FIRSTENERGY CORP
For the period ended May 22, 2024. Filed Mar 29, 2024.
View on SEC.govAbout this filing
What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
May 22, 2024 · Filed Mar 29, 2024
Use the contents to explore the available documents and sections.
Contents
PROXY STATEMENT SUMMARY Proxy Statement Summary
Proxy Statement Summary
2024 Annual Meeting of Shareholders (the “Annual Meeting” or the “Meeting”)
| ◾ | Time and Date: 8:00 a.m. EDT on Wednesday, May 22, 2024 |
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| ◾ | Location: The Annual Meeting will be a virtual meeting of shareholders, conducted via live webcast, and will take place at: www.cesonlineservices.com/fe24_vm. Online access will begin at 7:30 a.m. EDT on May 22, 2024. |
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| ◾ | Record Date: March 25, 2024 |
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| ◾ | Voting: Shareholders of FirstEnergy Corp. common stock as of the Record Date are entitled to receive the Notice of Annual Meeting of Shareholders and they or their proxy holders may vote their shares at the Annual Meeting. |
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| ◾ | Admission: If you plan to attend the Annual Meeting, you must register in advance. Registration instructions are available in the Questions and Answers section of the accompanying Proxy Statement, under the heading, “Attending the Virtual Annual Meeting.” Shareholders may only participate online and must pre-register to vote and ask questions at the virtual Annual Meeting. |
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VOTING MATTERS
| Item 1 | Elect the 10 nominees named in this Proxy Statement to the Board of Directors (“Board”). Refer to page 33 for more detail. | Item 3 | Approve on an advisory basis named executive officer compensation. Refer to page 35 for more detail. | ||||
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| ✓ | Your Board recommends you voteFOR the election of all the nomineeslisted in this Proxy Statement. | ✓ | Your Board recommends you voteFOR this item. | ||||
| Item 2 | Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2024. Refer to page 34 for more detail. | Items 4 - 6 | Shareholder proposals. Refer to page 36-44 for more detail. | ||||
| ✓ | Your Board recommends you voteFOR this item. | X | Your Board recommends you voteAGAINST each of these items. |
| 6 | FIRSTENERGY CORP. |
| ProxySummary | CorporateGovernance & Board of Directors | Items to BeVoted On | Commitments to EESG | Executive & Director Compensation | Other Important Matters / Q&A |
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HOW TO CAST YOUR VOTE
Your vote is important! Even if you plan to attend our Annual Meeting virtually, please cast your vote as soon as possible by:
| Do you hold shares directly with FirstEnergy or in the FirstEnergy Corp. Savings Plan? | |||
| INTERNET | |||
| Use the internet at www.cesvote.com | Mail by returning your proxy card/voting instruction form(1) | ||
| TELEPHONE | DURING THE MEETING | ||
| Call toll-free at 1-888-693-8683 | This year’s meeting will be virtual. For details on voting your shares during the meeting, see “Questions and Answers about the Annual Meeting.” | ||
| (1) If your pre-addressed envelope is misplaced, send your proxy card to Corporate Election Services, Inc., the Company’s independent proxy tabulator and Inspector of Election. The address is FirstEnergy Corp., c/o Corporate Election Services, P.O. Box 1150, Pittsburgh, PA 15230. | |||
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| Do you hold shares through a bank, broker or other institution (beneficial ownership)?(2) | ||
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| Use the internet atwww.proxyvote.com | Call toll-free at1-800-454-8683 | Mail by returning your proxycard/voting instruction form |
| (2) Not all beneficial owners may be able vote at the web address and phone number provided above. If your control number is not recognized, please refer to your voting instruction form for specific voting instructions. | ||
Please follow the instructions provided on your proxy card/voting instruction form (the “proxy card”), Notice of Internet Availability of Proxy Materials, or electronic or other communications included with your proxy materials. Shareholders as of the March 25, 2024, Record Date may attend the virtual Annual Meeting and vote if registered in advance by following the Advance Registration Instructions below. Refer to the “Questions and Answers about the Annual Meeting” section below for more details, including the Advance Registration Instructions and questions 2, 13 and 15.
If you have multiple accounts, you may receive more than one proxy card or voting instruction form and related materials. Please vote each proxy card and voting instruction form that you receive.
| 2024 PROXY STATEMENT | 7 |
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| ProxySummary | CorporateGovernance & Board of Directors | Items to BeVoted On | Commitments to EESG | Executive & Director Compensation | Other Important Matters / Q&A |
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Your Board Nominees
The following provides summary information about each nominee standing for election to your Board. Each member stands for election annually.
Your Board nominees are highly qualified individuals and represent a diversity of gender, ethnicity, age, tenure, thought, background and experiences. Your Board is periodically refreshed with the addition of candidates whom we believe bring new ideas and fresh perspectives into the boardroom.
| Heidi L. Boyd, 39 Independent Director Senior managing director of Blackstone Infrastructure Group | Jana T. Croom, 47 Independent Director Chief financial officer of Kimball Electronics, Inc. |
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| Paul Kaleta, 68 Independent Director Retired executive vice president andgeneral counsel at First Solar, Inc. | James F. O’Neil III, 65 Independent Director Former Chief executive officer and vice chairman of Orbital Infrastructure Group, Inc.Other public boards 1 |
| Leslie M. Turner, 66 Independent Director Retired senior vice president, general counsel and corporate secretary ofThe Hershey Company |
| 8 | FIRSTENERGY CORP. |
| ProxySummary | CorporateGovernance & Board of Directors | Items to BeVoted On | Commitments to EESG | Executive & Director Compensation | Other Important Matters / Q&A |
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| Steven J. Demetriou, 65 Independent Director Executive board chair of Jacobs Solutions Inc. Other public boards 2 | Lisa Winston Hicks, 57 Independent Director Lead Independent Director of FirstEnergy Corp. Retired board chairof MV Transportation, Inc. |
| John W. Somerhalder II, 68 Director Non-Executive Board Chair of FirstEnergy Corp. Previously Interim President andChief Executive Officer of FirstEnergy Corp. Other public boards 1 | Brian X. Tierney, 56 Director President and Chief ExecutiveOfficer of FirstEnergy Corp. |
| Melvin D. Williams, 60 Independent Director Retired president of Nicor Gas andretired senior vice president of Southern Company Gas |
OUR COLLECTIVE DIRECTOR NOMINEE SKILLS
| 2024 PROXY STATEMENT | 9 |
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| ProxySummary | CorporateGovernance & Board of Directors | Items to BeVoted On | Commitments to EESG | Executive & Director Compensation | Other Important Matters / Q&A |
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Key Board Corporate Governance Features
Your Board is committed to strong corporate governance, which we believe is important to the success of our business and in advancing shareholder interests. Highlights include:
| Independent Oversight | ◾ All directors are independent, other than our Non-Executive Board Chair and CEO ◾ The Board’s three primary standing committees are comprised entirely of independent directors ◾ Independent directors regularly hold executive sessions without management at Board and committee meetings |
| Board & Committee Oversight | ◾ Your Board and Committees regularly review material risks facing your Company and, through the Audit Committee, oversee your Company’s enterprise risk management practices ◾ The Audit Committee also provides oversight of risks related to financial statements and financial controls, cybersecurity regulatory compliance, the Office of Ethics and Compliance and the Internal Audit function ◾ The Operations and Safety Oversight Committee oversees the operational function of the Company, including operational cybersecurity risk ◾ Through the Governance, Corporate Responsibility and Political Oversight Committee, your Board oversees corporate citizenship practices, including the Political and Lobbying Action Plan, EESG and sustainability initiatives ◾ The Compensation Committee oversees the Company’s compensation philosophy, practices and human capital initiatives, and focuses on alignment between pay and performance ◾ Operations and Safety Oversight Committee oversees operational strategy including reliability, safety, cybersecurity risks and audits, as well as environmental practices and policies |
| Shareholder Rights & Accountability | ◾ Annual election of all directors ◾ Clear, effective process for shareholders to raise concerns to your Board ◾ Majority voting standard for uncontested director elections, with an accompanying Director Resignation Policy ◾ General majority voting threshold ◾ Direct investor relations and governance engagement and outreach to shareholders ◾ Advisory vote to approve named executive officer compensation held on an annual basis, consistent with the shareholder advisory vote on frequency ◾ Shareholders may nominate directors through proxy access ◾ Shareholders of 20% or more shares outstanding and entitled to vote may call a special meeting ◾ No poison pill |
| Board Practices | ◾ The Board balances directors’ skills, experiences, and perspectives with a mix of diverse characteristics, including gender, race and ethnicity, tenure and background ◾ The Board is comprised of 40% female directors and 50% diverse directors by gender, race and ethnicity combined. ◾ Actively seek to include in the director nominee pool candidates of diverse backgrounds, skills and experience, including highly qualified women and people of color ◾ A robust annual evaluation process, including full Board evaluation, Board committee evaluations and individual director evaluations ◾ Policy requiring directors who reach the age of 72 to tender their resignations to your Board to be effective upon acceptance by the Board ◾ Governance, Corporate Responsibility and Political Oversight Committee and full Board engage in rigorous director succession planning ◾ Extensive director orientation and continuing education ◾ Robust stock ownership guidelines ◾ Anti-Hedging and Anti-Pledging Policies |
Our corporate governance practices are described in greater detail in the “Corporate Governance and Board of Directors Information” section beginning on page 12.
| 10 | FIRSTENERGY CORP. |
| ProxySummary | CorporateGovernance & Board of Directors | Items to BeVoted On | Commitments to EESG | Executive & Director Compensation | Other Important Matters / Q&A |
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Executive Compensation Highlights
Under our compensation design, the percentage of pay that is based on performance increases as the responsibilities of a Named Executive Officer (“NEO”) increase. The charts below illustrate the mix of annualized base salary. 2023 target short-term incentive program (“STIP”) and target long-term incentive program (“LTIP”) awards for our NEOs. Approximately 89% of the President and CEO’s total target annual pay and 77% of our other NEOs’ (excluding Mr. Somerhalder) average annual target pay is variable and could be reduced to zero if performance metrics are not met at a minimum threshold level. For the NEOs who were serving as executive officers as of December 31, 2023, the values shown are effective as of December 31, 2023. The charts below exclude Mr. Somerhalder(1) due to the interim status of his role in 2023.
(1) During his role as Interim President and CEO (September 2022 to May 2023), Mr. Somerhalder’s pay mix for 2023 was made up of approximately 12% for base salary, 16% for target STIP award, and 72% for time-based restricted stock. Mr. Somerhalder’s pay mix in his former role is less variable than that of the other NEOs due to his interim status.
We believe that our executive compensation philosophy and practices align with the long-term interests of our shareholders and with commonly viewed best practices in the market.
| WHAT WE DO | Pay-for-performance ◾ LTIP(1) is 100% performance-based and at risk, with no solely time-based vesting requirements ◾ STIP is 100% at risk Threshold and caps on incentive awards: ◾ All STIP award payouts are contingent on achieving an Operating Earnings threshold, after accounting for the cost of the STIP payout ◾ Individual STIP awards capped at 200% (consistent with peer companies) ◾ Individual LTIP awards capped at 200% (consistent with peer companies) and capped at 100% if absolute Total Shareholder Return (“TSR”) over the performance period is negative Non-overlapping financial performance measures in our STIP and LTIP | Combination of absolute and relative performance goals Robust stock ownership guidelines Two distinct clawback policies with provisions for: ◾ Financial and reputational harm, and other detrimental activity ◾ Mandatory recoupment for financial restatement applying to current and former Section 16 Officers Mitigate undue risk through compensation design, corporate policies, and effective governance Annual Say-on-Pay vote Double-trigger change in control (“CIC”) provisions Compensation Committee comprised of only independent directors supported by an independent compensation consultant |
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| WHAT WE DON’T DO | No executive hedging or pledging is permitted No employment agreements No excise tax gross-up CIC provisions for our NEOs No excessive perquisites | No repricing of underwater stock options without shareholder approval (stock options are not currently used in plan design) No payment of dividend equivalents on unearned awards No payment of cash severance benefits above 2.99x base salary and target STIP |
(1) Excludes Mr. Somerhalder due to his interim status. For more details see the “Time-based Equity Award for Mr. Somerhalder” section.
Our executive compensation practices are described in greater detail in the “Executive Compensation” section of this proxy statement, beginning on page 55.
| 2024 PROXY STATEMENT | 11 |
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| ProxySummary | CorporateGovernance & Board of Directors | Items to BeVoted On | Commitments to EESG | Executive & Director Compensation | Other Important Matters / Q&A |
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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.