Ron L. Fleming
About Ron L. Fleming
Ron L. Fleming (age 45) is Chairman, President, and Chief Executive Officer of Global Water Resources, Inc. (GWRS), serving as CEO since May 2015 and as a director since May 2016. He joined the company in 2004 and previously held roles including Interim CEO, COO, VP/GM, and Senior Project Manager; he holds a B.S. in Construction Management (Heavy Civil) with a business minor from Northern Arizona University . Governance is a CEO/Chair dual-role model with a designated Lead Independent Director to mitigate concentration of power . On “pay-versus-performance,” GWRS cumulative TSR (initial $100) trended to 84.52 in 2024 (from 91.60 in 2023), with net income of $5.8M in 2024 versus $8.0M in 2023 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Global Water Resources, Inc. | Senior Project Manager, Engineering & Construction | 2004–2006 | Delivered large-scale heavy civil infrastructure projects in Arizona . |
| Global Water Resources, Inc. | VP & GM; COO; Interim CEO | 2007–2014 | Ran operations and stepped into interim leadership roles ahead of CEO transition . |
| Global Water Resources, Inc. | President & CEO | May 2015–present | Leads strategy, operations, M&A and regulatory agenda . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Pinal Partnership | Director; Board Liaison; co‑founder, Water Resources Committee | n/a (current) | Regional water resource planning and stakeholder engagement . |
| National Association of Water Companies (NAWC) | Director | Since Jan 2023 | Industry advocacy and policy influence . |
| Maricopa Economic Development Alliance | Chairman of the Board | n/a (listed in 2024 proxy) | Economic development leadership in core service area . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of salary) | Actual Cash Bonus ($) |
|---|---|---|---|
| 2023 | 350,000 | 100% | 175,000 |
| 2024 | 367,500 | 100% | 183,750 |
| 2025 (effective 1/1/25) | 385,000 | Up to 100% | Determined by plan |
Notes:
- 2026 base scheduled to $402,500 under new employment agreement .
- Compensation peer review by FW Cook; company noted NEO target cash comp below 25th percentile of peer group, leading to 5% base increases for 2024 .
Performance Compensation
| Component/Metric | Weight | Target | Outcome | Payout |
|---|---|---|---|---|
| Compliance & Safety (incl. IT metrics) | 25% | No compliance events; specific safety objectives | No compliance/safety incidents; goals met | 25.0% |
| Further Adjusted EBITDA | 25% | $22.9M budget; scale 0–100% | $23.2M achieved; 100% of scale | 25.0% |
| Capital projects execution vs. budget | 25% | $31.0M capex budget (excl. growth/M&A) | $25.6M; 100% payout | 25.0% |
| Board Discretionary (ops, CX, regulatory, H&S, water loss) | 25% | Committee judgment | Full amount awarded | 25.0% |
| Total | 100% | — | Company achieved all components | 100% pool earned |
Equity vehicle and vesting:
- Annual incentives delivered 50% cash/50% cash‑settled RSUs in 2023–2024; RSUs vest ratably over 12 consecutive quarters from grant .
Equity Ownership & Alignment
Ownership snapshot (as of record date March 17, 2025):
| Holder | Common Shares | Awards vesting within 60 days | Total Beneficial | % Outstanding |
|---|---|---|---|---|
| Ron L. Fleming | 96,463 | 133,000 | 229,463 | <1% |
Outstanding awards (Fleming) at 12/31/2024:
| Instrument | Quantity | Terms | Status/Value |
|---|---|---|---|
| Stock options | 93,000 @ $9.40 | Granted 8/10/2017; fully vested; expire 8/10/2027 | Exercisable |
| Stock options | 30,000 @ $11.26 | Granted 8/13/2019; fully vested; expire 8/13/2029 | Exercisable |
| RSUs (FY22 program) | 4,393 unvested | Grant 3/31/2023; vest over 12 quarters | $50,520 MV at 12/31/24 |
| RSUs (FY23 program) | 8,919 unvested | Grant 3/31/2024; vest over 12 quarters | $102,569 MV at 12/31/24 |
| RSUs (FY24 program) | 16,509 | Grant 3/21/2025; vest over 12 quarters (presented as if outstanding) | $189,854 MV equivalent at $11.50 |
| Restricted stock | 10,000 unvested | 30,000 shares granted 5/8/2022; final third vests May 2025 | $115,000 MV at 12/31/24 |
Additional alignment controls:
- Hedging/short sales/holding in margin accounts prohibited; pledging generally prohibited except limited cases with Audit & Risk Committee pre‑approval .
- Director stock ownership guidelines (≥3x annual retainer); directors receive 50% cash/50% stock; RSUs historically fully vested but redeemable only upon board service end .
Vesting-driven supply overhang (trading signal):
- Quarterly RSU vesting streams from 2022, 2023, and 2024 programs run through 2026–2028, plus May 2025 restricted stock vesting and options expirations in 2027/2029, creating periodic liquidity windows for potential insider sales .
Employment Terms
| Term | Key provisions |
|---|---|
| Agreement | New Employment Agreement effective Jan 1, 2025; initial term through Jan 1, 2028 with auto 12‑mo renewals . |
| Base salary | $385,000 in 2025; $402,500 in 2026–2027 . |
| Annual incentive | Target up to 100% of base; 2025–2026: ≤50% paid in RSUs (balance cash); 2027+: 100% paid in cash . |
| LTI equity | 10,000 restricted shares on May 5, 2025 and May 5, 2026 (each vests the following May 8); from 2027, annual restricted stock equal to 50% of base salary, vesting in three equal annual installments beginning Dec 15 following grant . |
| Severance (no cause / good reason) | Lump sum equal to 6.0x current base salary; COBRA premium reimbursement; full vesting/acceleration of equity awards . |
| Change-in-control (CoC) | If terminated w/ good reason or w/o cause within 24 months post‑CoC: cash equal to 6.0x current base salary (based on salary at CoC) . All outstanding equity awards fully vest upon any CoC, regardless of continued employment (single‑trigger equity) . |
| 280G “best-net” | Cut‑back to avoid excise tax if it increases after‑tax proceeds (“best‑net”) . |
| Clawback | Incentive‑based comp subject to recoupment under company Clawback Policy and applicable law . |
| Non‑compete / non‑solicit | Prior agreements included 1‑year post‑employment non‑compete and non‑solicit undertakings . |
| Pledging/hedging | Company policy prohibits hedging/shorting/margin; pledging generally prohibited absent pre‑approval . |
Implications: The 6.0x salary cash severance and single‑trigger equity acceleration at CoC are material and can increase sale‑event costs and reduce takeover appeal; they simultaneously reduce retention risk in a potential transition .
Board Governance and Service
- Board service: Director since 2016; Chairman of the Board; not compensated separately for board role .
- Leadership structure: CEO/Chair dual role with a Lead Independent Director (Richard M. Alexander) empowered to set agendas, preside executive sessions, and act as liaison; Board reviews structure periodically .
- Committee roles: Fleming serves on no standing committees; Board committees (Audit & Risk; Compensation; Corporate Governance/Nominating/Environmental/H&S) are fully independent; 2024 committee membership and chairs disclosed .
- Attendance: Directors attended 100% of board and committee meetings in 2024 .
- Independence: Several directors designated independent; CEO/Chair not independent .
- Related‑party/Control context: Significant shareholders Jonathan L. Levine/William S. Levine and Andrew Cohn subject to a Standstill Agreement restricting control‑accretive actions; recent capital raises included related holders’ participation .
Compensation Structure Analysis
- Mix and trajectory: Fleming’s 2024 pay was $753,670 with base $367,500, cash bonus $183,750, and cash‑settled RSUs $183,750 (50/50 cash/equity bonus), reflecting 100% plan payout; in 2023, total $718,727 with similar structure .
- Performance linkage: 2024 incentive design weighted four components equally—compliance/safety, Further Adjusted EBITDA vs budget, capex execution vs budget, and a discretionary operations factor; all achieved at 100% .
- Equity shift and vesting: Ongoing shift toward RSUs and time‑vested restricted stock over options; RSUs vest quarterly over 12 quarters, encouraging retention but creating steady vesting supply .
- Peer benchmarking: FW Cook review (Aug 2023) showed NEO target annual comp below 25th percentile of peer set; base salary increases implemented for 2024 .
Pay vs Performance and Operating Performance
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| PEO “Total Comp” (SCT) ($) | 1,135,950 | 718,727 | 753,670 |
| PEO “Comp Actually Paid” ($) | 914,672 | 669,484 | 688,448 |
| Cumulative TSR (initial $100) ($) | 92.67 | 91.60 | 84.52 |
| Net Income ($ thousands) | 5,506 | 7,982 | 5,789 |
Selected revenue/EBITDA (annual):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 44,728,000 | 53,028,000 | 52,692,000 |
| EBITDA ($) | 17,708,000* | 23,723,000* | 22,084,000* |
*Values retrieved from S&P Global.
Director Compensation (Board context)
- Non‑employee directors receive retainers and committee fees, delivered 50% in stock/50% cash; 2024 annual retainer $57,000; Lead Independent $9,500; committee chair/member retainers disclosed; CEO/Chair (Fleming) receives no director compensation .
Risk Indicators & Controls
- Clawback policy in place for incentive awards under the 2020 Omnibus Plan .
- Hedging/shorting/margin prohibited; pledging generally prohibited (pre‑approval required for limited exceptions) .
- 280G “best‑net” cutback; no tax gross‑ups disclosed .
- High severance multiples and single‑trigger equity acceleration at CoC elevate change‑in‑control costs .
Compensation Peer Group (used by Compensation Committee)
American States Water; Artesian Resources; California Water Service; Chesapeake Utilities; Consolidated Water; Genie Energy; Middlesex Water; Northwest Natural; Otter Tail; Pure Cycle; RGC Resources; SJW Group; Suburban Propane Partners; Unitil; Via Renewables; The York Water Company .
Investment Implications
- Incentive alignment: A 50/50 cash/RSU annual bonus with explicit EBITDA and capital execution targets supports near‑term operating discipline; 100% 2024 payout reflects budget execution and safety performance .
- Overhang/supply: Multi‑year, quarterly RSU vesting and the 2022 restricted stock’s final tranche (May 2025) create visible windows for potential Form 4 selling pressure; options expiring 2027/2029 add later‑dated triggers .
- Governance and control: CEO/Chair structure is mitigated by a Lead Independent Director but remains a concentration risk; strong related‑holder presence is tempered by a Standstill Agreement, though it may influence strategic flexibility and float dynamics .
- Transaction risk/cost: 6x salary severance and single‑trigger equity acceleration at CoC imply elevated M&A friction costs, potentially reducing external interest or requiring higher bid premiums; conversely, they reduce leadership transition risk in change events .
- Performance trend: TSR drifted down in 2024 and net income declined versus 2023, suggesting outcome scrutiny for future payouts; however, pay “actually paid” also moved modestly, reflecting mark‑to‑market equity effects .