Robert Stefani
Southwest Gas HoldingsAbout Robert Stefani
Senior Vice President and Chief Financial Officer of Southwest Gas Holdings, Inc. since November 30, 2022; age 50 as of December 31, 2024; prior CFO/Treasurer of PECO Energy since 2018; earlier roles at Exelon corporate development; U.S. Navy officer (aviation) 1996–2003; BBA (Accounting) from University of Notre Dame; MBA from University of Texas at Austin . 2024 company performance context: EPS $2.76, utility net income $261.2 million, utility ROE 8.1%, Southwest revenue ~$2.5 billion; Centuri revenues ~$2.6 billion . Shareholder say‑on‑pay support was ~98% in 2024, indicating broad approval of the pay program .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Southwest Gas Holdings, Inc. | SVP/Chief Financial Officer | 2022–Present | Leads financial strategy, planning, accounting, treasury, capital markets, strategic investment, risk management; principal financial officer for Holdings and Southwest Gas Corporation . |
| PECO Energy (Exelon) | SVP, Chief Financial Officer & Treasurer | 2018–2022 | Directed all financial activities; strengthened FP&A, operational finance, investor reporting . |
| U.S. Navy | Commissioned Officer (Naval Aviation) | 1996–2003 | Leadership, operations, discipline; logistics and mission execution experience . |
External Roles
No public-company directorships disclosed for Stefani .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 61,781 | 560,548 | 593,601 |
| Target Annual Incentive (% of Salary) | 70% | 70% | 70% |
| Actual Annual Incentive Paid ($) | 0 | 563,500 | 611,156 |
| Sign‑on Bonus ($) | 625,000 | — | — |
Performance Compensation
2024 Annual Incentive Structure and Results (Holdings Officers: CEO and CFO)
| Metric | Weight | Target | Actual | Payout Contribution (% of Target) | Vesting |
|---|---|---|---|---|---|
| Utility Adjusted Net Income | 30% | Not disclosed | $249.9 million | 60.00% | Annual cash; paid Q1 2025 |
| Centuri EBITDA | 5% | Not disclosed | $233.5 million | 3.30% | Annual cash; paid Q1 2025 |
| Centuri Free Cash Flow | 5% | Not disclosed | $136.8 million | 3.89% | Annual cash; paid Q1 2025 |
| O&M per Customer (Productivity) | 30% | Not disclosed | Not disclosed | 26.98% | Annual cash; paid Q1 2025 |
| Customer Satisfaction | 15% | Not disclosed | Not disclosed | 24.75% | Annual cash; paid Q1 2025 |
| Safety – Damage per 1,000 tickets | 7.5% | Not disclosed | Not disclosed | 15.00% | Annual cash; paid Q1 2025 |
| Safety – Response ≤30 min | 7.5% | Not disclosed | Not disclosed | 11.74% | Annual cash; paid Q1 2025 |
| Total Achievement | 100% | — | — | 146% | — |
CFO payout: total achievement 146% → incentive earned 102.2% of salary = $611,156 .
2024 Long‑Term Incentive (PSUs) – Three‑Year Cycle (2024–2026)
| Metric | Weight | Threshold | Target | Maximum | Payout Range |
|---|---|---|---|---|---|
| Consolidated Adjusted EPS (3‑yr cumulative) | 60% | $8.96 | $10.57 | $11.63 | 50%–200% of target PSUs |
| Utility Adjusted Net Income (3‑yr cumulative, $000s) | 40% | 693,991 | 771,101 | 809,657 | 50%–200% of target PSUs |
| Utility Average ROE (3‑yr) | 40% (for utility officers) | 7.0% | 7.5% | 8.0% | 50%–200% of target PSUs |
Stefani’s 2024 LTI grant targets: Time‑lapse RSUs 76% of salary ($437,000; 6,898 RSUs); PSUs 114% of salary ($655,500; 10,347 PSUs) .
Special 2024 PSUs (Centuri Separation Incentive)
| Executive | Special PSUs Granted | Initial Vest | Remaining Vest Condition | Notes |
|---|---|---|---|---|
| Robert J. Stefani | 15,785.320 | 25% upon Centuri IPO | 75% upon sale/disposition resulting in SWX owning <20% of Centuri (committee may reduce if spin) | Intended to incentivize separation execution and retention . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 9,656 SWX shares as of March 3, 2025 (<1% of outstanding) . |
| Unvested Time‑lapse RSUs (SWX) | 22,617 units; market value $1,599,248 at $70.71 (12/31/2024 close) . |
| Unearned PSUs (SWX) | 33,859 units; market/payout value $2,394,139 at $70.71 (assumes target achievement) . |
| Shares Acquired on Vesting (2024) | 17,828 shares; value realized $1,335,224 (includes 25% of special 2024 PSUs and RSU tranches) . |
| Scheduled Vesting (illustrative) | 2,853 RSUs (Jan 2025), 2,140 (Jan 2026), 2,140 (Jan 2027); 2,183 (Jan 2026); 11,118 (Nov 2025 from 2022 grant) . |
| Options | Company does not issue option awards; none outstanding . |
| Ownership Guidelines | Officers must hold Common Stock equal to 3× salary at SVP level and above; retention requirement 50% of net shares until met (75% for CEO) . |
| Pledging/Hedging | Prohibited for officers/directors; no margin accounts; anti‑hedging/anti‑pledging policy in Insider Trading Policy . |
Employment Terms
- Appointment: Named CFO on November 7, 2022; effective November 30, 2022; principal financial officer for Holdings and Southwest Gas Corporation .
- Base, Incentive, LTI Targets (offer terms): Base salary $550,000; annual incentive target 70% of salary; RSUs 48% and PSUs 112% of salary (later standardized to RSUs 76% and PSUs 114% in 2023/2024); special RSU grant $2.1 million vesting 1/3 annually .
- Sign‑on and Relocation: Cash sign‑on $625,000 (repayable if departure within 24 months without Good Reason or for Cause); relocation/housing support $25,000 plus additional relocation benefits if moving primary residence to Las Vegas (per policy) .
- Severance (non‑CIC): If involuntarily terminated other than for Cause before Nov 21, 2025: 1.5× base salary plus 100% of target annual incentive (e.g., $1,315,600 if as of 12/31/2024) .
- Change‑in‑Control (CIC): Double‑trigger; 30 months of base salary and target annual incentive; welfare benefits; accelerated vesting of RSUs and PSUs; outplacement up to $30,000; “best‑net” excise tax reduction (no tax gross‑up) . Estimated value under a hypothetical Double Trigger as of 12/31/2024: $6,632,095 total (Salary $1,495,000; Incentive $1,046,500; Welfare $67,208; Stock Acceleration $3,993,387; Outplacement $30,000) .
- Clawback: NYSE/SEC‑compliant clawback policy allows recoupment of excess incentive compensation upon required restatement; applies to time‑based RSUs and PSUs; administered by Compensation Committee .
- Deferred Compensation & Retirement: Not eligible for defined benefit pension plans; EIP (401k) non‑elective contribution 3% of salary and employer match on first 7% of contributions; EDP (nonqualified) company match up to 3.5% of salary; 2024 EDP aggregate balance $141,050 .
- Compliance: Confidentiality, non‑disparagement; Nevada forum and arbitration provisions .
Performance & Track Record
- 2024 business performance: EPS $2.76; utility net income $261.2 million; utility ROE 8.1%; progress on Centuri separation via April 2024 IPO; constructive regulatory outcomes supporting rate base growth .
- Annual incentive drivers (2024): Utility adjusted net income exceeded target; operational/customer metrics contributed; Centuri EBITDA/FCF below target but adjusted per policy; total achievement 146% for holdings officers (CFO/CEO) .
- Pay versus performance context: 2024 TSR value of a $100 initial investment was 110.90 vs. peer index 116.68; CAP tracked with TSR; Company uses utility adjusted net income as its principal single‑year measure linking pay to performance .
Compensation Structure Analysis
- Mix and risk: High proportion of at‑risk compensation via annual incentive and PSUs; 2024 at‑risk portion for CEO 83% and other NEOs average 69%, indicating strong pay‑for‑performance orientation extended to CFO .
- Equity emphasis: 2024 LTI targets for CFO remained balanced (RSUs 76% and PSUs 114% of salary), supporting retention and performance alignment .
- CIC terms: Double‑trigger without excise tax gross‑ups; “best‑net” approach reduces shareholder‑unfriendly gross‑up risk .
- Clawback and anti‑pledging: Robust governance mitigates misalignment and hedging/pledging risks .
- Special PSUs: Centuri separation PSUs (25% vested at IPO; 75% contingent on disposition below 20% ownership) directly link payout to strategic execution milestones .
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Ownership % | <1% individually; aggregate directors and officers held ~0.51% as of March 3, 2025 . |
| Scheduled RSU vesting cadence | Annual tranches through 2027 (40/30/30%), plus 2022 special grant vesting Nov 2025; facilitates steady accumulation but implies periodic sell-to-cover needs . |
| Pledging/Hedging | Prohibited; enhances alignment . |
| Guideline compliance | Officers required to build to 3× salary; retention rule until met (CFO status not explicitly disclosed; guideline exists) . |
Risk Indicators & Red Flags
- Form 4 timing: One late Form 4 filing (one day late) in 2024 for tax withholding related to RSU vesting; administrative issue, not indicative of selling pressure .
- No options repricing, no tax gross‑ups, no related‑party loans disclosed for Stefani; CIC severance structured to avoid excessive payouts (best‑net) .
Compensation Peer Group (Program Benchmarking)
Company uses a 19‑member utility peer group for Southwest officers (including CFO) to benchmark salary, target cash, and target total direct compensation at the 50th percentile; peer list includes Atmos, NiSource, PNW/TXNM, ONE Gas, Spire, etc. .
Say‑on‑Pay & Shareholder Feedback
Say‑on‑pay approval ~96% in 2023 and ~98% in 2024; Board maintained program design; resumed considering relative TSR modifiers starting with 2025 LTI .
Investment Implications
- Alignment: High at‑risk pay, PSU metrics (EPS/ROE), anti‑pledging, and rigorous clawback point to strong shareholder alignment; modest beneficial ownership and ongoing RSU vesting suggest occasional sell‑to‑cover activity but not structural selling pressure .
- Retention: Stefani’s severance (non‑CIC) and CIC protections, plus special PSUs tied to Centuri separation, reduce near‑term retention risk through completion of strategic milestones (separation below 20% ownership) .
- Trading signals: Watch for Centuri separation milestones; 75% of special PSUs vest upon disposition below 20%—a catalyst for equity issuance/settlement and potential insider Form 4s; scheduled RSU tranches in Jan/Nov may create predictable sell‑to‑cover events .