Michael Hennigan
Marathon PetroleumAbout Michael Hennigan
Michael J. Hennigan is Executive Chairman of Marathon Petroleum Corporation (MPC) since August 2024; he served as CEO from March 2020 through July 2024 and has been a director since 2020. He also chairs the board of MPLX GP LLC (director since 2017) and serves on Nutrien Ltd.’s board. He holds a B.S. in Chemical Engineering from Drexel University and is 65 years old . Under his CEO leadership, MPC executed major strategic priorities, returned ~$37B to shareholders, and delivered a 918% total shareholder return (with dividends reinvested) from March 2020; he will retire as Executive Chairman and director effective Jan 1, 2026 . MPC’s 2024 performance included $3.4B net income, $11.3B adjusted EBITDA, $8.7B net cash from operations, 92% refining utilization, and 99% capture .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Marathon Petroleum Corporation | CEO; President; Director | CEO 2020–Jul 2024; President 2020–2023; Director since 2020 | Led transformative priorities; sold retail business; ~$37B capital returns; 918% TSR since Mar 2020 |
| MPLX GP LLC | Chairman; CEO; President; Director | Chairman since 2020; CEO 2019–Jul 2024; President 2019–2023; Director since 2017 | Expanded midstream footprint (Marcellus, Utica, Permian) and distribution growth |
| Energy Transfer Partners GP | President, Crude, NGL & Refined Products | 2017 | Senior midstream leadership |
| Sunoco Logistics Partners L.P. | CEO; President & COO; VP Business Dev. | 2012–2017 (CEO); 2010–2012; 2009–2010 | Led large midstream MLP operations |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Nutrien Ltd. | Director | Since 2022 | Public company board service |
| American Fuel & Petrochemical Manufacturers (AFPM) | Chair, Executive Committee | Current | Industry leadership |
| MPLX GP LLC | Director | Since 2017 | Affiliate board counted as one with MPC for commitments |
Fixed Compensation
| Element | 2024 Pre-Change | 2024 Post-Change (Aug 1, 2024) | Notes |
|---|---|---|---|
| Base Salary ($) | $1,750,000 | $1,050,000 (−40%) | Reflects transition to Executive Chairman |
| ACB Target (%) | 165% | 165% | ACB target unchanged at 165% |
| Target LTI ($) | $14,800,000 | $8,880,000 (for 2025) | LTI reduced to reflect new role |
Multi-year compensation (Summary Compensation Table):
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | Change in Pension & NQDC ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 1,457,377 | 17,084,462 | 3,759,500 | 799,469 | 654,345 | 23,755,153 |
| 2023 | 1,737,809 | 16,200,864 | 4,688,700 | 741,763 | 685,356 | 24,054,492 |
| 2022 | 1,675,343 | 13,925,769 | 4,376,800 | 595,747 | 714,873 | 21,288,532 |
Perquisites and policies: limited perqs; $15,000 annual stipend for tax/financial planning; personal use of corporate aircraft permitted with time-sharing agreements approved by the Corporate Governance & Nominating Committee; no excise tax gross-ups; “no tax gross-ups on perquisites” except limited relocation reimbursements .
Performance Compensation
2024 Annual Cash Bonus (ACB) metrics and results:
| Metric | Weight | Threshold (50%) | Target (100%) | Max (200%) | Result | Performance Achieved |
|---|---|---|---|---|---|---|
| Relative Adjusted EBITDA per Barrel | 30% | 30th percentile | 50th percentile | 100th percentile | 100th percentile | 200.00% |
| ACB Adjusted EBITDA (in $mm) | 20% | 9,487 | 12,649 | 15,811 | 9,664 | 52.80% |
| MPLX DCF per Unit | 20% | $4.70 | $5.22 | $5.74 | $5.70 | 192.31% |
| Refining & Corporate Costs (in $mm) | 10% | 6,858 | 6,532 | 6,205 | 6,456 | 123.24% |
| Total Financial Performance Achieved | 80% | — | — | — | — | 121.34% |
Hennigan’s 2024 ACB payout:
| Eligible Earnings ($) | Bonus Target (%) | Target Bonus ($) | Final Award (% of Target) | Final Award ($) |
|---|---|---|---|---|
| 1,457,377 (prorated) | 165% | 2,404,672 | 156.34% | 3,759,500 |
2024 LTI target award mix (NEO program):
| Instrument | Hennigan Target ($) | Mix |
|---|---|---|
| MPC PSUs (3-yr relative TSR, cash-settled) | 8,880,000 | 60% |
| MPC RSUs (time-based) | 2,960,000 | 20% |
| MPLX Phantom Units (time-based) | 2,960,000 | 20% |
Vesting and settlement:
- PSUs vest and pay after 36-month performance; cash-settled; payout capped at 100% if PSU TSR is negative .
- RSUs vest ratably over 3 years .
- MPLX phantom units vest ratably over 3 years .
Recent PSU payout (2022–2024 cycle, certified Jan 2025):
- Hennigan 2022 PSU payout: 173,959 PSUs at $154.31, paid $26,843,613; PSU TSR 139.72% at 91.67th percentile, 183.33% payout .
Equity Ownership & Alignment
Beneficial ownership (as of Feb 1, 2025):
| Security | Amount & Nature of Beneficial Ownership | % of Class |
|---|---|---|
| MPC Common Stock | 219,040 (includes 40,781 RSUs) | <1% |
| MPLX Common Units | 357,249 (includes 147,195 phantom units) | <1% |
Outstanding equity awards (Dec 31, 2024):
| Award Type | Units Not Vested (#) | Market Value ($) |
|---|---|---|
| MPC RSUs | 40,781 | 5,688,950 |
| MPC PSUs (unearned) | 117,421 | 32,760,459 |
| MPLX Phantom Units | 147,195 | 7,044,753* |
| *Valued on MPLX unit price per plan |
Ownership guidelines:
- Executive Chairman: 6× base salary; compliance reviewed annually; all NEOs meet or are on track; no hedging or pledging permitted under policy .
Employment Terms
- Leadership transition: Board elected Hennigan Executive Chairman effective Aug 1, 2024; Lead Independent Director role established; mandatory retirement waiver granted then later rescinded; Hennigan retiring Jan 1, 2026 .
- Change-in-control (CIC) plans (double trigger): Cash severance equal to 3× (base salary + target annual cash bonus); 18 months COBRA-equivalent; accelerated vesting of MPC/MPLX LTI as applicable .
- Hennigan estimated CIC + qualified termination (Dec 31, 2024 assumptions): Severance $8,347,500; health benefits $35,689; total $8,383,189 (no incremental equity shown due to nonforfeitable status of prior awards) .
- No individual employment/severance contracts; general termination allowance plan applies (8–62 weeks of salary) for terminations without cause; unvested LTI forfeited unless award terms provide otherwise .
- Clawback: Short-term and long-term incentive compensation subject to recoupment for restatements due to misconduct, fraud, or reputational harm causing material financial impact .
- Hedging/Pledging: Prohibited for directors and officers .
Board Governance
- Role: Executive Chairman provides leadership to the Board and participates in agenda setting, succession planning, director recruitment; presides at shareholder meetings; attends all committee meetings but is not a standing member .
- Independence: Executive Chairman and CEO are not independent; 10 of 12 directors are independent .
- Board activity: 8 Board meetings and 20 committee meetings in 2024; average director attendance 98%; seven executive sessions of non-management directors .
Director Compensation (as applicable)
- Employee directors (e.g., Executive Chairman/CEO) receive no separate Board compensation .
Compensation Structure Analysis
- Emphasis on performance: Majority of target compensation at-risk; PSUs tied to 3-year relative TSR; RSUs/time-based and MPLX phantom units complement long-term alignment; options discontinued .
- 2024 ACB: Balanced financial (80%) and non-financial measures (safety, environmental stewardship, human capital); financial results yielded 121.34% performance score; Hennigan awarded 156.34% of ACB target on prorated eligible earnings .
- Role transition: Significant reduction in base salary and LTI targets for Hennigan upon moving from CEO to Executive Chairman; LTI target set at $8.88M for 2025 .
Risk Indicators & Red Flags
- No hedging/pledging; no excise tax gross-ups; options discontinued (no repricing) .
- Related person oversight: Aircraft time-sharing agreements approved by Corporate Governance & Nominating Committee and filed as exhibits, reviewed annually per related transactions policy .
Compensation Peer Group & Shareholder Engagement
- Compensation program references a Compensation Reference Group; Board recommends “FOR” say-on-pay; robust shareholder engagement (71% of outstanding shares targeted; 42% engaged) .
Expertise & Qualifications
- Technical and operational expertise in refining and midstream; senior leadership and governance credentials; AFPM industry leadership .
Equity Ownership & Vesting Schedules (Detail)
| Instrument | Vesting Schedule | Notes |
|---|---|---|
| MPC PSUs | 36-month, cash-settled, relative TSR; payout 0–200%; cap at 100% if TSR negative | |
| MPC RSUs | Ratable over 3 years | Supports ownership guidelines |
| MPLX Phantom Units | Ratable over 3 years | Aligns with MPLX unitholders |
Investment Implications
- Alignment: 6× salary ownership guideline, multi-year PSUs and RSUs, and prohibition on hedging/pledging support strong alignment; PSUs are cash-settled, limiting share supply impact from performance payouts .
- Retention/transition: Double-trigger CIC protections (3× cash multiple) reduce transition risk, while the announced Jan 1, 2026 retirement creates leadership continuity considerations; Lead Independent Director structure mitigates Executive Chairman independence concerns .
- Performance signals: 2024 ACB metrics demonstrate peer-leading relative EBITDA/barrel and strong MPLX DCF/unit, underpinning above-target bonus outcomes; 2022 PSU payout in early 2025 was substantial, reflecting strong TSR execution .
- Governance: No excise tax gross-ups, clawback policy, limited perqs, and discontinued options indicate shareholder-friendly compensation design .