Joseph D. Tarry
About Joseph D. Tarry
Joseph (Don) D. Tarry, 54, is President and COO of TXNM Energy, President and CEO of Public Service Company of New Mexico (PNM), and CEO of Texas-New Mexico Power (TNMP); he joined TXNM’s Board on December 3, 2024 and does not serve on any Board committees as an employee-director. He holds a B.A. in Accountancy from New Mexico State University and has 28+ years of utility experience; he will succeed as TXNM’s President and CEO effective July 1, 2025. Company pay-versus-performance disclosures for 2024 show company TSR index value of 113 vs. peer group 127, Net Earnings of $258.7 million, and Incentive EPS of $2.74; these are the core financial/market metrics tied to incentive pay. Tarry’s compensation is heavily performance-linked via EPS, reliability/customer satisfaction (AIP), and multi-year Earnings Growth, Relative TSR, and FFO/Debt (LTIP) goals, with 2024 AIP paying 101% of target and 2022–2024 LTIP PSs earned at 71% of target .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| TXNM Energy | President & Chief Operating Officer | May 2022–present | Senior leadership of regulated utilities within an intricate regulatory framework; interface to Board as management director . |
| TXNM Energy | Senior Vice President & Chief Financial Officer | Jan 2020–May 2022 | Led finance; experience informs EPS- and balance-sheet-tied incentives . |
| TXNM Energy | Vice President, Controller & Treasurer | Sep 2018–Jan 2020 | Controller/Treasurer responsibilities; financial reporting and capital structure grounding . |
| PNM (subsidiary) | President & CEO | As of 2025 | Certifying officer; leadership of New Mexico utility . |
| TNMP (subsidiary) | Chief Executive Officer | As of 2025 | Certifying officer; leadership of Texas utility . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Albuquerque Regional Economic Alliance | Chair | Current | Regional economic development connectivity . |
| New Mexico Chamber of Commerce | Director | Current | State policy and business advocacy linkage . |
| Greater Albuquerque Chamber of Commerce | Director | Current | Local business stakeholder engagement . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 480,717 | 532,192 | 577,352 |
| Actual AIP (Non-Equity Incentive) ($) | 439,013 | 544,673 | 539,684 |
| Stock Awards ($) | 517,195 | 833,200 | 1,600,674 |
- 2024 target bonus opportunity: 70% of base salary, increased to 75% on July 1, 2024, and to 90% on Dec 3, 2024 (pro-rated); base salary increased to $725,000 effective Dec 3, 2024 .
- 2025 AIP ranges: President & COO opportunity 45%–180% of base salary, subject to EPS gate and goal attainment .
Performance Compensation
2024 Annual Incentive Plan (AIP)
| Metric | Weight | Targets | 2024 Actual | Payout impact |
|---|---|---|---|---|
| Incentive EPS | 60% | Gate ≥$2.65; Max ≥$2.80 | $2.74 | Between target and max; AIP funded . |
| Reliability | 20% | Not disclosed | Below threshold | Negative impact . |
| Customer Satisfaction | 20% | Two-measure composite | PNM at threshold; TNMP between target and max | Mixed; partial positive . |
| Overall AIP Payout | — | — | — | 101% of target (prorated for changes) . |
Long-Term Incentive (LTIP)
| Program | Metric | Weight | Threshold | Target | Maximum | Actual/Payout |
|---|---|---|---|---|---|---|
| 2024–2026 LTIP (PS component) | Earnings Growth | 50% | ≥3.0% | ≥5.0% | ≥8.0% | In progress . |
| 2024–2026 LTIP (PS) | Relative TSR | 25% | ≥35th pctile | ≥50th pctile | ≥90th pctile | In progress . |
| 2024–2026 LTIP (PS) | FFO/Debt Ratio | 25% | ≥13% | ≥14% | ≥16% | In progress . |
| 2022–2024 LTIP (PS results) | Earnings Growth (75%) & FFO/Debt (25%) | — | — | — | — | Earned at 71% of target . |
2024 Grants (Tarry)
| Award | Grant date | Shares/Target | Grant-date fair value ($) |
|---|---|---|---|
| Performance Shares (2024–2026) | 3/1/2024 | 21,070 target (10,534 thr; 42,141 max) | 662,152 . |
| Time-vested RSAs (annual) | 3/1/2024 | 7,268 | 235,714 . |
| Retention RSAs (conversion) | 5/3/2024 | 19,851 | 702,808 . |
- RSAs granted on/after 2016 vest on a uniform cycle: one-third on March 7 of years 1–3 following grant; 2024 RSAs: 1/3 vested on Mar 7, 2025; remaining 2/3 vest Mar 7, 2026 and Mar 7, 2027 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 71,094 shares total: 41,847 shares held; 29,247 “right to acquire within 60 days” (includes rights under plans) . |
| Ownership guidelines | Requirement: 3x base salary; Tarry actual holdings: 4.1x base salary (as of 12/31/2024 at $49.17 share price) . |
| Hedging/pledging | Prohibited for directors and executive officers; no pledging allowed . |
| Outstanding unvested RSAs (12/31/2024) | 7,336 (3/18/2022; $360,711 MV), 3,401 (2/28/2023; $167,227 MV), 7,268 (3/1/2024; $357,368 MV), 13,234 (5/3/2024; $650,716 MV) at $49.17/share . |
| Unearned PS (12/31/2024) | 13,313 (2023–2025; $654,600 payout value at target), 42,141 (2024–2026; $2,072,073 at max) at $49.17/share . |
| Deferred comp (ESP II) | 2024: Exec contributions $67,321; Company contributions $97,867; Aggregate balance $1,196,334 . |
| Pension | ERP participation (legacy DB plan, frozen for post-1997 hires) . |
Upcoming vesting/trading dynamics:
- Dec 1, 2025: Retention RSAs vest ($500,000 equivalent retention tranche converted to RSAs; also eligible to vest on without-cause termination incl. post-CoC, death, or disability) .
- March 7, 2026 and March 7, 2027: Remaining tranches of 2024 annual RSAs vest; 2023 RSA residual vests March 7, 2025 (completed) .
- Ownership policy requires 100% retention of vested equity until guideline achieved; Tarry exceeds guideline (4.1x vs. 3x), reducing forced-hold constraints, though insider trading windows and policies apply .
Employment Terms
| Scenario (as of 12/31/2024) | Key terms | Estimated total (Tarry) |
|---|---|---|
| Change-in-control (CIC) termination without cause/constructive termination (double trigger) | Cash severance = 2x eligible compensation; restrictive covenant payment = 1x eligible comp over 12 months; RSAs/PSs per plan; COBRA; legal/outplacement . | $7,116,950 (incl. cash severance $3,528,825; retention $650,716; PS/RSA values; benefits; legal/outplacement) . |
| Impaction (position eliminated) | Lump-sum = 14 months base salary + 1 week per year of service; equity/benefits per plan; outplacement . | $3,564,047 (incl. severance $1,244,351; retention $650,716; RSAs/PSs; benefits; legal/outplacement) . |
| Death/Disability | AIP amounts; acceleration of certain equity; life insurance proceeds; benefits . | $2,658,766 (death) / $2,258,766 (disability) . |
Other terms and protections:
- No individual employment contract; special retention agreement converted to RSAs (6,617 RSAs on Dec 1, 2024; $250k tranche 2024; $500k tranche 2025; subject to accelerated vesting on specified terminations) .
- Clawback policy (Dec 1, 2023): recoupment on accounting restatement or improper conduct; covers all incentive compensation; NYSE-rule compliant .
- Double-trigger equity vesting under PEP following a CIC .
Board Governance and Director Service
- Board service: Elected by Board Dec 3, 2024; standing for shareholder election in 2025; age 54; not independent (employee-director) .
- Committee roles: None (employee-director); as an employee, receives no additional director compensation .
- Board structure and independence: Lead Independent Director (Norman P. Becker); all Board committees comprised entirely of independent directors; independent directors hold regular executive sessions .
- Governance safeguards: Prohibition on hedging and pledging; stock ownership guidelines for directors and officers; incentive awards subject to clawback .
- Say-on-Pay support: 84% approval in 2024 .
Director and Executive Pay Design Context (Benchmarking and Risk)
- Independent compensation consultant (Pay Governance) advises the Compensation & Human Capital Committee; peer benchmarking targeted to median TDC; WTW provided a competitive assessment review .
- 2024 LTIP mix: 70% performance shares, 30% RSAs; capped awards; conservative perquisites; no stock options granted since 2010 .
- 2025 LTIP mechanics: 70% PS; 30% RSAs granted in Feb 2025 with vest schedule 33%/34%/33% on Mar 7, 2026/2027/2028; performance goals include Earnings Growth, Relative TSR, FFO/Debt; amendments exclude extraordinary events post Feb 25, 2025 in FFO/Debt calcs .
Performance & Track Record Highlights
- Certifications and executive accountability: Tarry signed SOX 302/906 certifications as PNM President & CEO and TNMP CEO on Feb 28, 2025, indicating responsibility for disclosure controls and ICFR efficacy .
- Company-level performance inputs to pay: 2024 TSR index 113 vs. peer 127; Net Earnings $258.7 million; Incentive EPS 2.74 .
Board Service History, Committees, and Dual-role Implications
- History: Director since 2024; employee-director while serving as President & COO; slated to become CEO and President effective July 1, 2025 .
- Committees: None assigned due to employee status; Board committees remain fully independent .
- Independence and oversight: Employee-director status reduces independence; mitigants include a Lead Independent Director, independent committee composition, executive sessions, and strong ownership/anti-hedging/anti-pledging/Clawback policies .
Investment Implications
- Pay-for-performance alignment: Clear linkage to EPS and operational metrics (AIP) and multi-year Earnings Growth, Relative TSR, and FFO/Debt (LTIP); 2024 AIP at 101% and 2022–2024 PS at 71% show calibration and downside sensitivity on credit metrics .
- Near-term vesting/supply: Material scheduled equity deliveries on Dec 1, 2025 (retention RSAs) and March 7, 2026/2027 (RSA tranches) could create episodic selling pressure; mitigated by ownership guidelines (Tarry at 4.1x vs. 3x requirement) and anti-hedging/pledging policy .
- Retention and severance economics: Double-trigger CIC terms (2x eligible comp + 1x restrictive covenant) and full change-in-control package of ~$7.1 million for Tarry balance retention/stability with shareholder norms; “impaction” severance ~$3.6 million supports transition risk management outside CIC .
- Governance quality: Employee-director status is balanced by independent leadership (Lead Director), independent committees, and strong prohibitions/clawbacks; Say-on-Pay support (84%) suggests investor acceptance of design and levels .
- Leadership transition: Board announced transition to make Tarry CEO and President on July 1, 2025, reinforcing internal succession and continuity across regulatory/operational agendas at PNM and TNMP; execution risk will be judged against LTIP goals and regulatory credit metrics (FFO/Debt) .