Edward Kovalik
About Edward Kovalik
Edward Kovalik, 50, has served as Chief Executive Officer and Chairman of Prairie Operating Co. since May 2023, bringing investment banking and operating experience across energy, renewables, and E&P. Under his tenure, Prairie exited crypto, acquired Central Weld assets (NRO) in Oct-2024, and closed the transformative Bayswater transaction on Mar-26-2025, which management expects to add ~25,600 net BOEPD and materially improve free cash flow and operating efficiency . Prairie’s pay-versus-performance table shows cumulative TSR index values (base $100) of $1.81 (2022), $11.10 (2023), and $8.07 (2024); net losses were $(79.1)m (2023) and $(40.9)m (2024) . He is not independent and serves as combined CEO/Chair; four of seven directors are independent .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Prairie Operating Co. | CEO & Chairman | May 2023–Present | Led portfolio pivot to DJ Basin, NRO acquisition, closed Bayswater; equity/plan expansions |
| Prairie LLC | Co-Founder, member | Oct 2022–May 2023 | Built platform that merged into public company in May 2023 |
| Crown Electrokinetics (NASDAQ: CRKN) | President & COO; Director | Feb 2021–Oct 2022; Dec 2020–Oct 2022 | Public company operating experience |
| Prairie Partners Solar & Wind LLC | Co-Founder | May 2020–Feb 2021 | Renewable investing (utility-scale solar/wind) |
| KLR Group, LLC | Co-Founder & Co-CEO | Apr 2012–Oct 2020 | Built merchant bank; led creation of Rosehill E&P (SPAC/merger) |
| Rodman & Renshaw | Head of Capital Markets | Prior to 2012 | Energy capital markets leadership |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Crown Electrokinetics | Director | Dec 2020–Oct 2022 | Public company board experience |
Board Governance & Committee Roles
- Service history and roles: Director since 2023; elected Chairman in May 2023; Board nominates him for 2025–2026 term .
- Committee memberships: Audit, Compensation, and Nominating & Governance Committees are fully independent; Kovalik is not listed as a member, consistent with Nasdaq rules .
- Independence: Not independent due to executive role; Board independence: 4/7 directors .
- Dual-role implications: Board intentionally combines CEO/Chair for strategic alignment; Lead Independent Director can be designated if Chair is not independent to counterbalance oversight .
- Attendance: Board met six times in 2024; no director <94% attendance; regular executive sessions of independent directors .
Fixed Compensation
| Metric (USD) | 2023 | 2024 |
|---|---|---|
| Base salary | $362,788 | $550,000 |
| Target annual bonus % of salary | 250%* | 250%* |
| Actual cash bonus | $1,000,000 | $550,000 (discretionary) |
| All other compensation | $263,200 | $13,800 (401k match) |
*From Employment Agreements amended Aug-2023 (target bonus 250% of base salary) .
Performance Compensation
- 2024 equity mix included time-based RSUs and performance stock units (PSUs) under the Long-Term Incentive Plan (LTIP) .
| Incentive | Metric | Weighting | Target | Payout Range | Vesting / Terms |
|---|---|---|---|---|---|
| PSUs (granted 2024) | Relative TSR (3-year: 1/1/2024–12/31/2026) | Not disclosed | 100% of target | 0%–200% of target | Cliff vesting March 2027; earned shares based on relative TSR; change-in-control adjustments apply . |
| RSUs (grant 1) | Service (time-based) | N/A | N/A | N/A | 125,619 units vest ratably over 3 years starting Mar 5, 2025 . |
| RSUs (grant 2) | Service (time-based) | N/A | N/A | N/A | 61,560 units vest Dec 18, 2025 . |
Notes: 2024 stock awards grant-date fair value $2,750,000 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership (Apr 8, 2025) | 3,513,242 shares; 7.23% of outstanding . |
| Composition | 1,148,834 merger consideration shares; 2,333,333 fully exercisable non-compensatory options; 31,075 RSUs vested . |
| Unvested equity at 12/31/2024 | RSUs: 125,619 (3-yr ratable from 3/5/2025) and 61,560 (vest 12/18/2025); PSUs: 83,746 target (0–200%, vest 3/2027) . |
| Options | 2,333,333 non-compensatory options at $0.25/sh (post reverse-split), became fully exercisable Mar 2025 (tied to production hurdles) . |
| Pledging / Hedging | Company policy prohibits hedging; directors and officers are prohibited from pledging Company securities; short sales and derivative monetizations banned . |
| Ownership guidelines | Not disclosed in proxy; Corporate Governance Guidelines posted; no guideline figures stated . |
Vesting cadence and potential liquidity: RSU vests on Mar 5, 2025 (1/3 of 125,619) and Dec 18, 2025 (61,560), with PSU performance period ending 12/31/2026, cliff vest 3/2027 (subject to relative TSR) .
Employment Terms
| Provision | Key terms |
|---|---|
| Employment agreement | Amended and restated Aug 2023; salary $550,000; target bonus 250% of salary; annual LTIP eligibility . |
| Severance (without Cause / Good Reason) | Lump sum equal to 3x (base + target bonus + LTIP amount for year of termination) for CEO/President, payable ~60 days post-termination; plus up to 18 months healthcare subsidy . |
| Change in Control (CIC) cash | If termination within 12 months post-CIC, 4x multiple for CEO/President (of base + target bonus + LTIP amount) . |
| Equity on termination (non‑CIC) | Pro‑rata vesting of RSUs/PSUs by months served/36 on no‑cause/Good Reason; 100% vest on death/disability; forfeiture on cause/voluntary quit . |
| Equity on CIC | If awards not assumed in a CIC, RSUs vest 100%; PSUs vest based on actual performance through CIC date; if terminated without cause/Good Reason within 24 months of CIC, RSUs vest 100% and PSUs vest at greater of target or actual . |
| Definitions | Robust Cause/Good Reason/CIC definitions; Good Reason includes material diminution and, for CEO/President, failure to consult on strategy/operations . |
| Clawback | LTIP and awards subject to Company clawback policy and Dodd‑Frank compliant recoupment . |
Compensation & Incentives (multi-year)
| Year | Salary | Bonus | Stock awards | Total |
|---|---|---|---|---|
| 2023 | $362,788 | $1,000,000 | — | $1,625,988 |
| 2024 | $550,000 | $550,000 (discretionary) | $2,750,000 (RSUs/PSUs) | $3,863,800 |
Compensation structure notes:
- CEO’s target annual bonus set at 250% of salary by contract; 2024 bonus paid was discretionary (no explicit metric disclosed) .
- 2024 LTIP mix introduced PSUs tied to relative TSR (multi-year) plus time-based RSUs .
Performance & Track Record
| Metric | Data |
|---|---|
| Strategic execution | Closed NRO (Central Weld) acquisition; drilled 8 Genesis wells in 2H24 that came online Feb-2025; acquired/closed Bayswater on Mar-26-2025 . |
| TSR index (Pay vs Performance) | $1.81 (2022), $11.10 (2023), $8.07 (2024) on $100 base . |
| Profitability | Net loss $(79.1)m (2023), $(40.9)m (2024) . |
Related-Party & Governance Considerations
- Overriding royalty interests (ORRI) related to Exok/Genesis: entities controlled by Kovalik, Gary Hanna, and Paul Kessler each own one-third ORRI; to mitigate conflicts, drilling programs are approved by an independent Board committee quarterly .
- Historical stockholder/nomination agreement gave Kovalik/Hanna designation rights; terminated Nov 15, 2024 .
- Insider trading policy prohibits short sales, hedging/monetizations, and pledging by directors/officers; preclearance and blackout policies apply .
Director Compensation (context)
- As executive Chairman, Kovalik received no additional director pay beyond executive compensation .
- Non-employee directors (2024) generally received $150,000 cash plus ~$100,000 RSUs (7,614 units; vest 6/5/2025); one-time $50,000 cash recognition payment to some directors in Dec-2024 for exceptional time commitments .
Say‑on‑Pay & Shareholder Votes
- No say‑on‑pay result disclosed in 2025 proxy; a May-8-2025 special meeting approved issuances tied to Series F convertible preferred and associated warrants (to enable financing) .
Compensation Committee/Consultant
- Compensation Committee entirely independent; Company engaged Zayla (a Gallagher company) to advise on contemplated special one-time RSU retention awards for executives tied to Bayswater closing and growth strategy (up to 3-year vesting) .
Investment Implications
- Alignment and upside: High equity mix in 2024 (notably PSUs on relative TSR) and substantial unvested RSUs/PSUs align CEO with multi-year equity performance; upcoming vest dates (Mar-2025, Dec-2025, Mar-2027) could create windows of insider activity but are governed by strict hedging/pledging prohibitions and preclearance .
- Retention risk mitigants: Generous severance (3x cash; 4x on CIC with double-trigger) plus contemplated retention RSUs post-Bayswater reduce risk of departure during integration and development ramp .
- Governance watch‑items: Combined CEO/Chair role offset by majority‑independent board and potential Lead Independent Director; ORRI related‑party exposure addressed with independent committee approval of drilling programs but remains a governance sensitivity .
- Pay-for-performance calibration: 2024 cash bonus was discretionary amidst net losses and pre-Bayswater integration; however, performance equity is TSR‑based over 2024–2026, offering clearer pay-performance linkage going forward .
- Execution catalysts: Integration and development of Bayswater and Central Weld assets (with established permits/inventory) are central to value creation; committee‑advised retention program supports management continuity through this period .
Notes: All information is sourced from Prairie’s 2025 DEF 14A, 2024/2025 10‑K and 8‑K filings as cited above.