Adam Muñoz
ProPetro HoldingAbout Adam Muñoz
Adam Muñoz is President and Chief Operating Officer of ProPetro (PUMP), serving as COO since January 2021 and President & COO since August 2021; he joined ProPetro in 2010 after sales and operations roles at Frac Tech Services and Weatherford International and holds a BBA in Marketing from the University of Texas at the Permian Basin . Age 42 and an executive officer since 2020, his remit spans operational execution, fleet efficiency, and strategic programs in the Permian Basin . Company performance under his operating scope in 2024 included $1.4B total revenue, $252M net cash from operations, and 7.2M shares repurchased and retired; the annual bonus plan mixed Adjusted EBITDA and FCF (with FCF achieved at maximum), safety, and sustainability metrics, and PSUs are tied to relative TSR vs peers; the 2022 PSU cycle paid at 73% with a 3-year TSR of 6% and 36th percentile relative TSR .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ProPetro | President & Chief Operating Officer | Since Aug 2021 | Leads hydraulic fracturing operations and efficiency; drives strategic execution and equipment life improvements |
| ProPetro | Chief Operating Officer | Since Jan 2021 | Operational leadership across Permian pressure pumping; efficiency and productivity initiatives |
| ProPetro | Senior Vice President of Operations | Since Mar 2020 | Led hydraulic fracturing division to increase operational efficiencies and maximize financial productivity |
| ProPetro | Vice President of Frac Services | — | Led division; efficiency and financial productivity focus |
| ProPetro | Director of Business Development & Technical Services | — | Oversaw growth of hydraulic fracturing operations and day-to-day technical services |
| ProPetro | Initiated Permian pressure pumping operation | Joined 2010 | Built Permian pressure pumping platform |
| Frac Tech Services | Sales and operations roles | Pre-2010 | Industry operating experience |
| Weatherford International | Sales and operations roles | Pre-2010 | Industry operating experience |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 550,000 | 572,000 | 600,000 |
| Stock Awards ($, grant-date fair value) | 2,215,845 | 2,105,373 | 1,953,457 |
| Non-Equity Incentive Plan Compensation ($) | 864,000 | 501,100 | 721,800 |
| All Other Compensation ($) | 58,608 | 52,359 | 49,809 |
| Total Compensation ($) | 3,688,453 | 3,230,832 | 3,325,066 |
| Annual Bonus Target and Actual (2024) | Value |
|---|---|
| Target bonus opportunity (% of base) | 100% |
| Target bonus ($) | 600,000 |
| Actual payout (% of target) | 120.3% |
| Actual payout ($) | 721,800 |
Perquisites: vehicle allowance; limited club memberships/dues; occasional spouse travel on chartered aircraft at no incremental cost to company .
Performance Compensation
| Annual Bonus Plan Metric (2024) | Weight | Threshold | Target | Maximum | Actual | Payout as % of Target |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($MM) | 40% | 150 | 300 | 330 | 283 | 37.7% |
| Free Cash Flow ($MM) | 20% | 40 | 79 | 87 | 150 | 40% |
| Safety (TRIR) | 10% | 0.75 | 0.65 | 0.50 | 0.74 | -0.5% (committee discretion due to early 2025 accident) |
| Diesel displacement (gallons) | 5% | 46,800,000 | 58,500,000 | 64,350,000 | 62,895,391 | 8.8% |
| Employee training (hours) | 5% | 8,000 | 10,000 | 11,000 | 9,473 | 4.3% |
| Quantitative subtotal | 80% | — | — | — | — | 90.3% |
| Individual strategic goals (Adam) | 20% | — | — | 200% scale | 149% performance | 30% payout |
| Overall bonus payout (% of target) | 100% total | — | — | — | — | 120.3% (Adam) |
Adam’s 2024 qualitative goals centered on operational execution (PMO, maintenance cost reduction, frac efficiency, equipment life) and leadership (continuous improvement, communication); the Compensation Committee certified 149% achievement for his qualitative component, contributing 30% to the overall payout .
Long-Term Incentive Awards (granted 2/28/2024):
- RSUs: 125,786 units; vest in three equal annual installments beginning on first anniversary of grant; value $919,496 (grant-date fair value) .
- PSUs: 125,786 target units; three-year performance period (1/1/2024–12/31/2026); payout 0–200% based on modified relative TSR vs peer group, with reduction if absolute TSR is below zero .
| PSU Payout Grid (Relative TSR Percentile) | ≥90th | 75th | 50th | 25th | <25th |
|---|---|---|---|---|---|
| Payout as % of target | 200% | 175% | 100% | 50% | 0% |
| If absolute TSR < 0 | 175% | 150% | 90% | 40% | 0% |
Historical PSU outcome: 2022 PSUs paid at 73% based on 6% company TSR and 36th percentile relative TSR over 3-year period .
Equity Ownership & Alignment
| Ownership Component | Detail |
|---|---|
| Beneficially owned shares | 163,376 |
| Unvested RSUs (12/31/2024) | 206,682; market value $1,928,343 |
| Unearned PSUs (12/31/2024) | 425,930 (subject to TSR outcome); market value $3,973,927 |
| Stock options exercisable | 48,938 @ $14.00; expire 3/16/2027 |
| Stock ownership guideline | COO required ≥3x base salary; 5-year compliance runway for newly designated executive officers; unvested RSUs count at a 60% value factor; PSUs excluded |
| Hedging/Pledging | Prohibited under Insider Trading Policy |
Employment Terms
| Provision | Terms |
|---|---|
| Employment agreements | None; executives covered by Executive Severance Plan |
| Severance Plan tier | Tier 2 (Adam) |
| Termination without Cause / Good Reason | Lump sum = 1.5x (base salary + target bonus); prior year earned bonus; COBRA continuation reimbursement for 12 months |
| Change in Control (within 12 months; double-trigger) | Lump sum = 2.0x (base salary + target bonus at CIC); prior year earned bonus; prorated current-year target bonus; full COBRA continuation reimbursement for 12 months |
| Clawback policy | Dodd-Frank/NYSE-compliant; recovers excess incentive comp for 3 preceding completed fiscal years after material restatement; covers current/former executive officers |
| Tax gross-ups | None on severance/equity compensation |
| Insider Trading Policy | On file; governs transactions; includes anti-hedging/anti-pledging |
Related Party Transactions and Governance Considerations
- Transportation vendor: Family relationship with an employee of J&M Burns Transportation; ProPetro incurred ~$14.2M for services in 2024 .
- Family employment: Brother-in-law Oscar M. Dominguez (VP Hydraulic Fracturing Ops) total 2024 compensation ~$983,000 (cash ~$841,000; equity ~$142,000); brother-in-law Roger Dominguez (Supply Chain Logistics Manager) total 2024 compensation ~$292,000 (cash ~$249,000; equity ~$43,000) .
- Related-party procedures: Audit Committee review/approval required for transactions >$120,000; policy considers arm’s-length terms and conflicts .
Performance & Track Record
| Company Performance Indicators (2024) | Value |
|---|---|
| Total Revenue ($) | $1.4 Billion |
| Net Cash from Operating Activities ($) | $252 Million |
| Shares Repurchased & Retired | 7.2 Million |
| Fleet transition (capacity) | ~75% electric FORCE and Tier IV DGB dual-fuel |
| Power generation equipment ordered | ~140 MW under PROPWR |
Qualitative execution (Adam): 2024 goals focused on PMO establishment, maintenance cost reduction, frac efficiency, equipment life, continuous improvement, and communication—certified performance at 149% on the qualitative component .
Compensation Structure Analysis
- Pay mix: Significant variable “at-risk” compensation via annual bonus and RSUs/PSUs; PSUs are ≥50% of LTIP for NEOs; sustainability and safety metrics integrated into annual plan .
- Year-over-year (Adam): Salary rose to $600k (from $572k); stock awards declined ($1.95M vs $2.11M); annual incentive increased ($721.8k vs $501.1k), reflecting FCF outperformance and higher qualitative achievement .
- Peer benchmarking: Compensation targeted around 50th percentile of blended peer/survey data; peer set includes Liberty, Patterson-UTI, ProFrac, etc.; Pearl Meyer advises committee .
- Say-on-pay: 98% approval at 2024 annual meeting; approach retained with elevated quantitative metrics .
Investment Implications
- Alignment and retention: Large unvested RSUs and multi-year PSUs (TSR-based) create retention hooks and align pay with shareholder returns; anti-hedging/anti-pledging and stock ownership guidelines (3x salary for COO) further reinforce alignment .
- Performance-driven cash comp: 2024 bonus favored FCF and operational execution; Muñoz’s 149% qualitative score suggests strong management emphasis on operational efficiency and equipment life—constructive for margins/free cash flow resilience through cycles .
- Potential selling pressure: RSU tranches vest annually and options expire in 2027; monitor vesting calendars and PSU settlement windows for potential insider supply events (subject to trading windows and policy) .
- Governance risk flag: Material related-party interactions via transportation vendor and family member employment warrant continued oversight of arm’s-length terms and Audit Committee controls; any escalation could pressure governance perceptions and pay program support .
- Change-in-control economics: Double-trigger severance at 2.0x (base+bonus) is market-standard and mitigates single-trigger windfalls; clawback coverage adds discipline in event of restatement .