Richard Adkerson
FREEPORT-MCMORANAbout Richard Adkerson
Richard C. Adkerson (age 78) is Chairman of the Board and an executive officer of Freeport‑McMoRan; he has been a director since 2006, served as CEO from December 2003 to June 2024, and has served as Chairman since February 2021 . He holds a B.S. in Accounting (highest honors) and an MBA from Mississippi State University and completed the Advanced Management Program at Harvard Business School . Under his leadership, FCX reported 2024 revenues and adjusted EBITDA above 2023 levels, with strong operating cash flows and balance sheet, while 2024 share price slightly exceeded the peer average . Incentive outcomes aligned with performance: 2024 AIP paid at 116.5% of target and 2022–2024 PSUs paid at 75% of target (ROI at target; TSR ranked 7th vs peers) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Freeport‑McMoRan | Chief Executive Officer | Dec 2003 – Jun 2024 | Led multiyear transformation; oversaw Grasberg underground transition; capital allocation framework and balanced returns . |
| Freeport‑McMoRan | President | 1997–2007; 2008–2021 | Senior operating leadership across cycles . |
| Freeport‑McMoRan | Chief Financial Officer | 2000–2003 | Rebuilt financial flexibility post‑downturn . |
| Freeport‑McMoRan | Vice Chairman of the Board | 2013–2021 | Board leadership preceding Chair role . |
| McMoRan Exploration Co. | Co‑Chairman; President & CEO | 1998–2013; 1998–2004 | Upstream portfolio leadership; integrated at 2013 acquisition . |
| Arthur Andersen | Partner/Managing Director | 1978–1989 | Led global oil & gas industry services; public company audit practice . |
| U.S. SEC | Professional Accounting Fellow | 1976–1978 | Policy and regulatory experience . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| International Council on Mining & Metals (ICMM) | Member; Chair | 2008–2011; 2020–2022 | Industry leadership on sustainability frameworks . |
| International Copper Association | Executive Board (prior) | — | Sector advocacy . |
| The Business Council; Business Roundtable; Council on Foreign Relations | Member (various) | — | Policy and economic forums . |
Fixed Compensation
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary | 1,800,000 | 1,800,000 | 1,465,000 (CEO→Chair transition mid‑2024) |
| Perquisites & other personal benefits | 880,271 | 1,024,494 | 1,076,698 (incl. aircraft use $75,225; financial/tax advice; security; plan contrib.) |
Notes: Effective June 11, 2024, Adkerson’s annual base salary decreased to $1.2 million; AIP target reduced to 100% of salary from transition date (no change to 2024 LTIP already granted) .
Performance Compensation
Annual Incentive (AIP) – 2024 Design and Outcome
| Category | Metric | Weight | Targeting approach | 2024 payout contribution |
|---|---|---|---|---|
| Financial | Consolidated adjusted EBITDA | 30% | Targets set vs. 2024 plan; rigorous within market context | 42.2% of target weighting |
| Operational | Copper sales; Gold sales; Consolidated unit net cash costs; Manyar smelter concentrate feed | 45% | Production, cost discipline, start‑up progress | 20.0% + 5.0% + 10.8% + 0.0% of target weighting |
| ESG | Safety (TRIR); Sustainability scorecard | 25% | Pre‑set quantitative/qualitative goals (Copper Mark; climate; tailings; workforce; human rights) | 26.3% + 12.3% of target weighting |
| Result | Formulaic AIP Payout | — | — | 116.5% of target |
Additional AIP details: Threshold 50%, maximum 175% of target; targets for NEOs set as % of base salary (Adkerson: 175% pre‑transition, 100% post‑transition) .
Long‑Term Incentives (LTIP)
- 2024 structure: PSUs (payout 0–225%) based on 3‑yr average ROI with TSR modifier (±25% vs 8‑company mining peers); RSUs vest ratably over 3 years . Peer list: Anglo American, Antofagasta, BHP, Glencore, Rio Tinto, Southern Copper, Teck, Vale .
- 2022–2024 PSU payout certified at 75% (ROI at target; TSR rank 7th → −25% modifier) .
| 2024 Grants (Grant date) | Threshold | Target | Maximum | Grant‑date fair value ($) |
|---|---|---|---|---|
| PSUs (Feb 6, 2024) | 54,250 | 217,000 | 488,250 | 9,409,120 |
| RSUs (Feb 6, 2024) | — | 78,000 | — | 3,133,260 |
RSU Vesting Schedule Outstanding at 12/31/24
| Tranche | Shares | Vest date | Ref. |
|---|---|---|---|
| RSUs | 73,500 | 02/15/2025 | |
| RSUs | 49,833 | 02/15/2026 | |
| RSUs | 26,000 | 02/15/2027 |
PSU Tranches Outstanding at 12/31/24 (Target amounts)
| Grant date | Threshold | Target | Maximum | Performance period end |
|---|---|---|---|---|
| 02/07/2022 | 50,625 | 202,500 | 455,625 | 12/31/2024 (paid at 75%) |
| 02/07/2023 | 49,625 | 198,500 | 446,625 | 12/31/2025 |
| 02/06/2024 | 54,250 | 217,000 | 488,250 | 12/31/2026 |
Equity Ownership & Alignment
Ownership Levels and Guidelines
- Stock ownership guideline: 6x base salary for Chairman and CEO; all NEOs exceed guidelines; executives must retain 50% of net after‑tax shares until compliant .
- Adkerson ownership: 182x base salary as of 12/31/2024 (3‑yr trailing average stock price methodology) .
- Hedging prohibited; pledging restricted and none of the executives currently pledge FCX securities .
Beneficial Ownership (as of April 10, 2023)
| Holder | Direct/indirect shares not subject to options/RSUs | Options exercisable (≤60 days) | RSUs vesting (≤60 days) | Total beneficial | % class |
|---|---|---|---|---|---|
| Richard C. Adkerson | 4,453,979 | 1,798,000 | 1,000,000 | 7,251,979 | <1% |
Notes: Includes IRA, trusts, and foundation holdings (foundation disclaimed); unvested RSUs/PSUs excluded from “owned” under guidelines .
Options (exercisable) and Expiry (12/31/24)
| Grant date | Exercisable options | Exercise price | Expiry |
|---|---|---|---|
| 02/06/2018 | 255,000 | $18.74 | 02/06/2028 |
| 02/05/2019 | 131,667 | $11.87 | 02/05/2029 |
| 02/04/2020 | 421,666 | $12.04 | 02/04/2030 |
| 02/02/2021 | 112,000 | $28.14 | 02/02/2031 |
As of 12/31/2024, no NEOs had unvested stock options (only exercisable balances remained) .
Recent Insider Transactions (selling pressure)
- 169,229 shares sold at $50.56 on April 30, 2024 (Form 4) .
- 54,771 shares sold at $50.78 on May 6, 2024 (Form 4) .
Employment Terms
Severance and Change‑in‑Control (CIC)
- CIC Plan (double‑trigger): for Adkerson, lump sum 3x (base salary + 3‑yr average bonus), prorated bonus based on 3‑yr average, and 18 months of health benefit continuation; equity vests only upon qualifying termination within one year after CIC; no excise tax gross‑ups (best‑net cutback applies) .
- Illustrative potential payments (assumes termination 12/31/2024): lump sum $16,683,600; RSUs accelerated $5,686,601; PSUs at target $15,822,240; benefits $39,798; total $38,747,239 (based on $38.08 stock price) .
- Retirement treatment: 2013 letter provides “retirement treatment” under equity awards upon termination other than for cause or death, consistent with award terms .
Retirement/Pension/Deferred Compensation and Clawbacks
- SERP established for Adkerson in 2004; change in SERP value included in SCT “Change in Pension Value” .
- Nonqualified deferred comp program (SECAP) available; per 2024, excess earnings on NQDC credited (Adkerson $1.87 million) .
- Clawback: recovery policy adopted per NYSE/Dodd‑Frank in Oct 2023; broader clawbacks for misconduct causing restatements; both time‑ and performance‑based equity subject to clawback .
Board Governance (including dual‑role implications)
- Role: Chairman since Feb 2021; executive officer; non‑independent Chairman .
- CEO/Chair separation: CEO transitioned to Kathleen Quirk on June 11, 2024; board determined separation beneficial while retaining Adkerson as Chair for continuity .
- Lead Independent Director: Dustan McCoy, with robust authorities (approves agendas and materials, presides over executive sessions, stockholder engagement) .
- Committees: all independent; Adkerson serves on none .
- Director comp: Adkerson receives no board compensation as Chair; executive compensation only .
- Attendance: 2024 saw six board and 16 committee meetings; all directors attended 100% except two at 92% .
Director Compensation (for reference)
- Non‑management directors: cash retainer increased to $135,000 and equity retainer to $190,000 effective 2025 (RSUs vest in one year); leadership and committee chair retainers as disclosed .
- Not applicable to Adkerson’s pay (no board fees) .
Performance & Track Record
- 2024 operating and financial performance: operating cash flows $7.2B (> capex ex‑PTFI downstream), net debt ~$1.1B ex‑PTFI downstream; investment grade ratings; share price slightly exceeded peer group . Grasberg underground achieved records; Americas leach innovation drove ~50% YoY increase in low‑cost copper production; new Indonesian smelter/refinery constructed (fire in Oct 2024; recovery progressing) .
- Pay‑versus‑performance shows alignment with TSR, ROI and net income; 2024 CAP for Adkerson $16.45M vs SCT total $23.74M; most important measures: ROI, relative TSR, consolidated adjusted EBITDA, copper sales .
FCX Business Results Context (pay‑for‑performance)
| Metric ($ USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues | 22,780,000,000 [Values retrieved from S&P Global]* | 22,855,000,000 [Values retrieved from S&P Global]* | 25,455,000,000 [Values retrieved from S&P Global]* |
| EBITDA | 9,274,000,000* | 8,523,000,000* | 9,536,000,000* |
*Values retrieved from S&P Global.
Compensation Committee & Peer Framework
- Committee chair: David Abney; members Hugh Grant, Dustan McCoy; all independent .
- Independent consultant: FW Cook (no conflicts); compensation market references include S&P 250 and an Industrial Reference Group; PSU performance peers are global miners (not used for pay levels) .
Say‑on‑Pay & Stockholder Feedback
- Say‑on‑pay approval ~95% at 2024 annual meeting; ongoing semiannual outreach engaged holders representing ~45% of outstanding shares in 2024, with largely positive feedback .
Risk Indicators & Red Flags (what to watch)
- Positive governance features: double‑trigger CIC; no excise gross‑ups; robust clawbacks; no hedging; limited pledging and none pledged .
- Watch insider selling cadence: April–May 2024 open‑market sales by Adkerson (aggregate ~224K shares) ahead of mid‑year CEO transition; monitor future Form 4s for additional patterns .
- Related party transactions: none material disclosed for Adkerson; one Item 404 transaction involving another executive’s family member (not Adkerson) .
Investment Implications
- Alignment: High equity exposure (182x salary) and stringent ownership/hedging/pledging policies align Adkerson with long‑term shareholders; PSU design (ROI + TSR) ties outcomes to capital discipline and relative returns .
- Overhang/vesting supply: Meaningful RSU/PSU tranches outstanding through 2026 and exercisable legacy options could create periodic supply on vesting/exercise; 2022–2024 PSU payout at 75% tempers realized equity versus target .
- Governance comfort: Separation of CEO/Chair with a strong Lead Independent Director and fully independent committees mitigates dual‑role concerns; no board fees to the Chair further reduces perceived conflicts .
- Retention/transition risk: 2013 “retirement treatment” on equity plus SERP and defined CIC terms provide predictability and reduce abrupt departure risk; nonetheless, continued monitoring of insider sales remains prudent .