Toby Z. Rice
EQTAbout Toby Z. Rice
Toby Z. Rice (age 43) is President and Chief Executive Officer of EQT and has served as a director since July 2019; he is not an independent director under NYSE standards . He co-founded Rice Energy, serving as CEO (2007–2013) and later President/COO (2013–2017) until its acquisition by EQT in 2017 . Under Rice’s leadership, EQT completed the transformative acquisition of Equitrans Midstream in July 2024, advanced integration (90% of tasks) toward ~$275 million annualized synergies, generated $2.8 billion of operating cash flow and $695 million of free cash flow in 2024, and retired $4.3 billion of debt, exiting 2024 with $9.3 billion total debt . EQT highlights multi-year alignment between CEO compensation actually paid (CAP) and TSR/free cash flow, with 2024 PEO CAP of $26.4 million alongside five-year cumulative TSR value of $447.25 (from a $100 base in 2019) and 2024 free cash flow of $695 million .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Rice Energy Inc. | Co‑founder & Chief Executive Officer | 2007–2013 | Led company through growth phase prior to EQT acquisition in 2017 . |
| Rice Energy Inc. | President & Chief Operating Officer | 2013–2017 | Operational leadership through acquisition by EQT in 2017 . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Rice Investment Group (RIG) | Partner | 2018–present | Multi‑strategy O&G investment firm; subject to EQT’s RIG conflict governance policy while serving as CEO . |
Fixed Compensation
Multi‑year compensation (Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 1 | 1 | 1 |
| Stock Awards ($) | 10,820,736 | 9,550,925 | 9,783,420 |
| Option Awards ($) | — | — | — |
| Non‑Equity Incentive Plan Comp ($) | 780,000 | 1,050,000 | 1,460,000 |
| All Other Comp ($) | — | — | 11,500 |
| Total ($) | 11,600,737 | 10,600,926 | 11,254,921 |
Notes:
- CEO base salary is set at $1; nearly 100% of compensation is performance‑based/at‑risk .
- 2024 CEO pay ratio: 74:1 (CEO total $11,254,921 vs median employee $152,502) .
Performance Compensation
2024 Annual (Short‑Term) Incentive (STIP)
| Component | Weighting | Target | Actual | Payout |
|---|---|---|---|---|
| Free cash flow per share | 30% | Not disclosed | Not disclosed | Incorporated in plan multiple . |
| Total capex per Mcfe | 15% | Not disclosed | Not disclosed | Incorporated in plan multiple . |
| Adjusted gross G&A per Mcfe | 15% | Not disclosed | Not disclosed | Incorporated in plan multiple . |
| Cash operating margin | 10% | Not disclosed | Not disclosed | Incorporated in plan multiple . |
| Finding & development costs | 10% | Not disclosed | Not disclosed | Incorporated in plan multiple . |
| EHS intensity improvement | 20% | Not disclosed | Not disclosed | Incorporated in plan multiple . |
| Total plan funding multiple | — | — | — | 1.46x |
| CEO target ($) | — | 1,000,000 | — | — |
| CEO payout ($) | — | — | — | 1,460,000 |
Additional design elements: performance metrics and targets set by the Compensation Committee; downward discretion retained .
2024 Long‑Term Incentive (LTIP)
Award mix: 60% PSUs (3‑year performance), 40% time‑based RSUs (pro rata vest over 3 years) .
| Award | Grant date | Units (Target) | Units (Max) | Grant date fair value ($) | Vesting/Performance |
|---|---|---|---|---|---|
| PSUs | 2/16/2024 | 155,110 | 310,220 | 6,216,809 | 3‑yr PSU (2024–2026) tied to matrix of absolute and relative TSR; cap 2.0x . |
| RSUs | 2/16/2024 | 103,410 | — | 3,566,611 | Pro rata vest on each anniversary over 3 years . |
PSU performance matrix (absolute TSR vs relative TSR percentile) sets payout factor from 0x to 2.0x over the 2024–2026 period .
Stock Options
| Grant | Number exercisable | Exercise price ($) | Expiration |
|---|---|---|---|
| Legacy option award | 1,000,000 | 10.00 | 2/27/2027 |
2024 Stock Vesting/Realization
- Shares acquired on vesting (2024): 849,833; value realized $29,401,170; shares withheld for taxes: 365,459 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (as of Feb 3, 2025) | 1,803,023 EQT shares; percentage of class: less than 1% . |
| Exercisable options | 1,000,000 shares within 60 days . |
| Shares pledged | None; Security Ownership table notes no pledges; policy prohibits pledging . |
| Ownership guidelines | CEO must hold 8x base salary; value of CEO qualifying holdings: $88,068,359 (exceeds guideline and 8x median peer CEO base salary) . |
| Hedging/pledging policy | Hedging and pledging of EQT securities prohibited for executives/directors . |
Outstanding equity at year‑end 2024 (select line items):
- Unvested RSUs: 57,323 ($2,643,164); 73,720 ($3,399,229); 105,118 ($4,846,991); 554,584 ($25,571,864) [values at $46.11 per share] .
- Unearned PSUs (at max for disclosure): 331,748 ($15,296,900) and 315,346 ($14,540,604); actual payout depends on performance through period-end .
Employment Terms
Executive Severance Plan (CEO participation)
Key terms for termination by company without cause or by executive for good reason (non‑COC):
- Cash severance: 2x (base salary + average bonus over prior 3 years), paid over 24 months for CEO .
- Unpaid prior-year bonus paid at actual performance; pro‑rated current year bonus at actual performance .
- COBRA lump‑sum: 18 × 100% family rate .
- Equity: pro‑rated vesting of time-based awards; continued pro‑rated PSU eligibility (settled on actual performance) .
- Restrictive covenants: non‑compete, non‑solicit, and non‑poach each for 24 months (CEO) .
Change in control (COC) double‑trigger within two years:
- Cash severance: 3x (base salary + 3‑year average bonus), lump sum .
- Bonuses: unpaid prior‑year plus pro‑rated current year; 2024 STIP treated pursuant to plan on COC .
- Equity: if assumed, acceleration upon qualifying termination at actual performance; if not assumed, acceleration at actual performance as of COC .
- No excise tax gross‑ups; “best net” cutback applies .
Death/Disability:
- Death: 100% vest of outstanding RSUs and PSUs (PSUs vest without applying payout factor) .
- Disability: pro‑rated PSU vesting contingent on actual performance through the period .
Illustrative potential payments (as of 12/31/2024):
| Scenario | Payments under Severance Plan ($) | STIP ($) | LTIP ($) | Total ($) |
|---|---|---|---|---|
| Termination by Company Without Cause | 3,919,749 | — | 38,390,747 | 42,310,496 |
| Termination by Executive for Good Reason | 3,919,749 | — | 38,390,747 | 42,310,496 |
| Termination upon Change of Control | 3,682,999 | 1,460,000 | 51,380,001 | 56,523,000 |
| Death | — | 1,460,000 | 51,380,001 | 52,840,001 |
| Disability | — | 1,460,000 | 33,094,264 | 34,554,264 |
Board Governance
- Board service: Director since July 2019; current age 43 .
- Independence: Not independent as an executive officer; Daniel J. Rice IV also not independent (brother) .
- Committees: No committee memberships listed for the CEO .
- Board leadership: Separate, independent Chair; independent directors meet in executive session; Thomas F. Karam to assume independent Chair role after the 2025 annual meeting .
- Meetings/attendance: In 2024, Board held 5 regular and 7 special meetings; each director attended ≥75% of meetings; independent directors met 5 times in executive session .
- Say‑on‑pay support: 98% approval at 2024 annual meeting .
Dual‑role implications:
- CEO also serves as a director; independence concerns are mitigated by an independent Chair and fully independent Audit, Compensation, and Corporate Governance committees .
Related Party Transactions and Conflict Management
- RIG Governance Policy: Enhanced processes to identify and review transactions with RIG portfolio companies; Toby Rice barred from RIG investment committee and boards while serving as an EQT executive; prohibits competitive holdings; escalates all potential RIG transactions to Corporate Governance Committee .
- Approved vendor engagements:
- Cold Bore Technology (Smart Pad): 2024 payments ~$1,338,000 (annually reviewed/approved since 2020) .
- ComboCurve (asset management software): 2024 payments ~$255,000; two‑year renewal authorized in 2024 .
- No other related person transactions requiring disclosure for 2024 beyond those described and transactions tied to Equitrans/Quantum contexts as detailed in the proxy .
Performance & Track Record
Pay vs Performance (PEO) and Company Outcomes
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| PEO CAP ($) | 21,609,213 | 37,208,460 | 46,062,802 | 23,366,571 | 26,423,276 |
| Company TSR (Value of $100) | 117.25 | 201.20 | 317.08 | 368.48 | 447.25 |
| Peer Group TSR (Value of $100) | 66.66 | 146.75 | 223.41 | 203.87 | 210.77 |
| Net Income (Loss) ($000s) | (958,799) | (1,142,747) | 1,770,965 | 1,735,232 | 230,577 |
| Free Cash Flow ($ millions) | 320 | 925 | 1,925 | 858 | 695 |
Highlights and 2024 achievements:
- Completed Equitrans acquisition; 90% of integration tasks done, de‑risking ~$275 million annualized synergies .
- Operating cash flow ~$2.8 billion; free cash flow ~$695 million; dividends paid $327 million .
- Retired $4.3 billion of debt; year‑end 2024 total debt $9.3 billion .
- Achieved net zero Scope 1 and 2 GHG emissions ahead of 2025 goal (legacy operations), with NetZero Now+ initiative .
Compensation Structure Analysis
- Alignment and at‑risk mix: CEO salary fixed at $1 since appointment; nearly 100% of pay is variable, with heavy weighting to PSUs tied to absolute/relative TSR and annual cash metrics focused on per‑share FCF, capital efficiency, costs, and EHS .
- LTIP risk controls: PSU payout capped at 2.0x; multi‑year overlapping vesting; clawback policy aligned with NYSE/SEC 2023 standards .
- Ownership alignment: CEO’s qualifying holdings valued at ~$88.1 million for guideline purposes; hedging/pledging prohibited; director/NEO ownership guidelines enforced .
- Discretion and governance: Committee retains downward discretion on payouts; say‑on‑pay support of 98% suggests broad investor alignment in 2024 .
- Perquisites: No personal aircraft use, club dues, car allowances, or subsidized parking .
Board Service, Committees, and Governance
| Attribute | Detail |
|---|---|
| Board tenure | Director since July 2019 . |
| Independence | Not independent as an executive officer; familial relationship with director Daniel J. Rice IV noted . |
| Committee roles | None listed for the CEO . |
| Board structure | Independent Chair; separation of Chair/CEO; fully independent key committees (Audit, Compensation, Corporate Governance) . |
| Attendance | ≥75% attendance for all directors in 2024; independent directors met 5 times in executive session . |
Dual‑role implications: While CEO+director dual role reduces independence, EQT mitigates with an independent Chair, independent committees, and robust conflict‑management policies (including specific RIG conflict governance) .
Equity Overhang, Vesting Schedules, and Potential Selling Pressure
- Upcoming vesting: 2024 RSUs vest in equal annual installments over 3 years from 2/16/2024; 2024 PSUs measured over 2024–2026 with settlement in 2027 based on actual TSR outcomes .
- 2027 option expiry: 1,000,000 options at $10 strike expire 2/27/2027; option exercises/RSU settlements typically trigger tax withholding (EQT withheld 365,459 CEO shares for taxes upon 2024 vesting) which may result in share disposition activity around vest events .
Employment Terms Summary
| Topic | Key terms |
|---|---|
| Severance (non‑COC) | 2x salary+3‑yr avg bonus; prorated bonus; 18×COBRA; pro‑rata time‑based vesting and continued PSU eligibility; CEO restrictive covenants 24 months . |
| Severance (COC double‑trigger) | 3x salary+3‑yr avg bonus; bonuses per plan; equity accelerates or pays at actual performance; no tax gross‑ups; “best net” cutback . |
| Death/Disability | RSUs and PSUs vest on death (without performance factor for PSUs); disability pro‑rata PSUs based on actual performance . |
| Clawback | NYSE/SEC‑aligned mandatory recovery for restatements (executive incentive-based comp) . |
Investment Implications
- Pay-for-performance alignment: $1 salary, heavy PSU weighting tied to absolute/relative TSR, and per‑share FCF focus create tight linkage between payouts and shareholder outcomes; 98% say‑on‑pay support underscores investor alignment .
- Retention and overhang: Significant unvested RSUs/PSUs and 2027 option expiry support retention but can concentrate vest‑related share flows; EQT’s prohibition on hedging/pledging reduces misalignment risks .
- Change‑in‑control economics: CEO change‑in‑control protection (3x multiple; double‑trigger equity) is standard‑market and lacks gross‑ups, lowering governance risk; RIG conflict policy provides structured oversight of potential related‑party exposures .
- Execution track record: 2024 free cash flow generation ($695M), debt reduction ($4.3B), and Equitrans integration progress (90% tasks; ~$275M synergy target) point to operational discipline under Rice; multi‑year CAP/TSR alignment further supports pay‑for‑performance .