R. Lane Riggs
VALERO ENERGY CORP/TXAbout R. Lane Riggs
R. Lane Riggs is Chairman (since December 31, 2024), Chief Executive Officer and President (since June 30, 2023), and a director of Valero Energy Corporation; he previously served as President and Chief Operating Officer (January 23, 2020–June 30, 2023) and Executive Vice President and Chief Operating Officer (January 1, 2018–January 22, 2020) . Age: 59 (Director since 2023); Riggs began his career at Valero as a Process Engineer at the McKee refinery and has led supply optimization, crude/feedstock supply, and planning/economics, with noted improvements in safety, reliability, cost management, and environmental performance during his COO tenure . Pay-for-performance linkage is strong: 2024 annual bonus paid at 140.55% of target across EPS, HSE, mechanical availability, cash operating expense, and strategic execution goals; long-term incentives are split evenly between restricted stock and performance shares tied to relative TSR and low‑carbon strategy, with payouts capped at 100% if TSR is negative .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Valero Energy | Chairman of the Board | Since 12/31/2024 | Board leadership transition completed; succession developed over time |
| Valero Energy | CEO and President; Director | Since 6/30/2023 | Strategy continuity; peer‑leading performance focus |
| Valero Energy | President & COO | 1/23/2020–6/30/2023 | Oversaw logistics and low‑carbon fuels; improved safety, reliability, cost and environmental measures |
| Valero Energy | EVP & COO | 1/1/2018–1/22/2020 | Led refining operations and supply optimization |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Valero Energy Partners LP (GP) | Director (prior) | Prior years | Midstream/logistics oversight experience |
| Diamond Green Diesel JV | Board service (prior) | Prior years | Low‑carbon fuels project oversight (St. Charles expansion, Port Arthur plant) |
| Other public company boards (last five years) | None | n/a | No external public board interlocks disclosed |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,015,000 | 1,250,000 | 1,650,000 |
| Stock Awards ($) | 5,044,102 | 8,635,908 | 10,820,463 |
| Non‑Equity Incentive Plan Compensation ($) | 2,233,000 | 3,352,046 | 3,710,520 |
| Change in Pension Value & NQDC Earnings ($) | — | 6,723,177 | 5,917,094 |
| All Other Compensation ($) | 130,714 | 179,801 | 314,215 |
| Total ($) | 8,422,816 | 20,140,932 | 22,412,292 |
| Total Excluding Pension Change ($) | 8,422,816 | 13,417,755 | 16,495,198 |
Performance Compensation
Annual Incentive Bonus – 2024 Design and Outcome
| Component (Metric) | Weighting | Minimum | Target | Maximum | Achieved (2024) | Bonus % Earned |
|---|---|---|---|---|---|---|
| EPS, adjusted ($/share) | 40.00% | 3.57 | 14.30 | 21.45 | 8.48 | 23.72% |
| Health, Safety, and Environment | 13.33% | 0.00% | 100.00% | 200.00% | 200.00% | 26.66% |
| Mechanical Availability | 13.33% | 95.6% | 96.2% | 97.6% | 97.1% | 23.49% |
| Refining Cash Opex ($/EDC) | 13.34% | 185 | 157 | 138 | 132 | 26.68% |
| Strategic Execution | 20.00% | 0.00% | 100.00% | 200.00% | 200.00% | 40.00% |
| Total Bonus Achieved | 100.00% | 140.55% |
Bonus mechanics for 2024: Base salary $1,650,000; target bonus 160% ($2,640,000); payout at 140.55% delivered $3,710,520 . In 2023, blended target bonus was 138.5% of salary due to mid‑year CEO transition; payout factor 193.62% yielded $3,352,046 .
Long‑Term Incentive (LTI) Design – 2024 Targets
| Item | Riggs |
|---|---|
| LTI Target % of Base Salary | 700% |
| Total LTI Target Value | $11,550,000 |
| Restricted Stock Target Value | $5,775,000 |
| Performance Shares Target Value | $5,775,000 |
| Mix & Metrics | 50% RS / 50% PS; PS tied to relative TSR and low‑carbon strategy; PS payout capped at 100% if Valero’s TSR is negative |
2024 Equity Grants – Grant‑Date Fair Values
| Component | Grant‑Date Fair Value ($) |
|---|---|
| Restricted Stock | 5,663,027 |
| Performance Shares | 5,157,436 |
| Total Stock Awards | 10,820,463 |
Equity Ownership & Alignment
Beneficial Ownership (as of March 10, 2025)
| Holder | Shares Held | Shares Under Options | Total Shares | Percent of Class | Pledged? |
|---|---|---|---|---|---|
| R. Lane Riggs | 351,037 | — | 351,037 | <1% | None |
- Stock Ownership & Retention Guidelines: CEO must own 7.5x base salary in Valero stock; all NEOs, including CEO, met guidelines as of December 31, 2024/2023; pledging is prohibited and compliance monitored by HRCC .
Outstanding Unvested Equity (as of December 31, 2024)
| Award Type | Shares Unvested | Market Value ($) |
|---|---|---|
| Restricted Stock (group 1) | 5,551 | 680,497 |
| Restricted Stock (group 2) | 8,906 | 1,091,787 |
| Restricted Stock (group 3) | 25,042 | 3,069,899 |
| Restricted Stock (group 4) | 3,618 | 443,531 |
| Performance Shares (group 1) | 9,153 | 1,963,647 |
| Performance Shares (group 2) | 14,686 | 3,600,713 |
| Performance Shares (group 3) | 41,290 | 10,123,482 |
| Performance Shares (group 4) | 5,968 | 1,463,234 |
Assumed market values use $122.59 per share closing price on 12/31/2024; Valero had no outstanding stock options .
Vesting Schedule – Restricted Stock (Riggs)
| RS Group | Shares | Vesting Dates |
|---|---|---|
| Group (2) | 5,551 | Vested 2/22/2025 |
| Group (3) | 8,906 | 50% 2/23/2025; 50% 2/23/2026 |
| Group (4) | 25,042 | 1/3 2/22/2025; 1/3 2/22/2026; 1/3 2/22/2027 |
| Group (5) | 3,618 | 1/3 7/1/2024; 1/3 7/1/2025; 1/3 7/1/2026 |
Performance shares settle after performance periods and do not confer shareholder rights until settlement; vesting can accelerate pro‑rata upon double trigger following change of control per plan terms .
2023 Vested Equity – Shares and Values
| Award Type | Shares Vested | Value Realized ($) |
|---|---|---|
| Restricted Stock | 52,272 | 5,695,425 |
| Performance Shares | 47,583 | 6,655,910 |
These vestings contribute to potential insider selling pressure around vest dates due to tax withholding and diversification needs .
Employment Terms
Change‑of‑Control Severance – Structure and Illustrative Values
- Structure: Lump sum equals accrued pay plus pro‑rata bonus, and 2× (salary + eligible bonus); continued health and welfare benefits for two years; up to $25,000 outplacement; double‑trigger for RS and options; double‑trigger pro‑rata vesting for performance shares; no stock options outstanding .
- Definitions: “Cause” and “Good Reason” defined; double‑trigger required for equity acceleration (PS always double‑trigger) .
| Component (Termination by Company without Cause or by Executive for Good Reason) | Amount ($) |
|---|---|
| Salary (2×) | 3,300,000 |
| Bonus (2× target) | 5,280,000 |
| Health & Welfare Benefits | 66,620 |
| Outplacement | 25,000 |
| Accelerated Vesting – Restricted Stock | 5,285,714 (shares × $122.59) |
| Accelerated Vesting – Performance Shares | 2,454,497 (pro‑rata; double‑trigger) |
- Clawback: Executive Compensation Clawback Policy exceeds SEC/NYSE minimums; recovery in cases of material restatement and misconduct; also complies with SEC/NYSE baseline requirements .
- Hedging/Pledging: Prohibited for directors and officers; compliance monitored by HRCC .
- Tax Gross‑Ups: Eliminated; policy against implementing change‑of‑control gross‑ups .
- Perquisites: Required use of corporate aircraft for business and personal travel; Time Sharing Agreement reimburses Valero within FAA limits; amounts for Riggs did not exceed $120,000 and are reviewed annually (not a related‑party transaction under threshold) .
Board Governance
- Roles and Independence: Riggs is Chairman, CEO, and President (management; not independent); Valero maintains strong independent oversight with Lead Independent Director Robert A. Profusek and fully independent committees .
- Board Service History: Director since 2023; became Chairman effective 12/31/2024 upon Executive Chairman Joseph W. Gorder’s retirement .
- Committee Memberships: Independent committees include Audit; Human Resources & Compensation; Nominating & Corporate Governance; Sustainability & Public Policy. Employee directors do not receive director compensation, and committees are composed of independent directors .
- Attendance: In 2024, Board held six meetings; committees held 18; 100% director attendance at Board meetings and >98% aggregate average committee attendance; all directors attended the 2024 annual meeting .
Director Compensation Context
- Non‑employee director annual cash retainer: $130,000; committee chair fees $25,000; Lead Director +$50,000; annual equity grant $200,000 in stock units; employee directors (Riggs) receive no director compensation .
Say‑On‑Pay & Shareholder Feedback
- Say‑on‑pay approval: 94.9% for 2023 executive compensation .
- Engagement: Outreach to largest holders; multiple meetings; strengthened ownership guidelines (+50% for senior executives), capped PS payouts when TSR is negative, enhanced clawback .
Compensation Committee Analysis
- HRCC Members: Rayford Wilkins, Jr. (Chair); Eric D. Mullins; Robert A. Profusek; Randall J. Weisenburger; 100% attendance in 2024; no interlocks .
- Independent Consultant: Exequity LLP; fees $310,251 in 2023; no other services; independent under SEC/NYSE standards .
- Pay Benchmarking: Target pay benchmarked to median peers; LTI 100% denominated in Valero stock; PS require performance above peer TSR median; maximum payout ceilings maintained .
Equity Ownership & Alignment Analysis
- Ownership Guidelines Compliance: CEO at 7.5× salary; all NEOs met requirements; no pledging allowed .
- Insider Selling Pressure: Significant RS/PS vesting events (e.g., February and July 2025) can create supply from tax withholding and diversification; monitor Form 4 activity around 2/22–2/23 and 7/1 dates .
- Options: None outstanding; reduces repricing risk and leverage‑driven incentive misalignment .
Employment Terms Summary
- Severance Multiples: 2× salary and target bonus; two‑year benefits; outplacement; double‑trigger equity acceleration; no tax gross‑ups .
- Non‑Compete/Non‑Solicit: Not specifically disclosed; agreements define Cause and Good Reason and include change‑of‑control terms .
- Auto‑Renewal / Term: Not disclosed; change‑of‑control agreements entered in 2016 and thereafter for Riggs .
Investment Implications
- Alignment strong: High equity mix (700% of salary LTI target) and stringent ownership requirements (7.5× salary) with prohibitions on hedging/pledging signal robust alignment; PS design ties payouts to relative TSR and low‑carbon execution, capped when TSR is negative, mitigating windfalls in down markets .
- Retention risk low near term: Double‑trigger severance with meaningful RS/PS acceleration and recent RS vesting cadence suggest manageable retention risk; watch vest clusters around February and July for potential selling pressure .
- Governance considerations: Dual role (Chairman + CEO) is mitigated by Lead Independent Director and independent committees with high attendance; continued strong say‑on‑pay results indicate investor support of pay program and oversight .
- Pay‑for‑performance: 2024 bonus payout at 140.55% reflects strong operational execution (HSE 200%, cash opex best‑in‑class) despite EPS below target, balancing absolute and relative metrics; continued monitoring of PS outcomes vs peer TSR is warranted for compensation alpha signals .