Current Members:
Brooks J. Klimley (chair)
W. Howard Keenan, Jr.
David H. Keyte
Number of meetings in 2022:
4 | | The Nominating & Governance Committee identifies, evaluates and recommends qualified nominees to serve on the Board, develops and oversees Antero Midstream’s internal corporate governance processes, and directs all matters relating to the succession of Antero Midstream’s Chief Executive Officer.
The Board has determined that all matters relating to the succession of Antero Midstream’s Chief Executive Officer. Rules implemented by the NYSE require Antero Midstream to have a nominating & governance committee composed entirely of independent directors. All members of the Nominating & Governance Committee meet the NYSE’s independence standards.
* | John C. Mollenkopf served on the Nominating & Governance Committee through April 8, 2020.meet the NYSE’s independence standards. |
Conflicts Committee**Current Members:
David H. Keyte (chair)
Peter A. Dea
Number of meetings in 2022:
2 | Includes joint meetings with | The Conflicts Committee assists the Nominating & Governance CommitteeBoard in investigating, reviewing and evaluating certain potential conflicts of interest, including those between Antero Midstream and Antero Resources, Corporation.and carries out any other duties delegated by the Board that relate to potential conflict matters. |
ConflictsEnvironmental, Social and Governance (ESG) Committee
Current Members*: David H. Keyte (chair), Peter A. Dea, Rose M. Robeson
Number of meetings in 2020: 1
The Conflicts Committee assists the Board in investigating, reviewing and evaluating certain potential conflicts of interest, including those between Antero Midstream and Antero Resources, and carries out any other duties delegated by the Board that relate to potential conflict matters.
Current Members*:
Brooks J. Klimley (chair)
Nancy E. Chisholm*
Michael N. Kennedy
Janine J. McArdle
John C. Mollenkopf
Number of meetings in 2022:
4 | | The Environmental, Social and Governance (ESG) Committee provides guidance to the Board on, and oversees Antero Midstream’s risk management policies related to the ESG matters.
Members of the ESG Committee have expertise in areas relating to ESG, including environmental stewardship, social responsibility and community relations. Brooks Klimley, the ESG Committee Chair, brings ESG experience from his career leading investment banking practices covering the energy and mining sectors. Mr. Klimley also serves as an Adjunct Professor at Columbia University’s graduate schools of business and international affairs. Janine McArdle has more than 30 years of experience in engineering, marketing, business development, finance and risk management. John Mollenkopf has significant experience in executive management, business development, marketing, engineering and operations in the midstream energy sector. Michael Kennedy was an auditor with Arthur Andersen focusing on the Natural Resources industry.
During 2022, the ESG Committee reviewed, and the Company published, its published its 2021 ESG Report, which is available at www.anteromidstream.com/community-sustainability. |
| * | Brooks J. Klimley served onNancy E. Chisholm joined the Conflicts Committee through April 8, 2020. |
Environment, SustainabilityEnvironmental, Social and Social Governance (ESG) Committee
Current Members: Brooks J. Klimley (chair), Janine J. McArdle, John C. Mollenkopf
Number of meetings in 2020*: 3
The Environment, Sustainability and Social Governance (ESG) Committee provides guidance to the Board on, and oversees Antero Midstream’s risk management policies related to corporate citizenship, environmental sustainability, and social and political trends, issues and concerns, and advises the Board and management on significant public policy issues that are pertinent to the Company and its stakeholders.
During 2020, the Environment, Sustainability and Social Governance (ESG) Committee reviewed the Company’s ESG practices and procedures. Following such review, the Company published its 2020 Corporate Sustainability Report, which is available at www.anteromidstream.com/community-sustainability, and the Company adopted a Diversity and Inclusion Policy, a Supplier Code of Business Conduct and Ethics and a Human, Labor and Indigenous Rights Policy, all of which are available at https://www.anteromidstream. com/investors/corporate-governance/governance-documents. The Environment, Sustainability and Social Governance (ESG) Committee will continue to advise the Board on ESG matters.
* | The Board established the Environment, Sustainability and Social Governance (ESG) Committee as a standing committee of the Board in April 2020.on December 5, 2022. |
  | - 20212023 Proxy Statement 2629 |
COMPENSATION OF DIRECTORS General Our non-employee directors are entitled to receive compensation consisting of retainers, fees and equity awards as described below. The Compensation Committee reviews non-employee director compensation on a periodic basisperiodically and recommends itchanges, if appropriate, to the Board for approval. Our employee directors Messrs. Rady and Warren, do not receive additional compensation for their services as directors. All compensation that Messrs. Rady and Warren received from Antero Midstream as employees is disclosed in the Summary Compensation Table.Table on page 51. Annual Cash Retainers TheEffective April 15, 2022, some of the annual retainers payable to non-employee directors receivedof the following cashBoard were increased slightly, as indicated below. These modifications were made to ensure that our director compensation for their services during the 2020 fiscal year, prorated for a partial year of service:is competitive with that paid by our peers so that we can attract and retain qualified individuals to serve on our Board.
| Recipient | | Amount | | | Non-employee director | | $ | 90,000 | | | Lead Director | | $ | 25,000 | | | Audit Committee: | | | | | | Chairperson | | $ | 20,000 | | | Other members | | $ | 7,500 | | | Compensation Committee: | | | | | | Chairperson | | $ | 15,000 | | | Other members | | $ | 5,000 | | | Nominating & Governance Committee: | | | | | | Chairperson | | $ | 15,000 | | | Other members | | $ | 5,000 | | | Conflicts Committee: | | | | | | Chairperson | | $ | 5,000 | | | Other members | | $ | 5,000 | | | Environment, Sustainability & Social Governance (ESG) Committee: | | | | | | Chairperson | | $ | 15,000 | | | Other members | | $ | 5,000 | |
| Recipient | | Amount | | Non-employee director | | $ | 97,500
(previously $90,000) | | Lead Director | | $ | 25,000 | | Audit Committee: | | | | | Chairperson | | $ | 24,000 | | Other members | | $ | 15,000 | | Compensation, Nominating & Governance, and ESG Committees: | | | | | Chairperson | | $ | 15,000 | | Other members | | $ | 7,500 | | Conflicts Committee: | | | | | Chairperson | | $ | 7,500 | | Other members | | $ | 7,500 |
All retainers are paid in cash on a quarterly basis in arrears, but directors have the option to elect, on an annual basis, to receive all or a portion of their cash retainers in the form of shares of our common stock. For 2020, the directors who are members of committees of the Board were eligible to receive meeting fees of $1,500 for each committee meeting attended in excess of ten meetings for such committee per calendar year (up to a maximum of $22,500 per committee). Directors are also reimbursed for reasonable expenses incurred (i) to attend meetings and activities of the Board or its committees, and (ii) to facilitate participation in general education and orientation programs for directors. Effective April 15, 2021, members of all committees of2023, the Board other thanannual retainer for non-employee directors will be increased from $97,500 to $107,500 and the additional annual retainers for (i) Lead Director will be increased from $25,000 to $32,500, (ii) Audit Committee chair will be paid a cash retainer of $7,500 per year (previously $5,000), members of the Auditincreased from $24,000 to $27,500, and (iii) Compensation Committee chair will be paid an annual retainerincreased from $15,000 to $20,000. Otherwise, the cash compensation of $15,000 per year (previously $7,500) and the chairperson of the Audit Committeeour non-employee directors in 2023 will be paid an annual retainer of $24,000 (previously $20,000). These modifications were made to ensurethe same as that our director compensation is competitive with that paid by our peers so that we can attract and retain qualified individuals to serve on our Board.described for 2022. | - 2021 Proxy Statement27 |
Equity-Based Compensation and Stock Ownership Guidelines In addition to cash compensation, our non-employee directors receive annual equity-based compensation consisting of fully-vested stock with an aggregate grant date value equal to $130,000, subject to the terms and conditions of the Antero Midstream Corporation Long Term Incentive Plan (“AM LTIP”) and the award agreements pursuant to which such awards are granted. These awards are granted in arrears on a quarterly basis, such thatso each grantinstallment has a grant date fair value of approximately $32,500. In light Effective April 15, 2023, the annual equity-based compensation for non-employee directors will be increased from an aggregate grant date value of market conditions,$130,000 to $142,500. | - 2023 Proxy Statement30 |
FeesFor 2022, the directors who are members of Board committees were eligible to receive a fee of $1,500 for each committee meeting attended in excess of ten meetings for such committee per calendar year (up to a maximum of $22,500 per committee). Directors are also reimbursed for reasonable expenses incurred to attend meetings and activities of the Board delayed the grant of the first quarter installment until July 10, 2020, such that on July 10, 2020, our non-employee directors received a fully-vested stock award with a grant date fair value of approximately $65,000.or its committees, and to attend and participate in general education and orientation programs for directors. Stock Ownership GuidelinesUnder our stock ownership guidelines, eachwithin five years of ourbeing elected or appointed to the Board or five years from the adoption of the policy, whichever is later, a non-employee directors,director, other than Mr. Keenan, is required to own shares of our common stock with a fair market value equal to at least five times the amount of theirthe annual cash retainer within five years of being appointed to the Board or five years from the adoption of the policy, whichever is later.retainer. These stock ownership guidelines are designed to align our directors’ interests more closely with those of our stockholders. The guidelines were adopted less than five years from the measurement date in 2020.2022. As a result,each of our non-employee directors still has additional time remaining to achieve compliance with the stock ownership guidelines. For information regarding stock ownership guidelines applicable to our executive officers, please see “Compensation Discussion and Analysis—Other Matters—Stock Ownership Guidelines.” Total2022 Non-Employee Director Compensation
The following table provides information concerning the compensation of our non-employee directors for the fiscal year ended December 31, 2020.2022. | | | Fees Earned | | | | | | | | or Paid in Cash | | Stock Awards | | Total | | Name | | ($)(1) | | ($)(2) | | ($) | | Peter A. Dea | | 93,750 | | 129,997 | | 223,747 | | W. Howard Keenan, Jr. | | 95,000 | | 129,997 | | 224,997 | | David H. Keyte | | 140,000 | | 129,997 | | 269,997 | | Brooks J. Klimley | | 120,000 | | 129,997 | | 249,997 | | John C. Mollenkopf | | 107,500 | | 129,997 | | 237,497 | | Janine J. McArdle | | 97,500 | | 67,165 | | 164,665 | | Rose M. Robeson | | 120,000 | | 129,997 | | 249,997 |
| Name | | Fees Earned
or Paid in Cash
($)(1) | | Stock Awards
($)(2) | | Total
($) | | Nancy E. Chisholm(3) | | | 30,000 | | | | — | | | | 30,000 | | Peter A. Dea | | | 110,625 | | | | 129,980 | | | | 240,605 | | W. Howard Keenan, Jr. | | | 110,625 | | | | 129,980 | | | | 240,605 | | David H. Keyte | | | 168,625 | | | | 129,980 | | | | 298,605 | | Brooks J. Klimley | | | 140,625 | | | | 129,980 | | | | 270,605 | | John C. Mollenkopf | | | 118,125 | | | | 129,980 | | | | 248,105 | | Janine J. McArdle | | | 118,125 | | | | 129,980 | | | | 248,105 | | Rose M. Robeson(4) | | | 98,375 | | | | 64,992 | | | | 163,367 |
| (1) | Includes annual cash retainer, committee fees, committee chair fees and meeting fees earned by each non-employee director during fiscal 2020, as more fully explained above.2022. | | (2) | Amounts in this column reflect the aggregate grant date fair value of shares granted under the AM LTIP to each non-employee director during fiscal year 2020,2022, computed in accordance with the rules of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). See Note 12 to our consolidated financial statements on Form 10-K for the year ended December 31, 2020,2022, for additional detail regarding assumptions underlying the value of these equity awards. | | (3) | Ms. Chisholm was appointed to the Board, effective as of December 5, 2022. | | (4) | Ms. Robeson was an independent director who was served on the Board until June 7, 2022, when she did not stand for re-election at the 2022 annual meeting of shareholders. |
| - 20212023 Proxy Statement 2831 |
ITEM TWO: | RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
ITEM TWO: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee of the Board has selected KPMG LLP as Antero Midstream’s independent registered public accounting firm for the year ending December 31, 2021.2023. KPMG LLP has audited Antero Midstream’s and its predecessor’s financial statements since 2016 as well as the financial statements of Antero Midstream Partners LP since 2013. The Audit Committee annually evaluates the accounting firm’s qualifications to continue to serve Antero Midstream. In evaluating the accounting firm, the Audit Committee considers the reputation of the firm and the local office, the industry experience of the engagement partner and the engagement team, and the experience of the engagement team with clients of similar size, scope and complexity as Antero Midstream. The Audit Committee is directly involved in the selection of the new engagement partner when rotation is required every five years in accordance with SEC rules. KPMG LLP completed the audit of Antero Midstream’s annual consolidated financial statements for the year ended December 31, 2020,2022, on February 17, 2021.15, 2023. The Board is submitting the selection of KPMG LLP for ratification at the Annual Meeting. The submission of this matter for ratification by stockholders is not legally required, but the Board and the Audit Committee believe the ratification proposal provides an opportunity for stockholders to communicate their views about an important aspect of corporate governance. If our stockholders do not ratify the selection of KPMG LLP, the Audit Committee will reconsider, but will not be required to rescind, the selection of that firm as Antero Midstream’s independent registered public accounting firm. Representatives of KPMG LLP are expected to be present at the Annual Meeting. They will have the opportunity to make a statement, and are expected to be available to respond to appropriate questions. The Audit Committee has the authority and responsibility to retain, evaluate and replace Antero Midstream’s independent registered public accounting firm. Stockholder ratification of the appointment of KPMG LLP does not limit the authority of the Audit Committee to change Antero Midstream’s independent registered public accounting firm at any time. THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE SELECTION OF KPMG LLP AS ANTERO MIDSTREAM’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2021.
 | THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE SELECTION OF KPMG LLP AS ANTERO MIDSTREAM’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2023. |
| - 20212023 Proxy Statement 2932 |
AUDIT MATTERS The material in this report is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether made before or after the date hereof and irrespective of any general incorporation language in such filing. Audit Committee Report Pursuant to its charter, the Audit Committee’s principal functions include: (i) overseeing the accounting and financial reporting process of Antero Midstream and audits of Antero Midstream’s financial statements (ii) the appointment, compensation, retention and oversight of the work of the independent auditors hired for the purpose of issuing an audit report or performing other audit, review or attest services for Antero Midstream; (iii) pre-approving audit or non-audit services proposed to be rendered by Antero Midstream’s independent registered public accounting firm; (iv) annually reviewing the qualifications and independence of the independent registered public accounting firm’s engagement partner and other senior personnel who are providing services to Antero Midstream; (v) overseeing Antero Midstream’s internal auditor and reviewing the internal auditor’s reports and annual internal audit plan; (vi) reviewing with management and the independent registered public accounting firm Antero Midstream’s annual and quarterly financial statements, earnings press releases, and financial information and earnings guidance provided to analysts and ratings agencies; (vi)(vii) approving or ratifying certain related party transactions as set forth in Antero Midstream’s Related Persons Transactions Policy; (vii)(viii) reviewing with management Antero Midstream’s major financial risk exposures; (viii)(ix) assisting the Board in monitoring compliance with legal and regulatory requirements relating to financial, accounting, auditing and related compliance matters; (ix)(x) preparing the report of the Audit Committee for inclusion in Antero Midstream’s proxy statement; and (x)(xi) annually reviewing and reassessing its performance and the adequacy of its charter. While the Audit Committee has the responsibilities and powers set forth in its charter, and Antero Midstream’s management and the independent registered public accounting firm are accountable to the Audit Committee, it is not the duty of the Audit Committee to plan or conduct audits or to determine that Antero Midstream’s financial statements and disclosures are complete and accurate and in accordance with generally accepted accounting principles and applicable laws, rules and regulations. In performing its oversight role, the Audit Committee has reviewed and discussed Antero Midstream’s audited financial statements with management and the independent registered public accounting firm. The Audit Committee also has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable standards and regulations of the Public Company Accounting Oversight Board (the “PCAOB”). The Audit Committee has received the written disclosures and the written statement from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence. The Audit Committee also has considered whether the provision of non-audit services by the independent registered public accounting firm to Antero Midstream is compatible with maintaining the firm’s independence, and has discussed with the independent registered public accounting firm its independence. Based on the reviews and discussions described in this Audit Committee Report, and subject to the limitations on the roles and responsibilities of the Audit Committee referred to herein and in its charter, the Audit Committee recommended to the Board that Antero Midstream’s audited financial statements for the year ended December 31, 2020,2022, be included in the Form 10-K, which was filed with the SEC on February 17, 2021.15, 2023. Members of the Audit Committee*: Rose M. RobesonDavid H. Keyte (Chairman)
Nancy E. Chisholm
Brooks J. Klimley
Janine J. McArdle
John C. Mollenkopf
| * | Includes all members of the Audit Committee as of the time the Audit Committee Report was approved for inclusion in this Proxy Statement. |
| - 20212023 Proxy Statement 3033 |
Audit and Other Fees The table below sets forth the aggregate fees and expenses billed by KPMG LLP for the last two fiscal years to Antero Midstream (in thousands): | | | For the Years Ended | | | | December 31, | | | | 2019 | | | 2020 | | Audit Fees(1) | | | | | | | | | Audit and Quarterly Reviews | | $ | 855 | | | $ | 724 | | Other Filings | | | — | | | | — | | SUBTOTAL | | | 855 | | | | 724 | | Audit-Related Fees(2) | | | 575 | | | | 200 | | Tax Fees | | | — | | | | — | | All Other Fees | | | — | | | | — | | TOTAL | | $ | 1,430 | | | $ | 924 |
| | | For the Years Ended
December 31, | | | | 2021 | | | 2022 | | Audit Fees(1) | | | | | | | | | Audit and Quarterly Reviews | | $ | 672 | | | $ | 770 | | Other Filings | | | — | | | | — | | SUBTOTAL | | | 672 | | | | 770 | | Audit-Related Fees(2) | | | 135 | | | | — | | Tax Fees | | | — | | | | — | | All Other Fees | | | — | | | | — | | TOTAL | | $ | 807 | | | $ | 770 |
| (1) | Includes (a) the audit of Antero Midstream’s annual consolidated financial statements included in the Annual Report on Form 10-K and internal controls over financial reporting and review of Antero Midstream’s quarterly financial statements included in Quarterly Reports on Form 10-Q, and (b) the audit of the financial statements of Antero Midstream Partners LP. | | (2) | Represents fees related to review of Antero Midstream’s other filings including filings related to the Simplification Transactions, with the SEC, including review and preparation of registration statements, comfort letters and consents. |
The charter of the Audit Committee and its pre-approval policy require the Audit Committee to review and pre-approve the independent registered public accounting firm’s fees for audit, audit-related, tax and other services. The Chairman of the Audit Committee has the authority to grant pre-approvals up to a certain limit, provided such approvals are within the pre-approval policy and are ratified by the Audit Committee at a subsequent meeting. For the year ended December 31, 2020,2022, the Audit Committee approved all of the services described above. | - 20212023 Proxy Statement 3134 |
ITEM THREE: | ADVISORY VOTE ON EXECUTIVE COMPENSATION |
ITEM THREE: ADVISORY VOTE ON EXECUTIVE COMPENSATION Our policies are conceived with the intention of attracting and retaining highly qualified individuals capable of contributing to the creation of value for our stockholders. Our compensation program for 20202022 was designed to be competitive with market practices and to align the interests of our Named Executive Officers with those of Antero Midstream and its stockholders. Stockholders are urged to read the Compensation Discussion and Analysis section of this Proxy Statement, which discusses how our compensation design and practices reflect our compensation philosophy for calendar year 2020.2022. The Compensation Committee and the Board believe that our compensation practices for 20202022 were effective in implementing our guiding principles. Pursuant to Section 14A of the Exchange Act, we are submitting this annual proposal to our stockholders for an advisory vote to approve the compensation of our Named Executive Officers. This proposal, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity to express their views on the compensation of our Named Executive Officers for 2020.2022. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers for 20202022 and the principles, policies and practices described in this Proxy Statement. Accordingly, the following resolution is submitted for stockholder vote at the Annual Meeting: “RESOLVED, that the stockholders of Antero Midstream Corporation approve, on an advisory basis, the compensation of its named executive officers during 20202022 as disclosed in the proxy statement for the Annual Meeting pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and other related tables and disclosures.” As this is an advisory vote, the result is not likely to affect previously granted compensation. The Compensation Committee will consider the outcome of the vote when evaluating our compensation practices going forward. THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.
| THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT. |
| - 20212023 Proxy Statement 3235 |
COMPENSATION DISCUSSION AND ANALYSIS This Compensation Discussion and Analysis provides details on the following matters: | • | Our 20202022 say-on-pay advisory vote; | | • | Our 20202022 executive compensation program and the compensation awarded under that program; | | • | Material actions taken with respect to our 20212023 executive compensation program; and | | • | Pertinent executive compensation policies. |
20202022 Named Executive Officers
The table below sets forth the name and principal position of each of our 20202022 Named Executive Officers. Effective April 30, 2021, Glen C. Warren, Jr. will retire as President, Chief Financial Officer and Secretary of Antero Resources and President and Secretary of Antero Midstream. Mr. Warren will also step down from the boards of both companies as of the same date. Effective upon Mr. Warren’s retirement, (i) Paul M. Rady, currently Chairman and Chief Executive Officer of Antero Resources and Antero Midstream, will also be named President of Antero Resources and Antero Midstream, (ii) Michael N. Kennedy, currently Senior Vice President of Finance at Antero Resources and Antero Midstream and Chief Financial Officer of Antero Midstream, will be named Chief Financial Officer of Antero Resources, will cease to be the Chief Financial Officer of Antero Midstream and will continue to serve as Senior Vice President of Finance of Antero Midstream and Senior Vice President of Finance of Antero Resources and (iii) Brendan E. Krueger, currently Vice President of Finance and Treasurer of Antero Resources and Antero Midstream, will be named Chief Financial Officer of Antero Midstream and will continue to serve as Treasurer and Vice President of Antero Resources and Antero Midstream. Also effective upon Mr. Warren’s retirement, Mr. Kennedy will be appointed to the Board and will stand for election at the Annual Meeting. | Name | Principal Position | | Paul M. Rady | Chairman of the Board, and Chief Executive Officer | Glen C. Warren, Jr. | Director, President and Secretary | Alvyn A. Schopp | Chief Administrative Officer and Regional Senior Vice President | | Michael N. Kennedy | Chief Financial OfficerDirector and Senior Vice President—Finance and Former Chief Financial Officer | | W. Patrick Ash | Senior Vice President—Reserves, Planning and Midstream | | Yvette K. Schultz | Chief Compliance Officer, Senior Vice President—Legal, General Counsel and Corporate Secretary | | Brendan E. Krueger | Chief Financial Officer, Treasurer and Vice President—Finance |
20202022 Say-on-Pay Advisory Vote
At the Company’s 20202022 annual meeting, our stockholders were asked to approve, on an advisory basis, the compensation of the Named Executive Officers. Advisory votes in favor of our executive compensation program were cast by approximately 97%94% of the shares of common stock counted as present and entitled to vote at such meeting. The Compensation Committee considered the results of the “Say-on-Pay” vote when evaluating the compensation of the Named Executive Officers in 2020.2022. We have continued, and plan to continue, seeking to engage in stockholder outreach regarding executive compensation programs. | - 2021 Proxy Statement33 |
Compensation Philosophy and Objectives of Our Compensation Program We seek to attract, retain, and motivate exceptional executive talent by providing our executives with a competitive mix of fixed, time-based and performance-based compensation. Our performance-based compensation program focuses on motivating returns and value creation per share, disciplined capital investment, efficient operations, and generation of distributable cash flow. We believe our compensation philosophy and practices for 20202022 promote a strong alignment between Named Executive Officer pay and Company performance, while providing our Compensation Committee with the flexibility necessary to ensure that compensation was appropriate for this anomalous year.performance. | - 2023 Proxy Statement36 |
Compensation Best Practices Our Compensation Committee is committed to maintaining compensation best practices and employing methods that motivate our executives to create long-term value while minimizing risk to investors. The following table highlights the compensation best practices we followed during 20202022 with respect to our Named Executive Officers: | What We Do |   | Target reasonable compensation levels relative to peers with a focus on performance-based and at-risk components |   | Enforce robust minimum stock ownership guidelines | | Evaluate the risk of our compensation programs | | Include performance based long-term incentives | | Use and review compensation tally sheets | | Engage an independent compensation consultant | | Maintain a clawback policy |
| What We Don’t Do |   | No tax gross ups for executive officers |   | No severance arrangements for Named Executive Officers | | No guaranteed bonuses for Named Executive Officers | | No management contracts | | No granting stock options with an exercise price less than the fair market value of the Company’s common stock on the date of grant outside of transactional context (e.g., substitution of pre-existing target company awards for Company awards in an acquisition) | | No reduction of the exercise price of an outstanding stock option without stockholder approval outside of transactional context (e.g., substitution of pre-existing target company awards for Company awards in an acquisition) | | No hedging or pledging of Company stock | | No separate benefit plans for Named Executive Officers | | No excessive perquisites |
Implementing Our Compensation Program Objectives Role of the Compensation Committee The Compensation Committee oversees all elements of our executive compensation program and has the final decision-making authority on all executive compensation matters. Each year, the Compensation Committee reviews, modifies (if necessary), and approves the goals and objectives relevant to the compensation of the Chief Executive Officer and the otherall Named Executive Officers, as well as the executive compensation program as a whole, including performance goals for the annual cash incentive program, if applicable, and long-term equity awards. In addition, the Compensation Committee | - 2021 Proxy Statement34 |
is responsible for reviewing the performance of the Chief Executive Officer and the Company’s President and Secretary (“President”) within the framework of our executive compensation goals and objectives. Based on this evaluation, the Compensation Committee sets the compensation of theOur Chief Executive Officer, andtogether with our Senior Vice President—Finance, review the President.performance of the other Named Executive Officers. These evaluations are taken into account when setting the compensation for our Named Executive Officers. Actual compensation decisions for individual officers are the result of a subjective analysis of a number of factors, including the individual officer’s role within our organization, performance, experience, skills or tenure with us, changes to the individual’s position, and relevant trends in compensation practices. The Compensation Committee also considers a Named Executive Officer’s current and prior aggregate compensation when setting future compensation. The Compensation Committee determines whether adjustments to compensation are necessary to adopt emerging best practices, reflect Company performance, retain each executive or provide additional or different performance incentives. Thus, the Compensation Committee’s decisions regarding compensation are the result of the exercise of judgment based on all reasonably available information. | - 2023 Proxy Statement37 |
Role of the Antero Resources Compensation Committee and Allocation of Compensation Expenses Our Named Executive Officers provide services to us and to Antero Resources. As a result,In 2022, the Compensation Committee and the Antero Resources Compensation Committee (the “AR Compensation Committee”) holds portions ofeach separately discussed its meetings jointly with the Compensation Committee. During these joint meetings in Spring 2020, the Compensation Committee and the AR Compensation Committee discussed and established each Named Executive Officer’s aggregate total cash compensation and then approved an aggregate total 2022 base salary and 2022 target bonus for services providedour Named Executive Officers provide to both companies, includingAntero Resources and Antero Midstream. Cash compensation included base salary aggregate total targetand annual cash incentive value,incentives in 2022. Antero Resources pays all elements of cash compensation to, and aggregate total target long-term incentive value. Performance metricsprovides all benefits for, each company’s annual cash incentive program, if applicable, andour Named Executive Officers. The Company reimburses Antero Resources for a portion of base salaries paid to our Named Executive Officers based on the terms and provisions of all long-term incentive awards granted by each company are established separately by each of the Compensation Committee and the AR Compensation Committee. The percentage of all non-compensation general and administrative expenses we reimburseattributable to Antero Resources iseach company and calculated quarterly based on gross property and equipment, capital expenditure and labor costs, the last of which is calculated based on an estimate of how much time our employees spend providing services to Antero Midstream,us, in the aggregate, during each quarter (the “Reimbursement Percentage”). The Company reimbursed Antero Resources pays all elements of cash compensation to, and provides all benefits for our Named Executive Officers. Thea portion of eachour Named Executive Officer’s base salary that we reimbursed for 2020 was calculated using the average Reimbursement Percentageequaled 27.5% for each of the four quarters in 2020, which was 27.25%2022 (the “2020“2022 NEO AM Reimbursement Percentage”).
While our The Compensation Committee remained in communication withestablished its own performance metrics for its annual cash incentive program, and reimbursed Antero Resources for all amounts paid pursuant to the AR Compensation Committee regarding long-termCompany’s annual cash incentive awards granted in 2020, each worked independently to determine the value appropriate for grant from each respective company. Our Compensation Committee and the AR Compensation Committee then met to make sure the individual long-term incentive awards combine to achieve an overall award level in line with each company’s compensation philosophy.program.
We also reimburse Antero Resources for the portion of the cost of all health and welfare benefits, employer 401(k) contributions, and the limited perquisites Antero Resources provides to our Named Executive Officers that are attributable to services provided to us. This amount is calculated as the product of the total cost of such benefits and the 20202022 NEO AM Reimbursement Percentage. The Compensation Committee established the value of the long-term incentive awards that we granted to our Named Executive Officers at a level compared to similarly situated executives in the peer group, reviewing the Company’s performance and in consultation with the Company’s independent compensation consultant. The Compensation Committee believes the value granted will motivate and reward longer-term strategy development and execution by the Company. Consistent with the allocation of compensation expense for our Named Executive Officers described above, unless otherwise indicated, the information included in this Compensation Discussion and Analysis, as well as the tables that follow, only pertains to the compensation paid by us for services our Named Executive Officers provided to us in 2020.2022. For information regarding compensation paid to our Named Executive Officers for services provided to Antero Resources in 2020,2022, please see the Proxy Statement filed by Antero Resources on April 28, 2021.27, 2023. | - 2021 Proxy Statement35
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Role of Management The Chief Executive Officer, and the Presidenttogether with our Senior Vice President—Finance, typically provide recommendations to the Compensation Committee and the AR Compensation Committee regarding the compensation levels for the other Named Executive Officers and for our executive compensation program as a whole. In making their recommendations, the Chief Executive Officer and the President or Senior Vice President—Finance, as applicable, consider each Named Executive Officer’s performance during the year, the Company’s performance during the year, compensation levels of similarly situated executives of companies with which we compete for executive talent, and independent oil and gas company compensation surveys. The Compensation Committee in joint discussion with the AR Compensation Committee, considers these recommendations when reviewing the performance of, and setting compensation for, the other executive officers. | - 2023 Proxy Statement38 |
Role of External Advisors The Compensation Committee has the authority to retain an independent executive compensation consultant. For 2020,2022, the Compensation Committee retained Frederic W. CookNFP Compensation Consulting (“NFPCC”), formerly Longnecker & Co., Inc. (“F.W. Cook”).Associates. In compliance with the SEC and NYSE disclosure requirements, the Compensation Committee reviewed the independence of F.W. CookNFPCC under six independence factors. After its review, the Compensation Committee determined that F.W. CookNFPCC was independent. In 2020, F.W. Cook:2022, NFPCC: | • | Collected and reviewed all relevant Company information, including our historical compensation data and our organizational structure; | | • | With input from management, confirmedthe Compensation Committee evaluated the peer group of companies to use for executive compensation comparisons;comparisons and made recommendations regarding modifications; | | • | Assessed our compensation program’s position relative to market for our Named Executive Officers and other vice presidents and relative to our stated compensation philosophy; | | • | Prepared a report of its analysis, findings and recommendations for our executive compensation program; and | | • | Completed other ad hoc assignments, such as helping with the design of incentive arrangements. |
F.W. Cook’sNFPCC’s reports were provided to the Compensation Committee and the AR Compensation Committee in 20202022 and also used by Messrs. Rady and WarrenKennedy in making their recommendations to the Compensation Committee and the AR Compensation Committee. In early 2021, the Compensation Committee engaged Longnecker & Associates (“Longnecker”) to replace F.W. Cook as its independent compensation consultant. Longnecker was involved in decisions related to the 2020 annual cash bonus as well as changes to the 2021 compensation programs.
Competitive Peer Analysis When assessing the soundness of our compensation programs, the Compensation Committee compares the pay practices for our Named Executive Officers against the pay practices of other companies. This process recognizes our philosophy that our compensation practices should be competitive, though marketplace information is only one of the many factors we consider. Messrs. Rady and Warren,Kennedy, the Compensation Committee and the AR Compensation Committee used market compensation data provided by F.W. CookNFPCC to assess the total compensation levels of our Named Executive Officers relative to market. Market data is developed by comparing each executive officer’s compensation with that of similarly situated officers of companies in the Peer Group (described below) and of E&Poil and gas companies in general. In determining whether an officer is similarly situated, we consider the specific responsibilities assumed by our executives and executives at other organizations, and give greater weight to Peer Group data if a position appears comparable to the position of one of our Named Executive Officers. Otherwise, we supplement Peer Group data with industry data from the 20202022 Oil and Gas E&P Industry Compensation Survey prepared by Effective Compensation, Incorporated. | - 2021 Proxy Statement36
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Peer Group F.W. CookNFPCC recommended and after evaluation and discussion the AR Compensation Committee approved a peer group for use in determining compensation for 20202022 of onshore publicly traded oil and gas companies that are reasonably similar to Antero Resources in terms of size and operations. Further, we believe these companies are properly aligned with Antero Resources across financial metrics such as revenue, market capitalization, and enterprise value, complexity and geography of operations. Because aggregate total cash compensation for our Named Executive Officers is set jointly by both the Compensation Committee and the AR Compensation Committee, a single peer group is used for this joint analysis. Over two-thirds of the compensation our Named Executive Officers receives is for services provided to Antero Resources. As a result, a peer group composed of peer companies of Antero Resources, rather than a peer group composed of our peer companies, is used to establish total target compensation for our Named Executive Officers. The peer group was modified during 2020 to more closely reflect the Company’s current market capitalization. We refer to the following 17ten companies as the “Peer Group”:
| - 2023 Proxy Statement39 |
2019-20202022 APPROVED PEER GROUP
| Company | Ticker | Cabot Oil and Gas CorporationAPA Corp. | COGAPA | ChesapeakeCoterra Energy CorporationInc. | CHK | Cimarex Energy Co. | XECCTRA | | CNX Resources Corporation | CNX | Continental Resources, CorporationInc. | CLR | | Devon Energy Corporation | DVN | | Diamondback Energy Inc. | FANG | | EQT Corporation | EQT | Gulfport Energy Corporation | GPOR.Q | Noble Energy,Ovintiv Inc. | NBL | Oasis Petroleum, Inc. | OAS | Parsley Energy, Inc. | PE | QEP Resources, Inc. | QEPOVV | | Range Resources Corporation | RRC | SM Energy Company | SM | | Southwestern Energy Company | SWN | Whiting Petroleum Corporation | WLL | WPX Energy, Inc. | WPX |
In addition to referencing the Peer Group companies in structuring our 20202022 compensation program, the Compensation Committee reviewed compensation paid by certain other midstream companies to confirm the reasonableness of our compensation program as compared to other companies in our sector, but did not benchmark compensation against this group of companies. Positioning Versus Market While we generallyIn determining compensation for 2022, the Compensation Committee determined that it was appropriate to target the median75th percentile of the Peer Group for eachbase salaries, target annual cash incentive awards, and long-term equity-based incentive awards. This increase in target compensation element for ourfrom the 50th percentile to the 75th percentile of the Peer Group was made after consultation with NFPCC and after a review of individual Named Executive Officers, in 2020, theOfficer and Company performance. The Compensation Committee weighedfeels that this data less heavily, instead focusing on the most effective wayincrease in targeted compensation was not only appropriate but important to retain, appropriately reward, and motivate our Named Executive Officers to successfully navigate the unique challenges posed by the COVID-19 pandemicworld-class executive team, particularly in light of:
| • | the Company’s total shareholder return; | | • | successful management of two separate publicly traded companies; and | | • | an increasingly competitive talent market. |
Key 2021 performance highlights include: | • | Organically expanded asset base adding 26 miles of gathering pipelines and 240 MMcf/d of compression capacity; | | • | Generation of Adjusted EBITDA near the high end of our 2021 guidance range; and | | • | Delivery of asset uptime of over 99%. |
As noted throughout this Compensation Discussion and depressed oil and gas prices. This approach resulted in someAnalysis, targeted compensation elements that were significantly above and some that were significantly below the median of our Peer Group in 2020. It has always been the case that compensation paid by other members of our Peer Group islevels are only one of many factors considered by the Compensation Committee and the AR Compensation Committee when setting compensation levels for our Named Executive Officers. | - 20212023 Proxy Statement 3740 |
Elements of Direct Compensation Our Named Executive Officers’ compensation for 20202022 included the key components described below. | Pay Component | | Form of Pay | | How Amount is Determined | | Objective | | Base salary | | Cash | | Market-competitive amount that reflects the executive’s relative skills, responsibilities, experience and contributions | | Provide a minimum, fixed level of cash compensation | Discretionary cash bonusAnnual Incentive Awards | | Cash | | Discretion of Compensation CommitteeFree Cash Flow After Dividends, Net Debt / EBITDA, Return on Invested Capital and ESG | | Encourage short-term financial and operational performance that is aligned with our business strategy and will lead to long-term stockholder value | | Long-term incentive awards | | Performance share units | | Three-year ROIC | | Encourage efficient capital investments to produce quality earnings | | | Restricted stock units | | Two,33% vests on each of the first three or four-year vestinganniversaries of grant | | Provide an additionala strong retention mechanism | | | Cash retention awards | | Two or three-year vesting | | Provide an additional retention mechanismmechanism; alignment with stockholders since value is tied to stock price |
With respect to the compensation attributable to services provided to us by our Named Executive Officers, the components of our Named Executive Officers’ compensation for 2020,2022, calculated based on amounts reported for 20202022 in the Summary Compensation Table below, except that target annual incentive levels are used rather than actual 2022 annual incentive award levels, were distributed as follows: CEO Actual Compensation | Other NEOs Actual Compensation | | (average) |  |  |
Base Salaries Base salaries are designed to provide a minimum, fixed level of cash compensation for services rendered during the year. In addition to providing a base salary that is competitive with salaries paid by other independent oil and gas exploration and production companies, the Compensation Committee, in discussion with the AR Compensation Committee also considers whether our pay levels appropriately align each Named Executive Officer’s base salary level relative to the base salary levels of our other officers. Our objective is to have base salaries that accurately reflect each officer’s relative skills, experience and contributions to the Company. To that end, annual base salary adjustments are based on a subjective analysis of many individual factors, including:
| • | the responsibilities of the officer; | | • | the period over which the officer has performed those responsibilities; | | • | the scope of, and level of expertise and experience required for the officer’s position; | | • | the strategic impact of the officer’s position; and | | • | the potential future contribution and demonstrated individual performance of the officer. |
| - 2023 Proxy Statement41 |
In addition to the individual factors listed above, the Compensation Committee, in discussion with the AR Compensation Committee considers our overall business performance and implementation of Company objectives when determining annual base salaries. While these metrics generally provide context for making salary decisions, base salary decisions do not depend on attainment of specific goals or performance levels, and no specific weighting is given to one factor over another. Base salaries are reviewed annually, but are not increased if the Compensation Committee, in discussion with the AR Compensation Committee, believes that | - 2021 Proxy Statement38 |
(1) our executives are currently compensated at proper levels in light of Company performance or external market factors, or (2) an increase or addition to other elements of compensation would be more appropriate in light of our stated objectives. In March of 2022, the Compensation Committee approved the increase of base salary levels for each of the Named Executive Officers in an effort to align generally their base salary levels with the 75th percentile base salary levels for similarly situated executives at the Peer Group. The Compensation Committee decided to target the 75th percentile due to the fact that they believe that the Company’s management team is one of the best amongst its peers. The Compensation Committee looked to the 2021 TSR of 40%. In addition, key 2021 operating results were also considered, such as generating Adjusted EBITDA near the high end of our 2021 guidance range. These factors show that management has a disciplined plan to invest wisely and follow operations that are in the best interests of shareholders and management should be compensated at the 75th percentile to recognize their role in increasing shareholder value. The Compensation Committee also took into account the other factors listed above when setting base salary levels for each of the Named Executive Officers. As a result, of external market factors, in February 2020, the Compensation Committee determined that no changes should be made to the Named Executive Officers’ base salaries for the 2020 fiscal year. Accordingly, each Named Executive Officer was paid the samefinal base salary in 2020 as he was paid in 2019. Messrs. Rady and Warren have not received an increase in base salary since 2017.levels may differ from the 75th percentile of peers. The table below reflects the portion of the base salary allocated to the Company in 2022 for each Named Executive Officer allocated to the Company.Officer. For additional information, see “Implementing Our Compensation Program Objectives—Role of the Antero Resources Compensation Committee and Allocation of Compensation Expenses” above. | | | Allocated | | | Executive Officer | | Base Salary | | | Paul M. Rady | | $ | 233,805 | | | Glen C. Warren, Jr. | | $ | 175,763 | | | Alvyn A. Schopp | | $ | 129,438 | | | Michael N. Kennedy | | $ | 109,000 | | | W. Patrick Ash | | $ | 99,463 | |
| Executive Officer | | 2022 Allocated
Base Salary | | Percentage
Change in
Aggregate Base
Salary from 2021
to 2022(1) | | Paul M. Rady | | $ | 357,500 | | | | 25 | % | | Michael N. Kennedy | | $ | 181,500 | | | | 23 | % | | W. Patrick Ash | | $ | 159,500 | | | | 33 | % | | Yvette K. Schultz | | $ | 130,625 | | | | | (2) | | Brendan E. Krueger | | $ | 126,500 | | | | 41 | % |
| (1) | The amount of base salary allocated to the Company changes from year to year based on the NEO AM Reimbursement Percentage for that year. As a result, increases or decreases in the amount of base salary allocated to the Company may not indicate an increase or decrease in the executive’s aggregate base salary. This column indicates the increase in aggregate base salary paid to the Named Executive Officers for services provided to both the Company and Antero Resources that was approved by both the Compensation Committee and the AR Compensation Committee. | | (2) | Ms. Schultz was not a Named Executive Officer during 2021. |
Annual Cash Incentive Awards Purpose and OperationAnnual cash incentive awards paid based on pre-established metrics selected by the Compensation Committee and the AR Compensation Committee,payments, which we also refer to as cash bonuses, have historically beenare a key component of each Named Executive Officer’s annual compensation package. However, in 2020 the Compensation Committee, in discussion with the AR Compensation Committee, determined that the global COVID-19 pandemic and the resulting economic downturn paired with a great deal of uncertainty in the oil and gas markets made the establishment of meaningful quantitative goals for a 2020 annual cash incentive program impossible. The Compensation Committee andadopted bonus targets for each of the ARNamed Executive Officers, expressed as a percentage of base salary. The Compensation Committee, felt it would best serve our stockholders if they retained maximum flexibilitybased on analysis provided by its independent consultant, NFPCC, determined that a slight increase from 120% to appropriately shape this element130% was appropriate for Mr. Rady and from 80% to 85% for Mr. Krueger to align their compensation with the 75th percentile of compensationthe 2022 Peer Group. The | - 2023 Proxy Statement42 |
Compensation Committee did not elect to increase the target bonus percentage for any other Named Executive Officer except for Ms. Schultz, whose target bonus percentage was increased in connection with her appointment as Chief Compliance Officer, SVP – Legal and General Counsel on January 1, 2022. The bonus target percentages for our Named Executive Officers for 2020 following completion of this unprecedented year and the opportunity to review the Company’s performance, our Named Executive Officers’ performance, the economic landscape in the oil and gas industry, and the state of the global economy. The following were 2020 achievements by the Company and our Named Executive Officers particularly noted by the Compensation Committee during its subjective performance assessment following the end of the year:
• | Strong liquidity and leverage figures; | • | Best relative TSR in 2020 as compared to U.S. independent (non-major) oil and gas companies with a market capitalization over $500 million (excluding companies currently in bankruptcy); and | • | Strong safety and environmental performance. |
While no target bonuses were established for our Named Executive Officers in 2020, the Compensation Committee and the AR Compensation Committee used each named Executive Officer’s 2019 target cash bonus as a point of reference, though they decided to increase the target bonus used for these purposes for Patrick Ash from 80% to 85%. The target incentive bonuses used to determine the 2020 cash bonuses for our Named Executive Officers2022 were as follows:
| | Target | | | Bonus (as a % | | Executive Officer | | Target
Bonus (as a %
of base salary) | | Paul M. Rady | | | 120 | % | Glen C. Warren, Jr. | | | 100 | % | Alvyn A. Schopp | | | 85130 | % | | Michael N. Kennedy | | | 85100 | % | | W. Patrick Ash | | | 85 | % | | Yvette K. Schultz. | | | 85 | % | | Brendan E. Krueger | | | 85 | % |
2022 Performance MetricsThe maximum payout opportunity under the annual incentive program is 200% of the Named Executive Officer’s target bonus. In April 2022, the Compensation Committee approved an annual incentive plan for the 2022 fiscal year. The 2022 annual incentive plan uses the same metrics and weightings as the 2021 program. This structure is intended to provide payout levels that are consistent with our stockholders’ investment objectives, while remaining competitive with companies with which we compete for executive talent. In April of 2022 the Compensation Committee selected the following metrics, weightings and performance levels for the 2022 annual cash incentive program. | Selected Metrics | | Weighting | | Threshold
Performance
(50%) | | Target
Performance
(100%) | | Maximum
(200%) | | Performance
Score
(% of Target) | | Weighted
Score | Free Cash Flow after Dividends
($ Millions) | |  | |  | | 147.4% | | 36.8% | | Net Debt/EBITDA | |  | |  | | 84.3% | | 25.3% | | Return on Invested Capital | |  | |  | | 134.6% | | 40.4% | | ESG | |  | | Qualitative Assessment | | 200% | | 30% | | | | | | | | | | | | Preliminary Total | | 132.5% | | | | | | | | | | | | Discretionary Increase | | 12.5% | | | | | | | | | | | | Total | | 145% |
| - 20212023 Proxy Statement 3943 |
| Metric | | Definition | | Rationale | | Free Cash Flow after Dividends | | Adjusted EBITDA less interest expense and accrual-based capital expenditures and dividends declared for the year, as presented in the full year earnings press release furnished as exhibit 99.1 to the Form 8-K filed with the SEC on February 15, 2023. Adjusted EBITDA means Net Income plus interest expense, income tax expense, amortization of customer relationships, depreciation expense, impairment expense, loss on asset sale, loss on early extinguishment of debt, accretion of asset retirement obligations, equity-based compensation expense, excluding equity in earnings of unconsolidated affiliates, plus distributions from unconsolidated affiliates, as presented in the full year earnings press release furnished as exhibit 99.1 to the Form 8-K filed with the SEC on February 15, 2023 and our Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 15, 2023. | | Generating Free Cash Flow after Dividends is essential to ensure Antero Midstream can internally finance capital investments, support return of capital to shareholders and maintain a strong balance sheet. | | Net Debt/ EBITDA | | Year end 2022 Net Debt divided by 2022 full year adjusted EBITDA. Net Debt is calculated as consolidated total debt, excluding unamortized debt premiums and debt issue costs, less cash and cash equivalents, as presented in the full year earnings press release furnished as exhibit 99.1 to the Form 8-K filed with the SEC on February 15, 2023. | | Managing the balance sheet and leverage is essential for efficiently growing the business while maximizing returns to shareholders. Net Debt/ EBITDA is a key debt coverage ratio that motivates management to minimize debt relative to cash flow. | | Return on Invested Capital (ROIC) | | Earnings before interest and taxes (“EBIT”) excluding amortization of customer relationships, impairment expense, loss on asset sale, loss on early extinguishment of debt, and the tax effects of such amounts, divided by average total liabilities and stockholder’s equity, excluding current liabilities, intangible assets and impairment of property and equipment in order to derive an operating asset driven ROIC calculation, as presented in the full year earnings press release furnished as exhibit 99.1 to the Form 8-K filed with the SEC on February 15, 2023. | | ROIC is used as a performance metric that measures the efficiency of our capital investments and quality of our earnings. ROIC is a metric that many investors consider when assessing the performance of companies in our sector. | | ESG | | The Compensation Committee of our Board considered the company’s ESG plan in this assessment, which included non-financial performance goals to: continue progress towards meeting our 2025 climate goals, demonstrate leading safety performance compared to industry peers, reduce the number of reportable spills, provide a safe environment for our employees and contractors as we navigate the Covid-19 pandemic, enhance reporting on company community engagement and relations efforts, conduct a climate risk analysis as required by the Taskforce on Climate-related Financial Disclosures, create an inter-departmental ESG Advisory Council to manage ESG challenges and opportunities throughout the organization, require employee training with respect to the following company policies: Human Labor and Indigenous Rights, Diversity and Inclusion, and Supplier Code of Conduct. | | These functions are critical to the success of the business and the execution of our overall strategy. Our people are motivated to work in a safe environment that shows progress toward sustainable environmental goals. When determining the performance score for the ESG metric the Compensation Committee considered an evaluation by the ESG Committee assessing progress on ESG goals in 2022. The ESG Committee concluded that we exceeded expectations with regard to these goals. As a result, the Compensation Committee awarded a performance score above the target level. |
2022 Annual Incentive Program PayoutsWhen determining the performance score for the ESG metric the Compensation Committee considered an evaluation by the ESG Committee assessing progress on ESG goals in 2022. The ESG Committee concluded that we substantially exceeded expectations with regard to these goals. Key goals during 2022 were: developed emissions displacement technology to eliminate GHG emissions from pigging terminals (patent pending); a decrease of 59% in TRIR results from the prior year; 100% participation in mandatory policy training (Human Rights/ Indigenous, Diversity and Inclusion, and Supplier Code of Conduct). As a result, the Compensation Committee awarded a performance score at the maximum level. After giving consideration to the results of the Annual Incentive Program of 132.5%, the Compensation Committee felt that such result did not adequately | - 2023 Proxy Statement44 |
After consideringreflect the achievements noted above, our Compensation Committee and the AR Compensation Committee decided that eachperformance of the Named Executive Officers, other than Mr. Warren should receive an annual cash bonus equaland as a result, the Compensation Committee increased the Annual Incentive Program payout to 115%reflect 145% of their respective 2019 target bonus amounts.performance. The Compensation Committee considered market based information presented by its compensation consultant, in addition the Compensation Committee considered the Company’s superior stock performance (2022 TSR of 22%, in the top quarter of midstream companies) and operating results. The Compensation Committee also reviewed performance with respect to each metric after giving the full year effect of the October 2022 acquisition of Marcellus gas gathering and compression assets and the AR Compensation Committee determined that Mr. Warren should receiveDecember 2022 acquisition of Utica compression assets, which amounted to approximately a slightly higher bonus, equal to 122%145% of his 2019 target bonus, in recognition of the significant role he played in the creation and execution of our financial plan for 2020. payout percentage.
Key Operating Results included: | • | generation of Adjusted EBITDA near the high end of our 2022 guidance range; | | • | capital expenditures of $265 million, below the guidance of $275 to $300 million; and | | • | expansion of asset base through attractive bolt-on acquisitions extending our underlying dedicated inventory to over 20 years. |
The 20202022 annual cash bonus amounts reported below reflect the portion of the annual cash bonus for each Named Executive Officer allocated to the Company. For additional information, see “Implementing Our Compensation Program Objectives—Role of the Antero Resources Compensation Committee and Allocation of Compensation Expenses” above. The amounts below are reported in the “Bonus”“Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. | | | Percentage of | | | | | | | 2019 Target Bonus | | Allocated 2020 | | | | Paid for 2020 | | Annual Cash Bonus | | Executive Officer | | Performance | | Payments | | Paul M. Rady | | | 115 | % | | $ | 322,651 | | | Glen C. Warren, Jr. | | | 122 | % | | $ | 215,112 | | | Alvyn A. Schopp | | | 115 | % | | $ | 126,525 | | | Michael N. Kennedy | | | 115 | % | | $ | 106,547 | | | W. Patrick Ash | | | 115 | % | | $ | 97,225 | |
| Executive Officer | | Preliminary
Percentage of
2022 Target Bonus
Paid for 2022
Performance | | Preliminary
Allocated 2022
Annual Cash
Bonus Payments(1) | | Final Percentage of
2022 Target Bonus
to be paid for 2022
Performance | | Final Allocated
2022 Annual
Cash Bonus
Payments(2) | | Paul M. Rady | | | 132.5 | % | | $ | 615,794 | | | | 145 | % | | $ | 673,888 | | | Michael N. Kennedy | | | 132.5 | % | | $ | 240,488 | | | | 145 | % | | $ | 263,175 | | | W. Patrick Ash | | | 132.5 | % | | $ | 179,637 | | | | 145 | % | | $ | 196,584 | | | Yvette K. Schultz | | | 132.5 | % | | $ | 147,116 | | | | 145 | % | | $ | 160,995 | | | Brendan E. Krueger | | | 132.5 | % | | $ | 142,471 | | | | 145 | % | | $ | 155,911 | |
| (1) | The amounts in this column are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table, below. | | (2) | The portion of the annual cash bonus payments attributable to the Compensation Committee’s discretionary increase is reported in the “Bonus” column of the Summary Compensation Table, below. |
Long-Term Incentive Awards January 2020 Retention
2022 Long-Term Incentive Awards In January 2020, our Compensation Committee approved non-recurring retention awards to Messrs. Schopp, Kennedy and Ash, in the form of restricted stock units and cash awards pursuant to the AM LTIP. These awards vest over the course of two years for Mr. Schopp and in equal installments over the course of three years for Messrs. Kennedy and Ash. The total valueLargely as a result of the cash awards granted to Messrs. Schopp, KennedyCOVID-19 pandemic and Ash by us in 2020 was as follows: $1,333,333, $533,333the resulting uncertainty around the stock market and $333,333, respectively. Details regarding the restricted stock units granted can be found in the table entitled “Grants of Plan-Based Awards for Fiscal Year 2020,” below. The Compensation Committee believes these awards are imperative to help us succeed in implementing our short- and long-term business plans in the current environment of lower commodity prices and challenging capital markets because they help us retain these key executives. The Compensation Committee determined that restricted stock units and cash awards would generally have the strongest retentive effect.
Messrs. Schopp, Kennedy and Ash are uniquely qualified to execute our goals due to their institutional knowledge, strategic insight and unique skill sets. We feel this retention program adds a level of assurance to achieve our corporate objectives and maintain continuity, which we deem critical at this time.
Mr. Schopp has been an integral member of our senior management team for over 17 years. We believe he is vital to our continued contract negotiations and regulatory and litigation management due to his experience and knowledge of ongoing matters and negotiations, the breadth of his industry contacts, and his past litigation success. The awards were designed to motivate Mr. Schopp to lead certain ongoing projects to a successful completion, as well as to prepare a succession team to seamlessly take over his work following his eventual retirement.
Mr. Kennedy is our Chief Financial Officer and a critical player in developing our financial plan and financial risk mitigation strategy for the next several years. Further, Mr. Kennedy continues to provide valuable tactical advice related to budget management, forecasting and finance.
The vast majority of our operations report to Mr. Ash, who is one of our chief architects of strategic and operational planning. He plays a critical role in developing our annual business outlook, upon which our financial and operational plans are built.
We strongly believe that our people are our greatest asset and that consistent leadership through challenging economic times is critical.
| - 2021 Proxy Statement40 |
July 2020 Long-Term Incentive Awards
In 2020,commodities market, the Compensation Committee elected to grant solelyfocus on retention and in 2020 and 2021 granted only restricted stock units. In 2022, the Compensation Committee granted 75% time-based restricted stock units (instead of a mix of restricted stock units(or “RSUs”) and 25% performance share units as was the case in 2019)(or “PSUs”) to Messrs. Rady and Warrenour Named Executive Officers pursuant to the AM LTIP. The Compensation Committee feltdecided to add the performance component to incent management to make sound capital investment decisions that establishingalign with shareholder value creation.
The performance goals inshare units have a performance period from January 1, 2022 through December 31, 2024 and vest based on the midst of such a tumultuous and uncertain time for the global economy, and the oil and gas sector in particular, would be highly speculative and would not provide the motivation desired as the goals would likely be inappropriate in retrospect.Company’s return on invested capital (“ROIC”). The Compensation Committee also feltselected ROIC as the performance metric for the performance share units. ROIC is a metric that granting solely restricted stockmany investors consider when assessing the performance of companies in our sector. The performance share units communicated the importance of retention to our key employees during unprecedented times and is in linevest as follows, with market for midstream companies. vesting between performance levels calculated using linear interpolation. | - 2023 Proxy Statement45 |
| | | Below Threshold | | Threshold | | Target | | Maximum | | ROIC for the Company | | < 85% of Target ROIC | | 85% of Target ROIC | | Target ROIC | | 115% of Target ROIC | | Percentage of Target Amount of PSUs that are Earned* | | 0% | | 50% | | 100% | | 200% |
The restricted stock units granted to Messrs. Rady and Warrenour Named Executive Officers in 20202022 vest ratably on the first fourthree anniversaries of the date of grant, subject to continued service. The Compensation Committee reduced the vesting period from four years, as in prior years, to three years to be more in line with market practice. Target Value of Long-Term Incentive AwardsHistorically,
The table below shows the values approved by the Compensation Committee establishesfor the number ofannual long-term incentive awards granted to our Named Executive Officers in 2022. These vaules were established by setting a target value and granting a number of awards equal to that value. In 2020, the Compensation Committee considered the overall value of long-term incentive awards granted to our Named Executive Officers but took a slightly different approach when determining the number of awards granted during the annual grant process. At the time restricted stock units were granted to Messrs. Rady and Warren in July 2020, our stock price was depressed and there was a great deal of uncertainty about the market generally (because of the COVID-19 pandemic) and the oil and gas industry in particular (as a result of depressed oil and gas prices). In an effort to balancealign target equity compensation values with the twin goals of retaining our Named Executive Officers and maintaining a reasonable burn rate for the AM LTIP, the number of annual long-term incentive awards granted to our employee population in July 2020 was generally determined by establishing the desired duration75th percentile of the AM LTIP, dividing the remaining pool of shares reserved for issuance thereunder by that figure, and then allocating approximately that2022 Peer Group. | Executive Officer | | 2022
Target Long-Term
Incentive Value(1) | | | Paul M. Rady | | $ | 9,500,000 | | | Michael N. Kennedy | | $ | 3,250,000 | | | W. Patrick Ash | | $ | 2,600,000 | | | Yvette K. Schultz | | $ | 2,500,000 | | | Brendan E. Krueger | | $ | 2,000,000 | |
| (1) | The amounts set forth in this column differ from the amounts set forth under the “Summary Compensation Table” and the “Grants of Plan-Based Awards for Fiscal Year 2022” below, as these amounts were set by the Compensation Committee and then divided by the closing price on the applicable date of grant to determine the number of restricted stock units and target performance share units to be granted. The amounts set forth under “Summary Compensation Table” and the “Grants of Plan-Based Awards for Fiscal Year 2022” below reflect the grant date fair value of the number of restricted stock units and target performance share units granted, as computed in accordance with FASB ASC Topic 718, resulting in a slightly lower value attributable to the grants under those tables. |
The number of restricted stock units (i.e., the number attributable to one year) among the recipients in proportions similar to those granted in 2019. Due to market conditions in 2020 and to better align Messrs. Rady’s and Warren’s compensation packages with our stockholders’ investment experience, the total value of Messrs. Rady’s and Warren’s long-term incentive awards in 2020 was approximately 20% lower than the value of the long-term incentive awards granted to such Named Executive Officers in 2019.
The Compensation Committee did not grant annual long-term equity incentive awards to Messrs. Schopp, Kennedy and Ash in July 2020 because they received the non-recurring 2020 retention awards.
The number of restricted stockperformance share units granted to our Named Executive Officers in 20202022 are described more fully under “Grants of Plan-Based Awards for Fiscal Year 2020”2022” below.
Other Benefits Health and Welfare Benefits Our Named Executive Officers are eligible to participate in all of Antero Resources’ employee health and welfare benefit arrangements on the same basis as other employees of Antero Resources (subject to applicable law). These arrangements include medical, dental, vision and disability insurance, as well as health savings accounts. These benefits are provided to ensure that we and Antero Resources can competitively attract and retain officers and other employees. This is a fixed component of compensation, and these benefits are provided on a non-discriminatory basis to all Antero Resources employees. | - 20212023 Proxy Statement 4146 |
Retirement Benefits Antero Resources maintains an employee retirement savings plan through which employees may save for retirement or future events on a tax-advantaged basis. Participation in the 401(k) plan is at the discretion of each individual Antero Resources employee, and our Named Executive Officers participate in the plan on the same basis as all other employees. The plan permits Antero Resources to make discretionary matching and non-elective contributions. During 2020,2022, Antero Resources matched 100% of the first 6% (reduced to 4% mid-year as a cost-saving measure) of eligible compensation that employees contributed to the plan. We increased this amount to 6% effective January 1, 2022. These matching contributions are immediately fully vested. As part of our general and administrative expense, we reimbursed Antero Resources for a portion of these matching contributions. Perquisites and Other Personal Benefits We believe the total mix of compensation and benefits provided to our Named Executive Officers is currently competitive. Therefore, perquisites do not play a significant role in our Named Executive Officers’ total compensation. 20212023 Compensation Decisions
Base Salaries In March 2021,2023, after comparing base salary levels to those of similarly situated executives in the Peer Group,2023 peer group, reviewing the Company’s performance during 2020,2022, and discussing the recommendations of Messrs. Rady and WarrenKennedy and its independent compensation consultant for 2021, Longnecker,NFPCC, the Compensation Committee approved the following increases to base salary for the Named Executive Officers:Officers who continue to serve as executive officers during 2023: | | | 2020 Allocated | | 2021 Allocated | | Percentage | | Executive Officer | | Base Salary | | Base Salary(1) | | Increase | | Paul M. Rady | | $ | 233,805 | | | $ | 269,775 | | | | 15 | % | | Glen C. Warren, Jr. | | $ | 175,763 | | | $ | 190,750 | | | | 9 | % | | Alvyn A. Schopp | | $ | 129,438 | | | $ | 136,250 | | | | 5 | % | | Michael N. Kennedy | | $ | 109,000 | | | $ | 122,625 | | | | 13 | % | | W. Patrick Ash | | $ | 99,463 | | | $ | 113,088 | | | | 14 | % |
| Executive Officer | | 2022 Allocated
Base Salary | | 2023 Allocated
Base Salary(1) | | Percentage
Increase | | Paul M. Rady | | $ | 357,500 | | | $ | 393,250 | | | | 10 | % | | Michael N. Kennedy | | $ | 181,500 | | | $ | 199,650 | | | | 10 | % | | Yvette K. Schultz | | $ | 130,625 | | | $ | 143,688 | | | | 10 | % | | Brendan E. Krueger | | $ | 126,500 | | | $ | 139,150 | | | | 10 | % |
| (1) | Allocated base salary included here calculated based on the 20202022 NEO AM Reimbursement Percentage. The actual percentage of base salary allocated to the Company for 20212023 will not be determinable until the 20212023 Reimbursement Percentage is calculated following the end of 2021.2023. |
Annual Cash Incentive Awards Due to improving market conditions and relief from the global pandemic, inIn April 2021,2023, the Compensation Committee approved an annual cash incentive plan for the 20212023 fiscal year. For 2021, the Compensation Committee returned to the structure of our 2019The 2023 annual incentive program, which weplan mirrors the 2022 annual incentive plan. We believe this structure motivates our Named Executive Officers to accomplish specific objectives. In addition, the Compensation Committee modified the maximum payout opportunity from 150% of target, as was the case in 2019 (the most recent year during which target bonus amounts were established), to 200% of target, and incorporated an additional qualitative performance metric tied to ESG, which will be reflective of the strategy detailed in our sustainability report. This structure is intended to provide payout levelsobjectives that are consistent withimportant to our stockholders’ investment experience, while remaining competitive with companies with which we compete for executive talent.success and sustainable growth.
| - 2021 Proxy Statement42
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Long-Term Incentive Awards The Compensation Committee granted solely75% time-based long-termequity awards and 25% performance-based equity awards to our Named Executive Officers in April 2021.March 2023. These awards are subject to the terms and provisions of the 2020 AM LTIP and the award agreements pursuant to which they were granted. | - 2023 Proxy Statement47 |
Other Matters Employment, Severance or Change-in-Control Agreements We do not maintain any employment, severance or change-in-control agreements with any of our Named Executive Officers. As discussed below under “Potential Payments Upon a Termination or a Change in Control,” each of Messrs. Rady, Warren, Schopp, Kennedy and Ashour Named Executive Officers would be entitled to receive accelerated vesting of his performance share units and restricted stock units that remain unvested upon histheir termination of employment with us under certain circumstances or upon the occurrence of certain corporate events. Stock Ownership Guidelines Following the closing of the Simplification Transactions, we adopted stock ownership guidelines, pursuant to which our executive officers are required to own a minimum number of shares of our common stock within five years of becoming an executive officer or five years after adoption of the policy, whichever is later. In particular, each of our executive officers is required to own shares of our common stock having an aggregate fair market value equal to at least a designated multiple of the executive officer’s base salary. The guidelines for executive officers are set forth in the table below. | Officer Level | Ownership Guideline | | Chief Executive Officer, President, and Chief Financial Officer | 5x annual base salary | | Vice President | 3x annual base salary | | Other Officers (if applicable) | 1x annual base salary |
Compliance with these guidelines is measured as of June 30 of each year. If an individual covered by the ownership guidelines satisfies the guidelines on a prior determination date, a subsequent decrease in our stock price will not cause that executive to be out of compliance on a later determination date. As of June 30, 2020,2022, less than five years had passed since adoption of the policy and, as a result, each of our Named Executive Officers had time remaining to achieve the requisite ownership levels. Tax and Accounting Treatment of Executive Compensation Decisions Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), generally imposes a $1 million limit on the amount of compensation paid to “covered employees” (as defined in Section 162(m)) that a public corporation may deduct for federal income tax purposes in any year. The “Tax Cuts and Jobs Act,” enacted in 2017, repealed the performance-based compensation exception to the Section 162(m) deduction limitation for tax years beginning after December 31, 2017. In addition, the Tax Cuts and Jobs Act generally expanded the scope of who is considered a “covered employee.” With these changes, compensation paid to certain of our executives will be subject to the $1 million per year deduction limitation imposed by Section 162(m) unless such compensation qualifies for the transition relief applicable to certain compensation arrangements in place as of November 2, 2017.. While we will continue to monitor our compensation programs in light of the deduction limitation imposed | - 2021 Proxy Statement43 |
by Section 162(m), our Compensation Committee considers it important to retain the flexibility to design compensation programs that are in the best long-term interests of the Company and our stockholders. As a result, we have not adopted a policy requiring that all compensation be fully deductible. The Compensation Committee may conclude that paying compensation at levels in excess of the limits under Section 162(m) is in the best interests of the Company and our stockholders. It is likely that the Company will not be able to deduct for federal income tax purposes a portion of the compensation paid to our Named Executive Officers in 2020.2022. | - 2023 Proxy Statement48 |
Many other Code provisions and accounting rules affect the payment of executive compensation and are generally taken into consideration as our compensation arrangements are developed. Our goal is to create and maintain compensation arrangements that are efficient, effective and in full compliance with these requirements. Risk Assessment We have reviewed our compensation policies and practices to determine whether they create risks that are reasonably likely to have a material adverse effect on our Company. In connection with this risk assessment, we reviewed the design of our compensation and benefits program and related policies and determined that certain features of our programs and corporate governance generally help mitigate risk. Among the factors considered were the mix of cash and equity compensation, the balance between short- and long-term objectives of our incentive compensation, the degree to which programs provide for discretion to determine payout amounts, and our general governance structure. Our Compensation Committee believes that evaluating overall business performance and implementing Company objectives assists in mitigating excessive risk-taking that could harm our value or reward poor judgment by our executives. Several features of our programs reflect sound risk-management practices. | • | The Compensation Committee believes our overall compensation program provides a reasonable balance between short- and long-term objectives, which helps mitigate the risk of excessive risk-taking in the short term. | • | | | • | The metrics that determine ultimate value awarded under our incentive compensation programs are associated with total Company value. We do not believe these metrics create pressure to meet specific financial or individual performance goals. | • | | | • | The mix of time- and performance-based equity awards and multi-year vesting of our equity awards discourages excessive risk-taking and undue focus on short-term gains that may not be sustainable. |
Due to the foregoing program features, the Compensation Committee concluded that our compensation policies and practices for all employees, including our Named Executive Officers, are not reasonably likely to have a material adverse effect on the Company. Tally Sheets The Compensation Committee and the AR Compensation Committee useuses tally sheets as a reference in reviewing and establishing our Named Executive Officers’ compensation. The tally sheets provide a holistic view of all material elements of our Named Executive Officers’ compensation, including base salary, annual cash incentive awards, long-term equity incentive awards and indirect compensation such as perquisites and retirement benefits, including the portions of such compensation that are paid for services provided to Antero Resources.benefits. Tally sheets also demonstrate the amounts each executive could potentially receive under various termination and change in control scenarios, and include a summary of all shares beneficially owned. | - 2021 Proxy Statement44
|
Hedging and Pledging Prohibitions Our Insider Trading Policy prohibits our Named Executive Officers from engaging in speculative transactions involving our common stock, including buying or selling puts or calls, short sales, purchasing securities on margin, or otherwise hedging the risk of ownership of such securities. The Insider Trading Policy also prohibits our Named Executive Officers from pledging shares of such securities as collateral. | - 2023 Proxy Statement49 |
Clawback Policy We have adopted a general clawback policy covering long-term incentive award plans and arrangements. The clawback policy applies to our current Named Executive Officers as well as certain of our former Named Executive Officers. Generally, recoupment of compensation would be triggered under the policy in the event of a financial restatement caused by fraud or intentional misconduct. In the event of such misconduct, we may recoup performance-based equity compensation that was granted, earned or vested based wholly or in part upon the attainment of any financial reporting measure during the period in which such misconduct took place. The clawback policy gives the policy administrator discretion to determine whether a clawback of compensation should be initiated in any given case, as well as the discretion to make other determinations, including whether a covered individual’s conduct meets a specified standard, the amount of compensation to be clawed back, and the form of reimbursement. In order to comply with applicable law, the clawback policy may be updated or modified once the SEC adopts final clawback rules pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In addition, the AM LTIP generally provides that, to the extent required by applicable law or any applicable securities exchange listing standards, or as otherwise determined by the Compensation Committee, all awards under the AM LTIP are subject to the provisions of any clawback policy the Company implements.
In October of 2022, the final clawback rules pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 were adopted, and in February of 2023, the New York Stock Exchange proposed listing standards in accordance with the final clawback rules. The Company intends to revise its clawback policy to comply with the final clawback rules and related NYSE listing standards by the applicable deadline. Compensation Committee Report The material in this report is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in such filing. The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, and at the recommendation of the Compensation Committee, the Board of Directors has determined that the Compensation Discussion and Analysis should be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K. Compensation Committee Members*: David H. Keyte, Chairman
Peter A. Dea
W. Howard Keenan, Jr. | Compensation Committee Members*:
David H. Keyte, Chairman
W. Howard Keenan, Jr.
Janine J. McArdle
|
| * | Includes all members of the Compensation Committee as of the time the Compensation Committee Report was approved for inclusion in this Proxy Statement. |
| - 20212023 Proxy Statement 4550 |
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table The following table summarizes, with respect to our Named Executive Officers, information relating to the compensation earned for services rendered in all capacities during the fiscal years ended December 31, 2020, 2019,2022, 2021, and 2018. Unlike in 2018, for 2019 and 2020, the2020. The table reflects only the portion of the compensation earned by our Named Executive Officers attributable to their services to the Company, and does not include compensation earned for services provided to Antero Resources or its subsidiaries. As a result, the compensation included for 2019 and 2020 is lower than the compensation included for 2018. See above under “Compensation Discussion and Analysis—Implementing Our Compensation Program Objectives—Role of the Antero Resources Compensation Committee and Allocation of Compensation Expenses” for further discussion of the allocation methodology used. | | | | | | | | | | | | | | | | | | | | | Non-Equity | | | | | | | | | | | | | | | | | | | | | | Stock | | Option | | Incentive Plan | | All Other | | | | | | Name and | | | | Salary | | Bonus | | Awards | | Awards | | Compensation | | Compensation | | Total | | Principal Position | | Year | | ($) | | ($)(1) | | ($)(2) | | ($)(3) | | ($) | | ($)(4) | | ($) | Paul M. Rady
(Chairman of the Board of Directors and Chief Executive Officer) | | 2020 | | | 233,805 | | | | 322,651 | | | | 2,131,200 | | | | — | | | | — | | | | 3,883 | | | | 2,691,539 | | | | 2019 | | | 238,095 | | | | — | | | | 2,690,973 | | | | 15,200,000 | | | | 272,335 | | | | 4,662 | | | | 18,406,065 | (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | 858,000 | | | | — | | | | 7,520,882 | | | | — | | | | 753,140 | | | | 11,000 | | | | 9,143,022 | | Glen C. Warren, Jr.
(Director, President and Secretary) | | 2020 | | | 175,763 | | | | 215,112 | | | | 852,480 | | | | — | | | | — | | | | 3,883 | | | | 1,247,238 | | | | 2019 | | | 178,988 | | | | — | | | | 1,100,860 | | | | 10,133,650 | | | | 170,663 | | | | 4,662 | | | | 11,588,823 | (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | 645,000 | | | | — | | | | 3,076,725 | | | | — | | | | 471,810 | | | | 11,000 | | | | 4,204,535 | | Alvyn A. Schopp
(Chief Administrative Officer and Regional Sr. Vice President) | | 2020 | | | 129,438 | | | | 126,525 | | | | 3,333,339 | | | | — | | | | — | | | | 3,883 | | | | 3,593,185 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2019 | | | 130,423 | | | | — | | | | 550,429 | | | | — | | | | 117,806 | | | | 4,662 | | | | 803,320 | | | | 2018 | | | 442,800 | | | | — | | | | 1,538,352 | | | | — | | | | 276,661 | | | | 11,000 | | | | 2,268,813 | | Michael N. Kennedy
(Chief Financial Officer and Sr. Vice President—Finance) | | 2020 | | | 109,000 | | | | 106,547 | | | | 2,133,338 | | | | — | | | | — | | | | 3,883 | | | | 2,352,768 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2019 | | | 110,364 | | | | — | | | | 795,057 | | | | 1,266,350 | | | | 99,205 | | | | 4,662 | | | | 2,275,638 | (3) | | | 2018 | | | 384,375 | | | | — | | | | 1,538,352 | | | | — | | | | 240,157 | | | | 11,000 | | | | 2,173,884 | | W. Patrick Ash
(Sr. Vice President—Reserves, Planning & Midstream) | | 2020 | | | 99,463 | | | | 97,225 | | | | 1,666,670 | | | | — | | | | — | | | | 3,883 | | | | 1,867,241 | | | | 2019 | | | 96,993 | | | | — | | | | 199,996 | | | | — | | | | 85,200 | | | | 4,662 | | | | 386,851 | |
Name and
Principal Position | | Year | | Salary
($) | | Bonus
($)(1) | | Stock
Awards
($)(2) | | Non-Equity
Incentive Plan
Compensation
($)(3) | | All Other
Compensation
($)(4) | | Total
($) | Paul M. Rady
(Chairman of the Board of Directors, Chief Executive Officer and President | | 2022 | | 357,500 | | 58,094 | | 9,499,982 | | 615,794 | | 3,141 | | 10,534,511 | | | 2021 | | 287,100 | | — | | 4,499,995 | | 598,431 | | 3,364 | | 5,388,890 | | | 2020 | | 233,805 | | 322,651 | | 2,131,200 | | — | | 3,883 | | 2,691,539 | Michael N. Kennedy
(Director and Sr. Vice President—Finance) | | 2022 | | 181,500 | | 200,465 | | 3,249,993 | | 240,488 | | 3,190 | | 3,875,636 | | | 2021 | | 147,900 | | 177,778 | | 999,995 | | 256,902 | | 3,364 | | 1,585,939 | | | 2020 | | 109,000 | | 106,547 | | 2,133,338 | | — | | 3,883 | | 2,352,768 | W. Patrick Ash
(Sr. Vice President—Reserves, Planning & Midstream) | | 2022 | | 159,500 | | 128,058 | | 2,599,995 | | 179,637 | | 3,190 | | 3,070,380 | | | 2021 | | 120,350 | | 111,111 | | 999,995 | | 177,691 | | 3,364 | | 1,412,511 | | | 2020 | | 99,463 | | 97,225 | | 1,666,670 | | — | | 3,883 | | 1,867,241 | Yvette K. Schultz
(Sr. Vice President—Legal, Chief Compliance Officer, General Counsel) | | | | | | | | | | | | | | | | | 2022 | | 130,625 | | 13,879 | | 2,499,986 | | 147,116 | | 3,190 | | 2,794,796 | | | | | | | | | | | | | | | | Brendan E. Krueger
(Chief Financial Officer, Treasurer and Vice President) | | 2022 | | 126,500 | | 13,441 | | 1,999,978 | | 142,471 | | 3,190 | | 2,285,579 | | | 2021 | | 89,900 | | — | | 499,998 | | 124,925 | | 3,364 | | 718,187 |
| (1) | The Compensation Committee did not approve an annual incentive program tiedamounts reported in this column for 2022 for Messrs. Kennedy and Ash reflect the portion of the special cash retention awards granted to specific performance goals for 2020, but instead approved discretionary bonuses for each of oursuch Named Executive Officers during 2020 that vested and were paid out in 2022, which amounts were $177,778 and $111,111, respectively, and also includes the discretionary increases to the annual incentive plan as approved by the Compensation Committee, which amounts were $22,687 and $16,947, respectively. For all other Named Executive Officers, the amounts reported in this column for 2020 due2022 represent the discretionary increases to their superior performance despite unprecedented market conditions.annual incentive plan payments as approved by the Compensation Committee. |
| (2) | The amounts reported in this column for 2022 represent the grant date fair value of restricted stock unit awardsunits and performance share units granted to the Named Executive Officers in 20202022 pursuant to the AM LTIP, each as computed in accordance with FASB ASC Topic 718. See Note 12 to our consolidated financial statements on Form 10-K for the year ended December 31, 2020,2022, for additional detail regarding assumptions underlying the value of these equity awards. If the maximum level of performance for the ROIC performance share units granted in 2022 was achieved, then the value of such award granted to Messrs. Rady, Krueger, Kennedy and Ash and Ms. Schultz would be $4,749,985, $999,972, $1,624,997, $1,299,997, and $1,249,982, respectively. |
| (3) | The unvested Series B Unitsamounts reported in Antero IDR Holdings LLC (“IDR LLC”), originally granted in December 2016 and January 2017 prior to the initial public offering of Antero Midstream GP LP, our predecessor entity, were exchanged for restricted shares on March 12, 2019 in connection with the Simplification Transactions, which were approved by an overwhelming majority of the common shares held by disinterested stockholders of Antero Midstream GP LP and an overwhelming majority of the common units held by disinterested unitholders of Antero Midstream GP LP. The exchange of the unvested Series B Units (the “Series B Exchange”) resulted in an accounting modification under FASB ASC Topic 718, and the amounts in the “Option Awards” column, which are also included in the “Total”this column represent the incremental fair valueportion of the modification as computed in accordanceannual incentive plan payments made pursuant to actual performance with FASB ASC Topic 718. Excluding the incremental fair value of the modification for accounting purposes, the total compensation of the Named Executive Officers for 2019 would instead be $3,206,065 for Mr. Rady, $1,455,173 for Mr. Warren and $1,009,288 for Mr. Kennedy. Absent the Simplification Transactions and the Series B Exchange, no value relatingrespect to the Series B Unitsoriginally approved metrics and does not include the discretionary increase of such payments, which is reported in IDR LLC would be included inthe “Bonus” column of this column for 2019. See Note 13 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for additional detail regarding assumptions underlying the value of unvested Series B Units in IDR LLC.table. |
| (4) | The amounts reported in this column for 2022 represent the amount of the Company’s allocated portion of Antero Resource’s 401(k) match for fiscal 2020 for each participating Named Executive Officer. |
| - 20212023 Proxy Statement 4651 |
Grants of Plan-Based Awards for Fiscal Year 20202022 The table below sets forth the restricted stock unit awards granted under the AM LTIP to our Named Executive Officers during 2020.2022, including awards under the 2022 annual cash incentive plan and restricted stock units and performance share units granted under the AM LTIP. | | | | | | | | | | | | | | | | | | | | | | | All Other | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock | | | | | | | | | | | | | | | | | | | | | | | | | | | Awards: | | Grant Date | | | | | | Estimated Future Payouts Under | | | Estimated Future Payouts Under | | | Number of | | Fair Value | | | | | | Non-Equity Incentive Plan Awards | | | Incentive Plan Awards | | | Shares of | | of Stock | | | | | | | | | | | | | | | | | | | | | | | | Stock | | and Option | | | | Grant | | Threshold | | | Target | | | Maximum | | | Threshold | | | Target | | | Maximum | | | or Units | | Awards | | Name | | Date | | ($) | | | ($) | | | ($) | | | (#) | | | (#) | | | (#) | | | (#)(1) | | ($)(2) | | Paul M. Rady | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | RSUs(3) | | 7/15/20 | | | | | | | | | | | | | | | | | | | | | | | | | | | 370,000 | | | | 2,131,200 | | | Glen C. Warren, Jr. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | RSUs(3) | | 7/15/20 | | | | | | | | | | | | | | | | | | | | | | | | | | | 148,000 | | | | 852,480 | | | Alvyn A. Schopp | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | RSUs(3) | | 1/20/20 | | | | | | | | | | | | | | | | | | | | | | | | | | | 460,406 | | | | 3,333,339 | | | Michael N. Kennedy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | RSUs(3) | | 1/20/20 | | | | | | | | | | | | | | | | | | | | | | | | | | | 294,660 | | | | 2,133,338 | | | W. Patrick Ash | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | RSUs(3) | | 1/20/20 | | | | | | | | | | | | | | | | | | | | | | | | | | | 230,203 | | | | 1,666,670 | |
| | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards(1) | | Estimated Future Payouts Under
Equity Incentive Plan Awards(2) | | All Other Stock
Awards:
Number of
Shares of Stock
or Units
(#)(3) | | Grant Date
Fair Value
of Stock
and Option
Awards
($)(4) | | Name | | Grant
Date | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | | Paul M. Rady | | | | 232,375 | | 464,750 | | 929,500 | | | | | | | | | | | | ROIC PSUs(5) | | 4/15/22 | | | | | | | | 105,274 | | 210,549 | | 421,098 | | | | 2,374,993 | | RSUs(6) | | 4/15/22 | | | | | | | | | | | | | | 631,648 | | 7,124,989 | | Michael N. Kennedy | | | | 90,750 | | 181,500 | | 363,000 | | | | | | | | | | | | ROIC PSUs(5) | | 4/15/22 | | | | | | | | 36,015 | | 72,030 | | 144,060 | | | | 812,498 | | RSUs(6) | | 4/15/22 | | | | | | | | | | | | | | 216,090 | | 2,437,495 | | W. Patrick Ash | | | | 67,788 | | 135,575 | | 271,150 | | | | | | | | | | | | ROIC PSUs(5) | | 4/15/22 | | | | | | | | 28,812 | | 57,624 | | 115,248 | | | | 649,999 | | RSUs(6) | | 4/15/22 | | | | | | | | | | | | | | 172,872 | | 1,949,996 | | Yvette K. Schultz | | | | 55,516 | | 111,031 | | 222,062 | | | | | | | | | | | | ROIC PSUs(5) | | 4/15/22 | | | | | | | | 27,703 | | 55,407 | | 110,814 | | | | 624,991 | | RSUs(6) | | 4/15/22 | | | | | | | | | | | | | | 166,223 | | 1,874,995 | | Brendan E. Krueger | | | | 53,763 | | 107,525 | | 215,050 | | | | | | | | | | | | ROIC PSUs(5) | | 4/15/22 | | | | | | | | 22,163 | | 44,325 | | 88,650 | | | | 499,986 | | RSUs(6) | | 4/15/22 | | | | | | | | | | | | | | 132,978 | | 1,499,992 |
| (1) | These columns reflect the threshold, target and maximum amount that may be earned by each of the Named Executive Officers under our 2022 annual cash incentive plan. |
| (2) | These columns reflect the threshold, target and maximum number of shares that may be earned with respect to performance share units granted to each of the Named Executive Officers on April 15, 2022. |
| (3) | This column reflects the number of restricted stock unit awardsunits granted to each of the Named Executive OfficerOfficers in 2020.2022. |
| (2)(4) | The amounts in this column represent the grant date fair value of restricted stock unit awardsunits and performance share units granted to the Named Executive Officers pursuant to the AM LTIP, as computed in accordance with FASB ASC Topic 718. See Note 12 to our consolidated financial statements on Form 10-K for the year ended December 31, 2020,2022, for additional detail regarding assumptions underlying the value of these equity awards. |
| (3)(5) | The ROIC performance share units granted on April 15, 2022 are earned (or not) based upon our ROIC performance over the three-year period beginning on January 1, 2022 and ending on December 31, 2024. Pursuant to the ROIC performance share units, our Named Executive Officers are eligible to receive threshold, target and maximum payouts of 50%, 100% and 200%, respectively, of the target amount of ROIC PSUs awarded, subject to continued employment through the end of the performance period. In order to achieve threshold, target and maximum payouts under the ROIC performance share units, the Company’s ROIC performance must be at or over 85% of the target ROIC, 100% of the target ROIC or 200% of the target ROIC, respectively. |
| (6) | The restricted stock units granted to Messrs. Rady and Warren are subject to ratable vesting on the first four anniversaries of April 15, 2020, in each case, subject to such Named Executive Officer’s continued employment through such date. Fifty percent of the restricted stock units granted to Mr. Schopp vested on January 20, 2021, 25% of such award will vest on July 20, 2021, and 25% of such award will vest on January 20, 2022 in each case, subject to Mr. Schopp’s continued employment through such date. The restricted stock units granted to each of Messrs. Kennedy and Ash are subject to ratable vesting on the first three anniversaries of January 20, 2020,the date of grant, in each case, subject to such Named Executive Officer’s continued employment through such date. |
| - 2023 Proxy Statement52 |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table The following is a discussion of material factors necessary to an understanding of the information disclosed in the Summary Compensation Table and the Grants of Plan-Based Awards for Fiscal Year 20202022 table. Restricted Stock
Performance Share Units The Compensation Committee granted restricted stock unit awardsperformance share units to each of our Named Executive Officers in 2020.2022. The performance share units vest based on our ROIC over a three-year period beginning on January 1, 2022 and ending on December 31, 2024, if the Named Executive Officers remain continuously employed by us from the grant date through the end of the performance period. The potential acceleration and forfeiture events related to these performance share units are described in greater detail under the heading “Potential Payments Upon Termination or Change in Control” below. Restricted Stock UnitsThe Compensation Committee granted restricted stock units to each of our Named Executive Officers in 2022. The restricted stock units vest over a two-, three- or four-yearthree-year period, if such employees remain continuously employed by us from the grant date through the applicable vesting date. The potential acceleration and forfeiture events related to these restricted stock units are described in greater detail under the heading “Potential Payments Upon Termination or Change in Control” below. | - 2021 Proxy Statement47 |
Outstanding Equity Awards at 20202022 Fiscal Year-End The following table provides information concerning equity awards granted by the Company to our Named Executive Officers that had not vested as of December 31, 2020.2022. | | | Stock Awards | | | | | | | | | | Equity Incentive | | | | | | | | | | | | | Plan Awards: | | Equity Incentive | | | | | | | | | | Number of | | Plan Awards: | | | | | | | | | | Unearned | | Market or Payout | | | | Number of | | Market Value | | Shares, Units | | Value of Unearned | | | | Units That | | of Units That | | or Other Rights | | Shares, Units or | | | | Have Not | | Have Not | | That Have Not | | Other Rights That | | | | Vested | | Vested | | Vested | | Have Not Vested | | Name | | (#) | | ($)(1) | | (#) | | ($)(2) | | Paul M. Rady | | | | | | | | | | | | | | | | | | Restricted Stock Units(3) | | | 461,090 | | | | 3,555,004 | | | | | | | | | | | Performance Share Units(4) | | | | | | | | | | | 155,368 | | | | 1,197,887 | | | Glen C. Warren, Jr. | | | | | | | | | | | | | | | | | | Restricted Stock Units(3) | | | 193,720 | | | | 1,493,581 | | | | | | | | | | | Performance Share Units(4) | | | | | | | | | | | 63,560 | | | | 490,048 | | | Alvyn A. Schopp | | | | | | | | | | | | | | | | | | Restricted Stock Units(3) | | | 480,422 | | | | 3,704,054 | | | | | | | | | | | Performance Share Units(4) | | | | | | | | | | | 31,780 | | | | 245,024 | | | Michael N. Kennedy | | | | | | | | | | | | | | | | | | Restricted Stock Units(3) | | | 319,972 | | | | 2,466,984 | | | | | | | | | | | Performance Share Units(4) | | | | | | | | | | | 45,904 | | | | 353,920 | | | W. Patrick Ash | | | | | | | | | | | | | | | | | | Restricted Stock Units(3) | | | 246,758 | | | | 1,902,504 | | | | | | | | | |
| | | Stock Awards | | | | | | Name | | Number of Units
That Have Not
Vested
(#) | | Market Value of Units
That Have Not Vested
($)(1) | | Equity Incentive Plan
Awards: Number of
Unearned shares, Units,
or Other Rights That
Have Not Vested (#) | | Equity Incentive
Plan Awards: Market
or Payout Value of
Unearned Shares, Units
or Other Rights That
Have Not Vested ($)(2) | | Paul M. Rady | | | | | | | | | | | | | | | | | | Restricted Stock Units(3) | | | 1,223,555 | | | | 13,202,158 | | | | | | | | | | | Performance Share Units(4) | | | | | | | | | | | 421,098 | | | | 4,543,647 | | | Michael N. Kennedy | | | 406,156 | | | | 4,382,423 | | | | | | | | | | | Restricted Stock Units(3) | | | | | | | | | | | | | | | | | | Performance Share Units(4) | | | | | | | | | | | 144,060 | | | | 1,554,407 | |
| - 2023 Proxy Statement53 |
| | | Stock Awards | | | | | | Name | | Number of Units
That Have Not
Vested
(#) | | Market Value of Units
That Have Not Vested
($)(1) | | Equity Incentive Plan
Awards: Number of
Unearned shares, Units,
or Other Rights That
Have Not Vested (#) | | Equity Incentive
Plan Awards: Market
or Payout Value of
Unearned Shares, Units
or Other Rights That
Have Not Vested ($)(2) | | W. Patrick Ash | | | 339,246 | | | | 3,660,464 | | | | | | | | | | | Restricted Stock Units(3) | | | | | | | | | | | | | | | | | | Performance Share Units(4) | | | | | | | | | | | 115,248 | | | | 1,243,526 | | | Yvette K. Schultz | | | 215,245 | | | | 2,322,494 | | | | | | | | | | | Restricted Stock Units(3) | | | | | | | | | | | | | | | | | | Performance Share Units(4) | | | | | | | | | | | 110,814 | | | | 1,195,683 | | | Brendan E. Krueger | | | 203,527 | | | | 2,196,056 | | | | | | | | | | | Restricted Stock Units(3) | | | | | | | | | | | | | | | | | | Performance Share Units(4) | | | | | | | | | | | 88,650 | | | | 956,534 | |
| (1) | The amounts reflected in this column represent the market value of our common stock underlying the unvested restricted stock unit awardsunits held by the Named Executive Officers, computed based on the closing price of our common stock on December 31, 2020,30, 2022, which was $7.71$10.79 per share. |
| (2) | The amounts reflected in this column represent the market value of our common stock underlying the performance share units reported in the immediately preceding column held by the Named Executive Officers, computed based on the closing price of our common stock on December 31, 2020,30, 2022, which was $7.71$10.79 per share. |
| (3) | Except as otherwise providedThe amounts in the applicable award agreement, with respect to the amounts reported in these rows (i) the restricted stock unit awards reflecting converted phantom units that were granted in 2017 vested on April 15, 2021, (ii) the restricted stock unit awards reflecting converted phantom units that were granted to Mr. Ash in 2018 vested or will vest ratably on January 15 of each of 2021 and 2022, (iii) thethis row represent unvested restricted stock units awards granted in 2019 vested or will vest ratably on April 15 ofheld by each of 2021, 2022 and 2023, (iv) the restricted stock unit awards granted to Messrs. Rady and Warren in 2020 vested or will vest ratably on April 15 of each of 2021, 2022, 2023 and 2024, (v) 50% of the restricted stock unit award granted to Mr. Schopp in 2020 vested on January 20, 2021, and 25% of the unvested restricted stock unit award granted to Mr. Schopp in 2020 will vest on each of July 20, 2021 and January 20, 2022, and (vi) the restricted stock unit awards granted to Messrs. Kennedy and Ash in 2020 vested or will vest ratably on January 20 of each of 2021, 2022 and 2023, in each case, so long as the applicable Named Executive Officer remains continuously employed by us from the grant date throughthat vest on the applicable remaining vesting date.dates as follows, subject to the Named Executive Officer’s continued employment: |
| Name | Award | | Number
Unvested on
12/31/2022 | | Vesting
Schedule | | Remaining Vesting Dates | | Paul M. Rady | 2019 RSU | | 19,421 | | Ratable | | April 15, 2023 | | 2020 RSU | | 185,000 | | Ratable | | April 15, 2023 and April 15, 2024 | | 2021 RSU | | 387,486 | | Ratable | | April 15, 2023, April 15, 2024 and April 15, 2025 | | 2022 RSU | | 631,648 | | Ratable | | April 15, 2023, April 15, 2024 and April 15, 2025 | | Michael N. Kennedy | 2019 RSU | | 5,738 | | Ratable | | April 15, 2023 | | 2020 RSU | | 98,220 | | Ratable | | January 20, 2023 | | 2021 RSU | | 86,108 | | Ratable | | April 15, 2023, April 15, 2024 and April 15, 2025 | | 2022 RSU | | 216,090 | | Ratable | | April 15, 2023, April 15, 2024 and April 15, 2025 | | W. Patrick Ash | 2019 RSU | | 3,531 | | Ratable | | April 15, 2023 | | 2020 RSU | | 76,735 | | Ratable | | January 20, 2023 | | 2021 RSU | | 86,108 | | Ratable | | April 15, 2023, April 15, 2024 and April 15, 2025 | | 2022 RSU | | 172,872 | | Ratable | | April 15, 2023, April 15, 2024 and April 15, 2025 | | Yvette K. Schultz | 2019 RSU | | 3,531 | | Ratable | | April 15, 2023 | | 2020 RSU | | 23,964 | | Ratable | | April 15, 2023 and April 15, 2024 | | 2021 RSU | | 21,527 | | Ratable | | April 15, 2023, April 15, 2024 and April 15, 2025 | | 2022 RSU | | 166,223 | | Ratable | | April 15, 2023, April 15, 2024 and April 15, 2025 | | Brendan E. Krueger | 2019 RSU | | 3,531 | | Ratable | | April 15, 2023 | | 2020 RSU | | 23,964 | | Ratable | | April 15, 2023 and April 15, 2024 | | 2021 RSU | | 43,054 | | Ratable | | April 15, 2023, April 15, 2024 and April 15, 2025 | | 2022 RSU | | 132,978 | | Ratable | | April 15, 2023, April 15, 2024 and April 15, 2025 |
| (4) | The amounts reflected in this row represent the maximum number of performance share units granted in 20192022 because performance as of December 31, 20202022 was trending at maximum for payout of these awards. The actual number of shares earned pursuant to these performance share units may vary substantially from the amounts set forth above based on actual performance through the end of the applicable performance period. All of the outstandingThe performance share units granted to our Named Executive Officers were granted in 2019 and2022 will vestbe settled following the Compensation Committee’s determination in April 2022 of our ROIC achievement for the performance period ending December 31, 2021,2024, so long as the applicable Named Executive Officer remains continuously employed by us from the grant date through the Compensation Committee’s determination.December 31, 2024. |
| - 20212023 Proxy Statement 4854 |
Option Exercises and Stock Vested in Fiscal Year 20202022 The following table provides information concerning equity awards that vested or were exercisedheld by ourthe Named Executive Officers that vested during the 20202022 fiscal year. | | | Option Awards | | Stock Awards | | | | Number of Shares | | Value Realized | | Number of Shares | | Value Realized | | | | Acquired on Exercise | | on Exercise | | Acquired on Vesting | | on Vesting | | Name | | (#) | | ($) | | (#)(1) | | ($)(2) | | Paul M. Rady | | | — | | | | — | | | | 85,663 | | | | 190,172 | | | Glen C. Warren, Jr. | | | — | | | | — | | | | 52,107 | | | | 115,678 | | | Alvyn A. Schopp | | | — | | | | — | | | | 19,867 | | | | 44,105 | | | Michael N. Kennedy | | | — | | | | — | | | | 21,633 | | | | 48,025 | | | W. Patrick Ash | | | — | | | | — | | | | 6,512 | | | | 25,158 | |
| | | Option Awards | | Stock Awards | | Name | | Number of Shares
Acquired on Exercise
(#) | | Value Realized
on Exercise
($) | | Number of Shares
Acquired on Vesting
(#)(1) | | Value Realized
on Vesting
($)(2) | | Paul M. Rady | | — | | — | | 396,450 | | 4,471,956 | | Michael N. Kennedy | | — | | — | | 178,564 | | 1,893,391 | | W. Patrick Ash | | — | | — | | 111,948 | | 1,166,602 | | Yvette K. Schultz | | — | | — | | 27,405 | | 309,128 | | Brendan E. Krueger | | — | | — | | 33,637 | | 379,425 |
| (1) | This column reflects the (i) number of restricted stock units held by each Named Executive Officer that vested during the 20202022 fiscal year. Noyear and (ii) the number of performance share unit awardsunits held by any Named Executive Officer vested duringMessrs. Rady and Kennedy for which the 2020 fiscal year.performance period ended on December 31, 2021 but that required continued employment through April 15, 2022 to vest. |
| (2) | The amounts reflected in this column represent the aggregate market value realized by each Named Executive Officer upon vesting of the restricted stock unit awardsunits and performance share units held by such Named Executive Officer, computed based on the adjusted closing price of our common stock on the applicable vesting date. |
Pension Benefits We do not provide pension benefits to our employees. Nonqualified Deferred Compensation We do not provide nonqualified deferred compensation benefits to our employees. | - 2023 Proxy Statement55 |
Potential Payments Upon Termination or Change in Control Restricted Stock Units and Performance Share Units Any unvested restricted stock units and cash retention awards subject to time-based vesting criteria granted to our Named Executive Officers under the AM LTIP will become immediately fully vested if the applicable Named Executive Officer’s employment with us terminates due to his or her death or “disability” or in the event of a “change in control” (as such terms are defined in the AM LTIP). For In addition, upon a Named Executive Officer’s termination of employment due to his or her death or disability or in the event of a change in control, the performance period applicable to the 2022 ROIC performance share unit awards, any continued employment conditionsunits will be deemed satisfiedend on the earlier of (i) December 31, 2024 and (ii) the date of the applicable Named Executive Officer’s termination due to his death or “disability” or upon the occurrence of a “change in control,” the performance period will end on the date of such termination or “change in control,”triggering event, and such performance share unit awardsunits will be settled based on the actual level of performance achieved as of such date. In addition, any continued employment conditions will be deemed satisfied for a prorated portion of any performance share units granted in 2019 onIf the date of a Named Executive Officer’sOfficer incurs a termination of employment for any reason other than for “cause” that occurson or after April 15, 2020, and prior2023, the continued employment obligations applicable to the end2022 ROIC performance share units will be deemed satisfied, and a pro rata number of the applicabletarget performance period, based on the number of completed 12-month periods from the date of grant through the date of termination. Such prorated portion willshare units granted shall remain outstanding and eligible to vest at the end of the applicable performance period based on the actual levelperformance achieved. The pro rata number of performance achieved asshare units to remain outstanding and eligible to vest shall be determined by multiplying the target number of such date.performance share units granted by a fraction, the numerator of which is the number of completed 12-month periods that elapsed from the grant date to the date on which the Named Executive Officer’s employment terminated and the denominator of which is three. No performance share units shall be earned with respect to any partial 12-month period.
| - 2021 Proxy Statement49 |
For purposes of these awards, a Named Executive Officer will be considered to have incurred a “disability” if the executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of at least 12 months. For purposes of these awards, a “change in control” generally means the occurrence of any of the following events: | • | A person or group of persons acquires beneficial ownership of 50% or more of either (a) the outstanding shares of our common stock or (b) the combined voting power of our voting securities entitled to vote in the election of directors, in each case with the exception of (i) any acquisition directly from us, (ii) any acquisition by us or any of our subsidiaries, or (iii) any acquisition by any employee benefit plan sponsored or maintained by us or any entity controlled by us; | | • | The incumbent members of the Board cease for any reason (other than death or disability) to constitute at least a majority of the Board; provided, however, that any individual becoming a director who is approved by a vote of at least two-thirds of the incumbent members of the Board shall be considered an incumbent member of the Board for these purposes; | | • | The consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of our assets, or an acquisition of assets of another entity (a “Business Combination”), in each case, unless, following such Business Combination, (A) our outstanding common stock immediately prior to such Business Combination represents more than 50% of the outstanding common equity interests and the outstanding voting securities entitled to vote in the election of directors of the surviving entity, (B) no person or group of persons beneficially owns 20% or more of the common equity interests of the surviving entity or the combined voting power of the voting securities entitled to vote generally in the election of directors of such surviving entity, and (C) at least a majority of the members of the board of directors of the surviving entity were members of the incumbent Board at the time of the execution of the initial agreement or corporate action providing for such Business Combination; or | | • | Approval by our stockholders of a complete liquidation or dissolution of the Company. |
For purposes of the 20192022 performance share unit awards,units, “cause” shall mean a finding by the Compensation Committee of the executive’s: (i) final conviction of, or plea of nolo contendere to, a crime that constitutes a felony (or state law equivalent); (ii) gross negligence or willful misconduct in the performance of the executive’s duties that would reasonably be expected | - 2023 Proxy Statement56 |
to have a material adverse economic effect on us or any of our affiliates; (iii) willful failure without proper legal reason to perform the executive’s duties; or (iv) a material breach of any material provision of the applicable award agreement or any other written agreement or corporate policy or code of conduct established by us or any of our affiliates that would reasonably be expected to have a material adverse economic effect on us or any of our affiliates. | - 2021 Proxy Statement50
|
Quantification of Benefits The following table summarizes the compensation and other benefits that would have become payable to each Named Executive Officer assuming such Named Executive Officer was terminated either (i) as a result of his or her death or disability or (ii) for any reason other than cause or upon a change in control of the Company, in each case, on December 31, 2020.2022. The restricted stock units and performance share units represent a direct interest in shares of our common stock, which had a closing price on December 31, 2020,30, 2022, of $7.71$10.79 per share. | | | Cash Retention | | Restricted | | Performance | | | | | | | Awards | | Stock Units | | Share Units | | Total | | Name | | ($) | | ($) | | ($) | | ($) | | Paul M. Rady | | | | | | | | | | | | | | | | | | Death; Disability | | | N/A | | | | 3,555,004 | | | | 1,197,887 | (1) | | | 4,752,891 | | | Termination Other Than For Cause | | | N/A | | | | N/A | | | | 399,296 | (2) | | | 399,296 | | | Change in Control | | | N/A | | | | 3,555,004 | | | | 1,197,887 | (3) | | | 4,752,891 | | | Glen C. Warren, Jr. | | | | | | | | | | | | | | | | | | Death; Disability | | | N/A | | | | 1,493,581 | | | | 490,048 | (1) | | | 1,983,629 | | | Termination Other Than For Cause | | | N/A | | | | N/A | | | | 163,349 | (2) | | | 163,349 | | | Change in Control | | | N/A | | | | 1,493,581 | | | | 490,048 | (3) | | | 1,983,629 | | | Alvyn A. Schopp | | | | | | | | | | | | | | | | | | Death; Disability | | | 1,333,333 | | | | 3,704,054 | | | | 245,024 | (1) | | | 5,282,411 | | | Termination Other Than For Cause | | | N/A | | | | N/A | | | | 81,675 | (2) | | | 81,675 | | | Change in Control | | | 1,333,333 | | | | 3,704,054 | | | | 245,024 | (3) | | | 5,282,411 | | | Michael N. Kennedy | | | | | | | | | | | | | | | | | | Death; Disability | | | 533,333 | | | | 2,466,984 | | | | 353,920 | (1) | | | 3,354,237 | | | Termination Other Than For Cause | | | N/A | | | | N/A | | | | 117,973 | (2) | | | 117,973 | | | Change in Control | | | 533,333 | | | | 2,466,984 | | | | 353,920 | (3) | | | 3,354,237 | | | W. Patrick Ash | | | | | | | | | | | | | | | | | | Death; Disability | | | 333,333 | | | | 1,902,504 | | | | N/A | | | | 2,235,837 | | | Termination Other Than For Cause | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | Change in Control | | | 333,333 | | | | 1,902,504 | | | | N/A | | | | 2,235,837 | |
| Name | | Cash Retention
Awards
($) | | Restricted
Stock Units
($) | | Performance
Share Units
($) | | Total
($) | | Paul M. Rady | | | | | | | | | | | | Death; Disability; Change in Control(1) | | N/A | | 13,202,158 | | 4,543,647 | | | 17,745,805 | | | Termination Other Than For Cause(2) | | N/A | | — | | — | | | | | | Michael N. Kennedy | | | | | | | | | | | | Death; Disability; Change in Control(1) | | 177,778 | | 4,382,423 | | 1,554,407 | | | 6,115,608 | | | Termination Other Than For Cause(2) | | N/A | | — | | — | | | — | | | W. Patrick Ash | | | | | | | | | | | | Death; Disability; Change in Control(1) | | 111,111 | | 3,660,464 | | 1,243,526 | | | 5,015,101 | | | Termination Other Than For Cause(2) | | N/A | | — | | — | | | — | | | Yvette K. Schultz | | | | | | | | | | | | Death; Disability; Change in Control(1) | | N/A | | 2,322,494 | | 1,195,683 | | | 3,518,177 | | | Termination Other Than For Cause(2) | | N/A | | — | | — | | | — | | | Brendan E. Krueger | | | | | | | | | | | | Death; Disability; Change in Control(1) | | N/A | | 2,196,056 | | 956,534 | | | 3,152,590 | | | Termination Other Than For Cause(2) | | N/A | | — | | — | | | — | |
| (1) | Acceleration of the performance share unit awardsunits granted in 20192022 is based upon actual performance as of the date of the change in control or termination of employment as a result of the Named Executive Officer’s death or disability. As of December 31, 2020, all2022, actual performance for such awards werewas trending at maximum, or 200% of target, so the value reflected in this column represents settlement at each award’s maximum value.200% of the target value of such performance share units. | | (2) | Upon a Named Executive Officer’s termination other than for cause on December 31, 2020, one-third2022, none of the performance share units granted on April 15, 2019 would have remained outstanding subjectand eligible to achievement of the applicable performance goals through the remainder of the performance period. As of December 31, 2020, all such awards were trending at maximum, so the value reflected in this column represents one-third of each award’s maximum value. | (3) | Acceleration of the performance share unit awards granted in 2019 is based upon actual performance as of the date of the change in control. As of December 31, 2020, all such awards were trending at maximum, so the value reflected in this column represents settlement at each award’s maximum value.vest. |
| - 20212023 Proxy Statement 5157 |
Equity Compensation Plan Information The following table sets forth information about securities that may be issued under the existing equity compensation plans of the Company as of December 31, 2020.2022. | | | | | | | Number of securities | | | | | | | | remaining available for | | | | Number of securities to | | | | future issuance under | | | | be issued upon exercise of | | Weighted – average exercise | | equity compensation | | | | outstanding options, warrants | | price of outstanding options, | | plans (excluding securities | | Plan Category | | and rights (a)(1) | | warrants and rights (b) | | reflected in column (a)) (c) | | Equity compensation plans approved by security holders | | | | | | | | | | | | | | Antero Midstream Corporation Long Term Incentive Plan(2) | | | 3,463,261 | | | | N/A | (3) | | | 11,313,949 | | | Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | | | TOTAL | | | | | | | | | | | | |
| Plan Category | | Number of securities to
be issued upon exercise of
outstanding options, warrants
and rights (a)(1) | | Weighted – average exercise
price of outstanding options,
warrants and rights (b) | | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in column (a)) (c) | | | Equity compensation plans approved by security holders | | 5,317,193 | | | | | | | | | | Antero Midstream Corporation Long Term Incentive Plan(2) | | | | | N/A | (3) | | 7,420,368 | | | | Equity compensation plans not approved by security holders | | — | | | — | | | — | | | | TOTAL | | 5,317,193 | | | — | | | 7,420,368 | | |
| (1) | This column reflects the maximumtarget number of shares of our common stock subject to performance share unit awardsunits and the number of shares of our common stock subject to restricted stock unit awardsunits and options granted under the AM LTIP, outstanding and unvested as of December 31, 2020.2022. Because the number of shares of common stock to be issued upon settlement of outstanding performance share unit awardsunits is subject to performance conditions, the number of shares of common stock actually issued may be substantially more or less than the number reflected in this column. | | (2) | The AM LTIP was approved by our stockholders in connection with the approval of the Simplification Transactions at the special meeting of Antero Midstream GP LP and Antero Midstream Partners LP in March 2019. | | (3) | Only restricted stock units and performance share units have been granted under the AM LTIP; there is no weighted average exercise price associated with these awards. |
Chief Executive Officer Pay Ratio Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, this section provides information regarding the relationship of the annual total compensation of all of our employees to the annual total compensation of our Chief Executive Officer, Mr. Rady. For 2020,2022, the median of the annual total compensation of all Company employees (other than our Chief Executive Officer), calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K, was $35,017,$37,487, and the annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table, was $2,691,539.$10,534,511. Based on this information, for 2020,2022, the ratio of the annual total compensation of Mr. Rady to the median of the annual total compensation of all of our employees was 77281 to 1. | - 2021 Proxy Statement52
|
Methodology and Assumptions We selected December 31, 2020,2022, as the date on which to determine our employee population for purposes of identifying the median of the annual total compensation of all of our employees (other than the Chief Executive Officer) because it was efficient to collect payroll data and other necessary information as of that date. As of December 31, 2020,2022, our employee population consisted of 521580 individuals, including all individuals employed by the Company or any of its consolidated subsidiaries, whether as full-time, part-time, seasonal or temporary workers. This population does not include independent contractors. All of our employees are located in the United States. In identifying our median employee in 2020,2022, we used the annual total compensation as reported in Box 1 of each employee’s Form W-2 for 20202022 provided to the Internal Revenue Service, minus the amount of each employee’s compensation that we did not reimburse Antero Resources for, calculated using the same methodology used to determine the 20202022 NEO AM Reimbursement Percentage, as described above under “Compensation | - 2023 Proxy Statement58 |
Discussion and Analysis—Implementing Our Compensation Program Objectives—Role of the Antero Resources Compensation Committee and Allocation of Compensation Expenses.” We believe this methodology provides a reasonable basis for determining the allocated portion of each employee’s total annual compensation, and is an economical method of evaluating the total annual compensation of our employees and identifying our median employee. For the 23110 employees hired during 2020,2022, we utilized the annual total compensation reported on each such employee’s Form W-2 for 20202021 without annualization adjustments, less the amount of such employee’s compensation that we did not reimburse Antero Resources for. No cost-of-living adjustments were made in identifying our median employee, as all of our employees (including our Chief Executive Officer) are located in the United States. This calculation methodology was consistently applied to our entire employee population, determined as of December 31, 2020,2022, to identify our median employee in 2020.2022. After we identified our median employee, we calculated each element of our median employee’s annual compensation for 20202022 in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K using the allocation methodology described above, which resulted in annual total compensation of $35,017.$37,487. The difference between our median employee’s total compensation reported on Form W-2 and our median employee’s annual total compensation calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K was $9,097.$8,370. This amount reflects the Company’s 401(k) match and non-cash imputed earnings offset by benefits deductible from gross income. Similarly, the 20202021 annual total compensation of our Chief Executive Officer was calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K, as reported in the “Total” column of the Summary Compensation Table. Pay Versus PerformancePursuant to the amendments to Section 14(i) of the Exchange Act, Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, this section provides information regarding the relationship of compensation paid to our Named Executive Officers (“NEOs”) relative to our financial performance. The following table summarizes compensation values reported in the Summary Compensation Table for our principal executive officer (“PEO”) and the average for our other NEOs, as compared to “compensation actually paid” or “CAP” and the Company’s financial performance for the years ended December 31, 2022, 2021, and 2020: | | | Summary | | | | Average
Summary | | Average
Compensation | | Value of Initial Fixed $100
Investment Based On: | | | | | | Year | | Compensation
Table Total for
PEO(1) | | Compensation
Actually Paid to
PEO(1)(2) | | Compensation
Table Total for
Non-PEO NEOs(1) | | Actually Paid
to Non-PEO
NEOs(1)(2) | | TSR | | Peer Group
TSR(3) | | Net
Income
($MM) | | Adjusted
EBITDA
($MM)(4) | | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | 2022 | | $10,534,511 | | $14,034,979 | | $3,006,598 | | $3,882,778 | | $217 | | $ 244 | | $ 326 | | $884 | | 2021 | | $5,388,890 | | $7,829,324 | | $1,314,614 | | $1,844,273 | | $178 | | $ 161 | | $ 332 | | $876 | | 2020 | | $2,691,539 | | $3,247,352 | | $2,265,108 | | $2,407,498 | | $128 | | $ 76 | | $(123) | | $850 |
| The PEO reflected in columns (b) and (c) represents Paul M. Rady. The non-PEO NEOs reflected in columns (d) and (e) represent the following individuals by year: | | a. | 2022: Michael N. Kennedy, W. Patrick Ash, Yvette K. Schultz and Brendan E. Krueger. | | b. | 2021: Brendan E. Krueger, Alvyn A. Schopp, Michael N. Kennedy, W. Patrick Ash and Glen C. Warren, Jr.. | | c. | 2020: Glen C. Warren, Jr., Alvyn A. Schopp, Michael N. Kennedy and W. Patrick Ash. | | (2) | The Company deducted from and added to the Summary Compensation Table total compensation the following amounts to calculate compensation actually paid in accordance with Item 402(v) of Regulation S-K as disclosed in columns (c) and (e) for each PEO and Non-PEO NEOs in each respective year. As the Company’s NEOs do not participate in any defined benefit plans, no adjustments were required to amounts reported in the Summary Compensation Table totals related to the value of benefits under such plans. |
| - 20212023 Proxy Statement 5359 |
| | | 2022 | | 2021 | | 2020 | | | | Paul Rady | | Average Non-
CEO NEOs | | Paul Rady | | Average Non-
CEO NEOs | | Paul Rady | | Average Non-
CEO NEOs | | Total Compensation from Summary Compensation Table | | $10,534,511 | | $3,006,598 | | $5,388,890 | | $1,314,614 | | $2,691,539 | | $2,265,108 | | Adjustments for Equity Awards | | | | | | | | | | | | | | Grant date values in the Summary Compensation Table | | ($9,499,982) | | ($2,587,488) | | ($4,499,995) | | ($779,996) | | ($2,131,200) | | ($1,996,457) | | Year-end fair value of unvested awards granted in the current year | | $11,359,129 | | $3,093,857 | | $5,001,143 | | $866,861 | | $2,852,700 | | $2,184,376 | | Year-over-year difference of year-end fair values for unvested awards granted in prior years | | $657,017 | | $132,093 | | $1,528,212 | | $353,122 | | $20,253 | | $5,347 | | Fair values at vest date for awards granted and vested in current year | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | | $634,320 | | $86,376 | | $144,748 | | $104,439 | | ($415,466) | | ($117,780) | | Forfeitures during current year equal to prior year-end fair value | | $0 | | $0 | | $0 | | ($211,999) | | $0 | | $0 | | Dividends or dividend equivalents not otherwise included in the total compensation | | $349,984 | | $151,342 | | $266,326 | | $197,232 | | $229,526 | | $66,904 | | Total Adjustments for Equity Awards | | $13,000,450 | | $3,463,668 | | $6,940,429 | | $1,309,655 | | $2,687,013 | | $2,138,847 | | Compensation Actually Paid (as calculated) | | $14,034,979 | | $3,882,778 | | $7,829,324 | | $1,844,273 | | $3,247,352 | | $2,407,498 |
| (3) | The peer group is comprised of the Alerian Midstream Energy Index. | | (4) | A description of Adjusted EBITDA can be found on page 44 of this Proxy Statement. | | |
Narrative Disclosure to Pay versus Performance TableThe illustrations below provide a graphical description of CAP and the following measures: | • | the Company’s cumulative TSR and the Peer Group’s cumulative TSR; | | • | the Company’s Net Income; and | | • | the Company Selected Measure, which is Adjusted EBITDA. |
| - 2023 Proxy Statement60 |
| - 2023 Proxy Statement61 |
Disclosure of Most Important Performance Measures for Fiscal Year 2022The measures listed below represent the most important financial performance measures that we used to determine CAP for fiscal year 2022. | Most Important Performance Measures | | Adjusted EBITDA | | Free Cash Flow after Dividends | | Net Debt/EBITDA | | Return on Invested Capital (ROIC) | | TSR |
| - 2023 Proxy Statement62 |
ITEM FOUR: AMENDMENT TO ANTERO MIDSTREAM’S CHARTER TO REFLECT OFFICER EXCULPATIONBackgroundThe Delaware General Corporation Law (“DGCL”) permits Delaware corporations to limit the personal liability of directors for monetary damages associated with breaches of the duty of care in limited circumstances, and our charter has always included those limitations. That protection did not extend to corporate officers under the DGCL or our charter. This has resulted in increased litigation and insurance costs for companies, which harms stockholders. Effective August 1, 2022, the Delaware legislature amended the DGCL to correct this inconsistent treatment between directors and officers. The DGCL now allows Delaware corporations to amend their certificates of incorporation, subject to stockholder approval, to limit the personal liability of certain officers for monetary damages associated with breaches of the fiduciary duty of care (but not the fiduciary duty of loyalty) in limited circumstances. As provided in the new Delaware legislation, if the Company adopts the Exculpation Amendment, our Charter will permit officer exculpation only for direct claims brought by stockholders for breach of an officer’s fiduciary duty of care, including class actions, but would not eliminate officers’ monetary liability for breach of fiduciary duty claims brought by the Company itself or for derivative claims brought by stockholders in the name of the Company. The Exculpation Amendment would not apply to breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. These limitations are similar to those already in the Charter for directors. The primary reason to adopt the Exculpation Amendment, as further described below, is to strike a balance between stockholders’ interest in officer accountability and their interest in the Company being able to reduce litigation and insurance costs associated with frivolous lawsuits and heightened insurance premiums and attract and retain quality officers to work on its behalf. The Board has unanimously approved and determined, subject to stockholder approval, that the Exculpation Amendment is advisable and in the best interests of the Company and our stockholders, and, in accordance with the DGCL, hereby seeks approval of the Exculpation Amendment by our stockholders. Reasons for the AmendmentOur Board believes that there is a need for directors and officers to be protected from the risk of financial ruin as a result of an unintentional misstep. Furthermore, the Exculpation Amendment: (i) is carefully drafted, consistent with the new Delaware law, to protect officers without limiting their liability for claims by the Company or for breaches of their duty of loyalty, (ii) would help the Company to attract and retain the most qualified officers and (iii) would reduce potential litigation and insurance costs associated with frivolous lawsuits and heightened premiums. The Board has additionally determined that the proposed provision would not materially and negatively impact stockholder rights. Thus, in light of the narrow class and type of claims for which officers’ liability would be exculpated, and the benefits that the Board believes would accrue to the Company and its stockholders in the form of an enhanced ability to attract and retain quality officers, the Board approved the Exculpation Amendment. Frequently, directors and officers must make decisions in response to time-sensitive opportunities and challenges. Limiting concern about personal risk for ordinary failures of care (but not loyalty) empowers both directors and officers to best exercise their business judgment in furtherance of stockholder interests. Furthermore, the Company expects its peers to adopt exculpation clauses that limit the personal liability of officers in their certificates of incorporation and failing to adopt the amendment could impact our recruitment and retention of exceptional officer candidates that conclude that the higher exposure to personal liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the Company. | - 2023 Proxy Statement63 |
It is also possible that insurance premiums for director and officer insurance could be increased for corporations that do not adopt exculpation clauses that limit the personal liability of officers in their governing documents, which could adversely affect the Company, and thereby adversely affect our stockholders. Adopting the Exculpation Amendment would better position the Company to potentially reduce litigation and insurance costs associated with lawsuits (many of which may be frivolous) and heightened premiums, attract top officer candidates and retain our current officers and enable the officers to exercise their business judgment in furtherance of the interests of the stockholders without the potential for distraction posed by the risk of personal liability. This amendment will also more generally align the protections available to our officers with those already available to our directors. In view of the above considerations, our Board has unanimously determined to provide for the exculpation of officers as proposed. Proposed Exculpation AmendmentThe Board is asking our stockholders to approve the amendment to Article NINTH of our Charter. The text of the Exculpation Amendment is attached hereto as Appendix A, with additions marked with bold, underlined text and deletions indicated by strike-out text. If the Exculpation Amendment is approved by our stockholders, the Exculpation Amendment will become effective upon the filing of a Certificate of Amendment with the Delaware Secretary of State, which filing is expected to occur as soon as reasonably practicable after the Annual Meeting. If the Exculpation Amendment is not approved by our stockholders, the Charter will not be amended, and no exculpation will be provided for our officers. The Company’s officers will nevertheless retain their existing rights under indemnification agreements and insurance policies.  | THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE AMENDMENT TO ANTERO MIDSTREAM’S CHARTER TO REFLECT OFFICER EXCULPATION. |
| - 2023 Proxy Statement64 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial Ownership The following table sets forth information with respect to the beneficial ownership of our common stock as of April 22, 2021,21, 2023, by: | • | each of our Named Executive Officers; | | • | each of our directors and nominees; | | • | all of our directors, director nominees and executive officers as a group; and | | • | each person known to us to be the beneficial owner of more than 5% of our outstanding common stock. |
Except as otherwise noted, the persons or entities listed below have sole voting and investment power with respect to all shares of our common stock beneficially owned by them, except to the extent this power may be shared with a spouse. All information with respect to beneficial ownership has been furnished by the respective directors, officers or more than 5% stockholders, as the case may be. Unless otherwise noted, the mailing address of each person or entity named in the table is 1615 Wynkoop Street, Denver, Colorado, 80202. | | | Common Stock Beneficially Owned | | | | Number of | | Percentage of | | Name and Address of Beneficial Owner | | Shares | | Class | | Antero Resources(1) | | | 139,042,345 | | | | 29.13% | | | The Vanguard Group, Inc.(2) | | | 29,049,749 | | | | 6.09% | | | Invesco Ltd.(3) | | | 27,918,737 | | | | 5.85% | | | BlackRock, Inc.(4) | | | 25,754,652 | | | | 5.40% | | | Paul M. Rady(5) | | | 2,242,834 | | | | * | | | Glen C. Warren, Jr.(6) | | | 10,848,730 | | | | 2.27% | | | Peter A. Dea | | | 44,216 | | | | * | | | W. Howard Keenan, Jr.(7) | | | 78,304 | | | | * | | | David H. Keyte | | | 37,365 | | | | * | | | Brooks J. Klimley | | | 55,346 | | | | * | | | Janine J. McArdle | | | 19,881 | | | | * | | | John C. Mollenkopf | | | 51,208 | | | | * | | | Rose M. Robeson | | | 49,349 | | | | * | | | W. Patrick Ash(8) | | | 51,812 | | | | * | | | Michael N. Kennedy(9) | | | 640,975 | | | | * | | | Alvyn A. Schopp(10) | | | 1,598,792 | | | | * | | | Directors and executive officers as a group (12 persons)(11) | | | 15,718,812 | | | | 3.29% | |
| | | Common Stock Beneficially Owned | | Name and Address of Beneficial Owner | | Number of
Shares | | Percentage of
Class | | Antero Resources(1) | | 139,042,345 | | | 28.99% | | | The Vanguard Group, Inc.(2) | | 32,912,960 | | | 6.86% | | | Invesco Ltd.(3) | | 33,300,472 | | | 6.94% | | | BlackRock, Inc.(4) | | 38,884,707 | | | 8.11% | | | Paul M. Rady(5) | | 973,109 | | | * | | | Peter A. Dea | | 69,322 | | | * | | | W. Howard Keenan, Jr. | | 127,439 | | | * | | | David H. Keyte | | 82,471 | | | * | | | Brooks J. Klimley | | 72,952 | | | * | | | Janine J. McArdle | | 44,987 | | | * | | | John C. Mollenkopf | | 76,314 | | | * | | | Nancy E. Chisholm | | 3,956 | | | * | | | W. Patrick Ash(6) | | 164,747 | | | * | | | Michael N. Kennedy(7) | | 854,444 | | | * | | | Yvette K. Schultz(8) | | 59,099 | | | * | | | Brendan E. Krueger(9) | | 131,254 | | | * | | | Directors and executive officers as a group (11 persons) | | 2,495,347 | | | * | |
| * | Less than one percent. | | (1) | Based upon its Schedule 13D/A filed on May 6, 2020. Includes 107,000,001 shares of common stock held by Antero Subsidiary Holdings LLC (“AR Sub”). Antero Resources owns 100% of the limited liability company interests in AR Sub. Because AR Sub is a party to the Stockholders’ Agreement with Messrs. Rady and Warren, AR Sub and Messrs. Rady and Warren may be deemed to have formed a Section 13(d) group. If such persons are deemed to have formed a Section 13(d) group, such group may be deemed to beneficially own an aggregate of 152,475,150 shares of common stock for purposes of Rule 13d-3 under the Exchange Act. The number of shares of common stock shown in the table above as beneficially owned by Antero Resources excludes shares of common stock owned by Messrs. Rady and Warren. Antero Resources and AR Sub disclaim beneficial ownership of these shares of common stock except to the extent of their pecuniary interest therein. | | (2) | Based upon its Schedule 13G/A filed on February 10, 2021,9, 2023, with the SEC, The Vanguard Group, Inc. has a mailing address of 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. | | (3) | Based solely upon a Schedule 13G/A filed by Invesco Ltd. on February 9, 2021.3, 2023. The principal address for Invesco Ltd. is 1555 Peachtree Street NE, Suite 1800, Atlanta, GA 30309. Invesco Ltd., a Bermuda corporation, is the parent company of Invesco Advisers, Inc., Invesco Investment Advisers, LLC and Invesco Capital Management LLC, each an investment adviser, and Invesco Ltd. may be deemed to beneficially own the shares held by these investment advisers. |
| - 2023 Proxy Statement65 |
| (4) | Based solely upon a Schedule 13G/A filed by BlackRock, Inc. on January 29, 2021.February 3, 2023. BlackRock, Inc.’s address is 55 East 52nd Street, New York, NY 10055. The registered holders of the referenced shares are funds and accounts under management by investment adviser subsidiaries of BlackRock, Inc. (or wholly owned subsidiaries of such funds and accounts). BlackRock, Inc. is the ultimate parent holding company of such investment adviser entities. On behalf of such investment adviser entities, the applicable portfolio managers, as managing directors (or in other |
| - 2021 Proxy Statement54 |
| capacities) of such entities, and/or the applicable investment committee members of such funds and accounts, have voting and investment power over the shares held by the funds and accounts (or the wholly owned subsidiaries of such funds and accounts) which are the registered holders of the referenced shares. Such portfolio managers and/or investment committee members expressly disclaim beneficial ownership of all shares held by such funds and accounts (or such wholly owned subsidiaries). The address of such funds and accounts (and such wholly owned subsidiaries), such investment adviser subsidiaries and such portfolio managers and/or investment committee members is 55 East 52nd Street, New York, NY 10055. | | (5) | Includes 1,180,821 shares of common stock held by Mockingbird Investment, LLC (“Mockingbird”). Mr. Rady owns a 3.68% limited liability company interest in Mockingbird, and a trust under his control owns the remaining 96.32%. Mr. Rady disclaims beneficial ownership of all securities held by Mockingbird except to the extent of his pecuniary interest therein. Does not include 832,9891,480,809 shares of common stock that remain subject to vesting. Further, as a result of the Stockholders’ Agreement, AR Sub and Messrs. Rady and Warren may be deemed to have formed a Section 13(d) group. If such persons are deemed to have formed a Section 13(d) group, such group may be deemed to beneficially own an aggregate of 152,475,15013,628,167 shares of common stock for the purpose of Rule 13d-3 under the Exchange Act. The number of shares of common stock shown in the table above as beneficially owned by Mr. Rady excludes shares of common stock owned by AR Sub and Mr. Warren. Mr. Rady disclaims beneficial ownership of these shares of common stock except to the extent of his pecuniary interest therein. | | (6) | Includes 3,966,804 shares of common stock held by Canton Investment Holdings LLC (“Canton”). Mr. Warren is the sole member of Canton. Mr. Warren disclaims beneficial ownership of all shares held by Canton to the extent of his pecuniary interest therein. Does not include 126,890249,389 shares of common stock that remain subject to vesting. Because Mr. Warren is a trustee of the Warren Family 2020 Trust, he may be deemed to beneficially own an additional 817,000 shares of common stock. Further, as a result of the Stockholders’ Agreement, AR Sub and Messrs. Rady and Warren may be deemed to have formed a Section 13(d) group. If such persons are deemed to have formed a Section 13(d) group, such group may be deemed to beneficially own an aggregate of 152,475,150 shares of common stock for the purpose of Rule 13d-3 under the Exchange Act. The number of shares of common stock shown in the table above as beneficially owned by Mr. Warren excludes shares of common stock owned by AR Sub and Mr. Rady. Mr. Warren disclaims beneficial ownership of these shares of common stock except to the extent of his pecuniary interest therein. | | (7) | Has a mailing address of 410 Park Avenue, 19th Floor, New York, New York 10022. Mr. Keenan is a member and manager of the direct or indirect general partner of each of Yorktown Energy Partners VII, L.P. and Yorktown Energy Partners VIII, L.P., which own 2,009,634Does not include 506,286 shares of common stock and 3,169,985 shares of common stock, respectively. Mr. Keenan does not have sole or shared voting or investment power within the meaning of Rule 13d-3 under the Exchange Act with respectthat remain subject to the shares of common stock held by such investment funds and disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein.vesting. | | (8) | Does not include 278,322323,231 shares of common stock that remain subject to vesting. | | (9) | Does not include 322,726278,203 shares of common stock that remain subject to vesting. | (10) | Does not include 398,882 shares of common stock that remain subject to vesting. | (11) | Does not include Mr. Krueger, currently Vice President of Finance and Treasurer of Antero Midstream, who will be named Chief Financial Officer of Antero Midstream and will continue to serve as Treasurer and Vice President of Finance of Antero Midstream effective April 30, 2021. |
| - 20212023 Proxy Statement 5566 |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act and related rules of the SEC require our directors and Section 16 officers, and persons who own more than 10% of a registered class of our equity securities, to file initial reports of ownership and reports of changes in ownership with the SEC. These persons are required by SEC regulations to furnish us with copies of all Section 16(a) reports that they file. We assist our directors and executive officers in making their Section 16(a) filings, pursuant to powers of attorney granted by our insiders, based on information obtained from them and our records. DELINQUENT SECTION 16(A) REPORTS Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to Antero Midstream during 2020,2022, including those reports we have filed on behalf of our directors and Section 16 officers pursuant to powers of attorney, no person subject to Section 16 ofthere was one untimely Form 3 filing made during 2022 by Yvette K. Schultz as a result in a delay in obtaining EDGAR filing codes from the Exchange Act failed to file on a timely basis during 2020, except that Forms 4 filed with respect to the quarterly awards granted to each of our non-employee directors on October 10, 2020 were not timely.SEC. RELATED PERSON TRANSACTIONS General The Audit Committee is charged with reviewing the material facts of related person transactions that do not involve Antero Resources or its subsidiaries (other than the Company and its subsidiaries). The Board, or, if so delegated by the Board, the Conflicts Committee, is charged with reviewing the material facts of related person transactions involving Antero Resources and its subsidiaries (other than the Company and its subsidiaries). The Audit Committee, the Board, or the Conflicts Committee, as applicable, either approves or disapproves of Antero Midstream’s participation in such transactions under Antero Midstream’s Related Persons Transaction Policy adopted by the Board (“RPT Policy”), which pre-approves certain transactions that are not deemed to be related person transactions pursuant to Item 404 of Regulation S-K. The Audit Committee has the authority to modify the RPT Policy regarding pre-approved transactions or to establish guidelines for Antero Midstream to participate in any ongoing related person transaction.
For all related person transactions during 20202022 that were required to be reported in “Related Persons Transactions,” the procedures described above were followed unless the RPT Policy did not require review, approval or ratification of the transaction. References in this section to “Antero Midstream,” “we,” “us,” “our” or like terms refer to Antero Midstream Corporation and its consolidated subsidiaries. | - 20212023 Proxy Statement 5667 |
Agreements with Antero Resources Stockholders’ Agreement On October 9, 2018, concurrently with the execution of the Simplification Agreement, dated as of October 9, 2018 (the “Simplification Agreement”), by and among Antero Resources, Antero Midstream (f/k/a Antero Midstream GP LP), Antero Midstream Partners LP (“Antero Midstream Partners”) and certain of their affiliates (the “Simplification Agreement”), certain affiliates of Warburg Pincus LLC and Yorktown Partners LLC (collectively, the “Sponsor Holders”); Antero Midstream GP LP; AR Sub, a wholly owned subsidiary of Antero Resources; and Paul M. Rady, Glen C. Warren, Jr. and certain of their respective affiliates (collectively, the “Management Stockholders”) entered into a Stockholders’ Agreement (the “Stockholders’ Agreement”), which became effective as of the Closing and which governs certain rights and obligations of the parties following the consummation of the Simplification Transactions. The Sponsor Holders and the Management Stockholders no longer have rights under the Stockholders’ Agreement because they no longer hold the requisite number of shares of Antero Midstream Common Stock. Under the Stockholders’ Agreement, and subject to additional limitations in the event of a Fundamental Change (as defined in the Stockholders’ Agreement), AR Sub is entitled to designate two directors, who initially were Mr. Rady and Mr. Warren, for nomination and election to the Board for so long as, together with its affiliates, AR Sub owns an amount of shares equal to at least 8% of the qualifying Antero Midstream Common Stock and one director so long as it owns an amount of shares equal to at least 5% of the qualifying Antero Midstream Common Stock. EffectiveOn April 30, 2021, Mr. Warren will be retiringretired from the Board and, in connection with his retirement, AR Sub has designated Michael N. Kennedy as its replacement director to serve on the Board to fill the resulting vacancy. Mr. Kennedy will also standstood for election at the Annual Meeting2021 annual meeting as AR Sub’s director nominee. The Sponsor Holders and the Management Stockholders were previously entitled to certain director designation rights, but they no longer hold the requisite amount of Antero Midstream Common Stock. Notwithstanding the foregoing, upon the occurrence of a Fundamental Change, AR Sub will be entitled to designate one director so long as it owns an amount of shares equal to at least 5% of the qualifying Antero Midstream Common Stock. Pursuant to the Stockholders’ Agreement, AR Sub agreed to vote all of its shares of Antero Midstream Common Stock, at AR Sub’s election, either (i) in favor of any other nominees nominated by the Nominating & Governance Committee of the Board or (ii) in proportion to the votes cast by the public stockholders of Antero Midstream in favor of such nominees. In calculating the 8% and 5% ownership thresholds for purposes of the Stockholders’ Agreement, qualifying Antero Midstream Common Stock is determined by dividing the Antero Midstream Common Stock ownership for AR Sub as of the applicable measurement date by (i) the total number of outstanding shares of Antero Midstream Common Stock at the Closing or (ii) the total number of outstanding shares on the applicable measurement date, whichever is less. Pursuant to the terms of the Stockholders’ Agreement, no more than 45% of the shares of Antero Midstream Common Stock outstanding as of closing of the Simplification Transactions will be subject to the obligations of the Stockholders’ Agreement. In addition, under the Stockholders’ Agreement, for so long as AR Sub has the right to designate at least one director, (i) if Mr. Rady is an executive officer of Antero Resources, he shall serve as Chief Executive Officer at Antero Midstream and (ii) if Mr. Warren is an executive officer of Antero Resources, he shall serve as President at Antero Midstream, and both Mr. Rady and Mr. Warren shall be subject to removal from such officer positions at Antero Midstream only for cause. For so long as Mr. Rady is a member of the Board and is an executive officer of Antero Resources and/or Antero Midstream, the parties have agreed that he shall serve as Chairman of the Board, subject to his removal as Chief Executive Officer of Antero Midstream for cause. The Stockholders’ Agreement terminates as to each stockholder upon the time at which such stockholder no longer has the right to designate an individual for nomination to the Board pursuant to the Stockholders’ Agreement. | - 20212023 Proxy Statement 5768 |
Registration Rights Agreement Antero Midstream entered into a Registration Rights Agreement (the “Registration Rights Agreement”), dated as of March 12, 2019, with Antero Resources, pursuant to which Antero Midstream agreed to register the resale of certain shares of Antero Midstream Common Stock held by Antero Resources and its subsidiaries, under certain circumstances. Specifically, pursuant to the Registration Rights Agreement, Antero Midstream took effective a registration statement under the Securities Act that permits the resale of the Registrable Securities (as defined in the Registration Rights Agreement) from time to time as permitted by Rule 415 of the Securities Act (or any similar provision adopted by the SEC then in effect) (the “Resale Registration Statement”). Except in certain circumstances, Sponsor Holders (as defined in the Registration Rights Agreement), which includes Antero Resources and its subsidiaries and Paul M. Rady, and Glen C. Warren, owning at least 3% of the issued and outstanding shares of Antero Midstream Common Stock have the right to require Antero Midstream to facilitate an underwritten offering. Antero Midstream is not obligated to effect any demand registration in which the anticipated aggregate offering price is less than $50.0 million. Sponsor Holders will also have customary piggyback registration rights to participate in underwritten offerings. Gathering and Compression AgreementAgreements Pursuant to a gasAntero Midstream’s gathering and compression service agreements with Antero Resources include: (i) the second amended and restated gathering and compression agreement dated December 8, 2019 (the “2019 gathering and compression agreement”), (ii) gathering and compression agreements acquired with the Crestwood Equity Partners LP assets (the “Marcellus gathering and compression agreements”) and (iii) a compression agreement acquired with the EnLink Midstream LLC assets (the “Utica compression agreement” and, together with the 2019 gathering and compression agreement and the Marcellus gathering and compression agreements, the “gathering and compression agreements”). Pursuant to theses gathering and compression agreements with Antero Midstream, Antero Resources has agreed to dedicate substantially all of its current and future acreage in West Virginia, Ohio and Pennsylvania to Antero Midstream (other than the existing third-party commitments), so long as such production is not otherwise subject to a pre-existing dedication to third-partyfor gathering systems. Antero Resources’ production subject to a pre-existing dedication will be dedicated to Antero Midstream at the expiration of such pre-existing dedication. In addition, if Antero Resources acquires any gathering facilities, it is required to offer such gathering facilities to Antero Midstream at its cost.
Under theand compression services. Our 2019 gathering and compression agreement has an initial term through 2038, our Marcellus gathering and compression agreements expire between 2023 and 2031 and our Utica compression agreement has two dedicated areas that expire in 2023 and 2030. Upon expiration of each of the Marcellus gathering and compression service agreements and Utica compression agreement, the Company will continue to provide gathering and compression services under the 2019 gathering and compression agreement.
Under the 2019 gathering and compression agreements, Antero Midstream was initiallyis entitled to receive a low-pressure gathering fee of $0.30 per Mcf, a high-pressure gathering fee of $0.18 per Mcf, a compression fee of $0.18 per Mcf, and a condensate gathering fee of $4.00 per Bbl, which, in each case, has been subject to CPI-based adjustments. If, and to the extent Antero Resources requests that Antero Midstream construct new high-pressure lines and compressor stations, the 2019 gathering and compression agreement contains minimum volume commitments that require Antero Resources to utilize or pay for 75% and 70%, respectively, of the capacity of such new construction. Additional high-pressure lines and compressor stations installed on Antero Midstream’s own initiative are not subject to such volume commitments. These minimum volume commitments on new infrastructure, as well as price adjustment mechanisms, are intended to support the stability of Antero Midstream’s cash flows. Antero Midstream also has an option to gather and compress natural gas produced by Antero Resources on any acreage Antero Resources acquires in the future outside of West Virginia, Ohio and Pennsylvania on the same terms and conditions.conditions as the 2019 gathering and compression agreement. In the event that Antero Midstream does not exercise this option, Antero Resources will be entitled to obtain gathering and compression services and dedicate production from limited areas to such third-party agreements from third parties. In return for Antero Resources’ acreage dedication, Antero Midstream has agreed to gather, compress, dehydrate and redeliver all of Antero Resources’ dedicated natural gas on a firm commitment, | - 2023 Proxy Statement69 |
first-priority basis. Antero Midstream may perform all services under the 2019 gathering and compression agreement or it may perform such services through third parties. In the event that Antero Midstream does not perform its obligations under the 2019 gathering and compression agreement, Antero Resources will be entitled to certain rights and procedural remedies thereunder. In addition to the foregoing, Antero Midstream has the right to elect to be paid for certain services under the 2019 gas and gathering agreement on a cost of service basis designed to generate a specified rate of return. Pursuant to the 2019 gathering and compression agreement, Antero Midstream has also agreed to build to and connect all of Antero Resources’ wells producing dedicated natural gas, subject to certain exceptions, upon 180 days’ notice by Antero Resources. In the event of late connections, Antero Resources natural gas will temporarily not be subject | - 2021 Proxy Statement58 |
to the dedication. Antero Midstream is entitled to compensation under the 2019 gathering and compression agreement for capital costs incurred if a well does not commence production within 30 days following the target completion date for the well set forth in the notice from Antero Resources. Antero Midstream has agreed to install compressor stations at Antero Resources’ direction, but will not be responsible for inlet pressures or for pressuring natural gas to enter downstream facilities if Antero Resources has not directed Antero Midstream to install sufficient compression. Additionally, Antero Midstream will provide high-pressure gathering pursuant to the gathering and compression agreement.agreements. Under the 2019 gathering and compression agreement and the Marcellus gathering and compression agreement, Antero Resources may sell, transfer, convey, assign, grant, or otherwise dispose of dedicated properties free of the dedication, provided that the number of net acres of dedicated properties so disposed of, when added to the number of net acres of dedicated properties previously disposed of free of the dedication since the effective date of the agreement, does not exceed the aggregate number of net acres of dedicated properties acquired by Antero Resources since such effective date. Accordingly, under certain circumstances, Antero Resources may dispose of a significant number of net acres of dedicated properties free from dedication without Antero Midstream’s consent. After the completion of the initial term, which, as described below, was extended to November 2038, the 2019 gathering and compression agreement will continue in effect from year to year until such time as the agreement is terminated, effective upon an anniversary of the effective date of the agreement, by either Antero Midstream or Antero Resources on or before the 180th day prior to the anniversary of such effective date. On February 23, 2018, the gathering and compression agreement was amended to make clarifying changes with respect to the consumer price index (“CPI”) and other associated fee adjustments.
On December 8, 2019, the 2019 gathering and compression agreement was amended such that, Antero Midstream will rebate Antero Resources: (i) $12 million for each quarter in 2020 that Antero Midstream receives gathering fees on average daily volumes in excess of certain thresholds; and; (ii) for each quarter in 2021, 2022 and 2023 (a) $12.0 million for each quarter that the Antero Midstream receives gathering fees on average daily volumes between 2,900 MMcfe/d and 3,150 MMcfe/d, (b) $15.5 million for each quarter that Antero Midstream receives gathering fees on average daily volumes between 3,150 MMcfe/d and 3,400 MMcfe/d, and (c) $19.0 million for each quarter that Antero Midstream receives gathering fees on average daily volumes exceeding 3,400 MMcfe/d. Such amendment also extended the original 20-year initial term by four years to 2038. Antero Resources achieved the threshold in all such thresholds in 2020 four quarters of 2022 and the first quarter of 20212023 and received $48 million andearned $12 million respectively, in such periodseach period from Antero Midstream. ProcessingFor the year ended December 31, 2022, Antero Midstream received approximately $738 million in fees under the gathering and compression agreements.
ProcessingOn February 6, 2017, a joint venture was formed between Antero Midstream and MarkWest Energy Partners, L.P. (“MarkWest”), a wholly owned subsidiary of MPLX, LP (the “Joint Venture”), to develop processing and fractionation assets in Appalachia. Antero Midstream and MarkWest each own a 50% interest in the Joint Venture and MarkWest operates the Joint Venture assets. The Joint Venture assets consist of processing plants in West Virginia and a one-third interest in a recently commissioned MarkWest fractionator in Ohio. Pursuant to a gas processing agreement between Antero Resources and MarkWest, MarkWest has agreed to process gas from acreage dedicated by | - 2023 Proxy Statement70 |
Antero Resources for a fee. MarkWest has entered into a separate agreement with the Joint Venture whereby the Joint Venture has agreed to perform gas processing services with respect to certain volumes on behalf of MarkWest in exchange for the gas processing fees that MarkWest receives from Antero Resources in connection with such volumes (the “MW-JV Arrangement”). During the year ended December 31, 2020,2022, the Joint Venture derived approximately $228$258 million of revenues from Antero Resources under the MW-JV Arrangement. In addition, on February 6, 2018, Antero Resources and MarkWest entered into an agreement pursuant to which MarkWest agreed to address certain regulatory matters related to expansions at one of MarkWest’s processing sites, and if certain conditions are not met, Antero Resources has agreed to make reimbursement payments for such work directly to the Joint Venture. | - 2021 Proxy Statement59
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Right of First Offer Agreement On November 10, 2014, Antero Resources entered into a right of first offer agreement with Antero Midstream for gas processing services pursuant to which Antero Resources agreed, subject to certain exceptions, not to procure any gas processing or NGLs fractionation services with respect to Antero Resources’ production (other than production subject to a pre-existing dedication) without first offering Antero Midstream the right to provide such services. On February 6, 2017, in connection with the formation of the Joint Venture, Antero Resources and Antero Midstream amended and restated the right of first offer agreement to, among other things, amend the list of conflicting dedications set forth in such agreement to include the gas processing arrangement between Antero Resources and MarkWest. On February 13, 2018, Antero Resources and Antero Midstream further amended and restated the right of first offer agreement to make certain clarifying changes to reflect the original intent of the agreement. Water Services Agreement On September 23, 2015, Antero Resources entered into a water services agreement with Antero Midstream, pursuant to which Antero Midstream agreed to provide through certain of its subsidiaries certain water handling and treatment services to Antero Resources within an area of dedication in defined service areas in Ohio and West Virginia, and Antero Resources has agreed to pay fees for those services on a monthly basis. The initial term of the water services agreement is twenty years, automatically renewable from year to year thereafter. Under the water services agreement, Antero Resources committed to pay a fee on a minimum volume of fresh water deliveries through 2019, which commitments have since expired in accordance with the terms of the water services agreement. Fees payable to Antero Midstream under the water services agreement are based on the volume of fresh water delivered thereunder and the services provided by Antero Midstream thereunder. Antero Resources also agreed to pay Antero Midstream a fixed fee per barrel for wastewater treatment at Antero Midstream’s wastewater treatment facility, which was idled in the third quarter of 2019, and a fee per barrel for wastewater collected in trucks owned by Antero Midstream, in each case subject to annual CPI-based adjustments. In addition, Antero Midstream contracts with third-party service providers to provide Antero Resources other fluid handling services including flow back and produced water services and Antero Resources will reimburse Antero Midstream for its third-party out-of-pocket costs plus 3%. In addition to the foregoing, Antero Midstream has the right to elect to be paid for certain services under the water services agreement on a cost of service basis designed to generate a specified rate of return. For the year ended December 31, 2020,2022, Antero Midstream received approximately $260$245 million in fees under the water services agreement. Under the water services agreement, Antero Resources may sell, transfer, convey, assign, grant, or otherwise dispose of dedicated properties free of the dedication, provided that the number of net acres of dedicated properties so disposed of, when added to the number of net acres of dedicated properties previously disposed of free of the dedication since the effective date of the agreement, does not exceed the aggregate number of net acres of dedicated properties acquired by Antero Resources since such effective date. Accordingly, under certain circumstances, Antero Resources may dispose of a significant number of net acres of dedicated properties free from dedication without Antero Midstream’s consent. | - 2023 Proxy Statement71 |
On February 12, 2019, Antero Resources and Antero Midstream amended and restated the water services agreement to, among other things, make certain clarifying changes with respect to the CPI and the associated adjustments to the fees Antero Midstream will receive from Antero Resources under the water services agreement. | - 2021 Proxy Statement60
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Secondment Agreement In 2019, Antero Midstream entered into the Amended and Restated Secondment Agreement with Antero Resources. Under this agreement, Antero Resources agreed to provide seconded employees to us or one of our respective direct or indirect subsidiaries to perform certain operational services with respect to the gathering and compression, processing, and NGLs fractionation facilities and water assets, including serving as common paymaster with respect to the seconded employees, and we agreed to reimburse Antero Resources for expenditures Antero Resources incurs performing those operational services. The initial term of the agreement runs through November 2034, automatically renewable from year to year thereafter. For the year ended December 31, 2020,2022, Antero Midstream reimbursed Antero Resources for approximately $7$13 million of direct and indirect costs and expenses incurred on our behalf pursuant to the secondment agreement. Services Agreement In 2019, Antero Midstream entered into the Second Amended and Restated Services Agreement with Antero Resources, pursuant to which Antero Resources agreed to provide certain corporate, general and administrative services to Antero Midstream, including serving as common paymaster, in exchange for reimbursement of any direct and indirect costs and expenses associated with providing such services. The initial term of this agreement runs through November 2034, automatically renewable from year to year thereafter. For the year ended December 31, 2020,2022, Antero Midstream reimbursed Antero Resources for approximately $25$31 million of direct and indirect costs and expenses incurred on our behalf pursuant to the services agreement. License Pursuant to a license agreement with Antero Resources, Antero Midstream has the right to use certain Antero Resources-related names and trademarks in connection with the operation of its midstream business. | - 2023 Proxy Statement72 |
Other Agreements From time to time, in the ordinary course of business, Antero Midstream participates in transactions with Antero Resources and other third parties in which Antero Midstream may be deemed to have a direct or indirect material interest. These transactions include, among other things, agreements that address the provision of midstream services and receipt of contract operating services; the purchase of fuel for use in Antero Midstream’s operations; the release of midstream service dedications in connection with acquisitions, dispositions or exchanges of acreage; consent to the extension of existing services being provided by third parties; the construction of certain pipelines and facilities; and the acquisition of assets and the assumption of liabilities by us, our subsidiaries and our unconsolidated affiliates. While certain of these transactions are not the result of arm’s-length negotiations, we believe the terms of each of the transactions are, and specifically intend the terms to be, generally no more or less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar transactions. During the year ended December 31, 2020,2022, Antero Midstream paid $8received an aggregate of $12.7 million in expenses and receivedmade no payments in connection with such transactions. Employment Timothy Rady, Senior Vice President—Land of Antero Midstream and the son of Paul M. Rady, the Chairman, and Chief Executive Officer and President of Antero Midstream, provided services to us in 2020.2022. Total compensation paid to Timothy Rady and allocated to Antero Midstream in 20202022 consisted of base salary, bonus and other benefits totaling $96,638$148,247 and award grants under the AM LTIP having an aggregate grant date fair value of $248,458,$524,994, which are subject to certain time-based vesting conditions. | - 20212023 Proxy Statement 6173 |
QUORUM AND VOTING Voting Stock Antero Midstream’s common stock is the only outstanding class of securities that entitles holders to vote generally at meetings of Antero Midstream’s stockholders. Each share of common stock outstanding on the record date entitles the holder to one vote at the Annual Meeting. Stockholders do not have the right to cumulate their votes for election of Directors. Holders of shares of Series A Preferred Stock are not entitled to vote such shares at the Annual Meeting. Quorum The presence, in person, online or by proxy, of the holders of a majority in voting power of the votes eligibleoutstanding shares entitled to be castvote at the Annual Meeting is necessary to constitute a quorum. Abstentions and broker non-votes (described below) will be counted for purposes of determining whether a quorum is present at the Annual Meeting. If a quorum is not present, the chairman has the power to adjourn the Annual Meeting from time to time, without notice other than an announcement at the Annual Meeting, until a quorum is present. At any annual meeting reconvened following an adjournment at which a quorum is present, any business may be transacted that might have been transacted at the annual meeting as originally scheduled. Stockholder List Antero Midstream will maintain at its corporate offices in Denver, Colorado a list of the stockholders entitled to vote at the Annual Meeting. The list will be open to the examination of any stockholder, for purposes germane to the Annual Meeting, during ordinary business hours for ten days before the Annual Meeting. In addition, the list of stockholders will be available during the Annual Meeting through the meeting website. Vote Required Only stockholders of record at the close of business on April 20, 2021,17, 2023, have the right to vote at the Annual Meeting. The proposals at the Annual Meeting will require the following votes: | Proposal | | Vote required | | Voting options | | Can brokers vote without
instructions? | | Effect of abstentions,
withheld votes and | Proposal | | Vote required | | Voting options | | instructions? | | broker
non-votes | | Election of directors | | Each nominee must receive a plurality of the votes cast | | For all nominees
Withhold authority for all nominees
For all except | | No | | None.Withheld votes will not have any effect.*
Broker non-votes will not have any effect. | | Ratification of the selection of the independent registered public accounting firm | | Affirmative vote of the holders of a majority of the voting power of the shares counted as present in person, online or represented by proxy at the meeting and entitled to vote on the matter | | For
Against
Abstain | | Yes | | Abstentions will have the effect of a vote “against.” There should not be broker non-votes. | | Advisory approval of the compensation of the Named Executive Officers | | Affirmative vote of the holders of a majority of the voting power of the shares counted as present in person, online or represented by proxy at the meeting and entitled to vote on the matter | | For
Against
Abstain | | No | | Abstentions will have the effect of a vote “against.” Broker non-votes will not have any effect. | | Amendment to Antero’s certificate of incorporation to reflect officer exculpation | | Affirmative vote of the holders of 66 2/3% of the outstanding shares entitled to vote thereon | | For
Against
Abstain | | No | | Abstentions and broker non-votes will have the effect of a vote “against.” |
| * | Votes that are “withheld” from a director’s election will not affect the outcome of the vote on the election of a director. However, for a discussion of our Majority Vote Director Resignation Policy, please see “Corporate Governance—Majority Vote Director Resignation Policy.” |
| - 20212023 Proxy Statement 6274 |
An automated system that Broadridge Investor Communications Services administers will tabulate the votes. Brokers who hold shares in street name for customers are required to vote those shares in accordance with instructions received from the beneficial owners. NYSE Rule 452 restricts when brokers that are record holders of shares may exercise discretionary authority to vote those shares in the absence of instructions from beneficial owners. When brokers are not permitted to vote on a matter without instructions from the beneficial owner, and do not receive such instructions, the result is a “broker non-vote.” Default Voting A proxy that is properly completed and returned will be voted at the Annual Meeting in accordance with the instructions on the proxy. If you properly complete and return a proxy, but do not indicate any contrary voting instructions, your shares will be voted in accordance with the Board’s recommendations, which are as follows: | • | FOR the election of the three persons named in this Proxy Statement as the Board’s nominees for election as Class III directors; | | • | FOR the ratification of the selection of KPMG LLP as Antero Midstream’s independent registered public accounting firm for the fiscal year ending December 31, 2021;2023; and | | • | FOR the approval, on an advisory basis, of the compensation of Antero Midstream’s Named Executive Officers.Officers; and | | • | FOR the approval of an amendment to Antero’s Charter to reflect new Delaware law provisions regarding officer exculpation. |
If any other business properly comes before the stockholders for a vote at the Annual Meeting, your shares will be voted at the discretion of the holders of the proxy. The Board knows of no matters, other than those previously stated herein, to be presented for consideration at the Annual Meeting. Revoking Your Proxy Stockholders of record may revoke their proxy at any time before the electronic polls close by submitting a later-dated vote online via the Internet, by telephone or by mail; by delivering instructions to Antero’s Secretary before the Annual Meeting commences; or by voting online in person during the Annual Meeting. Beneficial stockholders may revoke any prior voting instructions by contacting the broker, bank, or other nominee that holds their shares prior to the Annual Meeting or by voting online during the meeting. Solicitation ExpensesWe will bear all costs incurred in the solicitation of proxies, including the preparation, printing and mailing of the Notice of Annual Meeting and Proxy Statement and the related materials. In addition to solicitation by mail, our directors, officers and employees may solicit proxies personally or by telephone, e-mail, facsimile or other means, without additional compensation. We have retained MacKenzie Partners, Inc. (“MacKenzie”) to aid in the solicitation of proxies for an estimated fee of approximately $17,500 and the reimbursement of out-of-pocket expenses. We have also agreed to indemnify MacKenzie and its representative against certain losses that arise or relate to MacKenzie’s engagement for the solicitation of proxies. Copies of the Annual Report Upon written request, we will provide any stockholder, without charge, a copy of the Form 10-K, but without exhibits. Stockholders should direct requests to Antero Midstream Corporation, 1615 Wynkoop Street, Denver, Colorado 80202. Our Form 10-K and the exhibits filed or furnished therewith are available on our website, www.anteromidstream.com, in the “SEC Filings” subsection of the “Investors” section. | - 20212023 Proxy Statement 6375 |
ADDITIONAL INFORMATION Proxy Materials, Annual Report and Other Information The Notice of Annual Meeting of Stockholders and Proxy Statement, along with Antero Midstream’s Annual Report on Form 10-K for the year ended December 31, 2020,2022, filed with the SEC on February 17, 2021,15, 2023, and Antero Midstream’s 20202022 Annual Report to Stockholders are available free of charge at www.anteromidstream.com in the “SEC Filings” subsection under the “Investors” section. These materials do not constitute a part of the proxy solicitation material. Stockholders Sharing an Address Each registered stockholder (meaning you own shares in your own name on the books of our transfer agent, American Stock Transfer and Trust Company LLC) will receive one Notice of Internet Availability (the “Notice”) per account, regardless of whether you have the same address as another registered stockholder. If your shares are held in “street name” (that is, in the name of a bank, broker or other holder of record), applicable rules permit brokerage firms and Antero Midstream, under certain circumstances, to send one Notice to multiple stockholders who share the same address. This practice is known as “householding.” Householding saves printing and postage costs by reducing duplicate mailings. If you hold your shares through a broker, you may have consented to reducing the number of copies of materials delivered to your address. If you wish to revoke a previously granted “householding” consent, you must contact your broker. If your household is receiving multiple copies of the Notice and you wish to request delivery of a single copy, you should contact your broker directly. Stockholder Proposals and Director Nominations for the 20222024 Annual Meeting Stockholder Proposals for Inclusion in the 2024 Proxy Statement. Any stockholder desiring to present a proposal at Antero Midstream’s 20222024 Annual Meeting of Stockholders and to have the proposal included in Antero Midstream’s related proxy statement pursuant to Rule 14a-8 must send the proposal to Antero Midstream, c/o Yvette K. Schultz, at 1615 Wynkoop Street, Denver, Colorado, 80202, so that it is received no later than December 28, 2021.29, 2023. All such proposals should be in compliance with SEC rules and regulations. Antero Midstream will only include in its proxy materials those stockholder proposals that it receives before the deadline and that are proper for stockholder action. Stockholder Proposals and Director Nominations for Presentation at the 2024 Annual Meeting But Not for Inclusion in 2024 Proxy Statement. In addition, any stockholder entitled to vote at Antero Midstream’s 20222024 Annual Meeting of Stockholders may propose business (other than proposals to be included in Antero Midstream’s proxy materials) and director nominees to be included on the agenda of, and properly presented for action at, the 20222024 Annual Meeting of Stockholders if written notice of such stockholder’s intent is given in accordance with the requirements of Antero Midstream’s bylaws and SEC rules and regulations. Any such proposal must be submitteddelivered in writing at the address shown abovepreviously in this section so it is received between February 17, 2022,6, 2024 and March 19, 2022.8, 2024; provided, however, that in the event that the date of Antero Midstream’s 2024 Annual Meeting of Stockholders is more than 30 days before or more than 60 days after the first anniversary date of this year’s Annual Meeting, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to the date of Antero Midstream’s 2024 Annual Meeting of Stockholders and not later than the close of business on the later of the 90th day prior to Antero Midstream’s 2024 | - 20212023 Proxy Statement 6476 |
Annual Meeting of Stockholders or, if the first public announcement of the date of Antero Midstream’s 2024 Annual Meeting of Stockholders is less than 100 days prior to the date of Antero Midstream’s 2024 Annual Meeting of Stockholders, the 10th day following the day on which public announcement of the date of Antero Midstream’s 2024 Annual Meeting of Stockholders is first made by the Company. Stockholder Proxy Solicitation for Shareholder Director Nominees. Any stockholder who intends to solicit proxies in support of any director nominees must comply with the content requirements of SEC Rule 14a-19 (the SEC’s universal proxy rule) at the time it complies with the earlier deadlines in the Company’s advance notice provisions of its bylaws. Thus, if a stockholder intends to solicit proxies in support of any director nominees submitted under the advance notice provisions of the Company’s bylaws for Antero Midstream’s 2024 Annual Meeting of Stockholders, then such stockholder must also provide proper written notice that sets forth all the information required by SEC Rule 14a-19 to the address shown previously in this section so that it is received between February 6, 2024 and March 8, 2024; provided, however, that if Antero Midstream’s 2024 Annual Meeting of Stockholder is called for a date that is more than 30 days before or more than 60 days after the first anniversary date of this year’s Annual Meeting, to be properly brought, timely notice by the stockholder must be so delivered not earlier than the close of business on the 120th day prior to the date of Antero Midstream’s 2024 Annual Meeting of Stockholders and not later than the close of business on the later of the 90th day prior to Antero Midstream’s 2024 Annual Meeting of Stockholders or, if the first public announcement of the date of Antero Midstream’s 2024 Annual Meeting of Stockholders is less than 100 days prior to the date of Antero Midstream’s 2024 Annual Meeting of Stockholders, the 10th day following the day on which public announcement of the date of Antero Midstream’s 2024 Annual Meeting of Stockholders is first made by the Company. Further, in the event that Antero Midstream’s 2024 Annual Meeting of Stockholders is called for a date that is more than more than 30 days but less than 60 days after the first anniversary date of this year’s annual meeting date, to be properly brought, the notice by the stockholder must be received no later than the close of business on the later of the 60th day prior to the date of Antero Midstream’s 2024 Annual Meeting of Stockholders or the 10th day following the day on which public announcement of the date of Antero Midstream’s 2024 Annual Meeting of Stockholders is first made by the Company. | - 2023 Proxy Statement77 |
APPENDIX AAmendment to Certificate of IncorporationAdditions to the Charter pursuant to the Exculpation Amendment contemplated by Proposal No. 4 are indicated below by bold, underlined text. The full text of the Company’s currently applicable Certificate of Incorporation was filed as an exhibit to the Company Annual Report on Form 10-K with the SEC on February 15, 2023. The proposed Exculpation Amendment changes to the first and second paragraphs of Article NINTH are set forth below: NINTH: No director or officer of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as it now exists. In addition to the circumstances in which a director or officer of the Corporation is not personally liable as set forth in the preceding sentence, a director or officer of the Corporation shall not be liable to the fullest extent permitted by any amendment to the DGCL hereafter enacted that further limits the liability of a director or officer, as applicable. Any amendment, repeal or modification of this Article Ninth shall be prospective only and shall not affect any limitation on liability of a director or officer for acts or omissions occurring prior to the date of such amendment, repeal or modification. | - 2023 Proxy Statement78 |
 
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