Francisco Leon
California ResourcesAbout Francisco Leon
Francisco J. Leon, 48, is President & CEO of California Resources Corporation (CRC) and has served on CRC’s Board since April 2023; he previously was EVP & CFO (Aug 2020–Apr 2023), EVP Corporate Development & Strategic Planning (2018), and VP Portfolio Management & Strategic Planning at CRC during the 2014 spin-off from Occidental Petroleum. He holds an MBA from the University of Texas at Austin and a BA in International Business from San Diego State University and CETYS Universidad in Mexico . Under his leadership, CRC completed the Aera Energy merger, raised synergies to an estimated $235 million by end-2025, and delivered 2024 adjusted EBITDAX over $1 billion, free cash flow of $355 million, adjusted net income of $317 million ($3.89 diluted EPS), returning more than 85% of 2024 FCF to shareholders; executive incentives are tied to sustainability, safety, and carbon management outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| California Resources Corporation | President & CEO; Director | Since Apr 2023 | Led Aera merger execution; advanced carbon management permitting; raised synergy target to $235M |
| California Resources Corporation | EVP & CFO | Aug 2020–Apr 2023 | Senior financial leadership through portfolio evolution |
| California Resources Corporation | EVP Corporate Development & Strategic Planning | 2018– | Oversaw all acquisition and divestiture activities |
| California Resources Corporation | VP Portfolio Management & Strategic Planning | 2014– | Joined at spin-off from Occidental; portfolio and strategy leadership |
| Occidental Petroleum Corporation | Finance, Planning, U.S./International BD | Prior to 2014 | Various roles in finance and business development |
| Petrie Parkman & Co., Inc. | Analyst/Associate (energy boutique IB) | Career start | Energy-focused investment banking experience |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| American Red Cross – LA Chapter | Board Member | Since Fall 2022 | Community engagement in safety and sustainability-aligned initiatives |
| McCombs School of Business (UT Austin) | Advisory Board Member | Since Fall 2022 | Academic-industry advisory contributions |
| Union Rescue Mission of Los Angeles | Board Member | 2019–2022 | Governance of one of the largest private homeless shelters |
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary | $750,000 | $850,000 (effective Mar 2024) | Compensation Committee adjusted based on scope and peer alignment |
| Annual Incentive Target (% of salary) | 120% | 120% | AIP payout range 0–200% of target |
| 2024 AIP Actual Paid | — | $1,500,984 (Scorecard $1,221,984; Individual $279,000) | Final AIP scorecard average for 2024 was 131.52% |
Performance Compensation
Annual Incentive Program (AIP) – 2024 Key Scorecard Metrics (Jul 1–Dec 31 period)
| Metric | Weight | Threshold | Target | Max | Actual | Weighted Payout |
|---|---|---|---|---|---|---|
| Adjusted EBITDAX | 25% | $643MM | $778MM | $907MM | $878MM | 44.39% |
| Free Cash Flow | 25% | $301MM | $436MM | $565MM | $595MM | 50.00% |
| E&P Capital Efficiency | 10% | $38,800 | $33,000 | $28,700 | $28,885 | 19.57% |
| E&P Controllable Costs | 10% | $850MM | $830MM | $705MM | $819MM | 10.92% |
| Safety – Combined IIR | 10% | <0.60 | <0.50 | <0.35 | 0.31 | 20.00% |
| ESG/Carbon Mgmt components (aggregate) | 20% | Various | Various | Various | Mixed (several at 200%) | ~14.35% |
| Combined Company Synergies | Included post-merger | — | — | — | — | Incorporated in AIP result |
| Total Scorecard Result (Jul–Dec) | — | — | — | — | — | 169.72% |
Notes: The Compensation Committee averaged the pre- and post-merger scorecards for the full-year AIP result (131.52%) .
2024 AIP Payout – Francisco Leon
| Bonus Eligible Salary | Target Bonus % | Target Bonus $ | Scorecard Portion | Individual Portion | Total Paid |
|---|---|---|---|---|---|
| $750,000 | 120% | $900,000 | $1,221,984 | $279,000 | $1,500,984 |
2024 Long‑Term Incentive Grants (awarded Feb 22, 2024)
| Award Type | Target Grant Value | Units Granted | Vesting | Performance Basis |
|---|---|---|---|---|
| RSU | $2,040,000 | 38,702 | 1/3 each on 2/22/2025, 2/22/2026, 2/22/2027 | Time‑vested |
| PSU | $3,060,000 | 58,054 | Cliff on 2/22/2027 | Absolute 3‑yr TSR and Relative TSR vs XOP index; 0–200% payout matrix |
PSU payout matrices use equal weighting of absolute TSR and relative TSR quartiles, with interpolation; 3-year awards range 0–200% depending on performance bands .
Outstanding Equity Awards at December 31, 2024 – Francisco Leon
| Grant | Type | Unvested Units | Market Value at 12/31/2024 ($51.89/sh) |
|---|---|---|---|
| 2/23/2023 | RSU (two tranches) | 29,614; 14,807 | $1,536,670; $768,335 |
| 2/22/2024 | RSU | 38,702 | $2,008,247 |
| 2/23/2023 | PSU (3-yr at max shown) | 133,268 | $6,915,277 |
| 2/23/2023 | PSU (2-yr earned 156%) | 69,298 | $3,595,873 |
| 2/22/2024 | PSU (target shown) | 58,054 | $3,012,422 |
Award delivery occurs post-vesting and certification; dividend equivalents accrue and are paid upon delivery .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 122,287 shares; 0.13% of class (90,646,665 shares outstanding as of Mar 10, 2025) |
| Ownership Guidelines | CEO required to hold 6x annual base salary; five years to attain minimum due to 2020 emergence |
| Anti‑Hedging/Pledging | Hedging and pledging of CRC securities prohibited for directors, officers, employees |
| Clawbacks | SEC/NYSE-compliant incentive compensation recoupment for restatements; misconduct clawback policy |
| Delivery Mechanics | Vested RSUs/PSUs delivered with share cancellation/cash paid for tax withholding to limit dilution |
Employment Terms
| Term/Provision | Summary |
|---|---|
| Agreement | 2023 CEO Employment Agreement (effective Feb 23, 2023); initial 2‑yr term; auto-renews annually unless 90‑day notice |
| Base; Bonus; LTIP | Base $750,000 (agreement baseline); AIP target 120% of base; LTIP target equal to 600% of base (60% PSUs, 40% RSUs) |
| Severance (No‑Cause/Good Reason) | Cash severance equal to 2.0x base + target bonus; pro‑rata AIP based on actual performance; COBRA differential reimbursement up to 24 months; unpaid prior-year bonus paid |
| CIC Protection | If termination within 1 year post‑qualifying CIC, multiple increases to 2.5x base + target bonus |
| Equity Treatment | RSUs: prorated vest upon no‑cause/Good Reason/disability; full vest upon death; full vest upon qualifying CIC termination. PSUs: prorated vest and remain eligible to earn based on performance upon qualifying termination; forfeiture upon voluntary quit w/o Good Reason |
| Restrictive Covenants | Release of claims required for severance; other standard covenants per agreement |
Board Governance
- Role: Director since 2023; not independent due to employment; Board has 8 of 10 independent directors; independent Chair separates CEO and Chair roles .
- Committees: Standing committees are composed entirely of independent directors; Leon is not listed as a member of standing committees .
- Meetings: Board held 11 meetings in 2024; 4 executive sessions of independent directors; all directors attended ≥75% of meetings .
- Independence determinations conducted annually under NYSE standards .
- Dual‑role implications: Separation of CEO and Chair mitigates CEO/Chair concentration risks; frequent executive sessions enhance independent oversight .
Compensation Governance, Peer Group, Say‑on‑Pay
- Independent consultant: Lyons Benenson & Company advises Compensation Committee; determined independent and conflict‑free .
- Compensation Peer Group (maintained at 18 companies in 2024): Includes Antero, Callon, Chord, CNX, Comstock, Coterra, Crescent, Denbury, Diamondback, Marathon, Matador, Murphy, PDC, Permian Resources, Range, SM Energy, Southwestern, Whitecap .
- Program design: 60% of LTI in PSUs tied to absolute and relative TSR vs XOP; 40% RSUs; annual incentives emphasize capital efficiency, controllable costs, ESG/safety .
- Say‑on‑pay: >95% approval in 2024 for 2023 compensation program; shareholder outreach incorporated into 2025 designs .
Risk Indicators & Red Flags
- Pledging/Hedging risk: Prohibited under Insider Trading Policy (mitigates alignment risks) .
- Option repricing: Prohibited by equity plan .
- Clawbacks: Robust SEC/NYSE‑compliant recoupment policies in place .
- Related party transactions: Board/Audit oversight processes; disclosed Alpine JV settlement and Aera merger-related agreements with standstills and staged lock-ups for holders (not Leon) .
Investment Implications
- Pay-for-performance alignment: High mix of variable comp with majority in TSR‑linked PSUs ties Leon’s realized pay to shareholder returns; AIP focuses on capital efficiency, FCF, safety, and carbon milestones, supporting disciplined capital allocation and ESG execution .
- Upcoming vesting/supply dynamics: Significant RSU/PSU deliveries on Feb 23, 2025 and Feb 22, 2027 could create trading windows; however, delivery mechanics cancel shares for taxes, reducing dilution; anti‑pledging and anti‑hedging temper leverage-related selling pressure .
- Retention and CIC economics: Severance of 2.0x base+bonus (2.5x on CIC termination) and prorated bonus provide stability and transaction neutrality; double‑trigger CIC terms and equity treatment are shareholder‑friendly vs single‑trigger structures .
- Execution track record: 2024 operational/financial delivery (adjusted EBITDAX >$1B, $355M FCF; elevated synergy targets post‑Aera; first‑ever EPA Class VI permit) indicates strong operational cadence under Leon, which can support incentive realization and near‑term TSR prospects .
Overall: Compensation design aligns with TSR and operational outcomes; governance structures mitigate dual‑role risks; equity vesting suggests identifiable calendar supply windows; execution on synergies and carbon management is a key lever for performance-based payouts and stock sentiment .