Clay Gaspar
DEVON ENERGY CORP/DEAbout Clay Gaspar
Clay M. Gaspar (age 53) is President and Chief Executive Officer of Devon Energy (appointed March 1, 2025) and a member of the Board of Directors. He previously served as Devon’s EVP & Chief Operating Officer from January 2021 following the WPX merger; earlier roles include President & COO and director at WPX, with technical and leadership roles at Newfield, Anadarko, and Mewbourne Oil. He holds a B.S. in Petroleum Engineering (Texas A&M) and an M.S. in Petroleum and Geosciences Engineering (UT Austin); he is a registered professional engineer in Texas . Devon’s recent operating record under the executive team includes 2024 net earnings of $2.9B ($4.56/sh), operating cash flow of $6.6B, free cash flow of $3.0B, record production of 737 Mboe/d (oil 347 Mbbl/d, +8% y/y), and $2.0B returned to shareholders; cumulative TSR to year-end 2024 was 63% over five years, though -25% over one year and -13% over three years . Say‑on‑pay support was ~94% in 2024, indicating broad shareholder alignment on the compensation program .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Devon Energy | President & CEO; Director | 2025–present | Leads multi-basin portfolio; Board-level oversight; member of Dividend Committee aligning capital returns with policy . |
| Devon Energy | EVP & Chief Operating Officer | 2021–2025 | Drove operations/technology post-WPX merger; oversight of geosciences, drilling, completions, EHS . |
| WPX Energy | President & Chief Operating Officer; Director | Pre‑2021 | Executive leadership prior to merger; board governance at predecessor company . |
| Newfield, Anadarko, Mewbourne Oil | Various technical/leadership roles | — | Reservoir/operations leadership foundation for current operating approach . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| API Upstream Committee | Chairman | Current | Industry policy/standards influence; regulatory engagement . |
| Permian Strategic Partnership | Board member | Current | Regional infrastructure and community initiatives supporting Permian development . |
| American Heart Association (SW Region) | Board member | Current | Community relations and stakeholder engagement . |
| Texas A&M Engineering Advisory Council | Member | Current | Talent pipeline and technology advisory . |
| Michigan Potash Company | Advisory board member | Current | Broader natural resources network . |
Fixed Compensation
Multi-year summary compensation (as EVP & COO through 2024):
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $638,362 | $674,362 | $703,315 |
| Stock Awards (RSAs/PSUs grant-date value) | $4,518,726 | $4,685,973 | $4,959,051 |
| Non-Equity Incentive Plan (Annual Bonus) | $1,058,800 | $687,100 | $1,117,900 |
| All Other Compensation | $279,155 | $290,219 | $226,527 |
| Total | $6,495,043 | $6,337,654 | $7,006,793 |
2025 CEO target total direct compensation (TTDC) was set at $10.3 million, comprising $1,000,000 base salary, 130% target bonus, and $8,000,000 LTI target; this reflects a reset below prior CEO TTDC and an overall leadership team TTDC reduction of ~$7.4 million .
Performance Compensation
Annual bonus structure and 2024 outcomes are formulaic, with company scorecard weightings and results below. Gaspar’s 2024 bonus target equaled 100% of base salary ($707,500 target), with actual payout determined by the 158% company score and any individual modifier; his actual earned bonus was $1,117,900 .
| 2024 Metric | Weight | Target | Outcome | Score | Weighted Score |
|---|---|---|---|---|---|
| Free Cash Flow ($mm) | 25% | $2,235 | $2,943 | 171% | 42.75% |
| CROCE (%) | 25% | 31% | 36% | 147% | 36.75% |
| Total Capital Expenditures ($mm) | 10% | $3,600 | $3,631 | 91% | 9.10% |
| Total Oil & Gas Production (Mboe/d) | 10% | 691 | 737 | 167% | 16.70% |
| Health & Safety | 15% | See goals | Achieved | 190% | 28.50% |
| Environmental Performance | 15% | See goals | Achieved | 165% | 24.75% |
| Company Performance Score | — | — | — | — | 158% (rounded) |
Long-term incentives (LTI) design:
- Mix: 60% PSUs (3-year relative TSR with payout 0–200% per grid), 40% time-based RSAs vesting 25% annually over four years .
- 2024 PSU peer set broadened to include S&P 500 and XOP ETF; payout capped at target if absolute TSR is negative .
2024 equity grants (Feb 10, 2024):
- RSAs: 38,826 shares; grant-date fair value $1,640,010; vests 25% on each anniversary of 2/10/2024 (i.e., 2/10/2025–2028) .
- PSUs (target): 58,239 units; grant-date fair value $3,319,041; performance period 1/1/2024–12/31/2026; 2024 year-end trending at 50% of target (not final) .
Historical PSU realization examples:
- 2022 PSUs (performance period ended 12/31/2024) paid at 75% of target based on 8th/12th relative TSR; value declines from grant illustrate performance-aligned outcomes .
Vesting/cash flow considerations:
- In 2024, Gaspar had 197,423 shares vest from prior awards, realizing $8,339,148 (gross) on vesting; no option exercises were reported (Devon uses RSAs/PSUs, not options) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 880,504 shares as of March 31, 2025; includes 186,289 shares in a trust for Gaspar and 194,175 in a trust where spouse is sole trustee/beneficiary; <1% of outstanding . |
| Unvested equity (12/31/2024) | RSAs unvested: 19,261 (2021 grant), 32,746 (2022), 14,554 (2023), 18,886 (2023), 38,826 (2024); PSUs unearned: 23,796 (2023 trend 63%), 29,119 (2024 trend 50%) . |
| Ownership guidelines | CEO 6x salary; other NEOs 3x salary; as of 12/31/2024, all NEOs were above required levels . |
| Hedging/pledging | Prohibited for executive officers/directors (no margin, pledges, or hedging instruments); Insider Trading Policy includes preclearance/blackouts . |
Employment Terms
| Provision | Key terms |
|---|---|
| Severance (no cause/good reason) | Lump sum 3x the sum of (a) greater of current or highest base salary in prior 2 years and (b) largest annual bonus paid/payable in prior 3 years; prorated current-year bonus; 18 months health benefits and COBRA equivalency; 36 months life insurance; outplacement up to $25k . |
| Change in control (double trigger) | Same as above if terminated within 24 months of CIC; additional service/age credits for retiree medical; equity generally not single-trigger accelerated unless job loss or awards not assumed . |
| Equity on termination | Death: accelerates (PSUs at target). Retirement/approved reasons: continue to vest subject to conditions (“Post‑Retirement Vesting Eligible” definitions apply). Terminations within one year of grant pro‑rated . |
| Payment conditions | Release of claims required; 36-month non-solicitation and non-disparagement in employment agreements . |
| Clawbacks | Dodd-Frank/NYSE-aligned policy to recoup erroneously awarded incentive compensation upon restatement . |
| Potential payouts (illustrative, as of 12/31/2024) | For Gaspar: Without cause/good reason ≈ $12.193M; CIC+job loss ≈ $13.848M; Disability ≈ $1.118M; Death ≈ $8.328M (values include equity components as described) . |
| Tax gross-ups | None on golden parachutes . |
Board Governance
- Board service: Gaspar joined Devon’s Board in March 2025; he serves on the Dividend Committee with Independent Chair John Bethancourt. The Board separates Chair and CEO roles; Gaspar is not independent by NYSE/SEC standards (10 of 11 current directors are independent) .
- Committee roles/attendance context: In 2024 the Board met 10 times; all directors attended ≥91% of Board/committee meetings. Employees serving as directors (e.g., CEO) receive no additional director compensation .
- Independence/dual-role implications: With an independent Chair and independent committees, governance mitigates CEO-director dual-role concerns; Gaspar does not serve on audit/compensation/GEPP/reserves committees reserved for independent directors .
Compensation Structure Analysis
- Mix and rigor: Heavy at‑risk pay with 60% of LTI in relative TSR PSUs and a quantitative annual bonus tied to FCF, CROCE, production, safety, and environmental metrics; payout grid caps PSUs at target if absolute TSR is negative, reinforcing downside protection .
- 2024 momentum vs 2023: Company score rose to 158% in 2024 from 101% in 2023, driving higher cash bonuses YoY (Gaspar $1.118M vs $0.687M), reflecting improved FCF/CROCE/production and safety/environmental outcomes despite capex discipline .
- Peer benchmarking and pay levels: Committee targets ~50th percentile for components/total vs E&P peers; 2024 PSU peer group broadened (added S&P 500 and XOP) to reduce concentration risk and enhance comparability .
- Shareholder alignment: 2024 say‑on‑pay approval ~94% and strong stock ownership guidelines (CEO 6x salary) indicate investor support and alignment .
Director Compensation (as applicable)
- Non‑management director retainers include $100,000 cash plus ~$230,000 equity (additional retainer/equity for non‑executive Chair). Devon employees receive no additional compensation for serving as directors; therefore Gaspar does not receive director fees .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay approvals: ~94% in 2024; ~93% in 2023 .
- Engagement: Ongoing outreach to top investors with feedback informing metric selection and transparency (e.g., prospective scorecards) .
Expertise & Qualifications
- Education: B.S. Petroleum Engineering (Texas A&M); M.S. Petroleum & Geosciences Engineering (UT Austin); Registered PE (Texas) .
- Domain: Operations leadership across Permian and multi‑basin portfolios; technology emphasis via CTO elevation and team structure .
Equity Grant Details (2024)
| Type | Grant date | Shares/Units | Grant-date fair value | Vesting |
|---|---|---|---|---|
| RSAs | 2/10/2024 | 38,826 | $1,640,010 | 25% annually on each 2/10 from 2025–2028 |
| PSUs (target) | 2/10/2024 | 58,239 | $3,319,041 | 3-year relative TSR (1/1/2024–12/31/2026); trending 50% at 12/31/2024 (not final) |
Investment Implications
- Alignment and retention: High insider ownership (880k shares) and stringent no-pledge/hedge policy reduce misalignment/forced-sale risks; strong ownership guidelines (CEO 6x salary) and multi-year vesting support retention .
- Near-term supply dynamics from vesting: Regular February RSA vesting and PSU settlements can create predictable withholding-related flow; 2024 vesting for Gaspar realized ~$8.34M, indicating potential periodic liquidity events around vest dates .
- Pay-for-performance signals: 2024 scorecard outperformance (158%) and PSU payout discipline (2022 PSUs paid at 75%) suggest balanced incentive design; CEO TTDC reset to $10.3M provides cost discipline while maintaining competitiveness .
- Change-in-control/severance risk: Standard 3x cash severance and double-trigger CIC treatment limit windfall risk; no tax gross-ups and robust clawback mitigate downside governance risk .
Note: All figures are as disclosed in Devon’s 2025 and 2024 Proxy Statements and related 8‑Ks. See citations throughout.