Kyle S. Ramachandran
About Kyle S. Ramachandran
President and Chief Financial Officer of Solaris Energy Infrastructure, Inc. (“SEI”); joined at founding in 2014, named CFO in 2017 and President in 2018. Age 40, with prior roles at Barra Energia (E&P, Brazil), First Reserve (energy private equity), and Citigroup M&A; B.S. in Finance and Accounting from Boston College and member of its Board of Regents . SEI’s compensation program ties pay to EBITDA and TSR; EBITDA rose from $72.237 million (2022) to $86.087 million (2023) to $95.949 million (2024), with TSR driving 2024 outperformance and strong “compensation actually paid” outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Citigroup (M&A Group) | Investment Banker | Prior to First Reserve (years not disclosed) | Transaction execution and capital markets foundation |
| First Reserve Corporation | Investor | Prior to Barra Energia (years not disclosed) | Energy PE investing discipline |
| Barra Energia (Rio de Janeiro) | Management Team Member | Pre-2014 | E&P operating and international experience |
| Solaris (SEI predecessor) | Finance leadership | 2014–2017 | Enabled IPO-era scale-up; became CFO in 2017 |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Boston College | Board of Regents | Current | External governance network and academic ties |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $319,781 | $326,350 | $350,000 |
| Target Annual Incentive (% of Salary) | 90% | 90% | 90% |
| Non-Equity Incentive Paid ($) | $286,665 | $293,128 | $283,500 |
| One-time Discretionary Bonus ($) | $0 | $0 | $116,500 |
Notes:
- 2024 one-time bonus awarded recognizing “exemplary efforts in transforming the Company’s business” .
- Annual incentive targets/payouts reflect EBITDA, FCF, operational utilization/market share, safety, and individual performance .
Performance Compensation
Annual Incentive – 2024 Structure and Outcome
| Metric | Weighting | Target | Actual | Earned Payout (% of Annual Incentive) |
|---|---|---|---|---|
| Financial Metrics (EBITDA, FCF) | 25% | $108 million | $102 million | 24% |
| Operating Metrics (utilization/market share) | 25% | 1.094 | 1.123 | 26% |
| Safety | 10% | 0.8 | 1.15 | 0% |
| Individual Performance | 40% | N/A | Variable | Variable |
- Kyle’s 2024 target annual incentive: $315,000 (90% of $350,000 base); performance achievement ~90% of target; payout $283,500 .
LTIP Equity Awards and Vesting Design
| Element | Grant Date | Quantity / Value | Vesting | Performance Metrics |
|---|---|---|---|---|
| Restricted Stock Awards (RSAs) | Mar 1, 2024 | 104,313 shares; $887,704 grant date fair value | Time-based; ratable over 3 years; dividends/vote prior to vest | N/A (time-based) |
| Performance-based RSUs (PSUs) | Mar 1, 2024 | Target 34,768; Max 69,536; $295,876 grant date fair value | 3-year period; Relative TSR vests 25%, 25%, 50 by year; Absolute TSR cliff at year 3 | Absolute TSR (≥15% → 200% payout); Relative TSR (≥75th percentile → 200% payout) |
- Company reported that 2023 PSUs (tranche 2) and 2024 PSUs (tranche 1) tied to Relative TSR vested at 200% of target, indicating strong shareholder-aligned performance .
Equity Ownership & Alignment
| Category | Detail | As of/Date |
|---|---|---|
| Class A Common Stock owned | 368,338 shares; <1% of class | Mar 21, 2025 |
| Class B Common Stock owned | 546,677 shares; 1.2% of class | Mar 21, 2025 |
| Combined voting power | 915,015 votes; 2.3% of total | Mar 21, 2025 |
| Unvested restricted Class A | 158,808 shares (sole voting, no dispositive power) | Mar 21, 2025 |
| Class B (direct) | 489,511 shares | Mar 21, 2025 |
| Class B (IRA) | 57,166 shares via Equity Trust Company (disclaims beyond pecuniary interest) | Mar 21, 2025 |
| Company Hedging/Pledging Policy | Hedging and pledging prohibited; pledging only via Audit Committee waiver | Policy filing referenced |
| Pledged shares (Directors/Execs) | None pledged by current directors or executive officers | Mar 21, 2025 |
Outstanding and Vested Equity (Liquidity cadence)
| Metric | Shares | $ Value | Notes |
|---|---|---|---|
| RSAs unvested (time-based) | 184,953 | $5,322,947 (at $28.78, 12/31/2024) | Vests in 3 equal annual installments on applicable grant anniversaries |
| PSUs unearned/unvested | 55,896 | $1,608,680 (at $28.78, 12/31/2024) | Half Absolute TSR (3-year cliff), half Relative TSR (25/25/50) |
| Shares vested in 2024 | 78,471 | $667,788 (at $8.51, 3/1/2024) | Annual vest date March 1 |
Implications:
- Significant multi-year RSA/PSU vesting cadence creates periodic supply; however, strong policy guardrails (no hedging/pledging; blackout windows) mitigate adverse signal risk .
Employment Terms
| Term | Key Provisions |
|---|---|
| Employment agreement | None; no fixed-term contract |
| Change-in-Control (CIC) | Double-trigger; severance lump sum = 2.5x–3.0x (salary + target bonus) depending on tier; 18–24 months COBRA-equivalent payment; prior-year earned bonus; pro-rata current-year bonus |
| Equity on CIC | Full vesting of unvested equity; PSUs at greater of 100% of target or actual performance measured at termination |
| Clawback | SEC/NYSE-compliant clawback adopted in 2023 for incentive comp upon accounting restatement |
| 401(k) | Company match $1-for-$1 up to 6% since 2023; no pension/SERP; limited perquisites |
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| EBITDA ($) | $72,237,000 | $86,087,000 | $95,949,000 |
| Net Income ($) | $33,512,000 | $38,775,000 | $28,918,000 |
| TSR – $100 initial value | $82 | $69 | $262 |
| Peer TSR – $100 | $177 | $166 | $198 |
Highlights:
- 2024 was “transformational”: MER acquisition (Mobile Energy Rentals) closed Sep 11, 2024; created Solaris Power Solutions, contributing over half of Q4 2024 earnings; capital investment plan underway to expand distributed power fleet, targeting data centers and non-O&G end markets; logistics segment remains stable cash generator .
- Compensation framework emphasizes EBITDA/FCF and TSR, aligning incentives with cash generation and shareholder returns; 2024 Relative TSR PSU tranches paid at 200% .
Compensation Committee & Shareholder Feedback
- Peer group includes Archrock, Cactus, Dril-Quip, U.S. Silica, ProPetro, Liberty Energy, ProFrac, Newpark, Patterson-UTI, Nine Energy, NOV, Oil States, Select Water Solutions; targeting median total compensation with heavy long-term mix .
- 2024 Say-on-Pay approval ~96%, supporting stability in philosophy/practices .
Risk Indicators & Red Flags
- No hedging/pledging permitted (waivers rare); no option repricing; no excise tax gross-ups; clawback policy adopted; no employment contract (reduces guaranteed pay risk) .
- No delinquent Section 16(a) filings for 2024 .
- Related-party arrangements disclosed and overseen; ongoing admin services with CEO-affiliated entities at cost; MER acquisition-related leases and equipment rentals disclosed; policy governs audit committee review of related-party transactions .
Compensation Structure Analysis
- Year-over-year mix: High variable pay persists; for non-CEO NEOs, ~75% of 2024 target direct compensation is variable; increased PSU use since 2023 adds relative/absolute TSR gates (harder to earn at high payout without execution) .
- 2024 discretion: One-time bonuses for business transformation reflect Compensation Committee’s use of discretion anchored in strategic repositioning (Power Solutions) .
- Governance: Independent Compensation Committee, consultant engagement, market benchmarking, clawbacks, anti-hedging/pledging; no pension .
Equity Ownership & Alignment (Detailed)
| Ownership Element | Shares | % |
|---|---|---|
| Class A owned | 368,338 | <1% |
| Class B owned | 546,677 | 1.2% |
| Combined voting power | 915,015 | 2.3% |
| Unvested RSAs (voting, non-dispositive) | 158,808 | N/A |
| Class B (direct) | 489,511 | N/A |
| Class B (IRA) | 57,166 | N/A |
Policy alignment:
- Anti-hedging/pledging policy; no pledges by execs/directors .
- PSUs tied to TSR (relative and absolute) with capped maximum (200%), reducing windfall risk from non-fundamental drivers .
Investment Implications
- Alignment: High proportion of at-risk pay (annual EBITDA/FCF/utilization + TSR PSUs) and meaningful unvested equity create strong retention and performance incentives; 200% relative TSR vesting indicates confidence and execution in 2024 .
- Liquidity/Selling Pressure: Annual vesting (March 1) and sizable unvested RSAs/PSUs imply periodic settlement-related share flow; absence of pledging and robust insider trading policy reduces forced-selling risks .
- Retention/CIC Economics: Double-trigger CIC with 2.5x–3.0x cash severance plus equity acceleration and pro-rata bonus is competitive; enhances continuity but can elevate M&A-related dilution costs; equity acceleration for PSUs at greater of target or actual performance aligns with realized shareholder outcomes .
- Execution Risk: Strategy pivot to distributed power (MER) elevates growth potential tied to data centers but increases capex intensity; compensation’s emphasis on EBITDA/FCF should discipline capital deployment; watch PSU vesting trends and continued 200% relative TSR payouts as confidence signals .
- Governance/Say-on-Pay: Strong 96% support and best-practice structures (clawbacks, anti-hedging/pledging, independent committee) lower governance risk; limited perqs and no pension avoid pay-creep .