Zach Davis
Cheniere EnergyAbout Zach Davis
Zach Davis (age 40) is Executive Vice President and Chief Financial Officer of Cheniere Energy, Inc. (LNG), serving as CFO since August 2020; he joined Cheniere in November 2013 and was promoted to EVP in February 2022. He holds a B.S. in Economics from Duke University and previously held energy investment banking and project finance roles at Credit Suisse, Marathon Capital and HSH Nordbank; he is also CFO and a director of Cheniere Energy Partners GP, LLC and was recognized as the All-America Executive Team Overall #1 ranked CFO in Energy – Natural Gas & MLP in 2022, 2023 and 2024 by Extel/Institutional Investor . Under his tenure, Cheniere delivered 2024 revenue of ~$15.7B, net income of ~$3.3B and Consolidated Adjusted EBITDA of ~$6.2B; cumulative shareholder return (value of $100) reached $364 in 2024 versus $98 in 2020, reflecting strong TSR performance versus peers ($202 in 2024) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cheniere Energy, Inc. | EVP & CFO | Aug 2020–present | Top-ranked CFO 2022–2024; led finance during record EBITDA/DCFs and execution of capital allocation plan . |
| Cheniere Energy, Inc. | EVP (while CFO) | Feb 2022–present | Senior executive oversight of finance . |
| Cheniere Energy, Inc. | SVP, Finance | Feb 2020–Aug 2020 | Finance leadership ahead of CFO appointment . |
| Cheniere Energy, Inc. | VP, Finance & Planning | Oct 2016–Feb 2020 | Corporate finance and planning leadership . |
| Cheniere Energy, Inc. | Joined company | Nov 2013 | Entry into Cheniere; subsequent promotions . |
| Credit Suisse; Marathon Capital; HSH Nordbank | Energy IB/Project Finance | — | LNG/power/midstream finance experience . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cheniere Energy Partners GP, LLC | Director & CFO | Current | Finance leadership at general partner of CQP . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 | 2025 (Base Rate) |
|---|---|---|---|---|
| Base Salary ($) | $640,385 | $710,577 | $785,577 | $880,000 (approved Mar 10, 2025) |
| Annual Base Salary (stated) ($) | — | — | $800,000 | $880,000 |
| All Other Compensation ($) | $23,210 | $21,421 | $21,516 | — |
Performance Compensation
Annual Incentive (AIP) – 2024
| Item | Value |
|---|---|
| Target bonus (% of base) | 100% |
| Target bonus ($) | $800,000 |
| Scorecard achievement | 166% of target ($1,328,000) |
| Individual performance adjustment | 120% applied to scorecard |
| Earned bonus ($) | $1,593,600 |
2024 Annual Performance Scorecard
| Metric | Weight | Target | Stretch | 2024 Actual | % Achievement |
|---|---|---|---|---|---|
| Scorecard EBITDA excl. Commodity Margin ($mm) | 25% | $4,200 | $4,400 | $4,352 | 176% |
| Commodity Margin ($mm) | 5% | $1,500 | $1,600 | $1,825 | 200% |
| Adjusted SG&A Expense ($mm) | 5% | $233 | $222 | $216 | 200% |
| Asset Production (TBtu) | 10% | 2,322 | 2,348 | 2,327 | 118% |
| Adjusted O&M Expense ($mm) | 10% | $1,584 | $1,505 | $1,542 | 153% |
| ESG – Emissions Strategy & Development | 10% | Set methane intensity target & OGMP Gold | — | Achieved | 200% |
| ESG – Safety (TRIR) | 10% | 0.32 | 0.12 | 0.15 | 184% |
| ESG – DEI Initiatives (committee discretion) | 5% | Discretion | — | Achieved | 125% |
| ESG – Regulatory/Compliance (committee discretion) | 5% | Discretion | — | Achieved | 125% |
| Strategic – Stage 3 Total Project Progress | 5% | 75% | 81% | 77.2% | 168% |
| Strategic – Expansion & Growth | 10% | Progress filings | On track to FID 2025 | Achieved | 150% |
| Weighted Average Score | — | — | — | — | 166% |
Long-Term Incentive (LTI) Design and 2024 Grants
| Feature | 2024 Terms |
|---|---|
| Mix | 50% PSUs; 50% RSUs |
| RSU vesting | 1/3 on Feb 8 of 2025, 2026, 2027 |
| PSU metrics & vesting | Cumulative DCF/share and Absolute TSR (ATSR); 3-year cliff (Jan 1, 2024–Dec 31, 2026); payout 0–300% of target with ATSR modifier |
| PSU settlement | Cash up to $3,000,000 FMV, remainder shares/cash (committee discretion) |
| Clawback | PSU agreements and company policy compliant with SEC/NYSE |
| 2024 LTI Award Component | Shares/Units | Grant Date Fair Value ($) |
|---|---|---|
| RSUs (Feb 8, 2024) | 11,924 | $1,896,154 |
| PSUs Target (Feb 8, 2024) | 11,924 | $2,119,849 |
2025 LTI Grants (approved Feb 2025)
| Component | Shares/Units | Target Value ($) | Notable Change |
|---|---|---|---|
| RSUs | 9,855 | Part of $4,400,000 total (500% of base) | ATSR modifier thresholds tightened for 2025+ |
| PSUs Target | 9,855 | Part of $4,400,000 total | ATSR 1.50x at ≥12% annual TSR |
PSU Achievement (2012–2024 award cycle, vested Feb 2025)
| Metric | Threshold | Target | Stretch | Actual | Payout |
|---|---|---|---|---|---|
| Cumulative DCF/share (2022–2024) | $33.73 | $46.73 | $80.15 | $80.15 | 200% |
| ATSR (annualized return) | — | — | 15% ⇒ 1.50x | 27.56% | 1.50x modifier; total 300% payout |
Stock Vested in 2024
| Item | Davis |
|---|---|
| Shares vested (RSUs + PSUs) | 74,844 |
| Value realized ($) | $12,815,137 |
| Units settled in cash (within above) | 64,844 |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial ownership (common shares) | 108,661 |
| Unvested RSUs (excluded from above) | 21,749 |
| Shares outstanding (for % calc) | 222,814,436 |
| Ownership as % of shares outstanding | ~0.0488% (108,661 / 222,814,436) |
| Executive stock ownership guideline | EVPs: 4x base salary |
| Compliance status | All executive officers in compliance |
| Hedging/short sales prohibited | Yes |
| Pledging/margin accounts prohibited | Yes |
| Options outstanding | Company currently does not grant stock options |
Outstanding Equity Awards at 12/31/2024 (Davis)
| Grant | Unvested RSUs (#) | Market Value ($) | Max PSUs Unvested (#) | Max PSUs Value ($) |
|---|---|---|---|---|
| 2022 LTI (02/10/2022) | 5,035 | $1,081,870 | 45,309 | $9,735,545 |
| 2023 LTI (02/09/2023) | 7,888 | $1,694,895 | 35,493 | $7,626,381 |
| 2024 LTI (02/08/2024) | 11,924 | $2,562,110 | 35,772 | $7,686,330 |
Employment Terms
| Scenario (as of 12/31/2024) | Cash Compensation | Prorated Target Bonus | Health & Welfare | Equity Treatment by Grant | Total Estimated |
|---|---|---|---|---|---|
| Termination without Cause or resignation for Good Reason (non-CIC) | $2,400,000 | $800,000 | $60,611 | RSUs vest in full; PSUs prorated based on actual performance; schedule by grant: 02/10/2022 RSUs $1,081,870; PSUs $3,245,182; 02/09/2023 RSUs $1,694,895; PSUs $2,542,127; 02/08/2024 RSUs $2,562,110; PSUs $2,562,110 | $13,688,293 |
| Death/Disability | — | — | — | RSUs vest in full; PSUs vest at target (values as listed) | $30,387,130 |
| Immediately upon Change-in-Control (CIC) | — | — | — | Time-based awards vest in full; PSUs vest at greater of target or actual; TSR PSUs vest at actual TSR | $4,060,611 (cash/benefits only; equity per grant listed separately) |
| Termination without Cause or for Good Reason in connection with CIC | $3,200,000 | $800,000 | $60,611 | Acceleration per CIC rules (as above) | $4,060,611 (cash/benefits only) |
Notes: Under the Severance Plan, non-CIC severance equals 1.5× (base+target bonus) for EVPs; CIC severance equals 2.0× (base+target bonus) for EVPs; equity acceleration/vesting follows plan rules including TSR-specific treatment .
Clawback and Insider Trading
- Mandatory clawback policy for current and former Section 16 officers in event of financial restatement; insider trading policy prohibits hedging, short sales, and pledging/margin accounts .
Compensation Structure Analysis
- Pay mix emphasizes performance: majority of AIP/LTI tied to financial, operating, safety, ESG, and strategic goals; PSUs tied to cumulative DCF/share and ATSR with capped payouts and clawbacks .
- Year-over-year: 2024 base up vs 2023; AIP paid at ~199% of target after strong scorecard and 120% individual performance adjustment; 2024 LTI granted at 500% of base with balanced RSU/PSU mix .
- No stock options; minimum 12-month vesting; no material perquisites; strong compensation risk controls; 2024 say-on-pay >90% support .
- Peer benchmarking spans large-cap energy; enterprise value within 75th–100th percentile of peer group; EVPs subject to 4x salary ownership guidelines, with all executives in compliance .
Related Party Transactions and Governance Red Flags
- Company prohibits hedging and pledging; none disclosed for Davis; no defined benefit/SERP; non-employee director equity limits; rigorous governance and risk oversight .
Performance & Track Record Context
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Income ($mm) | $501 | $(1,565) | $2,635 | $12,059 | $4,492 |
| Consolidated Adjusted EBITDA ($mm) | $3,961 | $4,867 | $11,564 | $8,771 | $6,155 |
| Value of $100 investment (TSR) | $98 | $167 | $248 | $286 | $364 |
| Peer Group $100 investment value | $74 | $107 | $158 | $174 | $202 |
Additional 2024 highlights: revenue ~$15.7B; Distributable Cash Flow ~$3.7B; record LNG cargoes and >95% utilization; Stage 3 Train 1 first LNG and substantial completion in early 2025; capital allocation includes ~$2.3B buybacks and dividend increase .
Employment Terms (Policy Highlights)
- Severance Plan: non-CIC 1.5× salary+bonus; CIC 2.0× salary+bonus; pro-rated target bonus; equity acceleration per plan; TSR PSUs vest at actual TSR; time-based awards accelerated .
- Indemnification agreements standard for officers/directors .
Investment Implications
- Strong pay-for-performance alignment: AIP tied to multi-factor scorecard (financial/operational/ESG) and LTI tied to cumulative DCF/share and ATSR, resulting in above-target payouts and PSU max achievement (300%) for 2022–2024; clawbacks and no options mitigate risk of misaligned incentives .
- Liquidity and selling pressure: 2024 vesting ($12.8M value; 74,844 units) with cash settlement elections for 2022 PSUs and certain RSUs may provide personal liquidity while limiting dilution; prohibitions on hedging/pledging reduce misalignment risk .
- Retention risk low near term: Material severance/CIC protections and substantial unvested RSUs/PSUs across 2023–2026 vesting cycles provide retention hooks; ownership guideline compliance further aligns interests .
- Governance quality: >90% 2024 say-on-pay support, robust risk oversight, and explicit prohibition on hedging/pledging support investor confidence in compensation governance .