Michael Preston
Executive Vice President, Chief Strategy Officer and General Counsel at 
California Resources
California ResourcesExecutive
About Michael Preston
Michael L. Preston is Executive Vice President, Chief Strategy Officer and General Counsel at California Resources Corporation (CRC). He has served in executive legal roles at CRC since 2014 and previously was Vice President and General Counsel at Occidental Oil & Gas from 2001–2014; he is age 60 as of March 3, 2025 . CRC’s 2024 performance included net income of $376 million, adjusted EBITDAX surpassing $1 billion, and free cash flow of $595 million; cumulative shareholder returns increased materially, with a $100 initial investment valued at $372.19 at year-end 2024; Aera merger synergies are targeted at $235 million by end-2025 while $170 million was implemented in 2024 with $65 million planned for 2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| California Resources Corporation | EVP, Chief Strategy Officer & General Counsel | 2023–present | Led Aera merger negotiations and closing, debt refinancing/RBL amendment, CCS permitting/legal support |
| California Resources Corporation | EVP, Chief Administrative Officer & General Counsel | 2019–2023 | Corporate legal leadership during post-emergence strategy and executive transitions |
| California Resources Corporation | EVP, General Counsel & Corporate Secretary | 2014–2019 | Built legal infrastructure post spin-out from Occidental |
| Occidental Oil & Gas | Vice President & General Counsel | 2001–2014 | Senior legal leadership across upstream operations |
External Roles
No external directorships or committee roles disclosed for Preston in CRC’s proxy or 10-K .
Fixed Compensation
| Item | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $500,000 | $569,038 | $622,115 |
| Target Bonus (% of salary) | 100% | 100% | 100% |
| Base Salary Effective Date | — | $610,000 (July 2023) | $625,000 (March 2024) |
Multi-year compensation summary:
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $500,000 | $569,038 | $622,115 |
| Bonus (includes retention and individual AIP portion) | $150,000 | $298,128 | $648,000 |
| Stock Awards (RSU/PSU grant-date fair value) | $0 | $3,819,735 | $2,727,604 |
| Non-Equity Incentive Compensation (AIP scorecard) | $483,200 | $789,742 | $657,600 |
| Change in Pension Value & Nonqualified Deferred Compensation Earnings | $30,044 | $27,431 | $23,567 |
| All Other Compensation | $244,557 | $253,195 | $138,016 |
| Total | $1,407,801 | $5,757,269 | $4,816,902 |
Notes:
- 2024 bonus line includes retention bonus final tranches; retention agreements for certain NEOs vested 20% at 6 months, 20% at 12 months, 60% at 18 months (February/August 2024 payments) .
- No option awards; CRC prohibits option repricing and has not granted options in recent years .
Performance Compensation
Annual Incentive Program (AIP) 2024:
- Scorecard metrics weighted toward financials (Adjusted EBITDAX, Free Cash Flow), E&P cost management, and ESG; post-Aera period added a synergies metric. Overall scorecard result approved at 131.52% (average of 139.33% pre-merger and 123.71% post-merger scorecards) .
- Preston AIP payout detail: | Component | Amount ($) | |---|---| | Scorecard Portion (80%) | $789,742 | | Individual Performance Portion (20%) | $186,128 | | Total AIP Paid | $975,871 |
AIP scorecard framework (selected metrics and weighting):
- Financial (50%): Adjusted EBITDAX; Free Cash Flow .
- E&P Cost Management (20%): Capital efficiency; Controllable costs .
- ESG (30%): Carbon management permits/MOUs; environmental targets (pneumatic devices, freshwater reduction, idle wells abandonment, spill prevention); safety (Combined IIR) .
- H2 2024 Combined Company Synergies metric introduced post-Aera .
Long-term incentives (2024 grants):
| Type | Target Value ($) | Units Granted | Vesting / Performance |
|---|---|---|---|
| RSU | $1,000,000 | 18,972 | Time-based; one-third vests on 2/22/2025, 2/22/2026, 2/22/2027 |
| PSU | $1,500,000 | 28,458 | Performance-based on cumulative 3-year absolute TSR and relative TSR vs XOP; 0–200% payout; vests 2/22/2027 (performance period 1/1/2024–12/31/2026) |
Outstanding equity awards at 12/31/2024 (Preston):
| Award | Grant Date | Units (#) | Market Value ($) |
|---|---|---|---|
| RSU (3-year, tranche remaining) | 2/23/2023 | 14,741 | $764,910 |
| RSU (2-year) | 2/23/2023 | 7,371 | $382,481 |
| RSU (3-year) | 2/22/2024 | 18,972 | $984,457 |
| PSU (3-year; max shown; vests 2/23/2026) | 2/23/2023 | 66,338 | $3,442,279 |
| PSU (2-year; performance met 156%; vests 2/23/2025) | 2/23/2023 | 34,495 | $1,789,946 |
| PSU (3-year; target shown; vests 2/22/2027) | 2/22/2024 | 28,458 | $1,476,686 |
Stock vested in 2024 (delivery values include tax withholding):
| Name | Shares Vested (#) | Value Realized ($) |
|---|---|---|
| Michael L. Preston | 125,573 | $6,507,484 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 26,409 shares; 0.03% of class as of March 10, 2025 (90,646,665 shares outstanding) |
| Stock Ownership Guidelines | 3x base salary for NEOs (CEO 6x); 5 years to comply; reset post-2020 emergence |
| Anti-Hedging/Pledging | Hedging and pledging prohibited for directors, officers, employees |
| Options | None outstanding; CRC does not grant or reprice options |
| Vested vs Unvested | Significant RSUs/PSUs outstanding through 2027; 2023 two-year PSUs achieved 156% performance (vesting Feb 2025) |
| Nonqualified Plans | SSP balance $1,519,423; SRP II balance $1,267,751; above-market earnings $23,567 in 2024 |
Upcoming vesting and potential insider selling pressure:
- RSU tranches on 2/22/2025, 2/22/2026, 2/22/2027 (18,972 units total) .
- PSU vesting on 2/23/2025 (2023 two-year PSU at 156% performance achieved), 2/23/2026 (2023 three-year PSU), 2/22/2027 (2024 three-year PSU); delivery post Compensation Committee certification; tax withholding reduces dilution at delivery .
Employment Terms
- Agreement: 2021 Employment Agreement (auto-renewing one-year terms unless 90 days’ written notice) .
- Severance (termination without cause or good reason): 18 months of base salary plus 1x target annual bonus; pro-rata current year bonus; medical benefits reimbursement up to 24 months; double-trigger equity acceleration per award terms .
- Change-in-control: Double-trigger required for vesting; Preston receives 1.5x target bonus upon CIC-related qualifying termination; equity accelerates per plan award terms; AIP pro-rata .
- Clawbacks: SEC/NYSE-compliant incentive compensation recoupment policy for restatements; separate misconduct clawback policy .
- Insider Trading Policy: Prohibits hedging, pledging, derivatives/monetizations; margin accounts not permitted .
- 2023–2024 Retention Bonus: Cash retention agreement (1x base salary) with 20%/20%/60% tranches at 6/12/18 months; final tranches paid in 2024 .
Potential payments as of 12/31/2024 (illustrative):
| Scenario | Severance ($) | Bonus ($) | Equity ($) | Medical ($) |
|---|---|---|---|---|
| Without Cause / Good Reason | $937,500 | $625,000 | $4,344,741 | $39,923 |
| Death/Disability | $0 | $857,600 | $4,344,741 | $0 |
| CIC + Qualifying Termination | $1,250,000 | $625,000 (1.5x target for some NEOs; Preston shows $625k in table) | $5,484,754 | $53,231 |
Performance & Track Record
- 2024 outcomes tied to Preston’s leadership include: negotiated and closed the Aera merger; integrated Aera legal matters; supported CCS development/permitting (CTV I Class VI permits); executed debt refinancing and RBL amendment; advocacy and regulatory engagement with state agencies; progressed Huntington Beach redevelopment and completed sale of Fort Apache .
- Company-level results: net cash from operations $610 million, free cash flow $355 million (letter), adjusted EBITDAX >$1 billion; TRIR 0.39; increased dividend; returned >85% of FCF to shareholders; MiQ “Grade A” methane certification .
Compensation Peer Group (Benchmarking)
CRC’s 2024 compensation peer group included 18 companies such as Antero Resources, Diamondback Energy, Marathon Oil, Matador Resources, Murphy Oil, Range Resources, Southwestern Energy, SM Energy, Crescent, Callon, Coterra, Comstock, CNX, Permian Resources, Denbury, Whitecap, PDC Energy, and Chord Energy .
Say-on-Pay & Shareholder Feedback
- 2024 advisory vote on 2023 NEO compensation received >95% approval; shareholder outreach favored majority performance-based long-term incentives and rigorous quantitative metrics; feedback influenced 2025 program structure (60% PSUs, 40% RSUs; ESG weighting at 25% in AIP) .
Equity Ownership & Alignment Details
| Metric | Value |
|---|---|
| Beneficial shares held | 26,409 |
| Ownership % | 0.03% |
| Guideline multiple | 3x salary for NEOs |
| Hedging/Pledging | Prohibited |
| Options | None; no repricing/backdating allowed |
Investment Implications
- Alignment: High proportion of at-risk pay (AIP + 60% PSUs/40% RSUs); PSUs tied to absolute and relative TSR vs XOP link Preston’s realizable comp to shareholder returns; anti-hedging/pledging and clawbacks reduce governance risk .
- Retention risk: 18-month salary plus target bonus severance (2nd tier vs CEO); double-trigger equity vesting; recent retention bonus fully paid, lowering near-term retention incentives; overall risk moderate given severance protections and ongoing vesting through 2027 .
- Trading signals: Significant upcoming PSU vesting in Feb 2025 (2023 two-year PSU at 156%); additional vesting in 2026–2027; potential delivery-related sales or withholding; beneficial ownership relatively modest (0.03%), so forced liquidity events likely modest in scale .
- Performance levers: AIP emphasizes cash generation, cost control, ESG safety/permits, and post-merger synergies; continued progress on CCS permits and Aera synergy capture (target $235M by end-2025; $170M implemented + $65M planned) supports AIP outcomes and PSU realizations .
- Governance: >95% say-on-pay support; robust peer benchmarking; prohibition on hedging/pledging and adoption of SEC/NYSE-compliant clawbacks indicate strong governance of pay-for-performance .