Katherine Gates
SunCoke EnergyAbout Katherine Gates
Katherine T. Gates, age 49, is President and Chief Executive Officer of SunCoke Energy (SXC) and a director since January 2023; she was promoted to CEO in May 2024 after joining SunCoke in 2013 and rising through legal and human capital roles, including General Counsel and Chief Compliance Officer (2015–2019) and SVP, Chief Legal Officer and Chief Human Resources Officer (2019–2023) . In 2024, SunCoke reported Adjusted EBITDA of $272.8 million, Net Income of $95.9 million, and TSR of $213 for a $100 base investment versus peer group TSR of $252; SunCoke’s 2024 revenue was $1,935 million (peer table) . Gates serves as an employee director (no separate director fees) on a board with independent Chairman and fully independent committees, supporting governance independence despite her dual role .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SunCoke Energy | Senior Health, Environment and Safety Counsel | Feb 2013 onward (initial role) | Built EHS/legal foundation; advanced into leadership |
| SunCoke Energy | Vice President | Promoted July 2014 | Broadened operational leadership |
| SunCoke Energy | Senior Vice President; General Counsel & Chief Compliance Officer | Oct 2015 – Nov 2019 | Led legal, compliance, governance; board oversight of MLP GP |
| SunCoke Energy | SVP, Chief Legal Officer & Chief Human Resources Officer | Nov 2019 – Jan 2023 | Led legal and HR; organizational development |
| SunCoke Energy | President & Director | Jan 2023 – May 2024 | Commercial/strategic leadership; succession to CEO |
| SunCoke Energy | Chief Executive Officer | May 2024 – present | Enterprise leadership; strategy and growth |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Beveridge & Diamond, P.C. | Partner; Management Committee; Co-chair civil litigation | Not disclosed; prior to Feb 2013 | Complex litigation leadership; governance experience |
| SunCoke Energy Partners GP LLC | Director (general partner of SXC’s former MLP) | Oct 2015 – Jun 2019 | Oversight of MLP governance and operations |
| Other public company boards | None | — | No public board interlocks |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 477,405 | 661,502 | 900,000 |
| Target Bonus (% of Salary) | Not disclosed | Not disclosed | 100% |
| All Other Compensation ($) | 119,204 | 146,049 | 186,731 |
Notes:
- Upon appointment as President & CEO, Gates’ base salary was set at $900,000 and AIP target at 100% of salary .
- Company provides no perquisites; standard benefits and Savings Restoration Plan (deferred comp) apply .
Performance Compensation
Annual Incentive Plan (AIP) – 2024
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Adjusted EBITDA | 70% | Company-set plan | Achieved (part of formula) | Included in 148.10% formula payout | Annual cash; paid post-year |
| Operating Cash Flow | 10% | Company-set plan | Achieved (part of formula) | Included in 148.10% formula payout | Annual cash |
| Safety (TRIR, no high-severity incidents) | 10% | Objective criteria | Achieved (part of formula) | Included in 148.10% formula payout | Annual cash |
| Environmental | 10% | Formulaic + committee judgment | Achieved (part of formula) | Included in 148.10% formula payout | Annual cash |
| CEO Target Award ($) | — | 900,000 | — | — | — |
| CEO Actual Award ($) | — | — | 1,332,810 | 148.10% (committee did not exercise discretion) | Annual cash |
2024 Grants (PSUs, RSUs, Long-term Cash)
| Award Type | Grant Date | Target (units/$) | Maximum (units/$) | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| Performance Share Units (PSUs) | 02/22/2024 | 57,720 units | 138,528 units | 664,357 | 3-year; payout 0–200% vs metrics; TSR modifier ±20% |
| Restricted Share Units (RSUs) | 02/22/2024 | 115,439 units | — | 1,265,211 | 1/3 vest on 1st, 2nd, 3rd anniversaries |
| Long-term Performance Cash | 02/22/2024 | $618,750 | $1,237,500 | Included in plan-based awards | 3-year; 50% cumulative Adjusted EBITDA, 50% average pre-tax ROIC |
PSU/LTI metrics (2024–2026 period):
- Cumulative Adjusted EBITDA thresholds: $546.2m (25%), $682.8m (100%), $730.5m (200%) .
- Average pre-tax ROIC thresholds: 14.7% (25%), 18.4% (100%), 19.7% (200%) .
- TSR modifier relative to NASDAQ Iron & Steel Index, capped at overall 240% including modifier .
2024 Vested/Exercised
| Category | Shares/Value |
|---|---|
| Shares acquired on vesting (#) | 78,277 |
| Value realized on vesting ($) | 852,901 |
| Options exercised (#) | — (none) |
| Value realized on option exercise ($) | — |
Equity Ownership & Alignment
| Component | Amount | Notes |
|---|---|---|
| Shares of Common Stock owned | 247,201 | Sole voting & investment power |
| Right to acquire within 60 days | 40,175 | From options/RSUs convertible within 60 days |
| Total beneficial ownership | 287,376 (calculated from above) | 247,201 + 40,175; reported as <1% in proxy |
| Shares outstanding (record date) | 84,646,201 | — |
| Ownership as % of shares outstanding | ~0.34% (calculated: 287,376 / 84,646,201) | Derived from cited figures |
| Unvested RSUs (12/31/24) | 161,748; $1,730,704 market value | Price $10.70 used for valuation |
| Unearned PSUs at target (12/31/24) | 84,538; $904,557 market value | Price $10.70 used for valuation |
| Options outstanding (exercisable) | 7,890 @ $16.90 exp 2/18/2025; 5,512 @ $9.85 exp 2/15/2027; 14,126 @ $10.49 exp 2/14/2028; 20,537 @ $9.87 exp 2/13/2029 | Retirement/CoC vesting terms apply |
| In-the-money option value (12/31/24) | $24,697 | Based on $10.70 price; shown in severance table |
| Stock ownership guideline | CEO: 5x base salary; hold 100% of vested shares until guideline met | All executives met or are on track |
| Hedging/pledging | Prohibited for employees, officers, directors | |
| Clawback | NYSE-compliant restatement clawback + conduct-based recovery (3 years) |
Employment Terms
| Term | Detail |
|---|---|
| Appointment & role | CEO effective May 15, 2024; continues as President and Director |
| Compensation | Base salary $900,000; AIP target 100% of base; long-term incentive awards determined by Board |
| Severance (involuntary, no CoC) | 2x salary + target AIP; benefits continuation; outplacement; paid monthly under Executive Involuntary Severance Plan |
| Severance (double-trigger CoC) | Lump sum 2x salary + greater of (i) 100% current target AIP or (ii) 3-year average AIP; 2-year medical/dental/vision; life insurance; outplacement; 280G cutback if more favorable |
| Equity treatment (Omnibus Plan) | Double-trigger equity vesting post-CoC; retirement rules allow continued vesting; death/disability acceleration for RSUs; PSUs vest at target upon death/disability |
| Potential payouts (as of 12/31/24) | Death/Disability total $4,859,581; Termination prior to CoC total $4,068,027; Termination in connection with CoC total $8,523,431 |
| Contracts | No individual employment or change-in-control agreements beyond company plans |
Board Governance
| Item | Detail |
|---|---|
| Board service | Director since Jan 1, 2023; employee director status |
| Committee roles | Not a member of Audit, Compensation, or Governance Committees (all independent) |
| Board leadership | Independent non-executive Chairman (Arthur F. Anton); separate Chair and CEO roles |
| Independence | 6 of 7 directors independent; fully independent committees |
| Attendance | >75% meeting attendance for all directors in 2024; Board met 8 times; committees 17 meetings |
| Executive sessions | Independent directors met in executive sessions 5 times in 2024 |
| Director compensation (employee directors) | Employee directors (including Gates) receive no separate board compensation |
Compensation Committee, Peer Group, and Say-on-Pay
- Compensation Consultant: Meridian Compensation Partners; committee assessed independence; provides peer benchmarking and plan design; performs no other work for SXC .
- Peer Group (2024): Includes ATI Inc., Cabot Corp., Eagle Materials, Warrior Met Coal, Minerals Technologies, Ingevity, Quaker Chemical, Worthington Steel, Koppers, Enviri, Kaiser Aluminum, Materion, Metallus, Radius Recycling, Summit Materials; SunCoke positions near median on 3-year EBITDA; committee confirmed peers for 2025 .
- Governance practices: Double-trigger severance; no tax gross-ups; no option repricing; clawbacks; stock ownership requirements; hedging/pledging prohibited .
- Say-on-Pay: 2024 support was 95.1% .
Performance & Track Record (2020–2024 context; includes transition to Gates as CEO in 2024)
| Year | PEO (CEO) SCT Total ($) | Compensation Actually Paid ($) | Total Shareholder Return ($100 base) | Net Income ($mm) | Adjusted EBITDA ($mm) |
|---|---|---|---|---|---|
| 2024 | 4,587,812 (Gates) | 4,624,570 (Gates) | 213 | 95.9 | 272.8 |
| 2023 | — (Rippey PEO) | — | 205 | 57.5 | 268.8 |
| 2022 | — (Rippey PEO) | — | 158 | 100.7 | 297.7 |
| 2021 | — (Rippey PEO) | — | 116 | 43.4 | 275.4 |
| 2020 | — (Rippey PEO) | — | 74 | 3.7 | 205.9 |
Notes:
- The 2022 PSU award paid out at 230.6% after a positive TSR modifier of 1.153% for the 2022–2024 period; LTI cash awards for 2022–2024 paid at 200% of target .
Compensation Mix and Trends
| Metric | 2023 | 2024 |
|---|---|---|
| CEO base salary ($) | 661,500 | 900,000 |
| AIP target (% of salary) | — | 100% (market-based increase approved with promotion) |
| Equity grant types | RSUs, PSUs | RSUs, PSUs; no options granted in 2024 |
| Committee discretion on AIP | — | None; formulaic payout 148.10% |
Risk Indicators & Red Flags
- Hedging and pledging of company stock are prohibited; reduces misalignment and leverage risks .
- No tax gross-ups on change-in-control; double-trigger severance required; mitigates excessive parachute risk .
- Clawback policies cover restatement-related excess incentive compensation and misconduct-based recovery (three-year look-back) .
- No individual employment contracts beyond plan participation; limits bespoke arrangements .
- AIP metrics include safety and environmental components (20% combined), decreasing excessive financial-only risk taking .
Equity Vesting Schedules and Potential Selling Pressure
- RSUs vest ratably over three years (1/3 per anniversary), creating predictable vesting events and potential periodic selling pressure for tax or diversification; Gates had 78,277 shares vest in 2024 ($852,901 value), with no option exercises .
- PSUs vest after three years subject to performance and TSR modifier; 2022–2024 PSU payout at 230.6% indicates strong performance alignment .
Employment Contracts, Severance, and Change-of-Control Economics
| Scenario (as of 12/31/24) | Cash Severance | Annual Incentive | Health & Welfare | Equity Acceleration | LTI Cash | Outplacement | Total |
|---|---|---|---|---|---|---|---|
| Death/Disability | — | 1,332,810 | — | Options: 24,697; RSUs: 1,730,704; PSUs: 904,557 | 866,813 | — | 4,859,581 |
| Termination prior to CoC | 2,700,000 | 1,332,810 | 1,620 | Options: 24,697 | — | 8,900 | 4,068,027 |
| Termination in connection with CoC | 3,600,000 | 1,332,810 | 2,491 | Options: 24,697; RSUs: 1,730,704; PSUs: 957,016 | 866,813 | 8,900 | 8,523,431 |
Director Compensation
- Employee directors do not receive separate director compensation (cash or equity retainers) .
- Independent director program: $90,000 cash + $130,000 stock annual retainers; committee chair/member retainers as disclosed; no meeting fees .
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay approval: 95.1% support; pay structure has remained materially consistent 2019–2024 .
Investment Implications
- Alignment: High proportion of equity-linked pay (RSUs, PSUs, LTI cash tied to EBITDA/ROIC, TSR modifier) and stringent ownership/holding requirements, with hedging/pledging prohibited and robust clawbacks, suggest strong pay-for-performance alignment and reduced agency risk .
- Retention vs. liquidity: Multi-year vesting and double-trigger CoC enhances retention; predictable RSU vesting creates periodic sell windows, but 2024 shows no option exercises by Gates, mitigating near-term selling pressure signals .
- Change-in-control economics: CEO severance multiples (2x) and equity acceleration under double-trigger are market-standard; the 12/31/24 modeled CoC total ($8.52m) is meaningful but within peer norms; absence of tax gross-ups and presence of 280G cutback reduce shareholder-unfriendly features .
- Governance independence: CEO is an employee director but not Chair; independent Chair and fully independent committees, >75% attendance, and executive sessions support board oversight and mitigate dual-role independence concerns .
- Performance context: 2024 TSR trailed peer group (213 vs 252) while EBITDA remained strong; PSU outcomes incorporate TSR modifier to balance operational execution and shareholder returns, with prior PSU payout at 230.6% reflecting robust execution .