Managing Member | as disclosed 2022 | Listed among other business interests in employment agreement exhibit . |
Fixed Compensation
| Year | Base salary ($) | Target bonus (%) | Actual bonus ($) |
|---|---|---|---|
| 2024 | 0 | — (no cash plan) | 0 |
| 2023 | 0 | — (no cash plan) | 0 |
| 2022 | 0 | — (no cash plan) | 0 |
Under Stepp’s Executive Employment Agreement (May 9, 2022–July 15, 2024), he was not entitled to cash compensation; after agreements expired on July 15, 2024, he and the President continued in their roles without written agreements or compensation .
Performance Compensation
Equity awards granted (June 13, 2022)
| Award type | Grant date | Shares granted (#) | Weighting of total | Aggregate grant-date fair value ($) |
|---|---|---|---|---|
| Restricted Stock Units (RSUs) | Jun 13, 2022 | 38,377 | 21.5% | — (included in total) |
| Performance Shares (PSUs) | Jun 13, 2022 | 140,121 | 78.5% | — (included in total) |
| Total stock awards (RSUs + PSUs) | Jun 13, 2022 | 178,498 | 100% | 1,154,257 (Stepp) |
RSU vesting schedule and outcomes (Stepp)
| Vesting date | % of original RSUs | Shares vested (#) |
|---|---|---|
| Jul 15, 2022 | 19.05% | 7,311 |
| Jul 15, 2023 | 33.33% | 12,791 |
| Jul 15, 2024 | 47.62% | 18,275 |
Company satisfied tax withholding by retaining a portion of vested shares at each vest date; net share issuances disclosed at the aggregate executive level (not per individual) .
PSU performance grid and vesting (Stepp)
| Price target ($) | % of PSU grant | Shares eligible (#) | Status / vest date |
|---|---|---|---|
| 12.00 | 11.27% | 15,792 | Vested at grant (criteria satisfied prior to grant), Jun 13, 2022 |
| 13.00 | 18.47% | 25,880 | Vested Feb 12, 2024 (10 trading days ≥ $13) |
| 14.00 | 16.86% | 23,624 | Not achieved; forfeited Jul 15, 2024 |
| 14.50 | 22.37% | 31,345 | Not achieved; forfeited Jul 15, 2024 |
| 15.00 | 31.03% | 43,480 | Not achieved; forfeited Jul 15, 2024 |
Pay versus performance context (company metrics; Stepp is sole non‑PEO NEO)
| Year | Compensation Actually Paid to Stepp ($) | Value of $100 TSR ($) | Net income ($) |
|---|---|---|---|
| 2024 | (779,032) | 132.42 | 250,224 |
| 2023 | 94,705 | 136.21 | 142,961 |
| 2022 | 793,326 | 104.57 | (1,317,718) |
CAP reflects SEC methodology applied to equity fair values; officers received no cash compensation in 2023–2024 and only stock awards in 2022 .
Equity Ownership & Alignment
| As-of date | Shares beneficially owned (#) | % of class |
|---|---|---|
| Apr 4, 2025 | 55,316 | 2.7% |
| Apr 2, 2024 | 60,543 | 3.0% |
| Mar 27, 2023 | 15,966 | <1% |
- Unvested equity: As of Dec 31, 2024 there were no outstanding unvested awards under the plan (remaining PSUs forfeited and RSUs fully vested) .
- Hedging/derivatives are prohibited by policy; the insider trading policy also prohibits pledging/margin of CKX stock, and restricts trading windows and requires pre-clearance .
- Insider transactions in 2022–2024 disclosed were withholding of shares to cover taxes upon vesting (timing corrections and late Form 4s noted); this points to tax-settlement activity rather than open-market selling .
Employment Terms
| Term/Clause | Detail |
|---|---|
| Effective term | Executive Employment Agreement effective May 9, 2022; term ended July 15, 2024 . |
| Cash compensation | No base salary or cash bonus entitlement under the agreement . |
| Equity compensation | Eligible for RSUs and PSUs under the 2021 Stock Incentive Plan; awards granted June 13, 2022 (see above) . |
| Termination notice | Company may terminate without cause; executive may terminate without good reason, in each case on 30 days’ notice . |
| Accelerated vesting | Upon termination without cause, resignation for good reason (after cure), death/disability, or change of control, a pro rata portion of unvested RSUs would vest based on months elapsed plus six months; unvested PSUs otherwise forfeited (Board retains discretion on unvested awards at CoC) . |
| Definitions | “Cause” includes conviction of a crime injuring the company, misappropriation, fraud, or uncured material breach; “Good reason” includes reduction in compensation (outside a recoupment policy), material diminution of title/authority, or uncured company breach . |
| Non‑compete during term | Executive must avoid engaging in any activity that competes with the Company or is contrary to its best interests during employment . |
| Post‑term arrangement | Agreements expired July 15, 2024; Stepp and the President agreed with the Board to continue in their roles without written agreements or compensation . |
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Total revenues ($) | — | 1,485,605 | 1,521,124 |
| Revenue mix ($) | — | Oil & gas: 380,654; Timber: 154,147; Surface: 950,804 | Oil & gas: 417,846; Timber: 22,225; Surface: 1,081,053 |
| Net income ($) | (1,317,718) | 142,961 | 250,224 |
| TSR value of $100 ($) | 104.57 | 136.21 | 132.42 |
- Strategic alternatives: Board initiated a formal process in Aug 2023; multiple indications of interest received; discussions advanced with a potential counterparty; any transaction would require shareholder approval; no assurance of completion .
- Internal control: Material weakness at 2024 year‑end (cash equivalents/short‑term investments classification); remediation policy adopted in Q1’25 .
- Organization: Only two part-time employees (President and CFO); Company notes continuity risks in adverse events and reliance on third parties in risk factors .
Compensation Committee Analysis
- Committee composition (2024): Chair Daniel J. Englander; members Max H. Hart and Eugene T. Minvielle; the Compensation Committee had no meetings during 2024; executive officers do not participate in deliberations on their compensation .
- Hedging policy: The insider trading policy prohibits hedging and transactions in CKX-based derivatives .
Related Party Transactions
- MSM relationship: The Company’s President is President of MSM and the CFO is CIO of MSM; MSM provides administrative/accounting services to CKX for no compensation .
- Stream Wetlands Services, LLC: 25‑year lease (option exercised Feb 28, 2022) with contingent payments and a $500,000 minimum if activity occurs; the President of CKX is President of Stream Wetlands; timing/occurrence uncertain .
Equity Ownership & Insider Trading Policy Highlights
- Beneficial ownership: Stepp held 55,316 shares (2.7%) as of April 4, 2025; prior year 60,543 (3.0%) as of April 2, 2024; 15,966 (<1%) as of March 27, 2023, reflecting vesting-driven increases in 2023–2024 and PSUs forfeited in July 2024 .
- Policy restrictions: Hedging, derivatives, pledging, margin accounts prohibited; trading permitted only in defined windows with pre‑trade notice; event‑specific suspensions can apply .
Investment Implications
- Alignment: Stepp’s pay is entirely equity-based over the contract term, with 78.5% tied to stock price hurdles ($12–$15) and the balance time‑vested RSUs—linking realized compensation to shareholder returns; all awards are now vested or forfeited, reducing future equity overhang .
- Near-term selling pressure: 2024 vesting included tax withholding via share retention (Form 4 late filings reflect tax settlement timing), which tends to be mechanical rather than discretionary selling; with no unvested awards outstanding at year‑end 2024, incremental vest‑related supply pressure should abate absent new grants .
- Retention and governance risk: With no cash compensation and no current written employment agreements post‑July 15, 2024, retention risk is non‑trivial in a two‑employee structure; a 2024 year‑end material weakness also flags execution risk, though a remediation policy was adopted in Q1’25 .
- Change‑of‑control economics: Pro rata RSU vesting (plus six months) upon CoC or certain terminations provides limited acceleration; PSUs not earned by price triggers lapse, limiting windfalls and potential deal‑related overhang .
- Protective policies: Prohibitions on hedging/pledging and a clawback policy aligned to SEC/NYSE American rules mitigate misalignment and malus risk .
Notes on insider activity: Company disclosures indicate late Form 4 filings related to withholding of shares for taxes upon vesting events in 2022–2024; CKX reported no other untimely Section 16 filings in the referenced fiscal years beyond those noted .