Jeffrey S. Sylvester
CHESAPEAKE UTILITIESAbout Jeffrey S. Sylvester
Jeffrey S. Sylvester is Senior Vice President and Chief Operating Officer of Chesapeake Utilities Corporation (CPK), appointed effective January 1, 2022; he previously served as Senior Vice President (appointed 2019) and held leadership roles in information technology, gas marketing, and customer care at the Company; he also served as Vice President of Nebraska Gas Operations at Black Hills Corporation and is a board member of the Southern Gas Association . He was age 51 at appointment in December 2021 and now oversees operations across CPK’s regulated and unregulated businesses (Delmarva, Florida, Ohio, propane, Marlin Gas Services, and Eight Flags Energy) . Company performance under the NEO program delivered a top-quartile 17% TSR in 2024, adjusted net income growth of ~24% to $121.5 million, and adjusted Basic EPS of $5.41 versus $5.33 in 2023, with capital expenditures near the top end of guidance ($356 million) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Chesapeake Utilities Corporation | Senior Vice President | 2019 (appointed) | Oversight of regulated operations (interstate/intrastate pipelines, gas and electric distribution) and customer care; positioned for COO responsibilities |
| Black Hills Corporation | Vice President, Nebraska Gas Operations | Not disclosed | Led Nebraska gas operations, bringing utility operating expertise to CPK |
| Chesapeake Utilities Corporation | Leadership roles in IT, gas marketing, customer care | Not disclosed | Built operational and customer-facing capabilities that underpin current COO oversight |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Southern Gas Association | Board Member | Not disclosed | Industry engagement; supports regulatory, operational, and safety best practices across gas utilities |
Fixed Compensation
Multi-year compensation for Jeffrey S. Sylvester (USD):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $360,000 | $386,999 | $420,000 |
| Bonus | — | $100,000 | — |
| Stock Awards | $230,294 | $307,318 | $382,530 |
| Non-Equity Incentive Plan Compensation | $135,355 | $153,284 | $296,861 |
| All Other Compensation | $57,459 | $39,670 | $44,787 |
| Total | $783,108 | $987,271 | $1,144,178 |
Compensation design benchmarks and philosophy:
- FW Cook peer analysis found aggregate target total direct compensation for NEOs within +/-15% of market median, with majority at-risk pay reinforcing pay-for-performance .
- Company practices include robust clawback policy (Dodd-Frank/NYSE compliant) and prohibition of hedging and pledging; company does not provide excise tax gross-up protections .
Performance Compensation
2024 cash incentive structure and outcomes (USD):
| Item | Detail |
|---|---|
| Target opportunity (% of base) | 50% of base salary |
| Base salary (4/1/2024) | $428,000 |
| Award at target | $214,000 |
| Weighting | 20% non-financial; 80% financial (EPS band centered at $5.35) |
| EPS multiplier applied | 127.5% applied to components |
| Non-financial payout | $78,581 |
| Financial payout | $218,280 |
| Total payout | $296,861 (≈136–139% of target for NEOs, per Committee summary) |
2024–2026 performance share design:
| Component | Benchmark | Weighting | Payout Range |
|---|---|---|---|
| Growth in Long-Term Earnings | Total capex as % of total capitalization vs performance peer group | 50% | 0% to 200% |
| ROE | Average ROE vs peer group; absolute ROE threshold of 8% for >100% payout | 50% | 0% to 200% |
| TSR | TSR vs peer group | +/-20% modifier | -20% to +20% modifier; additive only with positive TSR |
Equity award opportunity (2024–2026):
| Metric | Value |
|---|---|
| Target equity value (% of base) | 75% of base salary |
| Base salary (4/1/2024) | $428,000 |
| Target equity value (USD) | $321,000 |
| Average closing price (11/1–12/31/2023) | $97.17 |
| Target shares | 3,303 |
| Threshold/Max shares | 1,652 / 6,606 |
Realized vesting for 2022–2024 performance period:
| Item | Value |
|---|---|
| Target shares | 1,862 |
| Growth in Long-Term Earnings payout | 1,304 shares (200% of 35% component) |
| ROE payout | 808 shares (124% of 35% component) |
| TSR payout | 0 (bottom percentile) |
| Total shares vested | 2,112 |
| Vesting date | 2/26/2025 |
| Closing stock price on 2/26/2025 | $126.58 |
| Value realized | $267,337 |
Equity Ownership & Alignment
Ownership, outstanding awards, and policies:
| Item | Value |
|---|---|
| Beneficial ownership (3/10/2025) | 12,830 shares; <1% of class |
| Unvested performance shares outstanding (12/31/2024) | 11,362 (max awards at 200% for 2023–2025 and 2024–2026) |
| Market or payout value of unearned shares (12/31/2024) | $1,378,779 (at $121.35) |
| Options outstanding | None (company has no options outstanding under equity plans) |
| Hedging/pledging | Prohibited; no pledged shares by directors/NEOs |
| Stock ownership guideline | 3x base salary for non-CEO NEOs |
Non-Qualified Deferred Compensation (NQDC):
| Metric | 2024 Value |
|---|---|
| Executive deferrals | $206,430 |
| Employer contributions | $14,863 |
| Aggregate earnings | $157,313 |
| Withdrawals/distributions | $0 |
| Aggregate balance (12/31/2024) | $1,096,592 |
| Amount previously reported in SCT (cumulative) | $800,049 |
Employment Terms
Key terms from Executive Employment Agreement and proxy:
- Appointment/role: Appointed COO effective January 1, 2022; scope covers all regulated and unregulated operations (Delmarva, Florida, Ohio, propane, Marlin, Eight Flags Energy) .
- Initial compensation terms (12/16/2021 agreement): Base salary $360,000, target equity award 70% of base under the Stock and Incentive Compensation Plan, target annual cash bonus 40% of base under the Cash Bonus Incentive Plan; comprehensive clawback provisions; participation in retirement and welfare plans; company vehicle/perquisites .
- Severance (no change-in-control): If terminated without cause during current term or non-renewal (other than retirement), one year of base salary continuation and one year of medical/dental/vision benefits, subject to release and covenants .
- Change-in-control (two-year extended term): Lump sum payments equal to 24 months of base pay, vesting of unvested savings plan contributions that would vest over the covered period, and two times the average annual cash incentives from the prior three years; continued welfare benefits; 280G cutback to maximize net benefit if applicable .
- Restrictive covenants: Confidentiality; non-solicitation of employees and customers; non-competition during employment and for one year after termination; extended restricted period of 15 months after certain good-reason notices; post-termination cooperation and non-disparagement .
Estimated change-in-control benefits (hypothetical termination at 12/31/2024):
| Component | Estimated Value (USD) |
|---|---|
| Base salary (severance multiple) | $856,000 |
| Cash incentive (severance multiple) | $307,839 |
| Healthcare and other insurance benefits | $35,417 |
| Unpaid equity incentive compensation (target awards) | $689,389 |
| Total gross severance potential | $1,888,645 |
| Net amount payable (after 280G considerations) | $1,459,593 |
Investment Implications
- Pay-for-performance alignment is strong: 2024 cash incentive centered around EPS guidance ($5.35) with a 127.5% multiplier, yielding ~136–139% of target for NEOs; long-term equity is 100% performance-based with increased weighting on Growth and ROE (50% each) and TSR as a +/-20% modifier, tightening focus on capital deployment and returns .
- Execution risk and retention: COO’s change-in-control terms (2x cash incentives, 24 months base, target equity vesting) and non-compete/non-solicit covenants mitigate retention risk while balancing shareholder protections via 280G cutbacks; strong clawback and prohibitions on hedging/pledging reduce governance risk .
- Performance signal: 2022–2024 equity awards paid 200% on Growth and 124% on ROE but 0% on TSR, indicating strong internal investment/return performance but relative TSR underperformance versus peers over the period; management’s 2024 redesign (TSR as a modifier) may better align payouts with peer-relative returns going forward .
- Ownership and selling pressure: Sylvester beneficially owns 12,830 shares with no pledging; substantial unearned performance shares ($1.38M value at 12/31/2024) create alignment but also potential future supply on vesting; absence of options reduces near-term exercise-driven selling pressure .