Jonathan Frates
SANDRIDGE ENERGYAbout Jonathan Frates
Jonathan Frates is Executive Vice President and Chief Financial Officer (CFO) of SandRidge Energy, appointed effective October 21, 2024; age 42 as of April 14, 2025, with prior service as Chairman of the Board from June 2018 until his resignation from the Board on October 1, 2024 . He holds a BBA from Southern Methodist University and an MBA from Columbia Business School, and previously served at Vision One Management Partners, Daughters Capital, and Icahn Enterprises in investment leadership roles . 2024 executive compensation at SandRidge for NEOs was tied to a weighted scorecard of seven operational and cost metrics (LOE, CAPEX, production, HSE, G&A), with LTIP PSUs earned based on achieving specified annual target ranges; Frates had a 50% AIP target as CFO and received $52,352 for 2024, with no employee equity awards granted to him in 2024 . As of April 14, 2025, he beneficially owned 47,202 shares, representing approximately 0.13% of 36,687,591 shares outstanding; SandRidge prohibits hedging and pledging, and maintains stock ownership guidelines requiring executives to hold 60% of net shares until compliant within five years .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SandRidge Energy | Executive Vice President & Chief Financial Officer | Oct 21, 2024–present | Finance leadership; NEO compensation tied to AIP scorecard and LTIP framework |
| SandRidge Energy | Chairman of the Board (Independent Director) | Jun 2018–Oct 1, 2024 | Board leadership; service on Compensation and Nominating & Governance committees |
| SandRidge Energy | Independent Director | Jun 2018–Oct 1, 2024 | Governance oversight; director compensation and equity vesting approved on resignation |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Vision One Management Partners L.P. | Investment Director | Aug 2022–Sep 2024 | Investment leadership (Miami-based manager) |
| Daughters Capital Corp. | Managing Director & Head of Family Office | Jul 2021–Jul 2022 | Private/public equity investing |
| Icahn Enterprises L.P. | Managing Director | Nov 2015–Jul 2021 | Diversified holdings; multiple board roles among Icahn-affiliated companies |
| Herc Holdings, Inc. | Director | Aug 2019–May 2022 | Industrial equipment rental governance |
| VIVUS, Inc. | Chairman | Dec 2020–Jul 2021 | Biopharma board leadership |
| Viskase Companies, Inc. | Chairman/Director | Mar 2016–Jul 2021 | Meat casing manufacturer oversight |
| American Railcar Industries, Inc. | Director | Mar 2016–Dec 2018 | Railcar manufacturing governance |
| CVR Refining, LP | Director | Apr 2016–Jan 2019 | Downstream energy governance |
| Ferrous Resources Ltd. | Director | Dec 2016–Jul 2019 | Brazil iron ore governance |
| CVR Partners, LP | Director | Apr 2016–Jul 2021 | Nitrogen fertilizer governance |
| CVR Energy, Inc. | Director | Mar 2016–Jul 2021 | Petroleum refining & nitrogen fertilizer governance |
Fixed Compensation
| Metric | 2024 |
|---|---|
| Base Salary Rate | $335,000 (effective Oct 2024) |
| Salary Paid (NEO table) | $64,423 (partial year) |
| All Other Compensation | $773 |
| All Other Compensation – Breakdown | 401(k) match: $773; Life insurance premiums: $0; Dividend equivalents: $0 |
Performance Compensation
Short-Term Incentive (AIP) – 2024
| Item | Value |
|---|---|
| Target Opportunity (% of Base Salary) | 50% |
| Payout | $52,352 (calculated based on Oct 1, 2024 effective date) |
Annual Incentive Scorecard (company-wide metrics and weights for 2024)
| Metric | Weight | Threshold | Target | Maximum |
|---|---|---|---|---|
| Health, Safety & Environmental Goals | 10% | 2 of 4 Metrics | 4 of 4 Metrics | Plus “Stretch” on 2 Metrics |
| Total CAPEX | 15% | $39.0M | $36.0M | $33.0M |
| Return on CAPEX | 10% | 20% | 35% | 50% |
| Base Oil Production | 10% | 0.80 MMBbls | 0.95 MMBbls | 1.10 MMBbls |
| Total Base Production within CAPEX | 15% | 5.4 MMBoe | 5.9 MMBoe | 6.4 MMBoe |
| Lease Operating Expense | 25% | $43.0M | $39.5M | $36.0M |
| Adjusted G&A Expense | 15% | $11.0M | $9.8M | $8.5M |
Long-Term Incentive Program (LTIP) – 2024 Design and Results
| Component | Design | 2024 Performance Metrics | 2024 Actuals | Vesting/Payout |
|---|---|---|---|---|
| RSUs | 2/3 of LTIP target; time-based over 3 years (equal annual installments or designated schedule) | N/A | N/A | Vests over ~3 years; service-based |
| PSUs | 1/3 of LTIP target; one-year performance period; forfeited if targets missed beyond limits | Adjusted G&A, LOE, Base Oil & CAPEX, Total Production & CAPEX | G&A $9.3M; LOE $40.0M; Base Oil 0.92 MMBbls; Total Production 6.1 MMBoe | Earned and fully vested on Mar 12, 2025 for 2024 grants (not applicable to Frates; no 2024 PSUs granted to him) |
Note: Mr. Frates received no employee RSU or PSU grants in 2024; his NEO LTIP target for 2024 shows 50% under LTIP framework but with no grants as he became NEO in October 2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Apr 14, 2025) | 47,202 shares |
| Shares Outstanding (basis for % calc) | 36,687,591 shares |
| Ownership as % of Shares Outstanding | ≈0.13% (47,202 / 36,687,591) |
| Employee Equity Awards (as of Dec 31, 2024) | None granted to Frates in 2024; no outstanding RSUs/PSUs/options |
| Director Equity – 2024 | Upon his Oct 1, 2024 Board resignation, all of Frates’s unvested director stock awards vested per Board approval |
| Stock Ownership Guidelines | Five-year compliance window; until compliant, executives must hold 60% of net shares; CEO must hold 50% of net shares; policy in effect for executives and directors |
| Anti-Hedging & Anti-Pledging | Hedging and pledging of Company shares prohibited for executives and directors |
Employment Terms
| Term | Provision |
|---|---|
| Employment Agreement | No formal written agreements for continuing NEOs, including Frates |
| Severance Plan | Salary continuation only; for Frates, 6 weeks if involuntarily terminated without Cause (tenure-based) |
| Change-in-Control Treatment | Executives generally not eligible for payment or accelerated vesting under AIP, LTIP, Omnibus Plan on termination or change in control unless determined by Compensation Committee/Board |
| Clawback Policy | Adopted Oct 2, 2023; 3-year look-back; applies to incentive-based compensation for current/former executives regardless of fault; additional misconduct-based clawback in plans/agreements |
| Insider Trading Policy | Policy filed as Exhibit 19.1 to 2024 10-K; governs trading compliance |
| Indemnification | Indemnification agreements and D&O insurance maintained for directors/executives |
Director Compensation (context for 2023–2024 prior to CFO role)
| Metric | 2023 | 2024 |
|---|---|---|
| Frates – Fees Earned | $67,691 | $65,625 |
| Frates – Stock Awards (grant date fair value) | $150,009 | $150,001 (vested upon resignation) |
| Frates – All Other Compensation (dividends) | $2,166 | $1,236 |
| Frates – Total Director Compensation | $219,866 | $216,862 |
| Program Notes | 2023–2024 increased director comp levels: Chair $225k; others $175k; $150k in stock; committee retainers tiered |
Performance Metrics Tied to Compensation (2024)
| Program | Metric | Weighting | Target | Actual | Payout/Vesting |
|---|---|---|---|---|---|
| AIP | Health, Safety & Environmental Goals | 10% | 4 of 4 metrics | Not disclosed (AIP actual by metric) | Cash payout based on weighted score + individual rating |
| AIP | Total CAPEX | 15% | $36.0M | Not disclosed (AIP actual by metric) | Cash; CFO payout $52,352 |
| AIP | Return on CAPEX | 10% | 35% | Not disclosed | Cash |
| AIP | Base Oil Production | 10% | 0.95 MMBbls | Not disclosed | Cash |
| AIP | Total Base Production within CAPEX | 15% | 5.9 MMBoe | Not disclosed | Cash |
| AIP | Lease Operating Expense | 25% | $39.5M | Not disclosed | Cash |
| AIP | Adjusted G&A Expense | 15% | $9.8M | Not disclosed | Cash |
| LTIP (PSUs) | Adjusted G&A | N/A | $8.5–$11.0M | $9.3M | PSUs vested Mar 12, 2025 (Frates: none granted) |
| LTIP (PSUs) | Lease Operating Expense | N/A | $36.0–$43.0M | $40.0M | Vested (others) |
| LTIP (PSUs) | Base Oil & CAPEX | N/A | 0.80–1.10 MMBbls; $33–$39M | 0.92 MMBbls | Vested (others) |
| LTIP (PSUs) | Total Production & CAPEX | N/A | 5.4–6.4 MMBoe; $33–$39M | 6.1 MMBoe | Vested (others) |
Risk Indicators & Red Flags
- No formal employment agreement for CFO; retention risk mitigated by AIP and future LTIP participation but lacks contract protections such as non-compete/non-solicit disclosed in proxy .
- Anti-pledging/anti-hedging policy reduces alignment risk from collateralization/hedging; clawback policy adds recovery risk management for incentive comp .
- Change-in-control terms generally exclude automatic acceleration for equity; awards may be subject to committee/Board discretion, limiting windfalls but increasing uncertainty .
- Upon board resignation on Oct 1, 2024, Frates’s unvested director equity vested immediately, which increased tradable float from his holdings; employee awards were not present for 2024, lowering near-term vest-related selling pressure as a new CFO .
Compensation Structure Analysis
- 2024 AIP emphasizes cost discipline and capital efficiency (LOE 25%, CAPEX 15%, Adjusted G&A 15%), aligning CFO incentives to cash flow and EBITDA preservation; Frates’s target was 50% of base salary, with $52,352 paid for his partial-year service .
- LTIP design uses a 2/3 RSU time-vest component and 1/3 PSU one-year performance component; PSUs vested based on achieving specified ranges across G&A, LOE, oil mix, and total production/CAPEX; Frates had no 2024 employee grants due to timing of appointment .
- Governance controls: clawback in place (Dodd-Frank compliant), stock ownership guidelines (five-year window; hold 60% of net shares until compliant), and anti-pledging/anti-hedging policies support pay-for-performance discipline .
Investment Implications
- Alignment: CFO AIP targets prioritize cost control and capital returns, consistent with SandRidge’s focus on LOE, G&A, and CAPEX outcomes; LTIP PSU structure reinforces annual operational targets, though Frates’s 2024 participation was limited to AIP due to appointment timing .
- Selling Pressure: Director equity vested upon his board resignation, increasing liquidity of Frates’s holdings; absence of 2024 employee equity awards reduces near-term vest-driven selling pressure as CFO, with prohibited pledging/hedging further dampening forced sale risks .
- Retention/COC Economics: No formal employment agreement and modest severance (six weeks of base salary) could imply higher mobility; lack of automatic equity acceleration in change-in-control scenarios suggests limited golden parachute exposure and disciplined award governance .
- Ownership: Beneficial ownership is modest at ~0.13%, so alignment relies more on variable pay metrics and governance policies than on deep personal ownership; adherence to stock ownership guidelines over time will be important to monitor .