Mohammed Zerhouni
About Mohammed Zerhouni
Senior Vice President, Chief Financial Officer and Treasurer of Middlesex Water Company (MSEX); age 49; joined June 24, 2024; Certified Public Accountant with BS in Accounting and MBA from Franklin University; prior roles include SVP Finance & Principal Accounting Officer at SJW Group, CFO of Veolia North America’s regulated utility business, and Senior Manager in PwC’s audit practice . Company performance in 2024 improved materially: revenues $191.9 million vs $166.3 million in 2023, net income $44.4 million vs $31.5 million, and diluted EPS rose 40% to $2.47; TSR value-of-$100 for 2024 measurement period was $89.61 vs peer group $91.21; Income Before Income Taxes (IBT) reached $51.30 million, exceeding the Compensation Committee’s target of $41.3 million .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SJW Group | SVP Finance & Principal Accounting Officer | — | Led finance and accounting; public utility peer experience |
| Veolia North America (regulated utilities) | Chief Financial Officer | — | CFO of regulated utility unit; oversight of utility finance |
| PricewaterhouseCoopers LLP | Audit – Senior Manager | — | Big Four audit background; controls and reporting rigor |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed for Zerhouni | — | — | No public company directorships disclosed |
Fixed Compensation
| Metric | 2024 |
|---|---|
| Base Salary ($) | 271,634 |
| Actual Bonus Paid ($) | 81,731 (includes $60,000 sign‑on for forfeited prior employer equity; plus discretionary special cash bonus) |
| Stock Awards ($) | 305,000 (includes $105,000 equity award received and vested per employment agreement) |
| All Other Compensation ($) | 209,829 |
| Total Compensation ($) | 868,194 |
| Long-Term Incentive Target (% of Base) | 30% (Restricted Stock; CFO) |
Perquisites and Other Compensation Detail (2024)
| Component | Amount ($) |
|---|---|
| Dividends on Restricted Stock | 902 |
| Personal Automobile Use | 6,250 |
| Group Term Life Insurance Premiums | 773 |
| 401(k) Employer Match / DPS | 6,845 |
| Relocation Assistance (grossed up) | 195,059 |
| Spouse Travel | — |
| Total All Other Compensation | 209,829 |
Equity Grant and Vesting Activity (2024)
| Grant Date | Award Type | Shares Granted (#) | Vesting in 2024 (Shares) | Value Realized on Vesting ($) |
|---|---|---|---|---|
| 6/24/2024 | Restricted Stock | 2,043 | 2,043 | 109,260 |
| 2024 (per employment agreement) | Equity award | — | Immediate vest | 105,000 |
Performance Compensation
| Metric | Weighting | Target | Actual | Payout ($) | Vesting Terms |
|---|---|---|---|---|---|
| Income Before Income Taxes | 60% (CFO) | $41.3 million | Target exceeded (no non-recurring adjustments besides net positive legal outcomes) | 120,000 | Restricted Stock, generally 3- or 5‑year cliff vest; employment agreement included immediate vest grant in 2024 |
| Non-Financial Goal #1 | Part of 40% | Successful execution of various rate filings | Achieved (Committee judgment) | 50,000 | Restricted Stock plan terms |
| Non-Financial Goal #2 | Part of 40% | Lead development of customer experience and selective & sustainable growth pillars of MWC 2030 vision | Achieved (Committee judgment) | 30,000 | Restricted Stock plan terms |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership (shares) | 1,356 (as of March 25, 2025) |
| Ownership % of Shares Outstanding | Each individual <1% |
| Vested vs Unvested | Unvested RS: none as of 12/31/2024; 2,043 shares vested in 2024 |
| Options | Company does not employ stock options |
| Pledging/Hedging | Prohibited; no liens/pledges allowed |
| Stock Ownership Guidelines | CFO: 1.5× base salary; to be met within five years of NEO designation |
| Compliance Status | Not disclosed; timeline to comply by ~June 2029 (designation June 24, 2024) |
Employment Terms
| Term | Detail |
|---|---|
| Employment Start Date | June 24, 2024 |
| Employment Agreement (CFO) | If terminated without cause: accrued but unpaid salary, 30% of annual long‑term equity incentive target, and 18 months of COBRA coverage |
| Change‑in‑Control (CIC) | Double trigger (termination within two years after CIC): lump‑sum equal to 2× average annual base salary and targeted annual incentive (last five years), 24 months of health/welfare benefit continuation, payment of deferred compensation, and immediate vesting of unvested restricted stock |
| CIC Potential Payment (as of 12/31/2024) | $1,499,915 (compensation in 2024 used in definition: $376,634) |
| Clawback | Incentive awards subject to clawback upon restatement within 3 years |
| Insider Trading | Pre‑clearance required; hedging prohibited |
Performance & Track Record
- 2024 company outcomes: revenues $191.9m, net income $44.4m, EPS $2.47 (+40% YoY), IBT $51.30m; 52nd consecutive dividend increase; invested $75m capex; added ~2,100 regulated customers .
- Strategic leadership: “MWC 2030 Vision” launched; Zerhouni tasked with rate filings and the customer experience and selective/sustainable growth pillars; long-term awards resulted in 118% of target for 2024 .
- Financing and growth commentary (Janney conference): maintaining authorized capital structure, extended credit lines, $110m ATM program to support capex and growth; focus on tuck-in M&A and operate-to-own opportunities; constructive regulatory processes in NJ and DE; monitoring PFAS investment needs .
Compensation Structure Analysis
- Mix and benchmarking: Compensation targeted to ~50th percentile of comparator group; NEO program emphasizes restricted stock (no options), with clear financial (IBT) and qualitative goals .
- Shift to equity and at‑risk pay: LTI target for CFO = 30% of base; 2024 payouts above target (118%) on IBT outperformance and qualitative goals; discretionary cash bonuses granted for specific initiatives; sign‑on bonus acknowledges forfeited prior equity—reasonable for recruitment .
- Governance protections: Clawback, prohibition on hedging/pledging, simple vesting structure (3/5‑year cliffs), no repricing; stock ownership guidelines promote alignment .
Related Party Transactions, Legal, Red Flags
- No related party transactions disclosed specific to Zerhouni .
- Section 16 compliance: Late Form 4s noted for CEO and former CEO; none indicated for Zerhouni .
- No tax gross‑ups disclosed for golden parachutes; CIC terms follow market norms; no options repricing; hedging/pledging prohibited .
Compensation Peer Group, Say‑on‑Pay & Shareholder Feedback
- TSR peer group for pay-for-performance includes American States Water, Artesian Resources, California Water Service, Global Water Resources, SJW Group, York Water .
- Board recommends FOR annual say‑on‑pay; frequency annual; no specific approval percentages disclosed in 2025 proxy .
Expertise & Qualifications
- CPA; extensive utility finance and regulatory experience; prior Big Four audit background; senior finance leadership at peer utilities (SJW, Veolia) .
Investment Implications
- Alignment: Strong pay-for-performance design tied to IBT and qualitative strategic goals; clawback and ownership guidelines enhance alignment. Immediate‑vest employment equity (2024) is a recruitment artifact; otherwise, LTI employs 3/5‑year cliff vesting, dampening near‑term selling risk .
- Retention risk: CIC agreement provides market‑standard protection (2× salary+targeted incentive; double trigger) and accelerated vesting; employment agreement offers defined severance if terminated without cause—reduces flight risk amid strategic transition .
- Trading signals: No options; unvested RS for Zerhouni were nil at 12/31/2024 due to immediate‑vest employment grant; beneficial ownership is modest (1,356 shares) with a five‑year window to meet 1.5× salary ownership—watch future equity grants and open‑market accumulation for alignment trajectory .
- Execution: 2024 improved financials (EPS +40%, net income +41%) and capex deployment under new leadership; Zerhouni’s focus on rate filings, capital structure (ATM program), and selective M&A supports earnings durability and rate base growth, a positive for long‑term TSR in regulated utilities .