Steven Stellato
About Steven Stellato
Executive Vice President, Chief Accounting and Chief Administrative Officer of Kinetik since February 2022; age 50. CPA and CGMA with a B.B.A. in Accounting from the University of Texas at San Antonio. Prior roles include EVP/CAO at BCP GP, VP & CAO at CST Brands/CrossAmerica Partners, VP & Controller at Energy Transfer Partners, and Senior Manager at KPMG, with broad leadership across accounting, finance, treasury, tax, M&A, HR, IT, and risk/insurance functions . Company performance in 2024 included +16% YoY Adjusted EBITDA growth, +13% YoY processed volume growth, and absolute TSR of 74.8% (above peer median), which underpinned strong incentive outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Kinetik (via BCP GP) | EVP, Chief Accounting & Chief Administrative Officer | Feb 2022–Present | Oversees Corporate Communications, HR, IT, Insurance/Risk; extensive leadership in accounting, finance, treasury, tax, and M&A . |
| BCP GP | EVP, Chief Administrative Officer & Chief Accounting Officer | Jul 2017–Feb 2022 | Led corporate functions during build‑out of Delaware Basin midstream platform . |
| CST Brands & CrossAmerica Partners | Vice President & Chief Accounting Officer | Jun 2015–Jun 2017 | Public-company CAO responsibilities in retail energy/logistics . |
| Energy Transfer Partners, LP | Vice President & Controller | 6 years (dates not disclosed) | Public midstream controller; financial reporting and controls leadership . |
| KPMG | Senior Manager | N/D | Energy-focused public accounting; audit/transactions background . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No external directorships or public company board roles disclosed in the proxy . |
Fixed Compensation
| Metric | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary ($) | $416,000 | $445,000 | +7% YoY |
| Target Annual Incentive (% of Salary) | 90% | 90% | Unchanged |
Performance Compensation
Annual Incentive – 2024 Design, Outcomes, and Payout
| Component | Metric | Threshold | Target | Maximum | Actual | Payout on Metric | Weight | Contribution |
|---|---|---|---|---|---|---|---|---|
| Financial | Adjusted EBITDA ($mm) | 940.0 | 960.0 | 980.0 | 971.0 | 156% | 20% | 31.1% |
| Financial | Levered FCF ($mm) | 308.7 | 358.7 | 408.7 | 410.1 | 200% | 15% | 30.0% |
| Financial | Net Debt/EBITDA (x) | 4.00x | 3.50x | 3.50x | 3.56x | 172% | 15% | 25.7% |
| Sustainability & Safety | TRIR | 1.75 | 1.15 | 0.55 | 0.75 | 167% | 6.7% | 11.1% |
| Sustainability & Safety | MVIR | 2.00 | 1.50 | 1.00 | 1.36 | 128% | 6.7% | 8.5% |
| Sustainability & Safety | Methane Intensity (YoY change) | -8.00% | -13.50% | -19.00% | -23.70% | 200% | 6.7% | 13.3% |
| Qualitative | Strategic/Operational | — | — | — | — | 200% | 30% | 60.0% |
| Total | 100% | 180.0% |
| 2024 Payout Summary | Value |
|---|---|
| Base Salary ($) | $445,000 |
| Target Bonus % | 90% |
| Target Bonus ($) | $400,500 |
| Payout as % of Target | 180% |
| Actual Annual Incentive ($) | $720,900 (sum of $216,270 “Bonus” qualitative + $504,630 objective) |
| Form of Payment | Elected fully vested Class A shares |
Long‑Term Incentives (LTI)
| Award | Grant Date | Shares/Units | Grant Date Fair Value ($) | Vesting/Performance |
|---|---|---|---|---|
| RSUs (2024) | Mar 7, 2024 | 16,141 | 568,970 | Cliff vest Jan 1, 2027, service‑based |
| PSUs (2024) – Target | Mar 7, 2024 | 16,903 | 621,354 | 50% absolute TSR; 50% relative TSR vs defined peer set; 0–200% payout; performance period 1/1/2024–12/31/2026; vesting at 12/31/2026 subject to performance and service . |
| RSUs (2023) | Mar 10, 2023 | 36,324 (outstanding 12/31/24) | — | Cliff vest Jan 1, 2026, service‑based . |
| Consideration Allocation Shares (from 2022 Transactions) | Feb 25, 2022 | 234,134 Class A unvested at 12/31/24 | — | Three‑year cliff vest on Feb 25, 2025 (vested thereafter) . |
Notes: Kinetik does not grant stock options and no NEO held options in 2024 .
Equity Ownership & Alignment
Beneficial Ownership (as of March 28, 2025)
| Holder | Class A Shares | Class A % | Class C Shares | Class C % | Combined Voting Power % |
|---|---|---|---|---|---|
| Steven Stellato | 306,720 | <1% | — | — | — |
As of March 28, 2025, Kinetik had 60,922,044 Class A and 97,039,202 Class C shares outstanding . Kinetik prohibits directors and officers from pledging Company securities and prohibits hedging; employees/consultants may not pledge without preclearance, reinforcing alignment and limiting leverage risk . Executive stock ownership guideline is 3x base salary for executive officers; all NEOs were in compliance as of December 31, 2024 .
Unvested/Outstanding Equity Detail (as of December 31, 2024)
| Instrument | Quantity | Vest/Performance | Reference |
|---|---|---|---|
| Class A Shares (Consideration Allocation) | 234,134 | Vested in full on Feb 25, 2025 (3‑yr cliff from 2/25/2022) | |
| RSUs (granted 3/10/2023) | 36,324 | Vest Jan 1, 2026 (service) | |
| RSUs (granted 3/7/2024) | 16,141 | Vest Jan 1, 2027 (service) | |
| PSUs (granted 3/7/2024) – Target | 16,903 | TSR metrics; 0–200% payout; performance through 12/31/2026 | |
| PSU Dividend Equivalents (unvested) | 927 | Vest with PSUs at 12/31/2026 | |
| Stock Options | 0 | No options outstanding |
Employment Terms
Executive Severance Plan (adopted Feb 28, 2024; Stellato = Tier 1)
- Non‑CIC termination without Cause or for Good Reason: cash equal to 9 weeks of (base + target bonus) per year of service (min 9 weeks, max 52 weeks) plus 36 months of medical at active rates .
- CIC double‑trigger (termination during 24‑month CIC period): cash = 2.5x (base + target bonus) + prorated actual-year bonus; 36 months medical; 30 months of continued 401(k)/HSA employer contributions; up to $75k outplacement; accelerated vesting of all unvested equity under the 2019 Plan (performance awards at greater of target or actual as of CIC), subject to most-favorable document terms .
- Death/Disability: 36 months medical; prorated bonus based on actual performance .
- Conditions: release requirement; ongoing confidentiality, non‑solicit, IP, non‑disparagement, and cooperation covenants; 280G best‑net cutback (no gross‑ups) .
Potential Payments (Modeled at 12/31/2024; share price $56.71)
| Scenario | Cash Severance ($) | Equity Acceleration ($) | Total ($) |
|---|---|---|---|
| Change in Control (equity acceleration only) | 0 | 15,337,673 | 15,337,673 |
| Termination Without Cause/Good Reason during CIC Period | 2,659,913 | 1,926,495 | 4,586,409 |
| Non‑CIC Termination Without Cause | 867,851 | 13,277,739 | 14,145,590 |
| Non‑CIC Resignation for Good Reason | 867,851 | 13,819,560 | 13,592,763 |
| Death/Disability | 422,851 | 17,264,169 | 17,687,019 |
Definitions and CIC window are detailed in plan terms; CIC is defined with three prongs (control, merger/consolidation where holders fall below 50%, sale of substantially all assets), with a 24‑month CIC period .
Compensation Structure and Governance Notes
- Pay mix emphasizes at‑risk compensation: RSUs/PSUs with minimum 3‑year vesting; at least 50% of NEO LTI in PSUs; Stellato’s 2024 LTI split 50% RSU / 50% PSU .
- Annual incentive structure includes 50% financial, 20% safety/sustainability (methane, TRIR, MVIR), and 30% qualitative objectives; 2024 payout certified at 180% of target .
- Clawback compliant with SEC/NYSE adopted Oct 2, 2023 .
- Anti‑hedging and anti‑pledging policy; officers may not pledge; 10b5‑1 limitations described .
- Compensation Committee composed of independent directors; uses Meridian as independent consultant; no conflicts noted .
- Peer group used for benchmarking; no fixed percentile targeting; 2024 peer set listed .
- Say‑on‑pay support: 99.7% at 2024 AGM .
Investment Implications
- Alignment and incentive quality: High equity exposure with TSR‑based PSUs and multi‑year cliff RSUs aligns Stellato’s pay with shareholder returns; ESG/safety metrics (20% weight) can support lower operational risk and margin durability .
- Near‑term selling pressure: A large 3‑year cliff tranche of 234,134 Consideration Allocation Shares vested on Feb 25, 2025; additional RSU cliffs occur Jan 1, 2026 and Jan 1, 2027, which can create windows of incremental supply depending on 10b5‑1 plans and blackout schedules .
- Retention and CIC economics: The CIC package (2.5x cash + equity acceleration) is competitive and reduces unwanted turnover risk but increases potential change‑of‑control costs; non‑CIC severance provides meaningful but capped cash and benefits .
- Ownership and risk controls: Beneficial ownership is <1% with compliance to 3x‑salary ownership guidelines; anti‑pledging and clawback policies mitigate governance red flags .
- Performance execution: 2024 delivery on Adjusted EBITDA, FCF, leverage, and TSR underpinned an above‑target (180%) bonus outcome; sustained performance against TSR peers will be key for PSU vesting and long‑term value creation .