Patrick McNutt
Executive Vice President – Chief Administrative Officer at DAR
Executive
About Patrick McNutt
Patrick McNutt is Executive Vice President and Chief Administrative Officer at Darling Ingredients (DAR), age 65, serving in the role since October 2022 after joining the company in 2000 and leading fleet/logistics and safety programs; his background includes operations roles at Coca-Cola and Argonaut Insurance, U.S. Navy service (USS John Adams), and 15 years as an adjunct professor of management and leadership at Dallas Baptist University . Company performance during his current tenure: FY2024 net income was $278.9 million and combined adjusted EBITDA was $1.0798 billion; the DGD JV distributed $179.8 million in dividends to DAR, and the company paid down $353.4 million in debt (leverage 3.68x); the firm also started up a large SAF unit and launched the Nextida GC collagen peptide; DAR’s 2024 one-year TSR was -32.9% per proxy pay-performance disclosure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Darling Ingredients | Director, Safety Management | 2000–2010 | Led safety programs and foundational HSE initiatives |
| Darling Ingredients | Vice President, Fleet Operations | 2010–2022 | Led fleet/logistics projects, operational efficiency and cost management |
| Darling Ingredients | EVP & Chief Administrative Officer | Oct 2022–present | Oversees administrative functions, governance processes, and enterprise support systems |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Coca-Cola | Operations/Leadership roles | — (not disclosed) | Large-scale consumer operations exposure |
| Argonaut Insurance Company | Operations/Leadership roles | — (not disclosed) | Risk and insurance operations experience |
| Dallas Baptist University | Adjunct Professor (Management & Leadership) | 15 years | Leadership development and organizational behavior expertise |
| U.S. Navy | Service on USS John Adams (ballistic missile submarine) | — (not disclosed) | High-reliability operations and discipline |
Fixed Compensation
- Not disclosed for Mr. McNutt (not a Named Executive Officer in the proxy); DAR’s proxy details base salary and cash incentives for NEOs only .
Performance Compensation
Company annual incentive and long-term design applicable to executive officers:
- Annual incentive structure (2024): 65% weighting on adjusted EBITDA, 35% on strategic/operational/personal (SOP) goals; payout range 0–200% of target; global adjusted EBITDA included DAR’s share of DGD JV performance .
- 2024 actual results: global adjusted EBITDA below threshold leading to 0% payout on the EBITDA component; SOP payouts varied by executive (no individual disclosure for McNutt) .
- Long-term incentives: PSUs (60%) tied to 3-year average ROGI vs Performance Peer Group with a TSR modifier (+/– up to 30%, capped), and RSUs (40%) vesting in equal tranches over 3 years .
| Metric | Weighting | Target | Actual | Payout Range | Vesting |
|---|---|---|---|---|---|
| Global Adjusted EBITDA (FY2024) | 65% | $1,582.101 million | $1,079.8 million | 0–200% of target | N/A (annual cash) |
| SOP Goals (FY2024) | 35% | SMART goals set per executive | Achieved 92–100% for NEOs (illustrative) | 0–200% of target | N/A (annual cash) |
| PSUs (ROGI + TSR) | 60% of LTI | ROGI vs peers set at start | Earn-out 0–225% with TSR modifier | 0–225% | Cliff at 3 years |
| RSUs | 40% of LTI | N/A | Time-based | N/A | 1/3 per year over 3 years |
Equity Ownership & Alignment
- Stock ownership guidelines: CEO 5x base salary; other senior executive officers (including EVPs) 2.5x base salary; non-employee directors 5x annual cash retainer. Executives must retain at least 75% of after-tax shares from awards until in compliance; shares cannot be held in margin accounts or pledged as collateral .
- Hedging/pledging policy: Prohibits short sales, hedging via derivatives, margin accounts, and pledging; reinforces alignment and reduces selling pressure from collateral calls .
- Beneficial ownership: Proxy tables disclose directors and NEOs; Mr. McNutt’s specific share holdings are not disclosed (not a NEO) .
| Policy | Requirement |
|---|---|
| Stock ownership guideline (EVP and other senior execs) | 2.5x base salary |
| Retention | Hold ≥75% of after-tax award shares until compliant |
| Hedging | Prohibited (puts, calls, swaps, collars, exchange funds) |
| Pledging/Margin | Prohibited |
Employment Terms
- Senior Executive Termination Benefits Agreement: DAR states its EVPs are party to the standard agreement; terms disclosed in proxy for similar executives include severance protections, non-compete, non-solicit, COBRA reimbursement, and outplacement .
- Change-of-control treatment: Equity awards include double-trigger vesting (requires termination without cause or resignation for good reason within the CoC window) if awards are assumed or replaced by acquirer .
- Clawbacks: Mandatory recovery policy for erroneously awarded incentive compensation tied to restated results and supplemental clawback for misconduct .
- Tax gross-ups: Company policy indicates no change-of-control excise tax gross-ups; agreements include cutback provisions to optimize after-tax amounts (illustrated in CEO agreement) .
| Provision | Without CoC | With CoC |
|---|---|---|
| Cash severance | 24 months base salary paid over time | 2x (base salary + target bonus) lump sum |
| Bonus treatment | Prorated current-year bonus (actual) + any earned unpaid prior-year bonus (lump sum) | Greater of prorated actual or target bonus (lump sum) + any earned unpaid prior-year bonus |
| Benefits | COBRA reimbursement up to 18 months; outplacement up to $20,000 | COBRA reimbursement up to 18 months; outplacement up to $20,000 |
| Restrictive covenants | Non-compete, non-solicit, confidentiality post-termination (agreement includes 2-year periods for covered executives) | Non-compete, non-solicit, confidentiality post-termination |
| Equity | Standard double-trigger vesting if awards are assumed/replaced | Standard double-trigger vesting if awards are assumed/replaced |
Compensation Structure Analysis
- Executive pay design emphasizes variable, performance-based compensation (annual EBITDA + SOP, and multi-year PSUs with ROGI + TSR), with balanced risk controls and caps; no option repricing/discounting, no CoC excise tax gross-ups, and robust clawbacks and ownership/retention policy .
- 2024 annual incentive EBITDA component paid out at 0% company-wide given below-threshold results, while SOP goals drove partial payouts; LTI remains predominantly PSUs/RSUs (reduced reliance on options) .
Say-on-Pay & Peer Benchmarking
- Say-on-pay approval: 95.1% (2023) and 94.3% (2024) of votes cast supported executive compensation, indicating strong shareholder alignment .
- Peer groups: DAR uses separate Performance and Pay Levels peer groups with overlap (including Celanese, Clean Harbors, Corteva, FMC, Green Plains, Ingredion, IFF, Republic Services, Seaboard, Stepan, Andersons, Mosaic, plus ADM, Bunge, DSM-Firmenich, Neste, Tate & Lyle, Tyson, etc.) to set performance standards (ROGI/TSR) and benchmark pay levels around the 50th percentile .
Performance & Track Record
- FY2024 highlights: SAF unit start-up under budget and ahead of schedule; DGD sold a record 1.25B gallons of renewable diesel; DGD distributed $359.6M in dividends (DAR share $179.8M); debt reduced by $353.4M to 3.68x leverage; launched Nextida GC collagen peptide; improved safety (45% reduction in LTIR vs 2023) .
- TSR context: DAR’s one-year TSR was -32.9% for 2024 per the proxy’s indexed disclosure; management emphasizes capital deployment effectiveness (ROGI) and adjusted EBITDA as central performance metrics in pay design .
Risk Indicators & Red Flags
- Positive controls: No hedging/pledging; double-trigger CoC vesting; robust clawbacks; no CoC excise tax gross-ups; strong say-on-pay support .
- Potential pressures: Company-level 2024 EBITDA below threshold resulted in zero payout on the financial component of annual incentives—heightens dependence on SOP achievements for annual cash but maintains pay-for-performance integrity .
- Insider selling pressure: Company policy reduces risk via retention requirements and prohibition on pledging/margin accounts; no individual Form 4 activity for Mr. McNutt is disclosed in the proxy; not assessed here .
Investment Implications
- Alignment: McNutt, as an EVP, is subject to strict ownership, retention, hedging/pledging prohibitions and double-trigger equity provisions—favorable for investor alignment and reduces forced selling risk .
- Retention: Senior Executive Termination Benefits Agreement terms (cash severance, COBRA, outplacement, non-compete/non-solicit) provide meaningful retention and orderly transition economics, with no excise tax gross-ups; overall terms look standard among mid-cap industrials and reduce unplanned turnover risk .
- Pay-for-performance: Zero EBITDA component payout for 2024 indicates incentive rigor; long-term PSUs on ROGI with TSR modifier should focus executives (including CAO functions) on capital efficiency and shareholder returns through cycles .
Note: Where Mr. McNutt-specific compensation or ownership data is not disclosed (he is not a Named Executive Officer), the analysis reflects company-wide executive policies and structures and excludes undisclosed items .