VALERO ENERGY CORP/TX appointed new CEO

Item 5.02 
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. 


Leadership Transition 

On May 9, 2023, Valero Energy Corporation ("Valero," or the "Company") announced the following changes, each of which will take place effective as of the close of business on June 30, 2023 (the "Transition Date"): 


- 
Joseph W. Gorder, Valero's Chief Executive Officer and Chairman of the board of directors of Valero (the "Board") will retire from his position as Chief Executive Officer and will become Executive Chairman of the Board. 


- 
R. Lane Riggs, Valero's President and Chief Operating Officer will become Chief Executive Officer and President and a member of the Board. 


With the election of Mr. Riggs to the Board on the Transition Date, the size of Valero's Board will be increased to 12 directors effective as of the Transition Date. Mr. Riggs was not appointed to any committees of the Board. 

Any information with respect to Mr. Riggs required to be disclosed under Items 401(b), (d), (e) and Item 404(a) pursuant to Item 5.02(c)(2) of Form 8-K has been included in Valero's proxy statement filed with the Securities and Exchange Commission on March 22, 2023. 

Compensatory Arrangements. 

As employees of Valero, Mr. Gorder and Mr. Riggs will receive no additional compensation for their service as a member of the Board. 

In connection with the transition of Mr. Gorder and the promotion of Mr. Riggs, the Board approved the compensation changes below. 

Mr. Riggs: 


- 
annualized base salary beginning on July 1, 2023, will be increased to $1,425,000; 


- 
bonus target percentage will be increased to 160% for the final six months of 2023, resulting in a full-year 2023 bonus target that reflects a blend of Mr. Riggs's (i) current base salary and bonus target for the first six months of 2023 and (ii) increased annualized base salary of $1,425,000 beginning on July 1, 2023 and the increased bonus target of 160% for the final six months of 2023; and 


- 
long-term incentive ("LTI") award target percentage will be 700% beginning on July 1, 2023. 


Mr. Riggs will also be granted a transitional LTI award on July 1, 2023, valued at $2,031,250, which represents the difference between (i) Mr. Riggs's LTI target value for the first half of 2023 plus his LTI target value for the second-half of 2023, and (ii) the $5,912,500 grant value of Mr. Riggs's February 23, 2023 LTI grant. Mr. Riggs's transitional LTI grant to be made on July 1, 2023, will consist of 50% restricted shares and 50% performance shares, with the number of shares to be granted based on the average closing stock price over the 15 consecutive trading days ending on the trading day immediately preceding the grant date. The restricted stock to be granted will vest ratably over three years on the anniversary dates of the grant date with all other terms and conditions the same as the February 23, 2023 grant of restricted stock to Mr. Riggs. The performance shares to be granted will use the same terms, conditions, and vesting schedule as utilized for the February 23, 2023 grant of performance shares to Mr. Riggs. 

Mr. Gorder: 


- 
annualized base salary beginning on July 1, 2023, will be decreased to $1,080,000; and 


- 
full-year 2023 bonus target will reflect a blend of Mr. Gorder's (i) current base salary for the first six months of 2023 and (ii) decreased annualized base salary of $1,080,000 beginning on July 1, 2023, for the final six months of 2023. 


No changes were made to Mr. Gorder's bonus target percentage or LTI target percentage. 

Director Retirement 

Additionally, as previously announced, effective May 9, 2023, director Philip J. Pfeiffer retired from the Board in accordance with the terms of Valero's director retirement policy.