Lee E. Beckelman
About Lee E. Beckelman
Lee E. Beckelman is Smart Sand’s Chief Financial Officer, serving since August 2014; he is 59 and holds a BBA in Finance (High Honors) from the University of Texas at Austin . The company’s pay-for-performance framework ties his annual incentives to net free cash flow (2024) and operational/financial metrics (2023), and his long-term equity includes performance-vesting restricted stock linked to ROAIC and free cash flow (and earlier, TSR vs peers) . Company performance context (Pay vs Performance): net income of $2,992,000 (2024), $4,649,000 (2023), and $(703,000) (2022); a $100 investment on 1/1/2022 was valued at $126 (2024), $108 (2023), and $101 (2022) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hilcorp Energy Company | EVP & CFO | Dec 2009–Feb 2014 | Led finance at private E&P; upstream capital discipline and growth platform |
| Price Gregory Services, Inc. | EVP & CFO | Feb 2008–Oct 2009 | CFO through sale to Quanta Services; pipeline construction finance leadership |
| Hanover Compressor (later Exterran Holdings) | Various finance roles | 2002–2007 | Supported merger integration and global oilfield services finance |
External Roles
No public company directorships or external governance roles disclosed in the proxy materials reviewed .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $400,000 | $409,692 | $412,000 |
| Target Bonus (% of Salary) | 50% (NEOs; max 100%) | 50% (NEOs; max 125%) | 50% (NEOs; max 125%) |
| Actual Bonus Paid ($) | $85,769 | $258,106 | $206,000 |
| All Other Compensation ($) | $38,132 | $30,433 | $24,457 |
| Total Compensation ($) | $927,902 | $878,231 | $1,242,456 |
Notes:
- 2024 perquisites include apartment reimbursement ($8,657) and 401(k) employer match ($13,800) .
- Base salaries for 2023 and 2024 were set at $412,000 for Beckelman .
Performance Compensation
| Incentive Type | Metric(s) | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Annual Cash Bonus (2024) | Net free cash flow (company definition and deductions) | 50% of salary target | Not disclosed | Company exceeded target benchmark; payout $206,000 | Cash bonus for year earned/pays following year |
| Annual Cash Bonus (2023) | Adj. EBITDA; sales volumes; total production costs/ton; free cash flow | 50% of salary target | Not disclosed | Exceeded: costs/ton target, FCF stretch; base benchmark for EBITDA & volumes; payout $258,106 | Cash bonus for year earned/pays following year |
| RS — Performance (Grant Feb 2024) | ROAIC (annual for 2024–2026); annual net free cash flow vs benchmarks; payout 0–150% | 50% of 309,278 shares | Not disclosed | Not disclosed (performance period in flight) | Vests Jan 1, 2027 |
| RS — Performance (Grant Mar 2023) | ROAIC (2023–2025); cumulative FCF vs benchmarks; payout 0–150% | 50% of 109,091 shares | Not disclosed | Not disclosed (performance period in flight) | Vests Jan 1, 2026 |
| Historical Performance Metric (Grant Jul 2021) | TSR vs peer group; ROAIC; cumulative FCF (three equal tranches) | Part of 50% performance component | Not disclosed | Not disclosed | Vested Jan 1, 2024 (subject to outcomes) |
Equity Ownership & Alignment
| Metric | Value |
|---|---|
| Total Beneficial Ownership (Shares) | 1,101,541 (2.5% of 44,083,342 outstanding) |
| Shares Subject to Vesting (incl. performance) | 667,080 total; of which 339,620 performance-based |
| Outstanding Unvested Time-Based RS (12/31/2024) | 249,331 shares; market value $560,995 at $2.25/share |
| Outstanding Unearned Performance RS (12/31/2024) | 263,731 shares; market/payout value $934,034 |
| Latest Annual RS Grant (Feb 2024) | 309,278 shares; 50% service-vest over 4 years, 50% performance-vest to Jan 1, 2027 |
| Prior RS Grant (Mar 2023) | 109,091 shares; 50% service-vest over 4 years, 50% performance-vest to Jan 1, 2026 |
| Hedging/Pledging | Prohibited (hedging, margin purchases, and pledging banned) |
| Options | No options granted in 2024; equity program consisted of restricted stock |
Detailed Vesting Schedule (Service-based, as of 12/31/2024)
| Tranche | Shares | Vesting Dates |
|---|---|---|
| July 30, 2025 | 26,510 | 7/30/2025 |
| June 7, 2025 & 2026 (equal installments) | 27,273 | 6/7/2025; 6/7/2026 |
| March 17, 2025–2027 (equal installments) | 40,909 | 3/17/2025; 3/17/2026; 3/17/2027 |
| Feb 22, 2025–2028 (equal installments) | 154,639 | 2/22/2025; 2/22/2026; 2/22/2027; 2/22/2028 |
Employment Terms
- Change-in-control: Performance RSUs deemed achieved at target immediately prior to a change in control; time-based RSUs accelerate only on a double-trigger (termination without Cause or resignation for Good Reason within 18 months post-CIC). Good Reason is defined as a ≥10% reduction in current base salary and target bonus; Cause per the 2016 Plan .
- Clawback/forfeiture: 2016 Plan authorizes forfeiture, rescission, and clawback, including Sarbanes-Oxley 304 and company policies; adverse action/cause triggers termination and recoupment of awards .
- Retirement/benefits: NEOs participate in benefits; 401(k) match 100% up to 3% and 50% between 3–5% of eligible compensation; matching fully vested when made .
- Severance multiples, non-compete/non-solicit, consulting: Not disclosed in reviewed proxies.
Compensation Committee Analysis
- Committee members: Frank Porcelli (Chair), Timothy J. Pawlenty, Sharon Spurlin; all independent under NASDAQ and Exchange Act .
- Consultant: Meridian Compensation Partners engaged since late 2020; independence assessed and affirmed; Meridian advised on executive and director comp and equity programs .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($) | $(703,000) | $4,649,000 | $2,992,000 |
| Value of $100 Investment (Start 1/1/2022) | $101 | $108 | $126 |
- 2024 annual bonus tied solely to net free cash flow reflects increased emphasis on cash generation; 2023 bonus design balanced operational efficiency, throughput, and profitability metrics .
Related Party Governance Context
- CEO family members employed in operating and legal roles; related person transaction policy adopted and board oversight described (quarterly review) .
Investment Implications
- Strong alignment through significant equity ownership (2.5% of shares) and large unvested balances, including performance tranches extending to 2026–2027; hedging and pledging prohibited, reducing misalignment risk .
- Upcoming service-vesting tranches (2025–2028) may introduce periodic supply from vest-driven liquidity; 2025 tranche dates are clustered on 2/22, 3/17, 6/7, and 7/30 .
- Incentive design has shifted toward cash generation (2024) from multi-metric (2023), potentially increasing near-term FCF focus; long-term PSUs tethered to ROAIC and FCF should sustain capital discipline and returns orientation .
- CIC economics are moderate shareholder-friendly (double-trigger for time-based awards; performance at target), avoiding single-trigger windfalls; robust clawback language adds governance safeguards .
- Governance considerations include CEO family employment; while the company outlines related party oversight, investors should monitor for potential conflicts and compensation rigor across the executive team .