Gary Petersen
About Gary R. Petersen
Gary R. Petersen (age 78) is an independent director (Class II) of PAA/PAGP’s unified board; he has served on PAA’s board since 2001 and on the unified PAGP GP board since November 2016. He is a Managing Partner and co‑founder of EnCap Investments (founded 1988), with prior roles in energy banking at RepublicBank and as EVP/Director at Nicklos Oil & Gas; he holds BBA and MBA degrees in finance from Texas Tech University, and served as a U.S. Army First Lieutenant (Finance Corps) in 1970–1971 . The board has determined he is independent under Nasdaq/SEC rules, and all directors (including Petersen) attended 100% of 2024 board and applicable committee meetings .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| EnCap Investments LP | Managing Partner; Co‑founder | 1988–present | Private equity leadership focused on energy investing |
| PAA’s General Partner | Director | 2001–2016 | Board oversight pre‑unification |
| Nicklos Oil & Gas Company | Executive Vice President; Director | 1979–1984 | Corporate leadership in upstream E&P |
| RepublicBank Corporation | SVP & Manager, Corporate Finance Division, Energy Banking Group | Prior to 1988 | Energy banking leadership |
| U.S. Army | First Lieutenant, Finance Corps; Army Security Agency Officer | 1970–1971 | Military service |
| EV Energy Partners, L.P. | Director | 2006–2018 | Audit/board experience at public MLP |
External Roles
| Organization | Role | Type | Tenure | Notes |
|---|---|---|---|---|
| Memorial Hermann Health System | Director | Non‑profit | n/a | Healthcare governance |
| Houston Museum of Natural Science | Director | Non‑profit | n/a | Civic/education governance |
| The Council on Recovery | Board of Trustees | Non‑profit | n/a | Community services |
| EV Energy Partners, L.P. | Director (former) | Public company | 2006–2018 | Ended 2018 |
Board Governance
- Committee assignments: Compensation Committee (member); Governance Committee (member) .
- Independence: Board determined Petersen independent under Nasdaq/SEC standards .
- Attendance: All directors (including Petersen) attended 100% of 2024 board and applicable committee meetings .
- Board leadership: Lead Independent Director rotates (Shackouls through May 2025; Raymond effective June 1, 2025); non‑management executive sessions occur with each regular board meeting .
- Committee composition changes (effective June 1, 2025): Shackouls to chair Compensation (Raymond remains member); Raymond to chair Governance .
Fixed Compensation (Director – 2024)
| Component | Amount | Detail |
|---|---|---|
| Annual cash retainer | $115,000 | Standard non‑employee director retainer |
| Committee/lead fees | $0 | No Audit chair/member or lead director premiums applicable to Petersen in 2024 |
| Equity (PAGP phantom Class A) | $142,749 | 7,650 phantom Class A shares granted Aug 2024; vest August 2025; includes DERs |
| Total 2024 director pay | $257,749 | Cash + equity |
Additional director equity outstanding: 19,550 PAGP phantom Class A shares (7,650 granted in 2024; 11,900 prior awards), vest August 2025 . Directors receive PAGP phantom share LTIP awards that vest on the August 2025 distribution date and carry cash DERs; 2024 award value increased to ~$145,000 market value per director to maintain competitiveness .
Performance Compensation (Committee design oversight; directors do not receive NEO incentive payouts)
Petersen, as a Compensation and Governance Committee member, oversees PAA’s pay‑for‑performance program. 2024 annual bonus metrics and outcomes:
| Company Performance Metrics (60% weight) | Weight | Target | 2024 Result | Payout % |
|---|---|---|---|---|
| Adjusted EBITDA attributable to PAA ($mm) | 40% | $2,675 | $2,779 | 152% |
| Implied DCF per CUE ($/unit) | 40% | $2.44 | $2.49 | 127% |
| Safety (TRIR) | 10% | 0.25 | 0.25 | 75% (after −25 bps discretion for fatalities) |
| Environmental (FRR) | 10% | 15 | 19 | 89% (after +25 bps discretion for lower release volumes) |
Long‑term incentive plan metrics (50% performance/50% time‑based): three‑year relative TSR with negative TSR modifier (25% of LTIP) and three‑year cumulative DCF per CUE with leverage modifier (25% of LTIP); 2024 grants vest on the August 2027 distribution date . Compensation Committee engages Meridian as independent consultant; independence confirmed . 2024 Say‑on‑Pay approval ~98% .
Other Directorships & Interlocks
| Area | Disclosure |
|---|---|
| Current public boards | None disclosed beyond PAA/PAGP |
| Prior public boards | EV Energy Partners, L.P. (2006–2018) |
| Committee interlocks | None of the Compensation Committee members (including Petersen) served as officers of PAA or had interlocks in 2024 |
Expertise & Qualifications
- Public company experience; Finance/Accounting; Business Development/Strategy; Governance/Legal; Energy industry (upstream/midstream); Private Equity; International .
Equity Ownership
| Security | Beneficial Ownership | % of Voting Interests |
|---|---|---|
| PAA Common Units | 68,200 | <1% |
| PAGP Class A Shares | 48,594 | <1% |
| Combined PAA/PAGP holdings (units/shares) | 116,794 | <1% |
- No pledging: Consistent with policy prohibiting pledging, no units were pledged by directors/NEOs as of March 24, 2025 .
- Stock ownership guidelines: Directors must hold securities equal to 5x annual cash retainer; compliance required by November 2025; all directors are on track or compliant; “hold‑until‑met” applies to vested awards .
Related‑Party Transactions and Conflicts Assessment
- Board independence determination: The Board reviewed transactions with EMG (affiliated with director John Raymond) and EnCap (affiliated with Petersen). It determined these do not impact the independence of Raymond or Petersen .
- 2024–2025 transactions:
- Dec 2024/Jan 2025: JV affiliate acquired a Delaware Basin crude gathering business from EMG‑related entities for $161mm ($105mm net to PAA); Board noted EMG affiliation (Raymond) .
- Jan 2025: PAA acquired an Eagle Ford gathering system for ~$475mm from EnCap Flatrock Midstream; also repurchased ~12.7mm Series A preferred units for ~$343mm from EnCap Flatrock; Board disclosed EnCap association with Petersen and stated Petersen is not an executive officer, general partner or controlling shareholder of EnCap Flatrock Midstream and had no material interest in these transactions .
RED FLAGS to monitor: Ongoing business with EnCap/EMG affiliates creates perceived conflict risk; however, the Board utilizes independence assessments and may activate a conflicts committee per the partnership agreement to address conflicts; transactions above were reviewed without altering independence determinations .
Governance Controls and Investor Alignment
- Anti‑hedging/pledging policy applies to directors and officers; hedging/pledging prohibited .
- Clawback policy (amended Nov 2023) mandates recovery for material restatements and permits recovery for detrimental conduct causing significant harm (look‑back 3 years) .
- Change‑in‑control protections are double‑trigger for LTIPs; no option repricing/backdating; emphasis on at‑risk pay for executives; independent consultant engaged; broad investor outreach .
Governance Assessment
- Strengths: Independent status; 100% attendance; active roles on Compensation and Governance Committees; robust anti‑hedging/pledging and clawback policies; strong Say‑on‑Pay support; ownership guidelines with hold‑until‑met .
- Watch items: Related‑party optics due to EnCap affiliations and recent EnCap‑related transactions (acquisition and preferred repurchase); Board concluded no material interest and preserved independence, but continued oversight and use of conflicts committee remain important governance safeguards .
Overall, Petersen brings deep energy private equity and governance expertise, high engagement, and alignment via equity holdings and ownership policies; perceived conflicts from external affiliations appear mitigated by board process and disclosures, but merit ongoing monitoring .