Thomas B. Fargo
HAWAIIAN ELECTRIC INDUSTRIESAbout Thomas B. Fargo
Admiral Thomas B. Fargo (USN, Ret.) is HEI’s independent Chair of the Board, serving since May 5, 2020; he has been a director since 2005 and is age 76. He is President of Fargo Associates, LLC, holds a B.S. from the United States Naval Academy, and completed executive and business training at Harvard and Stanford . The Board affirms his independence; he has never been employed by HEI or subsidiaries .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| U.S. Pacific Command | Commander | Retired (past role) | Led security for ~52% of world’s surface; extensive strategic planning and risk oversight |
| Fargo Associates, LLC | President/Owner | Since 2005 | Defense/homeland/national security consultancy |
| Hawaiian Electric Company (HEI subsidiary) | Director | 2005–2016 | Utility governance experience |
| American Savings Bank (HEI subsidiary) | Director | 2022–2023 | Bank oversight experience |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| The Greenbrier Companies | Director; Lead Independent Director (2021–2022); Chairman (since 2022) | Since 2015 | Rail manufacturing & licensing |
| Matson Inc. | Director | 2012–2024 | Transportation & logistics |
| Huntington Ingalls Industries | Chairman | 2011–2020 | Military shipbuilder |
| Northrop Grumman Corporation | Director | 2008–2011 | Defense contractor |
| Hawaiian Holdings, Inc. | Director | 2005–2008 | Airline holding company |
| Alexander & Baldwin | Director | 2011–2012 | Real estate/transport |
| USAA | Director; Chairman | 2006–2021; 2019–2021 | Financial services |
| National Bureau of Asian Research | Advisory Board Member | Since 2005 | Policy research |
| AtHoc; GTA Telegram; SKAI Ventures | Director/Advisor | Until 2016/2017; 2005–2009 | Tech/communications/venture advisory |
Board Governance
- Current HEI roles: Independent Chair of the Board; Chair, Executive Committee; Chair, Nominating & Corporate Governance Committee; Member, Compensation & Human Capital Management Committee .
- Chair responsibilities include leading Board/stockholder meetings and executive sessions of independent directors, advising on board composition/succession, and facilitating communications across boards and management .
- Independence: Board determined all nonemployee directors, including Fargo, are independent under NYSE and HEI categorical standards .
- Attendance/engagement: In 2024, HEI held 7 regular and 24 special Board meetings; all directors attended ≥75% of Board and committee meetings; all attended the 2024 annual meeting; executive sessions were chaired by Fargo .
- Committee activity (2024): Audit & Risk (10 meetings), Compensation & HCM (5), Executive (6), Nominating & Corporate Governance (3) .
- Age policy exception: Directors tender resignation at term end after reaching age 75; Committee recommended re-nominating Fargo in 2024 and 2025 to ensure continuity during an extraordinarily challenging period .
Fixed Compensation
| Component (2024) | Amount ($) | Notes |
|---|---|---|
| HEI Board Retainer | 85,000 | Standard director cash retainer |
| HEI Chair Retainer | 125,000 | Nonexecutive Chair additional retainer |
| Committee Retainers (aggregate) | 33,393 | NCGC Chair $25,000; CC member $10,000; figures reflect actual 2024 accruals |
| Extra Meeting Fees | 34,500 | $1,500 per meeting above thresholds (Board >8; ARC >10; CC >6; NCGC >6) |
| Subtotal Cash Fees (excl. annual award) | 277,893 | Sum of above |
| Annual Cash Award (in lieu of stock) | 120,000 | Granted June 30, 2024 to manage dilution; immediate vest-equivalent |
| Total 2024 Director Compensation | 397,893 | Fees + cash award |
- Program structure: Nonemployee director pay typically mixes cash and stock; in 2024 equity was temporarily replaced with a $120,000 cash award to mitigate dilution given stock price decline and share reserve constraints .
- Maximum annual director compensation cap: $600,000 .
Performance Compensation
| Award Type | Grant Date | Amount/Units | Vesting/Terms |
|---|---|---|---|
| Annual Director Stock Award (customary) | Last business day in June (typical) | N/A in 2024 | Customarily vests immediately; replaced by cash in 2024 |
| Annual Cash Award (in lieu of stock) | June 30, 2024 | 120,000 | Cash; replaces equity to limit dilution |
- Deferred compensation: Directors may elect to defer compensation under HEI plans; no nonemployee director deferred in 2024 .
Other Directorships & Interlocks
| Company | Sector | Role | Governance/Interlock Considerations |
|---|---|---|---|
| The Greenbrier Companies | Industrials | Chairman | No evident direct HE utility customer/supplier linkage; governance expertise |
| Matson (past) | Industrials | Director | Hawai‘i logistics exposure; no disclosed HEI related-party transactions |
| Huntington Ingalls (past), Northrop (past) | Defense | Chair/Director | Defense relationships; U.S. military is a major HE utility customer—provides customer insight, not a disclosed conflict |
| USAA (past) | Financials | Director; Chair | No disclosed related-party transactions at HEI |
- Compensation Committee interlocks/insider participation: Committee (incl. Fargo) comprised solely of independent directors; no related-person transactions requiring disclosure in 2024; no cross-comp committee interlocks with other issuers .
Expertise & Qualifications
- Skills: Corporate governance, risk management, finance/accounting, strategic planning, leadership; deep U.S. military customer knowledge—critical given military’s role in Hawai‘i’s economy and as a major utility customer .
- Education: B.S., U.S. Naval Academy; executive/business training at Harvard and Stanford .
Equity Ownership
| Item | Detail |
|---|---|
| Beneficial ownership (HEI common) | 39,715 shares; <1% of class |
| Ownership guidelines | Directors must hold HEI stock equal to 5× board retainer; until compliance date, retain all shares received under annual stock retainer; effective Jan 1, 2025, multiple applies to Board retainer only; no current director has reached compliance date |
| Hedging/pledging | Prohibited for directors, officers, employees and certain family members; margin accounts/pledges/hedging instruments not permitted |
Governance Assessment
-
Positives:
- Independent Chair leading executive sessions; active committee leadership (NCGC and Executive Committee) enhances board effectiveness .
- Strong engagement: 31 total Board meetings in 2024; all directors met ≥75% attendance; annual meeting attendance 100% .
- Clear ownership alignment policies and strict prohibition on hedging/pledging; defined director stock ownership guidelines .
- No related-person transactions involving Compensation Committee members; committee uses independent consultant and best-practice features across compensation governance .
-
Watch items / potential red flags:
- Age policy exception: Re-nomination beyond age 75—Board justified for stability amid crisis; monitor succession planning and refresh dynamics .
- Shift from equity to cash for directors in 2024 reduces direct stock alignment in the short term (though rationale was dilution control); assess when equity grants resume .
- Performance headwinds: 2024 net loss and multi-year negative TSR may challenge investor confidence; underscores importance of board oversight of risk mitigation and strategic execution .
-
Shareholder sentiment:
- 2024 say‑on‑pay (NEOs) approval ~91%, indicating broad support for compensation governance despite operational challenges .
Board Governance Details (reference)
- Committee membership cheat‑sheet: Fargo—CC member; NCGC Chair; EC Chair; Independent Chair of Board .
- Extra meeting fee thresholds (for context): Board >8 meetings; ARC >10; CC >6; NCGC >6; $1,500 per excess meeting; no extra fees for Executive Committee .
Overall: Fargo brings deep governance, risk and strategic leadership, with customer insight into federal/military stakeholders. Independence is affirmed, attendance strong, and committee leadership robust. Monitor alignment as equity grants resume and ensure continued succession planning given age policy exception .