Jay Chernosky
About Jay M. Chernosky
Independent director (Age 65) serving on HPK’s Board since August 2020; elected as a Class A director in 2024 with a term through the 2027 Annual Meeting. Background spans ~35+ years in energy-focused corporate and investment banking and upstream sector advisory; education includes BBA (UT Austin, 1981), MBA (University of Houston, 1983), and Southwestern Graduate School of Banking (SMU, 1993). Core credentials: audit committee-qualified independent director, financially literate, upstream energy expertise, and board-level governance experience.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Wells Fargo Securities | Managing Director, Energy & Power CIB | 2009–2019 | Originated/executed capital markets and M&A in upstream O&G; built strategic/financial solutions for clients |
| Wachovia Securities (formerly First Union) | Co-founder of energy practice; senior banker | 1993–2009 | Established energy banking practice; upstream focus |
| First City, Texas – Houston (Energy Division) | Various roles | 10 years | Energy lending/finance roles across capacities |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Colt Midstream LLC (private) | Lead Director, Board of Directors | Since 2019 | Gas gathering/processing in Fort Worth Basin; private company |
| Christian Community Service Center | Chairman, Endowment Board; Director | Not disclosed | Non-profit governance |
| Houston Producers’ Forum | Board member; active member | Not disclosed | Industry group engagement |
| OneGoal Houston | Regional Board of Directors | Not disclosed | Non-profit education access |
Board Governance
- Committee memberships: Audit Committee member; Nominating & Governance Committee member; not a chair. Audit Committee held 4 meetings in 2024; Nominating & Governance held 2; Board held 6; every director attended ≥75% and all attended the 2024 annual meeting.
- Independence: Board determined Chernosky is independent under Nasdaq rules; also independent for Audit Committee under Exchange Act Section 10A.
- Board structure/risk: HPK is a “controlled company”; Chairman/CEO controls ~68% voting power; Compensation and Nominating & Governance Committees include non-independent management directors (Hightower, Hollis), reducing minority shareholder influence. Lead Director is Larry Oldham.
Fixed Compensation
| Year | Fees Earned (Cash) | Equity Awards (Grant-date fair value) | All Other | Total |
|---|---|---|---|---|
| 2024 | — | $150,006 (Restricted Stock) | — | $150,006 |
- Director compensation program: no annual cash retainer; annual restricted stock award valued at ~$150,000 (granted June 4, 2024 at $14.06/share), vesting at the next annual meeting (expected June 3, 2025); directors may elect up to $25,000 of award value in cash; Audit Chair receives an additional ~$7,500 award/cash (not applicable to Chernosky).
Performance Compensation
- Non-employee director awards are time-based restricted stock; no performance metrics (TSR/EBITDA/ESG) disclosed; directors hold no outstanding options other than time-based restricted stock granted in 2024.
| Metric | 2024 Award Detail |
|---|---|
| Grant date | June 4, 2024 |
| Shares granted (unvested as of 12/31/2024) | 10,669 |
| Grant-date fair value | $150,006 |
| Vesting | Full vest at next annual meeting (expected June 3, 2025), subject to service |
| Option awards | None outstanding for non-employee directors |
Other Directorships & Interlocks
- Public company boards: none disclosed in HPK’s proxy for Chernosky; external board role is Colt Midstream LLC (private).
- Interlocks/conflicts: No related-party transactions disclosed involving Chernosky; HPK maintains an RPT Policy requiring Board review/approval for transactions >$120,000 with directors/affiliates.
Expertise & Qualifications
- Education: BBA (UT Austin, 1981); MBA (University of Houston, 1983); Southwestern Graduate School of Banking (SMU, 1993).
- Technical/industry expertise: upstream oil & gas capital markets and M&A advisory; audit committee financial literacy.
- Governance qualifications: independent director; Audit Committee independence under Section 10A; participates in executive sessions among independent directors.
Equity Ownership
| Metric | Value |
|---|---|
| Total beneficial ownership (shares) | 47,220 |
| Ownership (% of shares outstanding) | Less than 1% (base: 126,067,436 shares) |
| Unvested restricted shares included | 10,669 (vest at 2025 annual meeting or change in control) |
| Stock ownership guidelines | Directors must hold ≥5x maximum annual cash payment option; all directors met guidelines as of 12/31/2024 |
| Hedging/pledging policy | Hedging prohibited; pledging prohibition removed in 2022; margin purchases require pre-approval |
Governance Assessment
- Alignment: Director pay is entirely equity-based with annual time-based restricted stock, supporting alignment but lacking performance conditions; Chernosky did not take cash in 2024 (— in cash column), reinforcing equity orientation.
- Independence/oversight: Chernosky is independent and financially literate; his service on Audit and Nominating & Governance supports risk oversight and governance process integrity.
- Controlled-company risks: Concentrated control (~68% voting) and inclusion of non-independent executives on Compensation and Nominating & Governance Committees diminish independent oversight over pay and nominations, a structural governance weakness.
- Ownership/skin-in-the-game: Beneficial ownership of 47,220 shares (including 10,669 unvested restricted shares); directors met stock ownership guidelines, indicating compliance, though lack of performance-based equity limits pay-for-performance rigor.
- RED FLAGS:
- Controlled company structure with CEO/Chair dominance; compensation and nominating committees include non-independent management directors.
- Insider Trading Policy change removed pledging prohibition in 2022; while no pledging by Chernosky is disclosed, allowance of pledging can impair alignment if used.
- Related-party exposure: No related-party transactions involving Chernosky disclosed; RPT Policy requires Board review/approval.