Lloyd Yates
About Lloyd Yates
Lloyd M. Yates, 64, has served as President & CEO of NiSource since February 2022 and as a director since 2020; he is the only non‑independent director on the board and serves on no committees . Under his leadership, NiSource reported 2024 adjusted EPS of $1.75 (+9.4% y/y) and an adjusted FFO/Debt ratio of 14.6% . Company TSR (value of $100 invested) was $157 in 2024 versus $109 in 2023; management also highlighted a 43.5% TSR in 2024, second in the industry, tied to strong execution .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| NiSource Inc. | President & CEO | 2022–present | Delivered 2024 adjusted EPS $1.75 (+9.4% y/y) and FFO/Debt 14.6% |
| Duke Energy | EVP, Customer & Delivery Operations; President, Carolinas Region | 2014–2019 | Led end‑to‑end customer experience and P&L for NC/SC regulated utilities; prior roles included EVP, Regulated Utilities and EVP, Customer Operations |
| Progress Energy, Inc. | Senior leadership roles | 2000–2012 | Held various senior roles prior to Progress’ merger with Duke Energy |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Marsh & McLennan Companies | Director | Current | Current public company directorship |
| American Water Works | Director | Prior | Former public company board service |
| Sonoco Products Company | Director | Prior | Former public company board service |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 879,167 | 1,041,667 | 1,133,334 (paid) ; rate increased from $1,050,000 to $1,150,000 effective 3/1/2024 |
| Target Annual Bonus (% of base) | — | — | 130% |
Multi‑year reported totals:
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 879,167 | 1,041,667 | 1,133,334 |
| Bonus (sign‑on/other) | 500,000 | — | — |
| Stock Awards (grant date fair value) | 4,671,273 | 5,208,422 | 8,266,041 |
| Non‑Equity Incentive (STI) | 954,828 | 2,500,000 | 3,230,100 |
| All Other Compensation | 108,238 | 466,592 | 155,495 |
| Total | 7,113,506 | 9,216,680 | 12,784,970 |
Perquisites (2024): $49,075 personal use of company/leased aircraft; methodology disclosed (incremental cost basis) .
Performance Compensation
2024 STI design, goals and results:
| Measure | Threshold | Target | Stretch | Result | Weight | Formulaic Payout (% of target) | Weighted Achievement |
|---|---|---|---|---|---|---|---|
| Adjusted EPS | $1.69 | $1.72 | $1.75 | $1.75 | 70% | 200% | 140% |
| Operational Excellence | 2 | 1 | 0 | 0 | 10% | 200% | 20% |
| Safety – DART | 0.60 | 0.57 | 0.51 | 0.59 | 5% | 67% | 3.33% |
| Safety – PVC | 1.53 | 1.46 | 1.31 | 1.35 | 5% | 173% | 8.67% |
| Customer Satisfaction | 69.5% | 71.5% | 73.5% | 72.8% | 10% | 165% | 17% |
| Overall STI Scorecard | 189% |
2024 STI payout calculation (Yates):
| Item | Value |
|---|---|
| STI Target % | 130% |
| Eligible Earnings Used | $1,133,334 |
| Scorecard Result | 189% |
| Individual Performance Modifier | 116% (leadership; 43.5% TSR noted) |
| Final Annual STI Award | $3,230,100 |
2024 LTI structure (grant date 1/25/2024):
- Mix: PSUs (performance‑based) and RSUs (time‑based) .
- PSU performance measures and weights over 2024–2026: 3‑yr cumulative Adjusted EPS (55%); 3‑yr relative TSR vs 32‑company peer group (25%); Operational Excellence & Safety index (10%); Employee Engagement (5%); GHG reduction (5%). Payout 0–200%, cliff‑vest after performance period (settled in shares; dividend equivalents accrue) .
- RSUs vest after 3 years (settled in shares; dividends paid in cash at vest) .
Key 2024 target LTI values:
| Component | Value ($) |
|---|---|
| PSUs at target | 6,400,000 |
| RSUs | 1,600,000 |
| Target Direct Compensation (base + STI target + LTI) | 10,645,000 |
Final settlement of 2022–2024 PSU cycle: Yates earned 190% of target; 122,994 target PSUs vested into 233,689 shares on performance/vesting .
Equity Ownership & Alignment
- Beneficial ownership: 521,687 NI shares (<1% of outstanding) as of 3/17/2025; no stock options outstanding .
- Outstanding unvested awards at 12/31/2024 (Yates):
- RSUs: 30,747 ($1,130,260); 36,311 ($1,334,792); 62,598 ($2,301,102) .
- PSUs (at max for disclosure): 245,988 ($9,042,519); 312,080 ($11,472,060); 518,350 ($19,054,556) .
- Vesting schedules (Yates):
- RSUs: 2022 grant vests 2/28/2025; 2023 grant vests 2/27/2026; 2024 grant vests 2/27/2027 .
- PSUs: 2022 grant (2022–2024) vests 2/28/2025; 2023 grant (2023–2025) vests 2/27/2026; 2024 grant (2024–2026) vests 2/27/2027 (subject to performance) .
- Stock ownership guidelines: CEO 6x base salary; executives must retain at least 50% of net shares until compliant; NEOs are on track within five years .
- Hedging/pledging: Prohibited for directors and executive officers; short sales and derivatives are not allowed .
- Options: Company does not currently grant stock options; none outstanding .
Implications: Significant 3‑year cliff vesting dates (Feb 2025/2026/2027) can create scheduled share delivery windows; anti‑hedging/pledging reduces forced‑sale risk .
Employment Terms
- Executive severance policy (non‑CIC): If eligible involuntary termination, 52 weeks base salary; lump‑sum 130% of 52 weeks COBRA; outplacement .
- Change‑in‑Control (CIC) agreements: Double‑trigger; no excise tax gross‑ups (best‑net‑benefit cutback); Yates receives 3x base salary plus 3x target bonus; pro‑rata STI for year of termination; 130% of COBRA premiums for three years; equity vests on double‑trigger (or single‑trigger only if awards not assumed by acquirer) .
- Potential payout sensitivities as of 12/31/2024 (Yates):
- Involuntary termination (non‑CIC): $1,150,000 cash; ~$27,318 welfare; $25,000 outplacement; total $1,202,318 .
- Disability/Death: Pro‑rata bonus $2,784,600; equity $13,555,140; total $16,339,740 .
- CIC termination: Severance $11,803,801; pro‑rata bonus $2,784,600; equity $24,550,722; welfare $90,377; outplacement $25,000; total $39,254,501 .
- Clawbacks: 2020 Omnibus Plan misconduct restatement clawback; standalone Rule 10D‑1/NYSE‑compliant recoupment policy for excess incentive comp upon restatement .
- Deferred compensation: Company contributions credited to Savings Restoration Plan ($74,025 in 2024; aggregate balance $190,851 as of year‑end) .
Board Service & Governance
- Board service: Director since 2020; President & CEO since 2022; no committee assignments; only non‑independent director .
- Board leadership: Independent Chair (Kevin T. Kabat); separate Chair/CEO; regular executive sessions of independent directors .
- Meetings/attendance: Board met 10 times in 2024; all incumbents attended at least 75% of meetings; 92% of directors attended 2024 annual meeting .
- Director pay: Yates receives no additional compensation for board service; legacy director RSUs/deferred stock units from pre‑CEO service outstanding (14,822.946 units as of 12/31/2024) .
- Director independence and committees: All committees fully independent; Yates not on committees .
- Say‑on‑Pay: ~97% approval in 2024; “more than 96%” support noted (company highlights) .
- Related party transactions: None requiring disclosure since 1/1/2024 .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Adjusted EPS ($) | 1.47 | 1.60 | 1.75 |
| YoY Adjusted EPS growth | — | +8.8% (calc from table) | +9.4% (company disclosure) |
| TSR – $100 invested (year end) | 109 | 109 | 157 |
| FFO/Debt (Adjusted) | — | — | 14.6% |
Selected operational outcomes used in pay programs:
- 2024 safety: Zero significant injuries or fatalities (SIF) or PHMSA reportable incidents due to operations/process failures; improved safety metrics (DART/PVC) and top‑level customer satisfaction exceeded targets .
- 2024 TSR commentary: 43.5% TSR highlighted in CEO performance assessment .
Compensation Structure Observations (pay‑for‑performance)
- Mix shift and at‑risk pay: Majority of CEO target direct compensation is performance‑based PSUs/RSUs; no stock options currently granted .
- STI metrics emphasize financials (70% EPS) plus safety, operations and customer outcomes, with formulaic scoring and bounded discretion (2024 pool increased ~$697k for NEOs) .
- LTI metrics balance financial (EPS, rTSR) with operational/safety, workforce and emissions, over a 3‑year horizon with 0–200% payout .
- Governance guardrails: Double‑trigger CIC; no excise tax gross‑ups; anti‑hedging/pledging; stock ownership guidelines (CEO 6x) .
Compensation Peer Group (for benchmarking)
- Companies include: Alliant Energy, Ameren, American Electric Power, Atmos, Black Hills, CenterPoint, CMS, Dominion, DTE, Entergy, Evergy, Eversource, FirstEnergy, New Jersey Resources, OGE, ONE Gas, PPL, PSEG, Sempra, Southwest Gas, Spire, WEC Energy Group, among others (full list in proxy) .
Risk Indicators & Red Flags
- Hedging/pledging prohibited for Yates (policy covers directors/execs) .
- No option repricing; no excise tax gross‑ups; double‑trigger equity vesting .
- Perquisites limited; 2024 aircraft personal use valued at $49,075 .
- No related party transactions disclosed in 2024 .
- Strong Say‑on‑Pay support (~97% in 2024) reduces governance backlash risk .
Investment Implications
- Alignment: Heavy PSU weighting (EPS and rTSR) ties realized pay to earnings trajectory and share performance; strong 2024 scorecard and PSU outcomes signal alignment with shareholder value creation .
- Vesting calendar: 3‑year cliff vesting in late Feb 2025/2026/2027 (RSUs/PSUs) creates identifiable stock‑delivery windows—potential supply overhangs around those dates; absence of hedging/pledging mitigates forced‑sale risks .
- Retention/CIC economics: Robust CIC package (3x salary+bonus, ~$39.3M total sensitivity as of 12/31/2024) strengthens retention but increases potential transaction costs; double‑trigger design limits windfalls absent termination .
- Governance quality: Independent chair, fully independent committees, and high Say‑on‑Pay support underpin stability; no options minimizes outsize sensitivity to near‑term volatility .
- Execution track: EPS growth and operational safety/customer outcomes under Yates support continued incentive realizations; 2024 TSR strength and raised forward guidance communicated via 8‑K reinforce momentum signals .