Ronald C. Kraemer

About Ronald C. Kraemer

Chief Operating Officer and President of the Pipeline & Storage segment at National Fuel Gas Company; named executive officer (NEO) in fiscal 2024. He had 46 years of service with the Company as of September 30, 2024 and is eligible for an unreduced defined benefit under the Company’s Retirement Plan, reflecting long-tenured operational leadership in regulated midstream operations . His compensation is tied to pay-for-performance metrics including Consolidated EBITDA, Regulated EBITDA, Seneca (E&P) EBITDA, Midstream EBITDA, Relative TSR, Relative ROC, and ESG emissions reduction, aligning incentives with shareholder value creation and safety/environmental goals .

Past Roles

External Roles

Fixed Compensation

Multi-year compensation for Kraemer:

Additional fixed comp details:

• Calendar 2024 base salary set at $825,000 (from $805,000), still below Energy Industry 50th percentile for comparable COO roles .
• Perquisites/other include Company contributions (401k, tophat, life insurance, travel accident insurance, limited perqs) totaling $134,826 in FY2024 .

Performance Compensation

FY2024 short-term incentive structure and outcomes (AARCIP):

*EBITDA goals are defined in the plan as operating income plus DD&A and specific adjustments, with performance averaged over two years to mitigate short-termism .

Long-term incentives (FY2024 grants):

• Standard LTI target value: $2,450,000 (297% of CY2024 base) for Kraemer; granted entirely as performance shares (no time-based RSUs), increasing performance emphasis for long-tenured executives .
• Performance share goals and cycles: 3-year Relative TSR, 3-year Relative ROC, and 3-year ESG emissions reductions; ESG cycle uses calendar years (2024–2026) .

Equity Ownership & Alignment

Outstanding equity awards (as of 9/30/2024):

Notes:

• FY2021/2022 ROC PSUs estimated above threshold but below target; TSR PSUs at/near threshold; FY2023 TSR PSUs estimated below target but above threshold; ESG PSUs estimated at threshold given available data; final payouts depend on full-cycle certification .
• Kraemer has no RSUs outstanding or payable on termination (reflecting performance-weighted equity mix) .

Employment Terms

Change-in-control (CIC) economics and severance:

• Agreements are double-trigger (benefits only if employment terminates within 3 years of CIC without cause or for good reason); no tax gross-ups; health/welfare benefits continue for 18 months; salary/benefits preserved for 3 years post-CIC if continuing employed .
• CIC severance multiple: 1.99x (base salary + average last two annual cash bonuses), pro-rata reduced between ages 62–65 to zero at 65 .
• Non-compete payment: one-times (base salary + average last two annual cash bonuses) if executive elects non-compete covenant after CIC termination; Kraemer estimated payment $1,772,405 .
• Equity treatment: If Alternative Award not provided, all RSUs vest and performance shares are earned at target; CIC value for Kraemer’s awards estimated at $7,584,008 (based on 9/30/2024 price) .
• ERP (Executive Retirement Plan): first annual payment on termination (non-CIC) for Kraemer estimated at $2,416,356; default benefit is a 4-year certain annuity; death yields reduced annuity to survivor ($418,844 first annualized payment) .
• DCP (Deferred Compensation Plan): estimated payable balance for Kraemer $3,422,303 (timing/form per election) .
• Potential payments upon termination (scenario analysis, as of 9/30/2024):

Retirement benefits (as of 9/30/2024):

• Present value of ERP: $8,873,793; qualified Retirement Plan: $2,043,711; eligible for unreduced Retirement Plan benefit; benefit service capped at 40 years (had 46 years of service, ERP recognizes first year; Retirement Plan excludes the first) .

Investment Implications

• High alignment: Equity mix is entirely performance shares for Kraemer (no time-based RSUs), and incentives are tied to TSR, ROC, and emissions goals; this concentrates upside on multi-year performance and relative value creation, reducing low-risk equity windfalls .
• Limited insider selling pressure: Kraemer deferred all FY2024 vested equity into DCP; coupled with no RSU overhang and anti-hedging/pledging policy, near-term selling pressure appears muted .
• Retention and transition risk: Strong retirement economics (ERP and qualified plan), long tenure, and substantial potential CIC payout suggest meaningful retention levers but also optionality to retire; performance-share-heavy LTI curbs pure time-based retention, placing emphasis on continued performance .
• Governance safeguards: Double-trigger CIC, no tax gross-ups, clawback policy, and ownership guidelines (≥3x base for NEOs) reduce misalignment and payout risk from non-performance outcomes; Kraemer is in compliance with ownership guidelines .
• Pay-for-performance structure: Short-term incentive outcomes (108.6% of target) were driven by strong regulated EBITDA and operational reliability, balanced by lower E&P EBITDA due to commodity dynamics; the 2-year averaging framework mitigates short-termism and pro-cyclical behavior .

Note: All data are from National Fuel Gas Company’s 2025 DEF 14A proxy; figures reflect fiscal year ended September 30, 2024 and estimates as of September 30, 2024 where applicable.