David E. Constable
FLUORAbout David E. Constable
David E. Constable (age 63) has served as Fluor’s CEO since 2021, Chairman since 2022, and will transition to Executive Chairman effective May 1, 2025; he previously held multiple senior roles at Fluor since 1982 and was CEO/President of Sasol Limited (2011–2016) . Under his leadership, Fluor grew revenue to $16.3B in 2024 from $15.5B in 2023 and improved operating cash flow to $828M from $212M, while shifting backlog to 79% reimbursable and repurchasing $125M of stock in 4Q24 . Pay-versus-performance disclosures show strong equity value creation with three-year cumulative TSR of 164% vs 152% for the Dow Jones Heavy Construction group and 97% for the S&P 500; a $100 investment at 12/31/2019 rose to $264 by 12/31/2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Fluor | Executive Chairman (effective) | 2025– | Continuity of governance post-CEO transition; liaison between Board and management |
| Fluor | Chairman & CEO | 2022–Apr 2025 | Led portfolio diversification, increased reimbursable backlog and cash generation |
| Fluor | CEO (pre-Chair) | 2021–2022 | Reset performance metrics and incentive alignment; instituted EBT/TSR LTIs |
| Fluor | EVP, Office of the CEO | 2020 | Transitional leadership role |
| Fluor | Group President, Project Operations | 2009–2011 | Global project execution leadership |
| Fluor | Group President, Power | 2005–2009 | Growth and execution in Power segment |
| Sasol Limited | CEO (2011–2016), President (2014–2016) | 2011–2016 | Client-side leadership perspective in energy/chemicals |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ABB Ltd. | Director | Current | Industrial technology exposure; governance experience |
| Rio Tinto plc/Rio Tinto Limited | Director (former) | Prior | Global natural resources insights |
| Anadarko Petroleum | Director (former) | Prior | Energy sector governance & strategy |
Fixed Compensation
| Metric | 2023 | 2024 | 2025 (role change) |
|---|---|---|---|
| Base Salary ($) | $1,350,000 | $1,350,000 | $525,000 (Executive Chairman, pro-rated from May 1, 2025) |
| Target Bonus (% of Salary) | 150% | 150% | 100% (Executive Chairman, pro-rated) |
| Actual Annual Incentive ($) | $3,381,800 (167% of target) | $2,835,000 (overall rating 1.40x) | N/A |
Notes on 2024 AIP metrics and weights: EBITDA 35%, Cash Flow from Segments 35%, Safety 10%, Strategic 20%; performance ratings: EBITDA 0.79x, Cash Flow from Segments 2.00x; average NEO payout 138% of target .
Performance Compensation
- LTI Mix: Performance Awards 50%, RSUs 35%, Stock Options 15% (unchanged since 2020) .
- 2024 CEO LTI target grant values: Performance Awards $5.0M, RSUs $3.5M, Options $1.5M; total $10.0M .
- 2024 Performance Award design: 80% Earnings Before Taxes (EBT) via three one-year goals; 20% three-year Relative TSR vs S&P 500; cliff vest March 2027 .
- 2025 change: increase Relative TSR weighting to 30% (EBT 70%) for new grants .
| Incentive Type | Metric | Weight | 2024 Target | 2024 Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Annual Incentive | EBITDA | 35% | $631.0M target (min $441.7M, max $820.3M) | $549.7M; 0.79x rating | Cash, annual |
| Annual Incentive | Cash Flow from Segments | 35% | $351.2M target (min $245.8M, max $456.6M) | $713.3M; 2.00x rating | Cash, annual |
| Annual Incentive | Safety | 10% | Qualitative | Companywide assessment (same for NEOs) | Cash, annual |
| Annual Incentive | Strategic | 20% | Qualitative | CEO achievements include $15.1B awards (85% reimbursable), backlog 79% reimbursable, cash balance up 19.8% | Cash, annual |
| Performance Award (2024 grant) | EBT | 80% | $697.2M target (min $488.0M, max $906.4M) | $653.3M; 0.90x rating | Cliff vest Mar-2027 |
| Performance Award (2024 grant) | Relative TSR | 20% | 50th percentile = 1.0x | 3-yr cumulative vs S&P 500; payout 0.5–2.0x | Cliff vest Mar-2027 |
| RSUs | Stock price | — | — | — | 1/3 per year on Mar-6 for 3 years |
| Stock Options | Stock price | — | — | — | 1/3 per year on Mar-6 for 3 years; 10-year term |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 1,425,281 shares (less than 1% of outstanding) |
| Unvested RSUs (12/31/2024) | 500,995 shares; market value $24,709,074 at $49.32 |
| Unvested Performance Awards (adjusted for performance through 12/31/2024) | 186,375 units; market value $9,192,029 at $49.32 |
| Options – exercisable/unexercisable (selected grants) | 221,088 exercisable / 55,272 unexercisable @ $16.55 (12/23/2020); 85,784 / 42,892 @ $21.90 (2/25/2022); 29,811 / 59,622 @ $35.76 (2/24/2023); 0 / 88,431 @ $37.02 (2/23/2024) |
| 2024 Option Grant | 88,431 options @ $37.02, 10-year life, vests 1/3 annually on Mar-6 |
| Stock Ownership Guidelines | CEO 6x base salary; other NEOs 2x; all currently employed NEOs satisfied as of Mar 1, 2025 |
| Hedging/Pledging | Prohibited for directors and employees; no short sales, hedging, or pledging allowed |
| 2024 Stock/Option Vesting | CEO acquired 481,382 shares on vesting; no option exercises in 2024 |
Implications: Significant unvested equity (RSUs and PAs) with scheduled vest dates (annual RSU/option tranches each Mar-6; PA cliff in Mar-2027) can create periodic supply, though policy and ownership guidelines moderate near-term selling; hedging/pledging prohibitions reduce alignment risk .
Employment Terms
- Severance (without cause): Two weeks of base pay per year of service; min 8 weeks, max 52 weeks; committee may approve pro-rated annual incentive; retirement-eligible NEOs (including Mr. Constable) may continue vesting (subject to non-compete and 1-year holding period since award) .
- Change-in-Control (double-trigger): CEO receives 3x (base salary + target annual incentive); non-CEO NEOs receive 2x; immediate vesting of time-based equity and performance awards vesting at actual-to-date plus target for remaining periods; no excise tax gross-up (cutback applies) .
- Illustrative CEO payouts (12/31/2024): Not-for-cause cash severance $1,350,000; CIC cash multiple $10,125,000; equity acceleration values detailed in proxy (e.g., options $4.88M; RSUs $11.85M; PAs $27.75M under CIC) .
- Clawback: SEC/NYSE-compliant policy adopted 2023; recovers excess incentive-based compensation following a restatement (three-year lookback) .
- Perquisites (2024): Perquisite allowance $71,100; business-related spousal travel $102,003; related tax gross-up $66,180; company retirement contributions $90,603 .
- Deferred Compensation (2024): CEO contributions $57,117; company contributions $50,252; year-end EDCP balance $225,290 .
Board Governance
- Board Service and Leadership: Director since 2019 (prior service 2010–2011); Executive Committee Chair; will serve as Executive Chairman effective May 1, 2025, while CEO role transitions to James R. Breuer .
- Independence and Structure: In 2024 he was Chairman & CEO with a Lead Independent Director; in 2025 roles split—Constable as Executive Chairman, Breuer as CEO—and Lead Independent Director designated (James T. Hackett) through Jan 2028; all standing committees except Executive are fully independent .
- Attendance: In 2024, the Board held six meetings; each current director attended all Board and relevant committee meetings; four executive sessions of independent directors were held .
- Director Compensation (context): Non-management directors receive $130,000 cash retainer plus $170,000 RSUs; director ownership guideline = 5x cash retainer; executive directors (e.g., CEO/Executive Chairman) do not receive director fees .
Dual-role implications: The 2024 combination of Chair/CEO was mitigated by a strong Lead Independent Director and fully independent committees; the 2025 separation into Executive Chairman and CEO further reduces concentration of authority and improves independence optics while preserving continuity .
Compensation Structure Analysis
- Pay Mix: Approximately 90% of CEO target TDC is variable (AIP + LTI), reinforcing pay-for-performance .
- Metric Rigor: 2024 annual EBITDA/Cash Flow targets increased vs prior year; performance range narrowed (70%–130%) and minimum payout threshold raised (50%); PA EBT goals similarly structured; 2024 PA EBT result modestly below target (0.90x) .
- LTIs and TSR: 2022 PAs paid at 119% of target on combined EPS/ROIC and top-decile relative TSR, indicating alignment with multi-year value creation .
- Shareholder Feedback: Say-on-pay support 92% in 2024 and 89% in 2023; 2025 LTI shifts greater weight to Relative TSR (30%) responding to competitive alignment and investor preferences .
- Policies: No excise tax gross-ups; no option repricing; no dividends on unvested awards; hedging/pledging prohibited; robust 6x ownership guideline (met) .
Say-on-Pay & Peer Group
- Say-on-Pay Approval: 92% (2024); 89% (2023) .
- Compensation Peer Group: Includes engineering/construction and industrial peers (e.g., AECOM, Jacobs, KBR, Quanta, Dycom, EMCOR, Parker-Hannifin, PACCAR, Baker Hughes, Cummins, Builders FirstSource, Icahn Enterprises) .
Equity Grant and Vesting Schedule (Key Dates)
- RSUs and Options: Annual grants (e.g., 2/23/2024) vest 1/3 each March 6 in the three years post-grant; options carry 10-year terms (e.g., 2/23/2024 grant @ $37.02) .
- Performance Awards: 2024 grants cover 2024–2026 with cliff vest in March 2027, subject to EBT (3 annual tranches) and 3-year Relative TSR .
Risk Indicators & Red Flags
- Red flags mitigated: Dual-trigger CIC, no excise tax gross-ups, no repricing, hedging/pledging ban, strong stock ownership guidelines, and high say-on-pay support .
- Areas to monitor: Executive Chair + CEO transition execution; sizable unvested PSUs/RSUs create periodic supply around vesting dates (Mar-6 annually; PA cliff 2027) but policy limits and guideline compliance reduce misalignment risk .
Investment Implications
- Pay-for-performance alignment is strong: 90% variable pay, rigorous EBITDA/Cash Flow/EBT targets, and increased TSR weighting in 2025 enhance linkage to shareholder outcomes .
- Governance trending positively: 2025 separation of Chair/CEO roles plus named Lead Independent Director improves checks-and-balances while preserving strategic continuity under Constable as Executive Chairman .
- Execution track record supports confidence: 2024 revenue growth, step-up in operating cash flow, higher reimbursable mix, and top-quartile multi-year TSR underpin incentive payouts and suggest ongoing momentum into the CEO transition .
- Supply watchpoints: Annual Mar-6 vesting cycles and PA cliff in 2027 may create episodic selling pressure; however, hedging/pledging prohibitions and ownership guidelines temper adverse alignment concerns .
Appendix: Select Quantitative Disclosures
| Metric | 2023 | 2024 |
|---|---|---|
| Revenue ($B) | $15.5 | $16.3 |
| Source |
| AIP Component | Target | Actual | Rating |
|---|---|---|---|
| EBITDA ($M) | 631.0 | 549.7 | 0.79x |
| Cash Flow from Segments ($M) | 351.2 | 713.3 | 2.00x |
| Source |
| CEO Annual Bonus | 2023 | 2024 |
|---|---|---|
| Amount ($) | $3,381,800 | $2,835,000 |
| Source |
| CEO LTI Target Mix (Grant Date Value) | 2023 | 2024 |
|---|---|---|
| Performance Awards ($) | $4,925,000 | $5,000,000 |
| RSUs ($) | $3,447,500 | $3,500,000 |
| Options ($) | $1,477,500 | $1,500,000 |
| Total ($) | $9,850,000 | $10,000,000 |
| Source |
| Ownership & Awards (12/31/2024) | Quantity | Value |
|---|---|---|
| Beneficially owned shares | 1,425,281 | — |
| Unvested RSUs | 500,995 | $24,709,074 at $49.32 |
| Unvested PAs (adjusted) | 186,375 | $9,192,029 at $49.32 |
| Source |
| Policy Highlights | Detail |
|---|---|
| Ownership Guidelines | CEO 6x base salary; met as of 3/1/2025 |
| Hedging/Pledging | Prohibited |
| CIC | CEO 3x base+target; double-trigger; no gross-up |
| Clawback | SEC/NYSE compliant (restatement-based) |
| Board/Committee | 2024 Highlights |
|---|---|
| Meetings/Attendance | Board met 6 times; all directors attended all Board/committee meetings; 4 independent executive sessions |
| Leadership | 2024 Chair/CEO combined with Lead Independent Director; 2025 separation—Constable to Executive Chairman; Hackett as Lead Independent Director through Jan 2028 |
All values and statements are sourced from company filings as cited.