Charles E. Drimal, Jr.
About Charles E. Drimal, Jr.
Charles E. Drimal, Jr., age 77, has served as PrimeEnergy’s President, Chief Executive Officer, and Chairman of the Board since October 1987; he holds similar positions at subsidiaries and is a graduate of the University of Maryland and Samford University School of Law, and a retired member of the New York State Bar . Under his leadership, the board currently combines the Chair and CEO roles with no lead independent director designated . Pay-versus-performance disclosure shows strong recent TSR, with a $100 initial investment growing to $508.66 in 2024 (vs. $246.35 in 2023 and $201.23 in 2022), alongside net income of $55.4M in 2024 (vs. $28.1M in 2023 and $48.7M in 2022) . Operationally, multi-year financials indicate sharp increases in 2024 revenue and EBITDA, complementing the TSR performance trend (values marked below with S&P Global disclaimer).*
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| PrimeEnergy Resources Corporation | President, CEO, Chairman | Since Oct 1987 | Long-tenured leadership through cycles; consolidated chair/CEO authority; guided credit capacity expansions . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed in proxy beyond subsidiary roles | — | — | The proxy notes similar positions at subsidiaries; no other public company directorships disclosed . |
Fixed Compensation
| Year | Base Salary ($) | Director Fees Included in “All Other” ($) | All Other Comp Components (select) | Total Cash Comp ($) |
|---|---|---|---|---|
| 2024 | 842,317 | 30,000 | 401(k) match $13,200; club dues $24,400; LTD $3,567; life insurance $11,052 | 4,924,536 (includes $4,000,000 bonus) |
| 2023 | 816,200 | 30,000 | 401(k) match $13,200; club dues $24,400; LTD $10,710; life insurance $11,052 | 4,605,562 (includes $3,700,000 bonus) |
| 2022 | 742,000 | 30,000 | 401(k) match $12,200; club dues $24,400; LTD $10,710; life insurance $11,052 | 4,467,237 (includes $3,636,875 bonus) |
Notes:
- The Compensation Committee uses judgment and discretion rather than formulaic metrics to determine salary and annual cash bonus .
Performance Compensation
- Structure and metrics:
- PrimeEnergy does not disclose a formulaic, metric‑based annual or long‑term incentive plan; annual bonuses are discretionary, based on leadership responsibilities, challenges, and company performance as evaluated by the Compensation Committee .
- No stock awards (RSUs/PSUs) or option awards were granted to named executives in 2022–2024; there are no non‑equity incentive plan payouts disclosed .
- Legacy equity:
- The only equity-based incentives are legacy options granted in May 1989 that fully vested in May 1994 and have no expiration date; the Committee continues to treat these as a significant equity stake and has awarded no new equity in recent years .
Detailed payout table (no formulaic metrics disclosed; payouts are cash bonuses):
| Year | Incentive Type | Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|---|
| 2024 | Annual cash bonus | Discretionary (committee judgment) | n/a | n/a | n/a | $4,000,000 | Cash in year granted |
| 2023 | Annual cash bonus | Discretionary (committee judgment) | n/a | n/a | n/a | $3,700,000 | Cash in year granted |
| 2022 | Annual cash bonus | Discretionary (committee judgment) | n/a | n/a | n/a | $3,636,875 | Cash in year granted |
Equity Ownership & Alignment
- Beneficial ownership and control:
- Mr. Drimal beneficially owns 1,218,144 shares, including 520,644 shares held directly and 697,500 options currently exercisable; this equates to 51.40% of shares outstanding as of April 7, 2025 . In 2024, the same beneficial ownership equated to 48.97% given higher shares outstanding at that time .
- Outstanding options and economics:
- Options outstanding: 523,125 at $1.00 and 174,375 at $1.25, all fully vested, non‑expiring; all exercisable . No options were exercised in 2024 .
Ownership snapshot
| Date | Shares Beneficially Owned | % of Class | Composition detail |
|---|---|---|---|
| Apr 7, 2025 | 1,218,144 | 51.40% | 520,644 shares + 697,500 options exercisable |
| Apr 10, 2024 | 1,218,144 | 48.97% | 520,644 shares + 697,500 options exercisable |
Legacy option position
| Holder | Exercisable Options | Exercise Price | Expiration | Vesting |
|---|---|---|---|---|
| Charles E. Drimal, Jr. | 523,125 | $1.00 | Non‑expiring | Vested since May 1994 |
| Charles E. Drimal, Jr. | 174,375 | $1.25 | Non‑expiring | Vested since May 1994 |
Red flags and alignment considerations:
- Pledging: “Mr. Drimal is the only Director who has pledged Common Stock as security” (potential misalignment and margin‑call risk) .
- Hedging policy: Hedging is discouraged but there is no formal anti‑hedging policy; trades are governed by Insider Trading Policy .
- No equity grants in recent years; incentive mix is heavily cash (discretionary bonuses) despite strong TSR .
Employment Terms
- Employment agreements and severance: The proxies do not disclose any specific employment agreement, severance, or change‑in‑control arrangements for Mr. Drimal; the Compensation Committee charter empowers the committee to approve such arrangements “as, when and if appropriate,” but no terms are presented in 2023–2025 proxies .
- Clawbacks/tax gross‑ups: No clawback policy or excise tax gross‑up provisions are disclosed for named executives in the reviewed proxies .
- Non‑compete/non‑solicit: Not disclosed in proxies .
Board Governance (director service, committees, independence)
- Board roles and tenure: Director since October 1987; Chair of the Board and CEO (combined roles) .
- Independence and board leadership: Board has a majority of independent directors (Fong, Gimbel, Hurt); the board believes combining Chair/CEO “has served the Company well”; no lead independent director designated .
- Meetings and attendance: The Board met three times in 2024; all directors attended board and committee meetings .
- Committees and roles:
- Executive Committee: Drimal (member), Hurt, Cummings; exercises board authority between meetings .
- Audit Committee: Fong (Chair, financial expert), Gimbel, Hurt; all independent .
- Compensation Committee: Gimbel and Hurt (both independent); Drimal participates in discussions but not deliberations/approvals on his compensation .
- Director compensation: $10,000 per board meeting; no equity or non‑equity incentive plans for directors .
Director Compensation (for Drimal’s board service overlap)
| Item | Amount/Structure |
|---|---|
| Board fees | $10,000 per Board meeting; for 2024, independent directors each received $30,000; Drimal’s director fees of $30,000 are included in his “All Other Compensation” . |
| Committee fees | No separate committee meeting fees . |
| Equity for directors | None . |
Dual-role implications:
- Combined Chair/CEO without a lead independent director concentrates authority; however, the board is majority independent and separates compensation decision‑making at committee level, with the CEO recused from deliberations about his own pay .
- Mr. Drimal sits on the Executive Committee, creating additional influence on board agenda between meetings; compensation decisions remain with independent Compensation Committee members .
Compensation Structure Analysis
- Mix shift and pay-for-performance:
- Compensation relies on base salary plus sizable discretionary cash bonuses; no formulaic revenue/EBITDA/TSR metrics are disclosed, and no equity grants were made in 2022–2024 .
- The pay-versus-performance table shows strong TSR and profitability in 2024, but the absence of disclosed performance curves, targets, or weights limits transparency about pay‑for‑performance alignment .
- Equity program design:
- Legacy, deeply in‑the‑money options remain outstanding and non‑expiring; absence of modern RSU/PSU constructs reduces direct alignment with multi‑year performance metrics but concentrates incentives via large personal share and option ownership .
- Consultants and peer benchmarking:
- The Compensation Committee did not use external compensation consultants in recent years .
- Peer group/target percentile practices are not disclosed in the proxies .
Say-on-Pay & Shareholder Feedback
| Meeting Date | Say-on-Pay For | Against | Abstain | Outcome | Frequency Vote (1/2/3 years) |
|---|---|---|---|---|---|
| Jun 5, 2025 | 905,423 | 35,392 | 246,035 | Approved | 1 yr: 274,284; 2 yrs: 800; 3 yrs: 910,899; Abstain: 867 — Board recommends 3 years . |
Related Party Transactions (select)
- The company repurchased 5,000 shares from Jan Smeets at $95.00 per share ($475,000) on Jan 24, 2024 .
- The company repurchased 18,000 shares from Amrace Inc. and Robert de Rothschild at $92.00 per share ($1,656,000) on Mar 12, 2024; and 17,800 shares at $97.50 per share ($1,735,500) on May 28, 2024 .
Performance & Track Record
Pay-versus-performance (company-reported)
| Year | Total Shareholder Return (value of $100) | Net Income ($) |
|---|---|---|
| 2022 | 201.23 | 48,664,000 |
| 2023 | 246.35 | 28,103,000 |
| 2024 | 508.66 | 55,404,000 |
Operations trend (fiscal years) — S&P Global data
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Revenues ($) | 82,388,000* | 137,096,000* | 123,125,000* | 233,894,000* |
| EBITDA ($) | 29,803,000* | 56,181,000* | 57,563,000* | 146,230,000* |
| Net Income ($) | 2,098,000* | 48,664,000* | 28,103,000* | 55,404,000* |
Values retrieved from S&P Global.*
Notable strategic/financing actions during tenure:
- Expanded borrowing base twice in 2024 (to $85M in February; to $115M in July), and added Independent Bank and U.S. Bank to the lender group; limited borrowings outstanding at time of amendments (none in Feb; $8M in Aug), supporting liquidity for drilling .
Employment Terms (Severance & Change-of-Control Economics)
- No employment contracts, severance, or change-of-control terms are disclosed for Mr. Drimal in the 2023–2025 proxies; no acceleration features are relevant given absence of unvested equity and the non‑expiring nature of legacy options .
Compensation Committee Analysis
- Members: Thomas S. T. Gimbel and Clint Hurt (independent); Mr. Drimal provides input but does not participate in deliberations or approvals on his own compensation .
- Practices: No external consultant retained; committee relies on judgment and discretion; no peer group/target percentile disclosed .
Risk Indicators & Red Flags
- Pledged shares by CEO (only director with pledged stock) — potential forced-sale risk in volatility .
- Combined Chair/CEO with no lead independent director — concentration of power .
- Hedging discouraged but not formally prohibited — potential alignment gap vs best practice .
- Heavy reliance on discretionary cash bonuses; lack of disclosed performance goals or long‑term equity structures .
Investment Implications
- Alignment: Extremely high insider ownership (>50%) and deeply in‑the‑money legacy options strongly align CEO economics with shareholders, but pledging introduces exogenous forced‑sale risk; absence of modern equity/PSU structures and formulaic goals reduces transparency of pay‑for‑performance alignment .
- Performance: TSR and profitability inflected positively in 2024; discretionary bonuses scaled with outcomes, but without disclosed targets investors can’t assess hurdle rigor .
- Governance: Combined Chair/CEO and no lead independent director are governance discounts; however, majority‑independent board and independent Compensation/Audit Committees mitigate somewhat .
- Liquidity/funding: Expanded borrowing base and modest utilization support development plans; covenants newly permit restricted payments under leverage and utilization thresholds, which could enable capital returns subject to performance and compliance .
References:
- 2025 DEF 14A (PrimeEnergy Resources Corporation)
- 2024 DEF 14A
- 2023 DEF 14A
- 8-K (Jun 5, 2025) — say-on-pay results
- 8-K (Feb 14, 2024) — borrowing base to $85M
- 8-K (Aug 1, 2024) — borrowing base to $115M; $8M drawn; added U.S. Bank