Beth McDonald - President and Chief Operating Officer | SM Energy (SM) Executive Profile & Compensation

About Beth McDonald

Beth McDonald is Executive Vice President and Chief Operating Officer at SM Energy; she joined on September 9, 2024 and is age 46 . She previously led strategic planning, field development and marketing at Pioneer Natural Resources and held engineering roles at Hess and Total E&P USA, bringing 23+ years of upstream operating experience across Permian and South Texas . Company performance metrics embedded in executive pay include adjusted free cash flow and total shareholder return; SM’s absolute TSR over the 2021–2024 LTIP period was 28% (capped at max payout), with adjusted FCF of $1.99B and Net Debt/Adjusted EBITDAX of 0.60x driving a 1.69x LTIP multiplier . In Q3 2025, SM’s net income was $155.1M ($1.35 diluted EPS), with 19.7 MMBoe production and >53% oil mix, and management reiterated priorities of debt reduction, fixed dividend growth, and eventual share repurchases under McDonald’s leadership trajectory .

Past Roles

Organization	Role	Years	Strategic Impact
Pioneer Natural Resources	EVP – Strategic Planning, Field Development & Marketing	—	Led strategy and development across Permian and South Texas; value creation focus
Hess Corporation	Engineering roles	—	Technical engineering experience; upstream operations foundation
Total E&P USA	Engineering roles	—	Technical engineering experience; upstream operations foundation

External Roles

Organization	Role	Years	Strategic Impact
Texas A&M University (Harold Vance Dept. of Petroleum Engineering)	Industry Board Member	—	Academic-industry linkage; talent and technology alignment
Advancing Women Executives in Energy	Member	—	Leadership diversity and network engagement

Fixed Compensation

Component	2024 Detail	Notes
Base Salary	$560,000	Set near market median; effective April 2, 2024
Target Bonus %	100% of base salary	STIP metrics, 0–2x payout range
Actual 2024 STIP Paid	$211,615 (prorated)	Hire date proration; final pool multiplier 1.31x (TSR +2% had no effect)
Sign-on Bonus	$1,750,000 total; $875,000 paid at hire, remaining $875,000 after 1st anniversary; repay if voluntary departure within 12 months of either payment	Make-whole for forfeited comp from prior employer

2024 Equity Grants

Award Type	Grant Date	Shares / Units	Grant-date Fair Value	Vesting / Measurement
RSUs	9/9/2024	29,070	$1,150,009	1/3 on 9/9/2025, 1/3 on 7/1/2026, 1/3 on 7/1/2027
PSUs (Target)	10/1/2024	26,895	$1,150,000	Performance period 10/1/2024–6/30/2027; vests 7/1/2027

Performance Compensation

Short-Term Incentive Plan (STIP) – 2024

Metric	Weight	Threshold	Target	Max	Actual	Weighted Multiplier
Cash Flow ($mm, adj. FCF basis)	25%	1,453.00	1,720.00	2,141.00	1,858.00	0.35
Proved Developed Reserve Additions (MMBOE, adj. FCF basis)	20%	75.50	89.40	111.30	94.00	0.26
Finding & Development Costs ($/BOE)	15%	15.44	13.38	10.09	12.35	0.20
Sustainability (safety, spills, GHG intensity)	15%	0.85	1.00	1.25	0.90	0.10
Production Volume (MMBOE, adj. FCF basis)	15%	48.50	57.40	71.50	59.10	0.17
Cash Operating Costs ($/BOE)	10%	14.49	12.56	9.47	11.48	0.14
Qualitative Modifier (Exploration & Inventory)	—	—	—	—	+0.10 (resources added 303 MMBOE vs 80 target)	+0.10
Absolute TSR Modifier	—	+10% to +30% up	—	−10% to −30% down	+2% TSR → no impact	0.00
Final STIP Multiplier	—	—	—	—	—	1.31x

Long-Term Incentive Plan (LTIP) – 2021–2024 Performance Outcomes

Metric	Weight	Threshold	Target	Max	Actual	Payout
Free Cash Flow Generation	25%	$300M	$1.0B	$1.7B	$1.99B	200%
Net Debt / Adjusted EBITDAX	25%	2.5x	1.5x	1.0x	0.60x	200%
Sustainability (GHG, safety, spills)	25%	—	—	—	Composite: 0.76x	76%
Absolute TSR	25%	+5%	+10%	+15%	+28%	200%
Final LTIP Multiplier	—	—	—	—	—	1.69x

LTIP Design – 2024–2027 Cycle

Metrics and weighting: Adjusted FCF (25%), Absolute TSR (25%), Relative TSR (25%), Sustainability (GHG intensity 10%, Safety 10%, Spills 5%); negative absolute TSR caps payout at target; above-median relative TSR required for target on that metric .
RSUs vest ratably over three years; PSUs settle after 3-year performance with 0–200% payout; 2024 PSUs delayed to include Uinta assets in targets .

Equity Ownership & Alignment

Item	Status / Amount
Beneficial Ownership (Common Shares)	0 shares; 0.0% of 114,461,934 outstanding (as of 3/24/2025)
Unvested RSUs (12/31/2024)	29,070 units; market value $1,126,753 at $38.76/share
Unvested PSUs (Target, 12/31/2024)	26,895 units; target payout value $1,042,450 at $38.76/share
Options	None disclosed for NEOs in 2024; RSUs/PSUs only
Upcoming RSU Vests	9,690 on 9/9/2025; 9,690 on 7/1/2026; 9,690 on 7/1/2027
Pledging / Hedging Policies	Prohibited (no pledging, hedging, margin accounts, derivative transactions)
Stock Ownership Guidelines	EVPs: 3x annual base salary; unvested RSUs counted; unvested PSUs excluded
Compliance Status	Guidelines allow time to meet; specific compliance for McDonald not disclosed

Employment Terms

Term	Detail
Employment Start Date	September 9, 2024 (EVP & COO)
Contract Type	At-will; no written employment agreements for executives
Change-of-Control Protection	Double-trigger; equity accelerates/settles (PSUs at target) if CoC + qualifying termination; no single-trigger; no excise tax gross-up
Severance – CoC Termination (Estimated as of 12/31/2024)	Base Salary: $1,400,000; Cash Bonus: $1,960,000; Accelerated RSU/PSU value: $2,276,753; Continued Benefits: $61,044; Total: $5,697,797
Clawback Policy	Mandatory recoupment for accounting restatements; no discretionary waiver by Board (subject to limited exceptions)
Perquisites & Benefits	Standard employee programs; group term life up to 2x salary; ESPP access; pension/SERP not applicable for McDonald

Compensation Structure vs. Performance Metrics

Executive pay is heavily variable: STIP tied to adjusted FCF, reserves, costs, production, and sustainability; LTIP tied to adjusted FCF, TSR (absolute and relative), and sustainability .
2024 STIP pool multiplier was 1.31x with strong quantitative results and overachievement on inventory additions; TSR modifier neutral (+2%) .
2021–2024 LTIP paid at 1.69x on the strength of FCF, leverage, and TSR; sustainability underperformed versus targets .

Vesting Schedules and Insider Selling Pressure

RSU tranche dates create potential supply windows: 9/9/2025, 7/1/2026, 7/1/2027 (9,690 each from 29,070 grant) .
PSUs settle 7/1/2027 after performance period; payout 0–200% based on metrics; negative absolute TSR caps PSU payout at target .
Company prohibits hedging/pledging, reducing forced-selling risk; pre-clearance required for officer trading .

Track Record, Value Creation, and Execution Risk

Company delivered record 2024 operating results and capital returns; Board reauthorized $500M buyback and raised fixed dividend (11%) .
Q3 2025 profitability and production mix robust despite commodity price headwinds; derivative gains supported realized pricing .
Integration priorities include debt reduction, sustaining fixed dividend, and eventual share repurchases; operational continuity across basins expected near term .

Additional Governance and Strategy Context

Expected CEO appointment upon closing of the Civitas merger; pro forma board to include McDonald and balanced committee leadership between companies .

Investment Implications

Alignment: McDonald’s pay is strongly linked to FCF and TSR outcomes; clawback and no-gross-up features, plus hedging/pledging prohibitions, are shareholder-friendly .
Retention risk: Significant RSU/PSU unvested and robust CoC protection with double-trigger terms mitigate near-term retention risk; sign-on make-whole includes repayment conditions for voluntary departure in first year .
Trading signals: RSU vest dates (Sep 2025/Jul 2026/Jul 2027) and 2027 PSU settlement are potential supply events; policy constraints and ownership guidelines may dampen immediate selling pressure .
Execution: Focus on deleveraging and returns-driven operations is consistent with incentive design; sustainability underperformance in prior LTIP period suggests continued scrutiny of EHS metrics and improvement trajectory .