Andrew Littlefair

About Andrew Littlefair

Andrew J. Littlefair (age 64) is co-founder, President, CEO, and a director of Clean Energy Fuels (since June 2001). Prior roles include President of Pickens Fuel Corp. (1996–2001), management positions at Mesa, Inc. (1987–1996), and Staff Assistant to the U.S. President in the Reagan Administration (1983–1987). He holds a B.A. from the University of Southern California. Leadership performance disclosures: 2024 Adjusted EBITDA was $76.642M with GAAP net loss of $83.070M; the company’s TSR “$100 investment” proxy metric stood at 107.26 at YE2024 (vs 387.19 in 2020). These frame pay-versus-performance alignment and trend context for his tenure and recent years.

Past Roles

External Roles

Fixed Compensation

• 2024 base salary increased 11.1% to $778,680 (first increase since 2015; previously voluntarily reduced), reflecting a return to prior levels; CFO and SVP received 7% merit increases.

Summary Compensation (CEO):

Perquisites: company-paid life insurance ($43,485), car lease, and spousal travel disclosed in 2024 “All Other Compensation.”

Performance Compensation

Annual cash incentive plan: weighted across seven measures; CEO earned 90.3% of target for 2024.

Equity awards (granted March 4, 2024; 3-year vesting; options 10-year term; strike=$2.85):

• CEO: 250,000 RSUs (grant-date fair value $712,500) and 200,000 options (grant-date fair value $398,000).
• Vesting schedule: time-based over three years for both RSUs and options.
• 2025 program change: PSUs introduced (50% stock-price hurdles; 50% Negative CI dairy gas sales CAGR over 3 years), increasing long-term performance linkage.

Stock vested/exercises (2024): CEO had 40,392 RSUs vest ($126,831 value) and no option exercises, indicating limited realized selling pressure from options in 2024.

Equity Ownership & Alignment

• Beneficial ownership (3/25/2025): 3,312,994 shares (1.5% of outstanding). Breakdown: 1,568,357 shares via options exercisable within 60 days; 1,744,637 shares held directly. Shares outstanding: 223,963,626.
• Outstanding unvested RSUs at 12/31/2024: 250,000 (valued at $627,500 at $2.51).
• Outstanding options (selected lines): multiple legacy grants (e.g., strikes at $1.37, $2.19, $2.83; expirations 2025–2034); 200,000 new unexercisable options at $2.85 expiring 3/4/2034.
• In-the-money status (unvested): none of CEO’s unvested options were in-the-money at 12/31/2024 (stock $2.51), per proxy methodology.
• Stock ownership guidelines: CEO must hold ≥5x salary; all NEOs, including CEO, were in compliance as of record date.
• Hedging/pledging: hedging prohibited; pledging or margin only with capacity to substitute collateral; as of the proxy date, no director/executive had pledged shares.
• Director pay: as employee-director, Mr. Littlefair receives no additional board compensation (non-employee program disclosed separately).

Employment Terms

• Employment agreements effective December 31, 2015; auto-renew annually each December 31.
• Annual incentive opportunity: CEO eligible at 70%/100%/150% of salary (base/middle/max).
• Severance (non-CIC): Lump-sum equals salary through termination plus unpaid prior-year bonus and deferrals; 150% of one year’s salary; 150% of prior-year bonus; full-year bonus for year of separation (paid after year-end); one year of benefits; accrued vacation.
• Severance (CIC double-trigger): If termination without cause or good reason within 6 months before/12 months after CIC: CEO receives 300% of current salary and 300% of prior-year bonus (others 225%), plus amounts noted above. Post-2014 equity is double-trigger for vesting acceleration; no excise tax gross-up (best-net cutback policy).
• Illustrative CEO payout table (as of 12/31/2024 assumptions): | Scenario (CEO) | Cash Severance | Benefits (PV) | Vacation | RSU Vesting | Option Vesting | Total | |---|---:|---:|---:|---:|---:|---:| | Voluntary (no good reason) | — | — | 89,848 | — | — | 89,848 | | Vol. for Good Reason | 2,585,236 | 27,331 | 89,848 | — | — | 2,702,415 | | Involuntary (no cause) | 2,585,236 | 27,331 | 89,848 | 627,500 | — | 3,329,915 | | Failure to Renew | 2,585,236 | 27,331 | 89,848 | 627,500 | — | 3,329,915 | | For Cause | — | — | 89,848 | — | — | 89,848 | | CIC Termination (double-trigger) | 4,467,036 | 27,331 | 89,848 | 627,500 | — | 5,211,715 | | Death/Disability | — | — | 89,848 | 627,500 | — | 717,348 |

Clawback policy: updated in 2023 to comply with SEC/Nasdaq; all awards subject to recoupment policy and plan clawback terms.

Pension/Deferred Comp: no defined benefit plan; no non-qualified deferred comp.

Board Governance (including dual-role considerations)

• Roles: Mr. Littlefair is CEO and a director; he is not the Chair and does not sit on standing committees shown (Audit, Compensation, Nominating & Governance).
• Board leadership: independent Chairman (Stephen A. Scully) since 2018; board explicitly separates Chair/CEO roles to enhance oversight—mitigating dual-role independence concerns.
• Committee structure and attendance: Independent directors serve on committees; each director attended ≥75% of 2024 board/committee meetings; at least two executive sessions held in 2024.
• Director stock ownership guideline: $180,000 minimum within five years for independents (TMS designees waived if uncompensated); all independents in compliance.

Director Compensation (context)

• Non-employee director cash retainers: Board $70,000; Chair $60,000; committee retainers vary ($3,000–$15,000).
• Equity: annual $120,000 split 50/50 options and RSUs; one-year vest; capped annually at $400,000 per director ($600,000 if independent Chair/new director).
• CEO as employee-director receives no director pay.

Performance & Track Record (recent disclosures)

Qualitative 2025 updates (Q3): $106.1M revenue; 61M RNG gallons sold; $17.3M Adjusted EBITDA; $232M cash and ST investments; RNG project ramp and heavy-duty trucking initiatives underway (Cummins X15N demos, fleet pilots).

Compensation Committee Analysis, Say-on-Pay, and Peer Benchmarking

• Compensation Committee: chaired by Lizabeth Ardisana; independent composition; committee oversees clawback, ownership guidelines, and executive/director pay.
• Independent consultant: Semler Brossy engaged; no conflicts; assisted with peer reviews, equity pool, design benchmarking, and shareholder engagement.
• Say-on-Pay: 74.8% approval at 2024 annual meeting; outreach prompted shift to PSUs for 2025 to strengthen pay-for-performance optics.
• Equity plan governance: no repricing of options without shareholder approval; minimum one-year vesting (limited 5% carveout).

Related Party Transactions and Red Flags

• TotalEnergies relationship: commodity swaps with a TotalEnergies affiliate; $3.6M paid in 2024 settlements; ongoing JV in ADG RNG projects.
• Family employment: CEO’s son was a non-executive employee in 2024 (total cash comp ~$151,705), approved by Audit Committee; employment ended January 2025.
• Hedging/pledging prohibited (with tight conditions) and none pledged; clawback in place; no CIC excise tax gross-ups; double-trigger vesting—all favorable governance signals.

Investment Implications

• Pay-performance alignment improving: 2025 adoption of PSUs tied to stock price and negative CI dairy gas sales enhances long-term linkage beyond time-vested RSUs/options. Watch for 2026–2027 PSU outcomes as RNG volumes and LCFS credit backdrop evolve.
• Retention economics: Double-trigger CIC severance at 3x salary+bonus for the CEO is above median and could be a consideration in strategic scenarios; no tax gross-up mitigates cost.
• Ownership alignment: CEO holds ~1.5% of shares and meets 5x salary ownership requirement; no pledging; limited 2024 equity sales (no option exercises) reduce near-term selling pressure.
• Annual bonus structure: diversified seven-metric construct reduces risk-taking and tied to EBITDA, margin, RNG/fuel volumes, and O&M; 2024 payout at 90.3% of target indicates measured calibration.
• Governance mitigants: Independent Chair, committee independence, clawback, ownership guidelines, anti-hedging/pledging, no repricing—lower governance risk; moderate say-on-pay support (74.8%) warrants continued investor scrutiny of pay outcomes vs TSR trend.

Appendix: CEO Outstanding Equity Snapshot (12/31/2024)

All equity awarded post-2014 subject to double-trigger vesting on change in control.