Gary Smalley
About Gary Smalley
Gary G. Smalley, age 66, is Chief Executive Officer since January 1, 2025 and President since November 2023; he previously served as EVP & CFO from September 2015–November 2023. He spent 24 years at Fluor in senior finance roles (segment Group CFO, SVP & Controller, Internal Audit) and earlier held audit positions at Ernst & Young LLP and J.P. Stevens & Co.; he holds a BS in Business Administration (UNC-Chapel Hill) and an MBA (Northwestern), and is a CPA, CFE, and CGMA (inactive) . Company performance context: 2024 revenue was $4.3B (+12% YoY); record operating cash flow $503.5M (+63% YoY); backlog reached $18.7B (+84% YoY); diluted loss was $3.13 per share; stock rose 166% in 2024 and had a 3-year CAGR of 25% through 12/31/2024 . Governance enhancements include a Dodd-Frank-compliant clawback, anti-hedging/anti-pledging policy, double-trigger CIC vesting, and majority voting for directors .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Tutor Perini Corporation | Chief Executive Officer; President | CEO since Jan 2025; President since Nov 2023 | CEO succession; focus on backlog growth, cash generation, and dispute resolution |
| Tutor Perini Corporation | EVP & CFO | Sep 2015–Nov 2023 | Led finance, risk management, litigation/dispute resolution, and cash flow improvement |
| Fluor Corporation | SVP & Controller; Group CFO; VP Internal Audit; other finance roles | 2008–2015 (senior roles); 24-year tenure overall | Global finance leadership across segments; international operations in AU, CL, MX, US |
| Ernst & Young LLP; J.P. Stevens & Co. | Audit roles | Not disclosed | Early-career auditing experience |
External Roles
- No current public-company directorships for Smalley disclosed in the proxy biography .
Fixed Compensation
| Component | 2024 | 2025 | Notes |
|---|---|---|---|
| Base Salary ($) | $1,100,000 | $1,200,000 | Increased on promotion to CEO |
| Target Annual Incentive (% of base) | 125% | 150% | Approved by Board/Comp Committee |
| Target Long-Term Incentive ($) | $3,000,000 | $4,000,000 | Equity-based focus |
| Actual Annual Incentive Paid ($) | $1,598,438 (paid Mar 2025 for 2024 performance) | — | 2025 not disclosed |
Performance Compensation
Annual Incentive Plan Mechanics and Outcomes (2024)
| Metric | Weight | Threshold | Target | Maximum | Actual Achievement | Smalley Payout ($) |
|---|---|---|---|---|---|---|
| Operating Cash Flow | 65% | $280,000k | $350,000k | $420,000k | $503,544k (143.9% of target) | $1,340,625 |
| Pre-tax Income | 20% | $96,000k | $120,000k | $144,000k | ($173,008k), 0% payout | $0 |
| Individual Performance | 15% | Subjective | Subjective | Subjective | 83.3% of maximum for NEOs other than Tutor | $257,813 |
| Total | — | — | — | — | — | $1,598,438 |
Long-Term Incentives (granted in 2023–2024; outstanding as of 12/31/2024)
| Award Type | Grant Date | Units (Target) | Metric | Vesting / Settlement |
|---|---|---|---|---|
| CPSU | 1/1/2023 | 477,454 | 3-year annualized stock price growth | Performance period through 12/31/2025; settled in cash at actual performance |
| CPSU | 3/13/2024 | 430,120 (max 25% growth; target 172,048; threshold 86,024) | 3-year annualized stock price growth (threshold 10%, target 15%, max 25%) | Performance period through 12/31/2026; settled in cash at actual performance |
| CRSU (time-based) | 3/13/2024 | 172,048 | Stock price indexed cash-settled | Ratable over 3 years on each anniversary of grant |
| DCA (CRSU-equivalent) | 11/15/2023 | 124,379 (value-indexed units) | Stock price indexed cash-settled | Three equal annual installments, subject to continued service |
Outstanding equity awards at 12/31/2024 for Smalley: CRSUs 254,968 vesting 98,809 (2025), 98,809 (2026), 57,350 (2027); CPSUs 477,454 (2025) and 430,120 (2026) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (shares) | 225,575 shares; less than 1% of outstanding; options currently exercisable within 60 days: 112,500 |
| Options | 112,500 options, exercise price $25.95, expire 9/6/2027; fully vested |
| Unvested Time-Based Units (CRSUs) | 254,968 units; vest schedule: 98,809 (2025), 98,809 (2026), 57,350 (2027) |
| Unvested Performance Units (CPSUs) | 477,454 (2025) and 430,120 (2026) outstanding; settled in cash at performance |
| Ownership Guidelines | CEO required to hold stock/equity valued at 6x base salary; all NEOs and directors in compliance as of 3/19/2025 |
| Hedging/Pledging | Company prohibits hedging and pledging; “No executive officer or director pledges Company stock” |
| Section 16 Compliance | Two late Form 4s for Smalley due to Company administrative error related to exempt CPSU grants |
Employment Terms
| Provision | Summary |
|---|---|
| Agreement | Amended & Restated Employment Agreement effective 11/15/2023; President through 12/31/2024; automatic 12-month renewals thereafter; terms stepped up on promotion to CEO (salary $1.2M; bonus target 150%; LTI $4M) |
| Perquisites | Additional life insurance; limited personal aircraft use as approved by independent directors; other standard perqs |
| Covenants | Non-solicit of employees; confidentiality; insider trading policy prohibits hedging/derivatives |
| Clawback | Dodd-Frank compliant clawback for incentive compensation upon restatement |
| CIC Treatment | Double-trigger acceleration policy for equity awards upon qualifying termination related to CIC |
| Severance Economics (as of 12/31/2024) | See table below |
Potential Payments on Termination (12/31/2024 assumptions)
| Trigger | Bonus ($) | Benefits ($) | Outstanding Equity ($) | Cash Lump Sum ($) | Total ($) |
|---|---|---|---|---|---|
| Death | 1,598,438 | 78,269 | 16,110,981 | — | 17,787,688 |
| Disability | 1,598,438 | 78,269 | 16,110,981 | — | 17,787,688 |
| For Cause / Resign without Good Reason | — | 78,269 | — | — | 78,269 |
| Without Cause / Good Reason | 1,598,438 | 152,572 | 28,133,517 (CRSUs $6,170,226; CPSUs $21,963,291) | 3,712,500 (1.5x salary+target bonus) | 33,597,027 |
| CIC Termination | 1,598,438 | 152,572 | 28,133,517 (same equity values) | 4,950,000 (2x salary+target bonus) | 34,834,527 |
Notes: Under death/disability, CPSUs pay at target; under without cause/good reason and CIC termination, CPSUs pay the higher of target or actual performance through termination; health benefits continuation for 24 months under D/E .
Board Governance and Roles
- Director since 2025; not independent; employees (Tutor, Smalley) do not serve on standing committees reserved for independent directors .
- Board leadership separated: Executive Chairman (Ronald Tutor) and CEO (Gary Smalley); Lead Independent Director is Robert C. Lieber with defined authorities and independent executive sessions .
- Board-level committees are fully independent: Audit (12 meetings in 2024), Compensation (6), Corporate Governance & Nominating (4) .
- 2024 attendance: all directors serving in 2024 attended at least 75% of Board/committee meetings; non-management directors met in executive session at each regular meeting .
Compensation Program Design and Peer Benchmarking
- Pay mix emphasizes performance; majority of NEO compensation is at-risk with multi-metric annual plan and multi-year equity awards; clawback and risk mitigation in place .
- Compensation peer group includes AECOM, Jacobs, APi Group, KBR, Comfort Systems USA, MasTec, Dycom, MYR Group, EMCOR, Primoris, Fluor, Quanta, Granite, Tetra Tech; CEO target pay aligned below peer median in 2025 .
- Long-term awards incorporate relative metrics (TSR) and multi-year performance periods; no dividends on unvested awards; no option repricing; no CIC excise tax gross-ups .
Compensation Structure Analysis
- Shift toward broader equity participation and pay-for-performance: CPSUs tied to stock price growth; CRSU/DCAs indexed to stock price; double-trigger only on CIC .
- Historical shareholder feedback prompted majority voting, CEO succession/pay reset, and elimination of one-year LTI performance periods; problematic practices (guaranteed bonuses, certain accelerations) acknowledged and addressed going forward .
Risk Indicators & Red Flags
- Late Section 16 Form 4s for Smalley due to Company administrative errors (exempt CPSU grants) .
- Anti-hedging/anti-pledging policy; no pledges reported; separation/CIC benefits are market-standard and double-trigger .
- 2024 “Say-on-Pay” for prior year compensation received less than majority support, indicating investor scrutiny of legacy pay practices .
Equity Ownership & Director Stock Guidelines (Board context)
- Non-management directors must hold 5x annual cash retainer; all compliant; director fees/stock grants disclosed; Smalley as employee-director does not receive non-management director pay .
Performance & Track Record
- Strategic achievements include record cash generation, backlog expansion, and debt reduction; however, 2024 earnings were negative due to net charges tied to dispute resolutions; shareholders optimistic about return to profitability as backlog executes .
Employment Contracts, Severance, Change-of-Control Economics
- Auto-renewing agreement, non-solicit, confidentiality; severance cash multiples: 1.5x salary+target bonus (without cause/good reason), 2x upon CIC termination; equity treatment favors performance-based settlement vs target depending on trigger .
Investment Implications
- Alignment: Strong stock ownership requirements and cash-settled equity (reduces dilution) align CEO incentives with shareholders; no pledging/hedging and robust clawback mitigate risk .
- Retention vs selling pressure: Multi-year CRSU/CPSU schedules and sizable outstanding performance units (477k in 2025, 430k in 2026) suggest retention anchoring; limited personal aircraft use and market-standard perqs pose minimal risk .
- Pay-for-performance trajectory: Annual bonus heavily tied to cash flow delivered a strong payout despite negative pre-tax income; as profitability resumes, equity metrics tied to sustained stock appreciation should drive realized comp more tightly to performance .
- Governance quality: Separation of Chair/CEO, Lead Independent Director, independent committees, and majority voting reduce dual-role concerns; Smalley’s non-independence is standard for CEOs and mitigated by board structure .