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HOUSTON – Archrock, Inc. (NYSE:AROC), a natural gas transmission company with a market capitalization of $4.65 billion, disclosed changes to its executive compensation structure in a recent SEC filing. The changes come as the company demonstrates strong financial performance, with revenue growth of nearly 15% in the last twelve months. According to InvestingPro analysis, Archrock appears overvalued at current levels, though analysts remain optimistic with price targets reaching up to $34. On February 19, 2025, the company’s compensation committee established a short-term incentive program for the current year, affecting its top executives’ potential earnings.
The 2025 Incentive Program outlines cash incentive targets as a percentage of eligible earnings for the Named Executive Officers. President and CEO D. Bradley Childers has a target set at 125%, while Senior Vice President and CFO Douglas S. Aron’s target is at 90%. Other senior vice presidents including Stephanie C. Hildebrandt, Jason G. Ingersoll, and Eric W. Thode each have a cash incentive target of 75%.
The incentive payout for each executive can range from 0% to 200% of the target, subject to the committee’s discretion. Actual payouts will be determined by company performance against specific indicators, including Adjusted EBITDA (currently at $507.2 million), sustainability metrics, and operating team performance. The latter will only apply to Ingersoll and Thode, who oversee operations and sales teams. InvestingPro data reveals that Archrock has maintained dividend payments for 12 consecutive years, demonstrating consistent financial management. Subscribers can access 6 additional ProTips and comprehensive financial metrics through the Pro Research Report.
In addition to the incentive program, the committee adjusted the base salaries of the Named Executive Officers, effective April 2025. Childers will see an increase from $925,000 to $950,000, Aron from $590,000 to $610,000, and other senior vice presidents from $535,000 and $455,000 to $550,000 and $470,000, respectively.
The Committee retains the right to adjust performance indicators and targets throughout the year to reflect internal and external developments. These executive compensation changes are part of Archrock’s broader strategy to align leadership incentives with company performance and strategic goals. The company’s stock has shown remarkable strength, with a 33% price increase over the past six months and a 48% total return over the last year, according to InvestingPro data.
The information in this article is based on a press release statement from Archrock, Inc. provided to the SEC.
In other recent news, Archrock has announced a 9% increase in its quarterly dividend, raising it to $0.19 per share, or $0.76 annually. This marks the company’s fifth dividend increase since January 2023, reflecting its consistent strong performance. Archrock’s President and CEO, Brad Childers, attributed the dividend boost to high utilization rates and a revamped platform. In addition, Mizuho (NYSE:MFG) Securities raised Archrock’s stock price target to $34 from $29, maintaining an Outperform rating. Analyst Gabriel Moreen cited Archrock’s strong performance and robust macro backdrop for US compression as key reasons for the upgrade. The company’s ’best in class’ balance sheet is seen as a factor that allows it to pursue growth opportunities while maintaining financial flexibility. Archrock’s management acknowledged the potential for slightly higher capital intensity but expects benefits from repricing its base fleet at higher rates. These developments indicate a positive outlook for Archrock’s financial prospects.
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