Robert S. McAnnally
ONE GasAbout Robert S. McAnnally
President and CEO of ONE Gas (since 2021), age 61; education: BA (History), Auburn University; JD, University of Alabama . ONE Gas met or exceeded the midpoint of guidance every year since 2014; in 2024 EPS was $3.91 and operating income was $399 million, with the stock at $69.25 on Dec 31, 2024 and a 106% price increase since the company’s 2014 inception . 2024 safety and environmental targets were exceeded (109% of annual emissions-reduction goal; first-quartile safety metrics) . 2024 say‑on‑pay passed with 96% support, and the program emphasizes median‑target benchmarking and a high mix of at‑risk pay .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ONE Gas, Inc. | President & CEO | 2021–present | Executive leadership with extensive operations/utility and strategic planning experience . |
| ONE Gas, Inc. | SVP & COO | 2020–2021 | Operations leadership; capital execution and safety culture implementation experience . |
| ONE Gas, Inc. | SVP, Operations | 2015–2020 | Operations leadership; human capital and compliance skills development . |
| Energen Corporation | SVP, Customer Service & Marketing | 2012–2015 | Customer and commercial leadership in energy/utility context . |
| Alagasco | VP, External Affairs & Strategic Planning | 2009–2012 | Regulatory/public affairs and strategy responsibilities . |
| Private Law Practice | Attorney | 1990–2009 | Legal, governance, and risk oversight experience . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| American Gas Association | Board of Directors | – | Industry leadership platform . |
| American Gas Foundation | Chair, Board of Trustees | – | Policy and research leadership . |
| Other industry associations | Various service roles | – | Sector engagement . |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 675,000 | 735,000 | 850,000 |
| STI Target (% of Salary) | 100% | 100% | 100% |
| STI Paid ($) | 532,170 | 794,902 | 1,110,000 |
Performance Compensation
- Program design: 2024 LTI mix 80% PSUs (relative TSR) / 20% RSUs (3‑yr cliff vest) . No stock options are outstanding or granted .
STI (2024) – Metrics, Targets, Outcomes
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual | Payout allocation |
|---|---|---|---|---|---|---|
| Diluted EPS | 70% | $3.53 | $3.85 | $4.17 | $3.91 | 76.56% of total (within company modifier) |
| Emissions Reduction (mtCO2e) | 7.5% | 1,988 | 2,097 | 2,324 | 2,280 | 10.52% |
| DART | 7.5% | 0.52 | 0.40 | 0.28 | 0.15 | 11.25% |
| PVIR | 7.5% | 2.05 | 1.80 | 1.70 | 1.56 | 11.25% |
| ERT ≤30 min (%) | 7.5% | 62.75% | 63.25% | 64.50% | 65.64% | 11.25% |
| Company Performance Modifier | – | – | – | – | – | 120.8% |
| CEO Individual Modifier | – | – | – | – | – | 108.1% |
LTI (2024 Grants) – Values and Structure
| Grant Type | Grant Date | Target Value ($) | Instrument Details |
|---|---|---|---|
| PSUs | 2/19/2024 | 2,240,000 | Relative TSR vs approved peer set; 0–200% payout; 3‑yr performance (1/1/2024–12/31/2026); dividend equivalents accrue . |
| RSUs | 2/19/2024 | 560,000 | Time‑based; 3‑yr cliff vest; dividend equivalents accrue . |
PSU payout curve (relative TSR): 25th/50th/75th/90th percentiles → 50%/100%/150%/200% payout; below 25th → 0% . 2021 PSU tranche vested in Feb 2024 at 0%, underscoring pay-for-performance alignment .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 45,011 shares (<1% of class) as of Mar 1, 2025 . |
| Unvested RSUs (12/31/2024) | 20,854 units; ~$1,444,132 market value . |
| Unearned PSUs (12/31/2024) | 65,608 units (based on projected performance as of 12/31/2024); ~$4,543,335 value . |
| RSU vesting schedule | 5,202 on 2/15/2025; 6,065 on 2/14/2026; 9,588 on 2/13/2027 . |
| PSU vesting (projected at 12/31/2024) | 10,403 on 2/15/2025; 14,556 on 2/14/2026; 40,649 on 2/13/2027 (actuals depend on final TSR performance) . |
| Ownership guidelines | CEO: 6x base salary; must hold net shares until met; McAnnally not yet at guideline; compliance deadline 2026 . |
| Hedging/pledging | Hedging prohibited; pledging prohibited for insiders; no exceptions granted in 2024; no exception allowed for CEO . |
| Options | None outstanding or granted . |
Nonqualified Deferred Compensation (alignment and retention)
| Year | Exec Contributions ($) | Company Match ($) | Aggregate Earnings ($) | Balance at FYE ($) |
|---|---|---|---|---|
| 2024 | 130,490 | 128,192 | 117,668 | 1,402,055 |
Employment Terms
- Employment agreements: none; rights governed by plans .
- Clawbacks: robust recoupment for fraud/negligence/misconduct; Dodd‑Frank supplemental policy effective Nov 2023 with 3‑year lookback for Section 16 officers, regardless of misconduct .
- Change-in-control (CIC): double‑trigger; CEO cash severance 3x salary + target STI; COBRA premium reimbursement up to 18 months; equity vests at target upon qualifying termination; no excise tax gross-ups (best net approach) .
Potential Post‑Employment/CIC Economics (as of 12/31/2024)
| Scenario | Cash Severance | Pro‑Rated STI | Health Benefits | RSUs | PSUs | Total |
|---|---|---|---|---|---|---|
| Death/Disability/Retirement | – | 850,000 | – | 781,284 | 2,078,295 | 3,709,579 |
| Termination Without Cause (non‑CIC) | – | – | – | 781,284 | – | 781,284 |
| Qualifying Termination Following CIC | 5,100,000 | 850,000 | 27,022 | 1,444,132 | 5,776,380 | 13,197,534 |
Perquisites: none (no personal perqs reported for NEOs in 2024) . Pension: not a participant in Qualified Pension Plan or SERP .
Board Governance
- Role: Management Director since 2021; no committee assignments .
- Independence: not independent (management); Board majority independent .
- Board leadership: Non‑executive Chairman John W. Gibson; Lead Independent Director Eduardo A. Rodriguez with defined authorities (agendas, information flow, executive sessions, shareholder access) .
- Executive sessions: regular sessions of non‑management and independent directors at each in‑person meeting .
- Attendance: all incumbent directors attended all Board/committee meetings in 2024 .
- Director pay: CEO receives no additional director compensation .
Dual‑role implications: While McAnnally is CEO and a director, the separation of Chair and CEO roles, presence of a Lead Independent Director, and fully independent committee chairs mitigate independence concerns and support oversight .
Compensation Structure Diagnostics
- Mix and leverage: Majority at‑risk via STI/LTI; LTI 80% PSUs (relative TSR) / 20% RSUs; targeted to market median with discretion for performance/experience .
- Metrics and rigor: STI heavily weighted to EPS (70%) plus safety and emissions metrics; 2024 company modifier 120.8% and CEO individual modifier 108.1% .
- Alignment evidence: 2021 PSUs paid 0% (relative TSR below threshold), demonstrating downside risk; no option re‑pricing; no options outstanding .
- Shareholder support: 96% say‑on‑pay approval in 2024 .
- Peer benchmarking: Utility‑centric peers (e.g., Alliant, Atmos, Avista, Spire, etc.) reviewed annually; target median positioning .
Board Service and Director Compensation (for completeness)
- Committee memberships/positions for McAnnally: none; other committees chaired by independent directors; full membership table and meetings disclosed .
- Director equity/cash retainers (non‑management directors only) and ownership guidelines; CEO not paid as director .
Investment Implications
- Near‑term insider supply windows: Scheduled RSU vests of 5,202 (Feb‑2025), 6,065 (Feb‑2026), 9,588 (Feb‑2027) and projected PSU vesting in 2025–2027 (subject to TSR) could create episodic selling windows; however, anti‑hedging/pledging policies, trading‑window controls, and share‑ownership requirements (CEO must hold net shares until 6x salary guideline is met by 2026) temper forced‑sale risks .
- Pay‑for‑performance: High PSU mix linked to relative TSR and a recent 0% vesting outcome in 2024 align payouts with investor returns, limiting windfalls in underperformance regimes .
- Retention and CIC economics: CIC protection (3x salary+target STI, double‑trigger, no gross‑up) is market‑standard and reduces retention risk during strategic events without excessive shareholder cost; equity accelerates at target only upon qualifying termination .
- Governance quality: Separate Chair/CEO, active Lead Independent Director, regular executive sessions and full attendance underpin oversight; say‑on‑pay (96%) and absence of related‑party transactions/perqs support governance credibility .
Appendix: Key 2024 Company Performance Reference Points
| Metric | 2023 | 2024 |
|---|---|---|
| Diluted EPS ($) | 4.14 | 3.91 |
| Operating Income ($mm) | 378 | 399 |
| Dividend per share ($) | 2.60 approx prior; $2.64 paid in 2024; declared $0.67/qtr in Jan‑2025 (annualized $2.68) | |
| Safety/ESG | AGA Safety Award; 109% of annual emissions‑reduction goal | |
| Customers / Rate base | +23,000 customers; avg rate base $5.52bn (+7% growth) |
Notes: All values and statements are cited from ONE Gas, Inc. 2025 DEF 14A proxy, dated April 2, 2025.