PES Holdings seeks approval of $20 million executive incentive program

By Caroline Salls

Pittsburgh, Nov. 25 – PES Holdings, LLC is seeking court approval to implement a $20 million key employee incentive program, according to a motion filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

“The ultimate success of the debtors’ Chapter 11 cases and maximization of value for the debtors’ constituents is heavily reliant on the debtors’ senior management team,” the motion said.

“Simply put, the debtors’ management team is the driving force behind the restructuring; the level of value in the estate will rise and fall with their efforts.”

According to the motion, the KEIP participants will earn a premium of $2.5 million if the company secures confirmation of a plan of reorganization within 15 months of the bankruptcy filing date.

That plan success fee and the amount of net proceeds realized from the sale of PES’s assets will contribute to the $20 million KEIP budget.

To earn any payment, PES must either confirm a plan within the success fee timeline and/or realize net proceeds that reach a threshold of $300 million.

For every additional, incremental dollar of net proceeds realized over the threshold, 2.5% will be allocated to the budget.

The company said the KEIP participants are separated into six separate ranges, based on varying levels of responsibility.

Specifically, chief executive officer Mark Smith will earn 29% of the budget, executive chair Mark Cox 25%, chief financial officer and treasurer Rachel Celiberti 18%, executive vice president, regulatory affairs counsel John McShane 6%, vice president of strategy and corporate development Mark Brandon 4% and vice president and refining complex general manager Daniel Statile 4%.

PES subsidiary Philadelphia Energy Solutions is a Philadelphia-based owner and operator of the Philadelphia refinery complex. The company filed bankruptcy on July 21 under Chapter 11 case number 19-11626.

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