Patrick J. McDonie
Targa ResourcesAbout Patrick J. McDonie
Patrick J. McDonie (age 64) is President – Gathering and Processing at Targa Resources Corp., a role he has held since March 2018 (7 years as of March 28, 2025). He previously served as EVP – Southern Field G&P (2015–2018), President of Atlas Pipeline Partners GP LLC (2013–2015), COO/SVP at Atlas (2012–2013), and President of ONEOK Energy Services Company (2008–2012). Targa delivered record 2024 adjusted EBITDA of $4,142.3 million, with strong fee-based margins, and three-year PSU performance for 2022–2024 paid at 250% on top-decile relative TSR of 239% versus the Alerian US Midstream Index, underscoring alignment of pay with shareholder returns .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Targa Resources Corp. | EVP – Southern Field G&P | Nov 2015 – Feb 2018 | Led Southern Field G&P operations before promotion to President – G&P |
| Atlas Pipeline Partners GP LLC | President | Oct 2013 – Feb 2015 | Led Atlas until acquisition by Targa Partners in Feb 2015, aiding integration |
| Atlas Pipeline Partners GP LLC | COO / SVP | Jul 2012 – Oct 2013 | Senior operations leadership during pre-acquisition period |
| ONEOK Energy Services Company | President | May 2008 – Jul 2012 | Ran natural gas transportation, storage, supply and marketing business |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ONEOK Energy Services Company | President | 2008 – 2012 | Commercial leadership in gas logistics and marketing (industry network) |
| Atlas Pipeline Partners GP LLC | President / COO / SVP | 2012 – 2015 | Led the entity acquired by Targa; continuity supported Targa’s G&P footprint |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $540,000 | $602,500 | $650,000 (raised from $615,000 at YE’23; +6%) |
| Actual Annual Bonus Paid (Cash) ($) | $1,080,000 | $830,300 | $1,300,000 |
| Stock Awards Grant-Date Fair Value ($) | $2,601,978 | $2,755,784 | $2,805,944 |
| All Other Compensation ($) | $27,225 | $29,539 | $30,876 |
| Total Compensation ($) | $4,249,203 | $4,218,123 | $4,780,987 |
| 2024 Target Bonus | Value |
|---|---|
| Target Bonus % of Salary | 100% |
| Target Bonus ($) | $650,000 |
| Company Plan Payout Factor | 2.00x (capped) |
| Individual Performance Factor | 1.00x |
| Actual Cash Bonus Paid | $1,300,000 |
Performance Compensation
| Metric (2024 AIP) | Weight | Threshold | Target | Max | Actual | Payout Factor |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($mm) | 60% | $3,292 | $3,658 | $4,207 | $4,142 | 2.36 |
| CFFO per Share ($) | 60% | $12.00 | $13.33 | $15.33 | $15.49 | 2.50 |
| 3-year ROIC (%) | 60% | 10% | 12% | 20% | 22% | 2.50 |
| Commercial/Operational Execution | 30% | On-time/on-budget projects | Target | Exceed | Multiple major projects delivered; >90% fee-supported G&P; Blackcomb stake; new acreage | 2.00 |
| Sustainability (Talent/Environmental) | 10% | Meet thresholds | Target | — | Record ~3,370 employees; investor dialogue; methane programs | 1.00 |
| Safety Modifier | Overlay | — | — | — | No adjustment applied | N/A |
| Total Calculated (Capped) | — | — | — | — | — | 2.00x |
| Long-Term Incentives (2024 Grants) | Detail |
|---|---|
| Target LTIP Award (% of Salary) | 325% |
| Target LTIP Award ($) | $2,112,500 |
| RSUs Granted (Jan 18, 2024) | 12,462 units; fair value $82.02 per unit |
| PSUs Granted (Jan 18, 2024) | 12,462 target units; Monte Carlo fair value $143.14 per unit |
| PSU Design | 3-year relative TSR vs Alerian US Midstream Index; 25th pct=50%, 55th pct=100%, ≥75th pct=250% (target at 55th pct) |
| 2022–2024 PSU Payout | Targa 3-year TSR 239%; 100th pct; 250% of target earned (certified Jan 16, 2025) |
| Shares Vested in 2024 | Value Realized |
|---|---|
| Shares vested (RSUs/PSUs from 1/19/2021 awards) | 101,493 |
| Value realized on vesting ($) | $8,372,158 (at $82.49 on 1/19/2024) |
Equity Ownership & Alignment
| Ownership Metric | Value |
|---|---|
| Total Beneficial Ownership (Shares) | 280,321 |
| Shares Outstanding (Record Date) | 217,585,332 |
| Ownership as % of Outstanding | ~0.129% (280,321 ÷ 217,585,332) |
| Unvested RSUs (12/31/2024) | 81,285 units |
| Unearned PSUs (12/31/2024, SEC disclosure at max level) | 65,120 units (combines 2023 and 2024 cycles shown at 250% level per SEC rules) |
| Options Outstanding | None (company does not currently grant options) |
- Stock ownership guidelines: 3.0x base salary for other executives; five-year compliance window; all NEOs are compliant .
- Anti-hedging/anti-pledging: Insiders prohibited from hedging and pledging Targa stock; certain options/derivatives also prohibited .
- No pledging disclosed for McDonie; beneficial ownership footnotes do not indicate any pledges .
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Contract | Company states “No employment contracts” for NEOs |
| Clawback Policy | Adopted Oct 2023; mandatory recovery of incentive compensation for Section 16 officers upon financial restatement (cash and equity) |
| Severance – CIC Program | Upon “Qualifying Termination” within 18 months of CIC: lump sum equal to 3×(salary + salary×most recent target bonus%); up to 3 years of medical/dental continuation; 280G cutback/pay full for best net |
| Equity – CIC Treatment | Double-trigger vesting: RSUs fully vest on CIC termination; PSUs vest at greater of 100% or actual guideline % at CIC; retirement conditions allow continued vesting if non-compete-like conditions met |
| Single-trigger policies | No single-trigger CIC severance; no single-trigger CIC vesting for NEO equity awards |
| Estimated Cash Severance (CIC Qualifying Termination) | $3,967,023 for McDonie (includes benefits continuation) |
| Aggregate Payments – CIC + Equity (as of 12/31/2024) | $30,578,394 for McDonie (CIC qualifying termination); $26,611,371 upon death/disability |
Vesting Schedules (Outstanding Awards as of 12/31/2024)
| Award | Vesting Date | Units |
|---|---|---|
| RSUs granted 1/20/2022 | 1/20/2025 | 39,455 (plus earned PSUs converted to RSUs for 2022 cycle) |
| RSUs granted 1/19/2023 | 1/19/2026 | 13,586 |
| RSUs granted 1/18/2024 | 1/18/2027 | 12,462 |
| PSUs grant 1/19/2023 (performance period) | Through 12/31/2025 | 13,586 target units; disclosed at 250% for SEC table presentation |
| PSUs grant 1/18/2024 (performance period) | Through 12/31/2026 | 12,462 target units; disclosed at 250% for SEC table presentation |
Compensation Structure Analysis
- Pay mix emphasizes at-risk compensation; RSUs+PSUs comprise majority of value and tie realizable pay to TSR and multi-year vesting; options are not used, reducing repricing risk .
- Year-over-year changes: 2024 salary +6% to $650k; bonus up to $1.3m from $0.83m in 2023; stock awards modestly higher ($2.81m vs $2.76m) .
- Performance rigor: AIP uses Adjusted EBITDA, CFFO/share, 3-year ROIC with high maximums and a 2.0x total cap; safety modifier can only reduce payout; PSU target set above median at 55th percentile .
Performance & Track Record
- Company TSR: Value of $100 investment reached $437.18 by 2024; peer group TSR $249.66; Net income $1,553.5m and Adjusted EBITDA $4,142.3m in 2024 .
- 2022–2024 relative TSR: 239%; top decile; PSUs paid at 250% of target .
- 2024 operating achievements: On-time/on-budget delivery of Daytona NGL Pipeline, Trains 9 & 10; >90% fee-based margins; major new acreage/commercial wins .
Governance & Shareholder Feedback (context)
- Say-on-Pay support 95% in 2024; board independence 91%; active shareholder outreach .
Equity Ownership & Alignment Table (Detail)
| Component | Count/Value |
|---|---|
| Beneficial shares owned | 280,321 |
| Unvested RSUs (total) | 81,285 (2022: 39,455; 2023: 13,586; 2024: 12,462; plus 2022 earned PSUs converted to RSUs) |
| Unearned PSUs (SEC table presentation at 250%) | 65,120 (2023 adjusted: 33,965; 2024 adjusted: 31,155) |
| Shares vested in 2024 | 101,493; value $8,372,158 |
| Ownership guidelines | 3.0x salary; all NEOs compliant |
| Hedging/pledging | Prohibited for insiders; no pledges disclosed |
Employment Terms Summary (Detail)
| Term | Detail |
|---|---|
| CIC cash severance | 3×(salary + salary×target bonus%); paid within 60 days; 3 years medical/dental continuation; 280G best-net approach |
| Equity acceleration (CIC termination) | RSUs fully vest; PSUs vest at ≥100% or actual guideline percentage as of CIC; committee discretion to adjust average performance % |
| Retirement vesting conditions | Continued vesting if performing consulting or refraining from working for competitors/similar roles (director roles at non-competitors permitted) |
| Clawback | Mandatory recovery for restatements (cash/equity) effective Oct 2023 |
| Perquisites | Minimal (parking subsidies); standard 401(k) contributions; life insurance premiums disclosed |
Investment Implications
- Strong pay-for-performance alignment: McDonie’s variable pay is driven by multi-factor AIP and three-year PSUs tied to above-median relative TSR; recent 250% PSU payout signals robust execution and shareholder value alignment .
- Retention risk moderate: Three-year cliff vesting on RSUs/PSUs and double-trigger CIC protection promote retention; no employment contract reduces rigidity, but substantial unvested equity and ownership guideline compliance increase stickiness .
- Insider selling pressure: 2024 vesting realized 101,493 shares with $8.37m value; combined with ongoing unvested RSUs/PSUs, watch Form 4s around January vest dates for potential sales, though pledging/hedging are prohibited .
- Change-in-control economics: Aggregate payout potential ($30.6m including equity at 12/31/2024) is sizable; cash severance formula is standard vs peers with no excise tax gross-up, mitigating a common red flag .
- Execution signal: Company-level record adjusted EBITDA ($4.142B) and high fee-based margins underpin AIP outperformance; continued on-time/on-budget project delivery and commercial wins increase confidence in McDonie’s operational oversight .