Richard McGee
About Richard McGee
Richard K. McGee is Executive Vice President, General Counsel and Secretary at Plains All American Pipeline (PAA), serving in this role since February 2013; he is 64 years old as of March 24, 2025, and has ~12 years in his current role . Under McGee’s legal oversight, PAA delivered 2024 performance above guidance, including Adjusted EBITDA attributable to PAA of $2.779 billion vs. a $2.675 billion goal and Implied DCF per CUE of $2.49 vs. a $2.44 goal . PAA’s investor support for executive compensation has been strong, with ~98% say‑on‑pay approval in 2024 , and the company’s TSR since 2019 reflects recovery and outperformance versus its midstream peer index (Company TSR value of a fixed $100 investment reached $137.87 in 2024; peer group TSR $212.45) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Plains All American Pipeline, GP LLC | EVP, General Counsel & Secretary | Feb 2013–present | Oversaw Legal/Land/HR; led legal work on acquisitions, JVs and commercial arrangements; mitigation of Line 901 and other litigation; supported board/governance/comp initiatives |
| Plains All American Pipeline – Natural Gas Storage | VP — Legal & Business Development | Sep 2009–Mar 2012 | Led legal and BD for natural gas storage business |
| Plains All American Pipeline, GP LLC | VP & Deputy General Counsel | Aug 2011–Mar 2012 | Deputy GC responsibilities during transition to enterprise GC role |
| Duke Energy International | President | Oct 2001–Jul 2009 | Led international operations; executive leadership across energy assets |
| Duke Energy Services | General Counsel | Jan 1999–Sep 2001 | General counsel for services division |
| Vinson & Elkins L.L.P. | Partner (Energy M&A/Dev.) | ~1987–1999 | Advised energy clients on acquisitions, divestitures and development |
Fixed Compensation
Multi-year compensation (USD):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $512,500 | $550,000 | $550,000 |
| Stock Awards ($) | $1,237,005 | $1,153,018 | $1,406,160 |
| Non‑Equity Incentive (Bonus) ($) | $1,515,000 | $1,180,000 | $1,100,000 |
| All Other Compensation ($) | $19,140 | $20,640 | $21,540 |
| Total ($) | $3,283,645 | $2,903,658 | $3,077,700 |
2024 base salary remained $550,000; “All Other Compensation” consisted primarily of a 401(k) match ($20,700) and group term life insurance premiums .
Performance Compensation
2024 Annual Bonus Mechanics (Company Metrics)
| Metric | Weight | Target | Actual | Payout % | Weighted % |
|---|---|---|---|---|---|
| Adjusted EBITDA attributable to PAA ($mm) | 40% | $2,675 | $2,779 | 152% | 61% |
| Implied DCF per CUE ($/unit) | 40% | $2.44 | $2.49 | 127% | 51% |
| Safety (TRIR) | 10% | 0.25 | 0.25 | 75% (25 bps reduction) | 7.5% |
| Environmental (FRR) | 10% | 15 | 19 | 89% (25 bps increase) | 8.9% |
| Company Performance Subtotal | — | — | — | — | 128% |
Individual performance score for McGee: 140% on a 40% weight (legal transaction execution, litigation risk mitigation, governance/HR initiatives) . Final 2024 bonus earned was 133% of target; target $825,000 and actual $1,100,000 .
| Executive | Target Bonus ($) | Company Score × Weight | Individual Score × Weight | Percent of Target Earned | Actual Bonus ($) |
|---|---|---|---|---|---|
| Richard McGee | $825,000 | 128% × 60% | 140% × 40% | 133% | $1,100,000 |
Long‑Term Performance Awards (2024 Grants)
| Metric | Weight | Target / Comparator | Vesting | Payout Range | DER Treatment |
|---|---|---|---|---|---|
| Relative TSR (with negative TSR modifier) | 50% | TSR vs TSR Comparator Peer Group through Jun 30, 2027 | Aug 2027 distribution date | 0–200% | Accrues; paid lump sum at vest on units that vest |
| Cumulative DCF per CUE (with leverage modifier) | 50% | $7.75 over three years, leverage modifier can reduce payout by 25 bps | Aug 2027 distribution date | 0–200% | Accrues; paid lump sum at vest on units that vest |
Grant sizing used 10‑day VWAP of $17.82 around August 2024 ex‑distribution date .
Equity Ownership & Alignment
Beneficial Ownership and Guidelines
| Item | Value |
|---|---|
| PAA common units owned | 499,166 |
| Common units outstanding (3/24/25) | 703,775,950 |
| Ownership as % of common units | ~0.07% (499,166 ÷ 703,775,950) |
| PAGP Class A & B shares owned | 429,346 |
| Stock ownership guideline (EVP) | 3x base salary; 5-year compliance window; hold‑until‑met |
| Compliance status | Executives on track or met; McGee compliance date Nov 2025 |
| Hedging/Pledging | Prohibited for directors/officers; no pledged units as of 3/24/25 |
Outstanding Unvested Phantom Units (as of 12/31/2024)
| Grant Year | Time‑Based Units (#) | Vesting Date | Performance‑Based Units (Target #) | Vesting Date |
|---|---|---|---|---|
| 2022 | 69,300 | Aug 2025 | 69,300 | Aug 2025 |
| 2023 | 51,075 | Aug 2026 | 51,075 | Aug 2026 |
| 2024 | 54,000 | Aug 2027 | 54,000 | Aug 2027 |
Notes:
- 2022 performance‑based award estimated payouts at YE 2024: TSR ~167%; DCF/CUE ~143% .
- DERs accrue and pay per award design (time‑based: first year lump sum then quarterly; performance‑based: lump sum at vest) .
2024 Annual LTIP Grant (McGee)
| Target Value | Phantom Units Granted | Time‑Based Units | Performance‑Based Units |
|---|---|---|---|
| $1,925,000 | 108,000 | 54,000 | 54,000 |
Plan features:
- No stock options have been issued; equity is delivered via phantom units with DERs .
- Double‑trigger change‑in‑control vesting in LTI grants (requires change in status) .
Employment Terms
| Provision | Details |
|---|---|
| Role and tenure | EVP, General Counsel & Secretary since Feb 2013 |
| Confidentiality / Non‑solicit | Maintain confidentiality; non‑solicit customers for two years post‑termination |
| Clawback policy | Amended Nov 2023; mandatory recovery after material restatement; discretionary recovery for detrimental conduct causing significant harm (3‑year lookback) |
| Change‑in‑control vesting | LTI grants accelerate only with “double trigger” (change in status) |
| Say‑on‑pay support | ~98% approval at 2024 annual meeting |
| Tax gross‑ups | No excise tax gross‑ups; no significant perquisites |
Potential payments upon termination/change‑in‑control (as of 12/31/2024):
| Scenario | Equity Compensation ($) |
|---|---|
| Death | $4,112,010 |
| Disability | $4,112,010 |
| Company without cause | $2,678,682 |
| Executive with good reason | — (not specified for McGee) |
| Change‑in‑control or retirement (double trigger) | $5,956,650 |
Vesting mechanics and pro‑rata treatment under various triggers are detailed in phantom unit grant letters (including forfeiture if termination occurs <1‑year from grant; pro‑rata vesting thereafter at target for performance units) .
Investment Implications
- Pay‑for‑performance alignment is strong: McGee’s bonus was driven by objective formulas (Adjusted EBITDA, DCF/CUE, safety/environment) plus individual execution (140% score) in legal/commercial initiatives; LTI is 50% performance‑based with explicit TSR and DCF/CUE targets and risk‑mitigating leverage modifiers .
- Insider selling pressure events: multiple vesting cliffs occur on August 2025/2026/2027 for time‑ and performance‑based units; DERs pay at vest, which can create discretionary liquidity events, though “hold‑until‑met” ownership rules and hedging/pledging prohibitions dampen immediate selling risk .
- Retention risk is mitigated by double‑trigger change‑in‑control vesting, pro‑rata vesting after year one, and meaningful outstanding unvested awards; potential equity acceleration values in CIC/death/disability scenarios are material but not excessive given market norms .
- Governance and compensation process quality: independent Compensation Committee, use of Meridian for peer benchmarking, and strong say‑on‑pay support suggest low governance friction and reduced pay inflation risk; policies prohibit hedging/pledging and include robust clawbacks .