Justin Brown
Southwest Gas HoldingsAbout Justin Brown
Justin L. Brown is President of Southwest Gas Corporation (utility subsidiary of Southwest Gas Holdings) and was one of the Company’s named executive officers in 2024; he is 52 and has served as President since 2022 after previously serving as Senior Vice President/General Counsel from 2020–2022 . Company performance during his tenure included utility net income of $261.2 million in 2024, utility ROE of 8.1%, and Company EPS of $2.76, with operational achievements such as 41,000 new meter sets and per-customer O&M held flat year-over-year . The long-term plan emphasizes utility optimization and regulatory outcomes; Brown’s 2024 “special PSUs” explicitly tie his incentives to utility optimization, operational performance, cost management, and regulatory outcomes—with vesting contingent on performance determinations by the CEO .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Southwest Gas Corporation | President | 2022–Present | Leads utility optimization, operational performance, cost management, and regulatory outcomes; 2024 special PSUs granted to incentivize these goals . |
| Southwest Gas Corporation | Senior Vice President/General Counsel | 2020–2022 | Legal leadership through transformative corporate changes and regulatory processes . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 459,759 | 531,877 | 577,645 |
| Discretionary/Sign-on Bonus ($) | 224,025 (discretionary) | — | — |
| Employer Contributions (EDP/EIP) ($) | — | 7,956 | 21,253 |
| Above-Market Interest (Deferred Comp) ($) | 11,735 | 592,495 | 24,230 |
| Total Compensation ($) | 1,172,676 | 2,616,506 | 3,959,990 |
- Perquisites and personal benefits for NEOs were less than $10,000 each in 2024 .
- Executive Deferral Plan (EDP) contributions and balances: Executive contributions $109,038, company contributions $21,253, aggregate balance $690,620 in 2024 .
Performance Compensation
Annual Incentive – 2024 Structure and Outcome
| Item | Value |
|---|---|
| Target bonus (% of salary) | 75% |
| Total achievement (% of target) | 158% |
| Incentive earned (% of salary) | 118.5% |
| Incentive earned ($) | $690,855 |
| Metric (Utility Officers) | Weighting | Contribution to Payout (% of Target) | Notes |
|---|---|---|---|
| Utility Net Income (adjusted) | 40% | 80.00% | Performance adjusted per policy for IPO-related allocations; threshold 80% of target utility adjusted net income required for any payout . |
| Productivity (O&M per customer) | 30% | 26.98% | Target based on budgeted O&M and customer additions; IPO-related cost allocation adjustment applied . |
| Customer Satisfaction | 15% | 24.75% | Target calibrated to ~2023 actuals . |
| Safety – Damage per 1,000 tickets | 7.5% | 15.00% | Targets modestly tightened vs. 2023 (response-time maximum slightly decreased) . |
| Safety – Response times within 30 minutes | 7.5% | 11.74% | — |
Long-Term Incentives – 2024 Grants and Design
| Component | Grant Details | Vesting | Performance Metrics / Targets |
|---|---|---|---|
| Time-lapse RSUs | 6,658 units; grant-date fair value $501,566 | 40% after 1 year; 30% after 2 years; 30% after 3 years | Time-based retention and alignment; dividend equivalents accrue and are reallocated . |
| PSUs (Target) | 9,987 target units; grant-date fair value $752,321 | Earned after three-year period (2024–2026), payout 50–200% of target | Utility officers: 60% cumulative 3-year utility adjusted net income, 40% 3-year average utility ROE; target levels published (below) . |
| Special PSUs (Utility Optimization) | 15,785.320 units; grant-date fair value $1,189,084 | 50% on first anniversary; 50% on second anniversary, contingent on CEO determination of meeting optimization/performance objectives; initial vest occurred in Q1 2025 | Focused on utility optimization, operational performance, cost management, and regulatory outcomes; CEO may partially/fully eliminate vesting . |
Three-year PSU performance grid (2024–2026):
| Performance Level | 3-year Utility Adjusted Net Income ($000s) | 3-year Average Utility ROE | % of Target Award Earned |
|---|---|---|---|
| Below Threshold | <693,991 | <7.0% | 0% |
| Threshold | 693,991 | 7.0% | 50% |
| Target | 771,101 | 7.5% | 100% |
| Maximum | 809,657 | 8.0% | 200% |
Near-term Vesting Schedule (Time-lapse RSUs)
| Grant Year | Vests Jan 2025 (#) | Vests Jan 2026 (#) | Vests Jan 2027 (#) |
|---|---|---|---|
| 2024 | 2,754 | 2,065 | 2,065 |
| 2023 | 1,829 | 1,829 | — |
| 2022 | 535 | — | — |
Note: Special PSUs vest 50% on Feb 22, 2025 and 50% on Feb 22, 2026, subject to CEO performance determination; initial vesting occurred in Q1 2025 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (SWX) | 32,298 shares |
| Beneficial Ownership (CTRI) | 18,700 shares |
| Unvested Time-lapse RSUs | 11,077 units; market value $783,255 at $70.71/share (12/31/2024 close) |
| Unearned PSUs | 35,796 target units; payout value $2,531,157 at $70.71/share |
| Ownership guidelines | Officers must hold multiples of base salary (3x at SVP-and-above; 5x for CEO); retention requirements: 50% for officers, 75% for CEO; qualified shares include earned-but-unvested RSUs/PSUs |
| Hedging, pledging, margin | Prohibited for directors and officers; short sales, derivatives, hedging/monetization, and margin accounts banned |
All directors and executive officers together beneficially own ~0.51% of SWX outstanding shares as of March 3, 2025; individual officer percentages not disclosed .
Employment Terms
| Scenario | Economics / Protections |
|---|---|
| Change-in-control (Double-trigger) | 2.5 years salary; 2.5 years annual incentive at target; welfare benefits for 2.5 years; vesting (pro-rata or target/actual for PSUs); outplacement up to $30k; additional SERP credit; “best net” excise approach (no gross-ups) . |
| Estimated CIC payout (as of 12/31/2024) | Salary $1,457,500; Incentive $1,093,125; Welfare $67,137; Stock acceleration $2,612,002; Outplacement $30,000; Additional SERP benefits $1,609,735; Total $6,869,499 . |
| Absent CIC – RSUs | Full vest upon death, disability, RIF/job elimination, or retirement at ≥55 with ≥10 years service; 2024 RSU value $783,255 at 12/31/2024 close price . |
| Absent CIC – PSUs | Pro-rata vesting upon death, disability, RIF/job elimination, or retirement (1/3 for 2024–2026 cycle; 2/3 for 2023–2025 cycle at target assumption); 2024 PSU pro-rata value $674,574 (assumes target) . |
| Clawback policy | NYSE/SEC compliant clawback covers excess incentive comp linked to financial reporting measures across past 3 years; applies to time-based RSUs and PSUs; administered by Compensation Committee . |
| Non-compete / non-solicit | Not specifically disclosed for Brown; insider trading policy filed separately . |
Pension, Deferred Comp, and Benefits
| Plan/Metric | Brown |
|---|---|
| Retirement Plan (Credited Service/ PV) | 19 years; $841,493 PV |
| SERP (Credited Service/ PV) | 19 years; $1,805,775 PV (limited benefit of ~$24,731 annually if leaving now; not fully vested) |
| EDP – Executive Contributions (2024) | $109,038 |
| EDP – Company Contributions (2024) | $21,253 |
| EDP – Aggregate Balance (YE 2024) | $690,620 |
Performance & Track Record
- 2024 utility net income $261.2 million, utility ROE 8.1%, Company EPS $2.76; 41,000 new meter sets; O&M per customer held flat; constructive regulatory outcomes including ~$59 million annual revenue increase in Nevada; Arizona and California rate case filings .
- Centuri IPO completed in April 2024; separation planning continued in 2024 .
- Say-on-pay 2024 approval ~98%; the Committee made no changes to philosophy or plan design following strong support .
Compensation Committee and Peer Group Context
- Independent Compensation Committee with Aon as independent consultant; annual risk review concluded incentives do not encourage inappropriate risk taking .
- 2024 peer group (19 utilities) includes Atmos Energy, NiSource, Spire, NorthWestern Energy Group, ONE Gas, Pinnacle West, among others; pay targeted at the 50th percentile .
Investment Implications
- Alignment: Brown’s incentives heavily tied to utility adjusted net income, productivity, customer satisfaction, and safety (annual), and to multi-year utility ROE and utility adjusted net income (PSUs), plus a bespoke “utility optimization” special PSU tranche—linking pay to execution of operational and regulatory milestones .
- Vesting/selling pressure: A concentrated RSU vest calendar (Jan 2025–2027) and special PSUs vesting in 2025 and 2026 could create episodic liquidity events; hedging/pledging prohibitions mitigate leverage-driven selling but do not eliminate normal tax-related sales around vesting .
- Retention/transition: Double-trigger CIC protections and substantial estimated CIC value indicate moderate retention security; clawback coverage across RSUs/PSUs supports governance but increases recoupment risk if restatements occur .
- Ownership: Direct SWX ownership plus significant unvested equity supports alignment; officer ownership guidelines and retention requirements further strengthen alignment, though individual compliance status is not disclosed .