Stephen Higgins
Executive Vice President and Chief Administrative Officer at FCX
Executive
About Stephen Higgins
Stephen T. Higgins is Executive Vice President and Chief Administrative Officer of FCX. He has served as CAO since January 2019 and was promoted to EVP in July 2024; he is 67 years old as of February 14, 2025 . Higgins previously served as Senior Vice President from August 2018 to June 2024, Vice President – Sales & Marketing from March 2007 to August 2018, and President of Freeport‑McMoRan Sales Company, Inc. from April 2006 to August 2019 . Pay-for-performance signals in 2024 included an above-target Annual Incentive Program (AIP) payout of 116.5% of target and long-term PSUs for the 2022–2024 cycle paying out at 75% of target, reflecting target ROI but bottom-three relative TSR versus peers .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Freeport‑McMoRan Inc. | Executive Vice President & Chief Administrative Officer | Jul 2024 – present | Executive leadership over administrative functions . |
| Freeport‑McMoRan Inc. | Senior Vice President & Chief Administrative Officer | Jan 2019 – Jun 2024 | Administrative leadership; elevated from SVP in Aug 2018 . |
| Freeport‑McMoRan Inc. | Senior Vice President | Aug 2018 – Dec 2018 | Senior leadership role (prior to CAO designation) . |
| Freeport‑McMoRan Inc. | Vice President – Sales & Marketing | Mar 2007 – Aug 2018 | Commercial leadership in sales and marketing . |
| Freeport‑McMoRan Sales Company, Inc. | President | Apr 2006 – Aug 2019 | Led sales company operations . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $520,833 | $537,500 | $556,667 |
| AIP Target (% of salary) | 150% (NEOs other than CEO/president) | 150% (NEOs other than CEO/president) | 150% (NEOs; CEO/Chair updated) |
| Actual AIP Paid ($) | $773,325 | $810,000 | $978,600 |
| Stock Awards (Grant Date Fair Value, $) | $1,434,700 | $1,749,405 | $1,792,705 |
| All Other Compensation ($) | $100,290 | $101,278 | $115,607 |
Notes:
- 2024 base salary set at $560,000 (committee-approved) with a 3.7% increase vs 2023; SCT reflects partial-year cadence ($556,667) .
- “All Other Compensation” includes perquisites (e.g., spousal commercial airfare on business travel for Higgins), company contributions to defined contribution plans, and insurance; see proxy footnotes for components .
Performance Compensation
Annual Incentive Program (AIP) – Design and 2024 Outcome
| Category | Metric | Weight | 2024 Weighted Payout as % of Target |
|---|---|---|---|
| Financial | Consolidated Adjusted EBITDA | 30% | 42.2% |
| Operational | Copper Sales (bn lbs) | 20.0% | |
| Gold Sales (mm oz) | 5.0% | ||
| Consolidated Unit Net Cash Costs ($/lb) | 10.8% | ||
| Manyar Smelter Concentrate Feed (000s DMTs) | 0.0% | ||
| ESG | Safety – TRIR | 25% | 26.3% |
| Sustainability Scorecard | 12.3% | ||
| Total | Formulaic result | 116.5% |
- Target AIP opportunity for Higgins: 150% of base salary; payout range 50%–175% of target based on performance .
- 2023 AIP result was reduced by committee discretion to 100% of target (from 112.1% formulaic) .
Long-Term Incentives (LTIP)
- Structure: Mix of PSUs and RSUs. PSUs pay 0%–225% of target based on three-year average ROI and relative TSR vs peer group; RSUs vest ratably over three years .
- 2022–2024 PSU cycle certified at 75% of target (below target due to relative TSR positioning) .
PSU Awards Outstanding (as of 12/31/24)
| Grant Date | Threshold | Target | Maximum | Performance Period End |
|---|---|---|---|---|
| 2/7/2022 | 4,375 | 17,500 | 39,375 | 12/31/2024 (certified 75%) |
| 2/7/2023 | 4,625 | 18,500 | 41,625 | 12/31/2025 |
| 2/6/2024 | 5,125 | 20,500 | 46,125 | 12/31/2026 |
2024 Grants (Higgins)
| Award Type | Grant Date | Number of Units | Grant Date Fair Value ($) |
|---|---|---|---|
| PSUs (target) | 02/06/2024 | 20,500 | $888,880 |
| RSUs | 02/06/2024 | 22,500 | $903,825 |
RSU Vesting Schedule (as of 12/31/24)
| Vest Date | Shares |
|---|---|
| 02/15/2025 | 20,333 |
| 02/15/2026 | 14,167 |
| 02/15/2027 | 7,500 |
Option Activity and Overhang
- As of 12/31/2024, no options outstanding for Higgins (only RSUs/PSUs listed) .
- 2024 exercises: 166,667 options exercised; value realized $6,322,066 .
- Prior option grant strikes/outstanding (12/31/2023): e.g., $11.87–$28.14 strikes with portions exercisable/unexercisable .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (4/14/2025) | 122,314 shares; less than 1% of 1,436,200,253 shares outstanding . |
| Unvested RSUs (not in beneficial count within 60 days) | 47,667 shares . |
| Unvested PSUs (target, not in beneficial count) | 64,000 shares . |
| Outstanding Unvested at 12/31/2024 – RSUs | 42,000 units; market value $1,599,360 at $38.08/share . |
| Outstanding Unearned at 12/31/2024 – PSUs | 52,125 units (mix of 2022 at 75% + 2023/2024 at target); market value $1,984,920 . |
| Hedging/Pledging | Hedging prohibited; pledging limited by policy . |
| Ownership Guidelines | Executives subject to stock ownership guidelines; specific multiple disclosed for CEO/Chair (6x base salary). No specific multiple disclosed for Higgins in cited sections . |
Employment Terms
| Scenario (as of 12/31/2024 assumptions) | Lump Sum Cash ($) | RSUs (Accel.) ($) | PSUs (Accel.) ($) | Dividends on Accel. ($) | Health & Welfare ($) | Total ($) |
|---|---|---|---|---|---|---|
| Retirement | — | $774,281 | — | $23,600 | — | $797,881 |
| Disability | — | $774,281 | — | $23,600 | — | $797,881 |
| Death | — | $1,599,360 | $1,485,120 | $75,100 (RSU+PSU) | — | $3,159,580 |
| Qualifying Termination after Change in Control (double trigger) | $3,553,325 | $1,599,360 | $1,485,120 | $75,100 (RSU+PSU) | $65,165 | $6,778,070 |
Additional terms and policies:
- Double-trigger requirement for CIC benefits (no single-trigger acceleration) .
- No excise tax gross‑ups; “best net” cut or pay approach under 4999 excise tax .
- Clawback policy compliant with NYSE/Dodd‑Frank; equity awards subject to recovery under certain circumstances .
- Supplemental Retirement Plan (SRP): Higgins participates; SRP was frozen 12/31/2008; benefit formula based on final average compensation and years of service as of freeze date; 100% vested .
Performance Compensation – Metric Framework
| Program | Key Metrics | Notes |
|---|---|---|
| AIP (annual cash) | Consolidated Adjusted EBITDA; Copper & Gold Sales; Consolidated Unit Net Cash Costs; operational milestones (e.g., Manyar smelter feed); ESG (TRIR, Sustainability Scorecard) | Weightings applied across financial/operational/ESG; 2024 payout 116.5% overall . |
| PSUs (3-year) | Three‑year average ROI; Relative TSR vs peer group | Payout 0%–225% of target; 2022–2024 certified at 75% . |
| RSUs | Time‑based | 3-year ratable vesting (service-based retention) . |
Pension, Deferred Compensation, and Perquisites
- Nonqualified deferred compensation (SECAP) available; Higgins had $42,408 of above‑market NQDC earnings in 2024; SRP actuarial change $(33,395) reflected in “Change in Pension Value & NQDC Earnings” .
- Perquisites include select items such as spouse commercial airfare on business travel, security, company car usage, executive services; 2024 total “All Other Compensation” $115,607 .
Track Record & Execution Indicators
- 2024 outcomes: AIP paid at 116.5% (above target) reflecting strong financial/operational performance; 2022–2024 PSU payout at 75% due to bottom-three TSR relative to peers despite target ROI, indicating lagging shareholder return vs industry .
- 2023 outcomes: Committee exercised negative discretion to reduce AIP payouts to 100% of target from 112.1% formulaic result due to safety incidents and production challenges—aligned with governance and risk oversight .
Compensation Structure Analysis
- Mix and risk: Significant at‑risk pay via AIP and PSUs; RSUs provide retention. For Higgins, 2024 target LTIP grant value $1.82M split 50% PSUs / 50% RSUs (committee-approved) .
- Metric rigor: AIP includes commodity‑sensitive financial/operational goals and ESG (TRIR), while LTIP ties to multi‑year ROI and relative TSR, capping payouts and reinforcing alignment .
- No gross‑ups; double‑trigger CIC; clawbacks in place—shareholder‑friendly features .
Equity Vesting & Potential Selling Pressure
- RSU vesting dates cluster mid‑February each year (20,333 on 2/15/2025; 14,167 on 2/15/2026; 7,500 on 2/15/2027), which can create predictable liquidity windows and potential selling pressure around vesting/tax events .
- Options largely cleared in 2024 (166,667 exercised; no options shown as outstanding at 12/31/2024), reducing future option‑driven sales pressure .
Equity Ownership & Alignment Indicators
- Direct ownership of 122,314 shares plus unvested 47,667 RSUs and 64,000 target PSUs (not counted in beneficial ownership), with policy prohibiting hedging and limiting pledging—supports alignment and mitigates risk of misalignment via derivatives or excessive collateralization .
Employment Terms – Severance & Change‑of‑Control Economics
- Illustrative values (12/31/2024): CIC double‑trigger total $6.78M, including $3.55M lump sum, full RSU/PSU acceleration at target and benefits; retirement/death/disability values disclosed and exclude balances under NQDC and qualified plans (reported separately) .
- No excise tax gross‑ups; best‑net approach; equity acceleration under CIC requires termination without cause/for good reason within one year following CIC .
Investment Implications
- Alignment: High proportion of variable and multi‑year performance‑based equity (PSUs) plus explicit clawback and anti‑hedging policies indicate strong pay‑for‑performance and governance alignment .
- Retention: Meaningful unvested RSUs/PSUs ($3.58M in market value at 12/31/2024) and scheduled vesting through 2027 reduce near‑term flight risk; predictable vest dates may create tactical trading windows around mid‑February .
- Performance signals: 2024 above‑target AIP suggests sound operational execution; below‑target (75%) PSU payout for 2022–2024 highlights relative TSR underperformance risk—watch for changes in PSU calibration and forward cycles as indicators of confidence .
- Downside protection and CIC: Double‑trigger CIC design with no gross‑ups mitigates shareholder-unfriendly outcomes; disclosed CIC values quantify potential dilution/overhang under stress scenarios .