Alan S. Armstrong
About Alan S. Armstrong
Alan S. Armstrong, 62, is President & Chief Executive Officer of The Williams Companies, Inc., and has served as a director since 2011; he holds a BS in Civil Engineering from the University of Oklahoma . Under Armstrong’s tenure, Williams expanded to handle about one-third of U.S. natural gas volumes and delivered record 2024 Adjusted EBITDA of $7.08 billion, up 4.4% year-over-year, alongside strong balance sheet leverage of 3.79x . Shareholder value creation is evident in a nearly 30% annualized total shareholder return (TSR) from 2019–2024 and consistent dividend growth, including a 5.3% increase for 2025 and 51 consecutive years of quarterly dividends . He is not independent due to his CEO role; Williams separates the Board Chair and CEO roles, with an independent Chair overseeing executive sessions and committee work .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Williams (Gulf Coast Midstream) | Director of Commercial Operations | 1995–1997 | Led midstream commercial operations in Gulf Coast region |
| Williams | VP Retail Energy Services | 1997–1998 | Built retail energy services capabilities |
| Williams | VP Commercial Development | 1998–1999 | Advanced commercial development initiatives |
| Williams | VP Gathering & Processing | 1999–2002 | Managed gathering/processing; foundation for midstream scale-up |
| Williams | SVP — Midstream | Pre-2011 | Led North American midstream & olefins businesses before becoming CEO |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| BOK Financial Corporation | Director; Credit Committee | — | External financial services exposure; credit oversight experience |
| Business Roundtable | Member | — | National CEO policy forum; strategic advocacy |
| American Petroleum Institute | Member | — | Industry policy alignment and network |
| National Petroleum Council | Member | — | Energy policy advisory engagement |
| University of Oklahoma Foundation | Trustee | — | Governance in higher education/endowment stewardship |
| Junior Achievement USA | Board member | — | Community and youth economic education |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $1,340,000 | $1,390,770 | $1,435,539 |
| Base Pay at Year-End ($) | — | $1,400,000 | $1,442,000 |
| Target Bonus % of Base | — | — | 150% |
| AIP/Non-Equity Incentive Paid ($) | $3,207,960 | $2,649,416 | $3,338,243 |
| Stock Awards Grant-Date Fair Value ($) | $9,300,000 | $9,999,977 | $10,499,994 |
Perquisites and benefits include financial planning, mandated annual physicals, supplemental executive LTD, life insurance, 401(k) match ($20,700), and limited personal use of company aircraft with imputed income; officers do not receive tax services from EY .
Performance Compensation
Annual Incentive Program (AIP) – 2024
| Metric | Weight | Target | Actual | Payout % | Notes |
|---|---|---|---|---|---|
| Adjusted EBITDA ($bn) | 50% | 6.950 | 7.085 | 165% | Collar not triggered |
| Controllable Costs ($bn) | 35% | (1.947) | (1.926) | 121% | — |
| Methane Emissions Reduction (%) | 5% | 5.0 | 11.9 | 200% | ESG metric |
| CT3 Loss of Primary Containment Ratio | 5% | 13:1 | 19.98:1 | 200% | Safety/process |
| HiPo Hazard ID to Incident Ratio | 5% | 20:1 | 44.19:1 | 200% | Safety leading indicator |
| Total Business Performance % | — | — | — | 155% | AIP paid March 2025 |
2025 AIP increases Adjusted EBITDA weight to 85% and removes Controllable Costs (elements now within EBITDA), with ESG metrics totaling 15% .
Long-Term Incentives (RSUs & PSUs)
| Feature | CEO | Others | Vesting | Dividends |
|---|---|---|---|---|
| Equity Mix | 60% PSUs / 40% RSUs | 50% PSUs / 50% RSUs | 3-year cliff | Cash equivalents paid only on earned/vested units |
2024 grants: PSUs target 184,588 (max 369,176), fair value $6,299,988; RSUs 120,344, fair value $4,200,006 .
PSU designs and outcomes:
- 2021 Award (vested Feb 2024): ROCE target 8.30% (actual 9.97%) and AFFO/share target $3.25 (actual $4.27) each paid 200%; Relative TSR (6th of 10) no modifier; total payout 200% .
- 2022 Award (vested Feb 23, 2025): payout 191.7%; metrics ROCE and AFFO per share with +/-25% Relative TSR modifier .
- 2025 Awards: switch ROCE to CROIC (50%) and retain AFFO/share (50%); Relative TSR modifier +/-25% .
Stock options have not been granted since 2018; options outstanding remain only from prior cycles . In 2024, Armstrong had 153,177 shares acquired on option exercise (value realized $268,060) and 665,587 shares acquired on vesting (value realized $23,109,181), indicating sizable distributions around vest dates (tax withholding may impact net flows) .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Shares owned directly/indirectly | 2,274,461 |
| RSUs counted as beneficially owned (60-day vestability) | 536,110 |
| Total beneficial ownership | 2,810,571 |
| Shares outstanding (Feb 25, 2025) | 1,220,685,724 |
| Ownership as % of shares outstanding | ~0.23% (2,810,571 / 1,220,685,724) |
| Stock ownership guideline | CEO: 6× base pay; retain 50% after-tax until met |
| Hedging/pledging | Prohibited for directors/officers/employees |
Outstanding unvested equity (Dec 31, 2024; market price $54.12):
| Grant | Type | Units Outstanding | Market Value |
|---|---|---|---|
| 2/22/2024 | RSU (time) | 120,344 | $6,513,017 |
| 2/22/2024 | PSU (perf) | 184,588 | $9,989,903 |
| 2/23/2023 | RSU (time) | 128,824 | $6,971,955 |
| 2/23/2023 | PSU (perf) | 186,683 | $10,103,284 |
| 2/23/2022 | RSU (time) | 123,506 | $6,684,145 |
| 2/23/2022 | PSU (perf) | 171,798 | $9,297,708 |
Vesting dates for time-based RSUs: 2/23/2025 (2022 grant), 2/23/2026 (2023 grant), 2/22/2027 (2024 grant) . Ownership guidelines require 50% post-tax retention until met; Board guidelines require 60% retention for directors (all director equity deferred until retirement) .
Employment Terms
| Provision | Summary |
|---|---|
| Employment Agreement | No employment contract; standard change-in-control agreements only |
| Severance (non-CIC) | Executive Severance Pay Plan for NEOs other than CEO; discretionary 1.5×–2.0× salary+target bonus; 18 months medical coverage; up to $25,000 outplacement |
| Change-in-Control (CIC) | Double trigger required; 3× salary+target bonus lump sum; accelerated vesting of equity per plans; 36 months medical cost; legal fee reimbursement; up to $25,000 outplacement; continued D&O coverage; “best net” (no excise tax gross-up) |
| Clawback | Compliant with NYSE listing standards (recoup up to 3 years on restatement) and separate discretionary recoupment for fraud/intentional misconduct |
| Non-compete/Non-solicit | Not disclosed in proxy |
Illustrative termination values (hypothetical 12/31/2024): Armstrong total under CIC $65,977,854, comprising stock awards, AIP, cash severance, benefits, and outplacement; other scenarios detailed in proxy .
Board Governance
- Role: Director since 2011; no committee memberships; not independent due to CEO role .
- Structure: Independent Board Chair (Stephen W. Bergstrom); all committees comprised solely of independent directors; regular executive sessions without management .
- Committees and oversight: Audit, Compensation & Management Development, Governance & Sustainability, Environmental, Health & Safety—each with specific charters and annual evaluations .
- Attendance: Board met 5 times in 2024; independent directors met in executive session at each regularly scheduled meeting; all directors attended ≥75% of meetings and the 2024 annual meeting .
Compensation Structure Analysis
- Pay mix emphasizes at-risk compensation: 80%+ of NEO annual target pay is variable; CEO equity is more performance-tied than peers (60% PSUs) .
- AIP and PSUs link pay to financial, safety, and ESG outcomes (Adjusted EBITDA, cost discipline, methane reduction, process safety, hazard identification; ROCE/AFFO per share with Relative TSR modifier) .
- Program practices: double-trigger CIC; caps at 200% for AIP and PSUs; robust ownership and anti-hedging/pledging policies; clawback compliant with NYSE and Dodd-Frank .
- Peer benchmarking: Compensation set around market median; 2024 compensation peer group spans 16 energy/utilities peers; Williams ranked 42nd percentile assets, 48th market cap, 39th EV vs peers .
Say-on-Pay & Shareholder Feedback
2024 say-on-pay received 96.1% “for” votes; Williams engaged with institutions representing ~50% of outstanding shares to discuss HCM and compensation programs; no related party transactions required review/approval in 2024 .
Performance & Track Record
| Metric/Context | Data |
|---|---|
| Adjusted EBITDA (2024) | $7.08B; record; +4.4% y/y |
| Leverage (2024) | 3.79×; investment grade balance sheet |
| Dividend policy | 5.3% increase to $2.00 annualized in 2025; 51 years of quarterly payments; coverage 2.32× in 2024 |
| 5-year Annualized TSR (2019–2024) | ~29% |
| 3-Year TSR comparison (start 2021) | Williams $241.63 vs S&P 500 $129.22, Arca Nat Gas $166.81, Bloomberg Americas Pipeline $176.44 (each per $100 initial) |
| Strategic execution | Expanded record contracted transmission capacity (33.4 Bcf/d, +3.4%), multiple project in-service/announced, storage and deepwater integration |
| M&A/Portfolio | Gulf Coast storage acquisition ($1.95B), Discovery consolidation, Crowheart acquisition |
Equity Ownership & Director Compensation (Board context)
Non-employee director compensation totals $305,000 (cash retainer $120,000; RSU retainer $185,000 deferred until retirement); additional chair fees apply; all director equity deferred until retirement; director retention and ownership guidelines set at 5× cash retainer with 60% retention until met .
Risk Indicators & Red Flags
- No excise tax gross-ups in CIC; “best net” only .
- Hedging and pledging prohibited .
- Clawback policy strengthened under NYSE adoption .
- No related party transactions requiring review in 2024 .
- Strong say-on-pay approval (no low vote risk) .
Performance Compensation – Detailed Tables
2021 PSU Award (vested 2024)
| Metric | Weight | Threshold | Target | Stretch | Actual | Weighted Result |
|---|---|---|---|---|---|---|
| ROCE (2023) | 50% | 8.00% | 8.30% | 8.70% | 9.97% | 100.0% |
| AFFO per Share (2023) | 50% | $3.15 | $3.25 | $3.35 | $4.27 | 100.0% |
| Relative TSR | +/-25% modifier | — | — | — | 6th of 10 (middle-third) | No change |
| Total Payout | — | — | — | — | — | 200% |
2022 PSU Award (vested 2025)
| Metric | Notes |
|---|---|
| Design | ROCE (50%) and AFFO/share (50%); Relative TSR +/-25% modifier |
| Payout | 191.7% |
Equity Grant Detail (2024)
| Grant Date | Type | Target Units | Max Units | Grant-Date FV ($) |
|---|---|---|---|---|
| 2/22/2024 | PSU | 184,588 | 369,176 | $6,299,988 |
| 2/22/2024 | RSU | 120,344 | — | $4,200,006 |
| 2024 PSU Max Potential | — | — | — | $12,599,977 |
Investment Implications
- Alignment: Heavy use of PSUs tied to CROIC/AFFO and Relative TSR plus AIP ESG metrics supports pay-for-performance and sustainability execution; ownership guidelines and anti-pledging/hedging further align interests .
- Vesting supply: Significant vesting distributions (e.g., 665,587 shares vested in 2024) and scheduled RSU/PSU cliffs through 2027 can create episodic selling pressure via tax withholding and portfolio rebalancing; monitor Form 4s around February vesting windows .
- Retention/CIC: Robust double-trigger CIC (3× salary+target bonus; accelerated equity) and discretionary severance for non-CIC events mitigate retention risk while avoiding shareholder-unfriendly tax gross-ups .
- Execution track: Demonstrated EBITDA/TSR performance and project backlog favor continued cash flow and dividend growth; watch AIP/PSU metric calibrations (e.g., 2025 shift to 85% EBITDA) for signal on management confidence and cost discipline .