Tennessee Valley Authority

Compensation Discussion and Analysis

This Compensation Discussion and Analysis ("CD&A") provides information on the objectives, goals, and structure of TVA's executive compensation program and the 2024 compensation awarded to TVA's CEO, CFSO, and the three other most highly compensated executive officers serving at the end of 2024. Collectively, these officers are TVA's 2024 Named Executive Officers ("NEOs"):

Note

Mr. Thomas was named Executive Vice President and Chief Financial and Strategy Officer ("CFSO") in June 2021 and has held the Chief Financial Officer position since June 2010.

TVA's Executive Compensation Philosophy

TVA has a public mission - one that is uniquely focused on serving the people of the Tennessee Valley and making those lives better. TVA aims to achieve its mission by attracting, retaining, and motivating highly qualified and committed executives to guide the organization's strategy, performance, and public power mission. Given the nature and scale of its operations, TVA competes with large investor-owned utilities ("IOUs") to attract and retain talent.

To effectively fulfill its public power mission, TVA must provide market-based, competitive compensation levels to drive superior performance and execution of ambitious multi-year objectives aligned with TVA's public power mission.

TVA’s Compensation Plan as adopted by the TVA Board is designed to:

•Align compensation with TVA performance and productivity improvement.•Set performance goals that are aligned with TVA's strategic priorities - See 2024 Performance Goals and Performance Achievements.•Provide market-based, competitive compensation levels so TVA can attract, retain, and motivate highly competent employees. Total direct compensation ("TDC"), which includes annual cash and short- and long-term incentives, generally is set by considering several factors, including reference to the median (50th percentile) of the relevant labor market, as well as factors such as individual performance, experience, and internal equity. Executives may be positioned above or below the median based on labor market conditions and other factors such as tenure in the role. See Compensation Setting Process - Establishing Competitive Compensation - Use of Market Data and Benchmarking for a discussion of benchmarking practices and competitive compensation decisions at TVA.•Motivate and reward short-term and long-term performance by providing a mix of salary and performance-based short-term and long-term incentives, typically targeting a majority portion of long-term compensation in the form of at-risk, performance-based compensation.

The TVA Board follows the requirements of the TVA Act, which includes the approval of a compensation plan and other notable considerations:

•Compensation will be based on an annual survey of benchmark compensation for similar positions in private industry, including engineering and electric energy companies, publicly owned electric companies, and federal, state, and local governments; and

•Compensation will take into account education, experience, level of responsibility, geographic differences, and retention and recruitment needs.

Notable 2024 Actions

The following are key compensation actions and plan amendments for 2024:

TVA Executive Severance Plan

On January 26, 2024, TVA’s Executive Severance Plan ("Severance Plan") was amended and restated to eliminate the additional severance benefits available to NEOs and other participants in connection with a change in control of TVA. Following a review by the People and Governance Committee (the "Committee") and the TVA Board, it was determined that TVA's Severance Plan did not need to include change in control provisions to remain competitive with its peers, based on factors unique to TVA's public power model.

Compensation Board Practice, TVA Compensation Plan, and Supplemental Plans

On May 9, 2024, the TVA Board adopted the TVA Employee Compensation Board Practice (“Board Practice”) to clarify the roles and responsibilities of the TVA Board, the Committee, and management with respect to compensation matters. In addition, the TVA Board approved amended and restated versions of the TVA Compensation Plan and the following supplemental compensation plans to, among other things, reflect the principles set forth in the Board Practice: (1) Executive Annual Incentive Plan (“EAIP”), (2) Long-Term Incentive Plan (“LTIP”), (3) Severance Plan, (4) Supplemental Executive Retirement Plan, (5) Deferred Compensation Plan, and (6) Restoration Plan.

Three of the above supplemental plans (EAIP, LTIP, and Severance Plan) were amended and restated to reduce the amounts that TVA’s CEO may receive under these plans.

•Under both incentive plans (EAIP and LTIP), the potential maximum earned payout achievement was reduced from 200 percent to 150 percent of the CEO's target opportunity.

•Under the Severance Plan, the CEO's cash severance was reduced as a result of a change in the cash severance formula from (1) 1.5 times the sum of the CEO's salary and target EAIP to (2) 1.0 times the CEO's salary.

The above changes are a cumulative result of specific recommendations presented to the Committee by the Executive Compensation Task Force ("ECTF"), which was created in December 2023 and consisted of a subset of members of the TVA Board. The ECTF focused its review and subsequent recommendations on Board governance and oversight with respect to executive compensation, CEO participation in TVA plans, and management's process for communicating compensation matters to the Committee and Board regarding CEO payouts under TVA plans. The Committee believes the above changes are appropriate in light of TVA's public service mission.

Amendment to Compensation Board Practice

On August 22, 2024, the TVA Board approved amendments to the Board Practice adopted on May 9, 2024, to allow the CEO to approve compensation of his or her executive direct reports within ranges of total compensation that are approved annually by the Chair of the Committee. These amendments are designed to ensure that the TVA Board, through the Chair of the Committee, maintains appropriate oversight while allowing the CEO flexibility to implement his or her own compensation decisions.

TVA Board Actions Related to Compensation

On September 17, 2024, the TVA Board (1) established 2024 EAIP performance measures and goals for the CEO, (2) established 2025 corporate performance measures and goals for the Enterprise Scorecard for the Winning Performance Team Incentive Plan (“WPTIP”) and EAIP, (3) established performance measures and goals for the 2024-2026 and 2025-2027 performance cycles under the LTIP, and (4) approved amendments to the WPTIP and EAIP that would eliminate the use of the corporate multiplier and would authorize the TVA Board to utilize a standard discretionary range to adjust the scorecard achievement by plus or minus 20 percent beginning with the 2025 performance cycle. This standard discretionary range allows the TVA Board to account for extraordinary events or significant occurrences that impact TVA's performance.

TVA's Executive Compensation Program Aligns Pay with Performance

Two-thirds of the CEO's target TDC is performance-based and at risk, based on achievement of performance goals that further advance TVA's mission and strategic objectives. More than half of the other NEOs' target TDC opportunity is performance-based and at risk. This alignment of compensation with performance also results in compensation being aligned with value delivered to TVA's stakeholders, including LPCs, businesses, and communities, and to the economy of the Tennessee Valley.

Compensation Setting Process

Establishing Compensation and Governance Practices

The TVA Board, under the authority of the TVA Act, has responsibility for establishing compensation for TVA employees, including the NEOs. The TVA Board is directed under Section 2 of the TVA Act to establish a plan that specifies all compensation (such as salary and any other pay, benefits, incentives, or other form of remuneration) for the CEO and TVA employees. The TVA Act also provides that the TVA Board will annually approve all compensation (such as salary and any other pay, benefits, incentives, or other forms of remuneration) for all managers and technical personnel who report directly to the CEO (including any adjustments to compensation).

Under the authority of the TVA Act, the TVA Board, its Committee, and individual TVA Board members are all involved in compensation matters. The TVA Board has taken the following actions to delegate authority with respect to compensation:

Delegation to Committee

•Oversee executive compensation pursuant to the Compensation Plan.

•Review this CD&A and recommend approval to the TVA Board.

•Review and make critical recommendations to the TVA Board, as reflected in Compensation Setting Process - Compensation Setting - Annual Roles and Responsibility.

Delegation to TVA Committee Chair

•Establish annual performance goals of the CEO, with concurrence of the TVA Board Chair and input from other members of the TVA Board, as appropriate.

•Determine the CEO’s annual performance rating in accordance with the approved goals, with concurrence of the TVA Board Chair and input from other members of the TVA Board, as appropriate.

•Approve, with concurrence of the TVA Board Chair, the terms of any non-salary compensation benefits applicable to the CEO under supplemental compensation plans.

•Annually approve total compensation ranges for the CEO's executive direct reports following review by the Committee.

Delegation to CEO

•Following annual approval of total compensation ranges by the Committee Chair, set or adjust the total eligible compensation of the CEO's present or future executive direct reports within such ranges after informing the Committee's independent compensation consultant and the Committee Chair. The Committee Chair has discretion to reject any compensation actions proposed by the CEO pursuant to this section.

•Approve individual performance goals for the CEO's direct reports.

•Evaluate and rate the performance of the CEO's direct reports during the year against approved performance goals and adopt any individual multiplier, in consultation with the Committee. Review CEO direct reports' performance with the Committee, prior to finalizing end of year payout for the CEO's direct reports, and inform the Committee of any discretion under consideration. Determine final payouts under supplemental compensation plans after informing the Committee Chair and the Committee's independent compensation consultant.

•Approve, or delegate to others the authority to approve, the terms of supplemental compensation plans when the CEO is not a participant in the plan. The TVA Board retains the authority to amend or terminate supplemental compensation plans at its discretion.

•Approve, or delegate to others the authority to approve, the salaries of employees whose annual salaries would be in excess of Level IV of the Executive Schedule of the U.S. Government ($191,900 in 2024) for anyone except the CEO, the Inspector General, and the CEO direct reports (except to the extent described in the first bullet of this section), provided that the CEO provides the Committee a list of names and salaries of all such employees for its review at least once annually.

•Approve, or delegate to others the authority to approve, all compensation matters that are not specifically reserved to the TVA Board, a member of the TVA Board, or the Committee.

Role of Compensation Consultant

The Committee engaged the independent consulting firm Frederic W. Cook & Co., Inc. ("FW Cook") to help with evaluating TVA’s 2024 competitive compensation decisions, peer group, and benchmarking processes. The Committee assessed certain independence factors and determined the firm's work raised no potential conflict of interest. In June 2024, the TVA Board engaged Meridian Compensation Partners (“Meridian”) to perform services previously provided by FW Cook, who ceased providing services to the TVA Board in June 2024.

Compensation Setting– Annual Roles and Responsibilities

The following chart sets forth the roles of the TVA Board, Board Chair, Committee, Committee Chair, and CEO, and typical timeframe, in setting compensation for the NEOs.

Establishing Competitive Compensation

A fundamental goal of TVA's executive compensation program is to attract, retain, and motivate the highly competent talent necessary to manage TVA's complex operations and achieve superior performance. TVA competes for this talent with large IOUs, and thus TVA needs to offer compensation programs that are competitive with those peers.

Use of Market Data and Benchmarking

TVA generally determines target TDC for executives considering the median of the relevant labor market as well as other factors such as individual performance, experience, and internal equity.

After compiling market compensation for the positions at the beginning of 2024, the Committee, with assistance from FW Cook, used the information to:

•Assess target compensation level and incentive opportunity competitiveness; and

•Determine appropriate target compensation levels and incentive opportunities to maintain the desired degree of market competitiveness.

The relevant labor market for most of TVA's executives, including the NEOs, consists of both private and publicly-owned companies in the energy services industry that have similar revenue and scope as TVA. The process for gathering and analyzing information about executive compensation in the relevant labor market is as follows:

•Each year, the Committee's compensation consultant recommends a relevant labor market peer group for approval by the Committee. For 2024 compensation opportunities, TVA's market data was determined based on a review of executive compensation survey data and/or public proxy statement data for members of this peer group.

•For the survey-based analysis, TVA referenced a sample from the 2023 Willis Towers Watson ("WTW") Energy Services Executive Compensation Database consisting of (1) 33 IOUs with revenue greater than or equal to $3.0 billion plus (2) 11 additional government/non-profit entities with revenue greater than or equal to $1.0 billion. Data from this sample were further regressed to TVA's size based on revenue.

•The survey analysis was supplemented with public compensation data from a separate proxy peer group of IOUs. The Committee reviews the proxy peers annually to ensure continued appropriateness, including comparable business content and model, company size measured primarily by revenue and assets, and other refining factors such as generating capacity, number of employees, and number of customers.

List of Compensation Peer Companies

The following chart outlines the companies that constituted the survey sample and proxy peer group used to benchmark NEO compensation for 2024:

Assessment of Risk

TVA's Enterprise Risk Management organization, in coordination with other members of TVA's management, including Human Resources, conducts an annual assessment of enterprise-level risks including risks arising from TVA's compensation policies and practices.

Based on the results of this assessment, norisks were identified with the compensation policies and practices that are reasonably likely to have a material adverse effect on the organization and its achievement of its strategic goals and objectives.

2024 Executive Compensation Program Components

Total Direct Compensation ("TDC")

In setting executive compensation each year, the Committee focuses on TDC, which includes those compensation elements that motivate future performance or reward past performance. TDC is comprised of annual salary, an annual incentive award under TVA’s EAIP, and an LTI award provided under TVA’s LTIP, which is delivered in two components, a Long-Term Performance (“LTP”) award and a Long-Term Retention (“LTR”) award.

Each year, two key compensation decisions are made with respect to NEO compensation: (1) the amount of the TDCopportunity to grant, which is forward-looking, incentivizes the NEO to perform, and is determined toward the beginning of the fiscal year, and (2) the amount of TDCearned, which rewards the NEO for demonstrated performance (other than salary or LTR award) and is determined at the end of the fiscal year. The TDC components and weightings for TDC opportunities granted to the NEOs in 2024 are summarized below and described in the sections that follow. Since TVA is a governmental entity that issues no equity, all direct compensation is denominated and paid out in cash.

Setting Competitive Compensation Amounts and Opportunities Relevant to Labor Market

Salary

Annual salary is considered a "fixed" compensation component. Salary levels are typically reviewed annually to consider changes in benchmark salaries and/or individual performance.

Note

(1) All salaries were effective October 1, 2023.

The 2024 salaries for the NEOs are reported in the Executive Compensation Tables and Narrative Disclosures - Summary Compensation Table.

Incentive Opportunities

The short- and long-term incentive opportunities for the NEOs are set at levels that (1) are competitive with the relevant labor market, with target TDC generally determined by considering the 50th percentile of the relevant labor market, and (2) result in a majority of each executive's total LTI opportunity in the form of performance-based awards and the remaining percent of each executive's total LTI opportunity in the form of retention awards. More than half of TVA's NEO's target TDC opportunity is performance-based and at-risk as described above in TVA's Executive Compensation Program Aligns Pay with Performance.

LTI awards are intended to provide a similar pay component as equity-based compensation at peer IOUs. Since TVA does not issue equity, the compensation program cannot provide a component similar to equity awards that capture long-term value, and have the potential for significant gains or losses, based on market fluctuations. As a result, TVA's LTIs are not necessarily intended to match market pay levels.

Target incentive opportunities increase with position scope and responsibility to hold management accountable for delivery of results and are based in part on the opportunities other companies in TVA's peer group provide to those in similar positions. Incentive opportunities are typically reviewed annually to consider changes in benchmark short- and long-term incentives. The Committee reviews peer benchmark information by position for each component of pay as well as for overall TDC.

Non-Direct Compensation Elements

Other Compensation

To recruit high-quality talent, TVA may offer recruitment awards as well as relocation assistance and reimbursement. These types of deferred cash incentive awards are intended to compensate the individuals for amounts they may have forfeited from their previous employer in order to join TVA and/or provide substitute compensation when the individual is not eligible to receive certain incentive payments until a future date.

Executive Severance Plan

TVA has established a Severance Plan to provide additional benefits to certain executives if TVA terminates the employment of covered executives other than for Gross Misconduct or such executives terminate for Good Reason. See Executive Compensation Tables and Narrative Disclosures - Executive Severance Plan below for additional information regarding the benefits available to covered executives under the Severance Plan as well as definitions of Gross Misconduct and Good Reason. Material changes in the Severance Plan were approved for 2024, as reflected above in Notable 2024 Actions.

Retirement Benefits

TVA provides its NEOs with retirement benefits through its qualified plans as well as through a non-qualified supplemental executive retirement plan ("SERP") in order to provide compensation beginning with retirement or termination of employment (if vesting requirements are satisfied), with enhanced compensation for certain executives to provide an additional incentive for hiring and retention of qualified individuals.

TVA sponsors a qualified defined benefit plan ("pension plan") and a qualified defined contribution plan ("401(k) plan"), which are administered by the TVA Retirement System ("TVARS"). The availability of, and level of benefits provided by, these qualified plans are comparable to similar qualified plans provided by companies in TVA's peer group.

In addition to its qualified retirement plans, TVA has a SERP for selected executives who are critical to the ongoing success of the enterprise. TVA's SERP is a non-qualified plan that provides supplemental retirement benefits at compensation levels that are higher than the limits specified by Internal Revenue Service ("IRS") regulations for qualified retirement plans. The provision of such non-qualified plans to executives is a common practice among companies in TVA's peer group. The purpose of the SERP is to:

•Provide a competitive retirement benefit level that cannot be delivered solely through TVA's qualified retirement plans due to IRS limitations, and

•Provide a benefit level (as a percentage replacement of pre-retirement pay) that is more comparable to that of employees who are not subject to the IRS limitations.

More information regarding these retirement benefits is found following the Pension Benefits Table.

Health and Other Benefits

TVA offers a group of health and other benefits (medical, dental, vision, life and accidental death and disability insurance, and long-term disability insurance) that are available to a broad group of employees. The NEOs are eligible to participate in TVA's health benefit plans and other non-retirement benefit plans on the same terms and at the same contribution rates as other TVA employees.

2024 Performance Goals and Performance Achievement

*Incentive compensation measures align with strategic priorities and are further described below in Executive Annual Incentive Plan ("EAIP") - 2024 EAIP Performance Measuresand Long-Term Incentive Plan ("LTIP").

Executive Annual Incentive Plan ("EAIP")

All TVA employees (including NEOs) participate in an annual, short-term incentive program (subject to eligibility requirements), since every employee contributes to the success of TVA and the execution of its public power mission. While the measures used for annual incentives are the same for all employees, they are provided under two plans: the WPTIP provides for annual incentive awards for eligible non-executives, and the EAIP provides for annual incentive awards for eligible executives, including the NEOs.

The EAIP is designed to encourage and reward executives for successfully achieving annual financial and operational goals. For 2024, the annual incentive payment for each NEO other than the CEO was calculated as follows:

The EAIP award for the CEO was calculated in the same manner as those awards for other NEOs except that the Scorecard Achievement range measured from 0 percent to 150 percent instead of 0 percent to 200 percent. See Notable 2024 Actionsfor additional information regarding this change.

Each component of this calculation is discussed below (except for annual salary, which is discussed above). The award for certain participants in the EAIP may be adjusted by the participant's supervisor based on an evaluation of the participant's individual achievements and performance during the year. In addition, pursuant to discretion granted under the TVA

Compensation Plan and EAIP, awards may be further adjusted by the TVA Board in its discretion. There is no guaranteed minimum payout under the EAIP, and the maximum payout for the EAIP cannot exceed 225 percent of the target award for all participants other than the CEO. For the CEO, the maximum payout cannot exceed 150 percent of the target award.

EAIP Target Incentive Opportunity

Following a review of benchmarking and individual performance, the TVA Board evaluated the appropriateness of the EAIP award opportunity for the CEO based on market data and other individual factors and made no changes for 2024. Similarly, the CEO evaluated the appropriateness of the EAIP award opportunities for the other NEOs based on market data and other individual factors, including internal parity, and made no changes for 2024. Accordingly, target EAIP award opportunities of the NEOs for 2024 were as follows:

Note

(1) Represents a percent of each NEO's salary.

2024 EAIP Performance Measures

EAIP performance measures tie directly to key enterprise metrics used by senior management in TVA's annual budget and strategic planning process, which in turn link directly to the achievement of TVA's mission and strategic priorities. The 2024 EAIP performance measures and goals were provided in an organizational scorecard ("TVA Enterprise Scorecard"). The 2024 performance measures, along with the weighting ascribed to each, are shown below as a percentage of the total EAIP award opportunity at target-level performance.

In setting the goal for each measure, consideration is given to TVA's historic performance, its strategic business plan priorities and strategic benchmarking goals, customer and stakeholder feedback, environmental and regulatory concerns and goals, and the competitive environment. Achievement of the target goal would result in a 100 percent payout with respect to that goal. A threshold goal is also set for each measure, so that no award payout would occur with respect to a measure when performance fails to achieve that threshold. Additionally, a stretch goal for each measure is set to incentivize and reward exceptional performance. Linear interpolation is used for results between threshold and stretch goals.

2024 Enterprise Scorecard and Corporate Multiplier Results

The performance results on the 2024 TVA Enterprise Scorecard are set forth below. TVA's Enterprise Scorecard is based on a scale of 0 percent to 200 percent for all participants other than the CEO and resulted in a 170 percent of target opportunity payout. For the CEO, TVA's Enterprise Scorecard is based on a scale of 0 percent to 150 percent and resulted in a 127.5 percent of target opportunity payout. TVA's Corporate Multiplier (described in the following section) has been used to determine final payout results.

ENTERPRISE SCORECARD PERFORMANCE(1)

Note

(1) The TVA Enterprise Scorecard sets forth performance goals of annual incentive plans applicable to both executive and non-executive employees.

Corporate Multiplier Approval

The TVA Board qualitatively assessed TVA’s performance at the end of the 2024 performance period. Based on TVA's performance with respect to the 2024 corporate multiplier measures and the overall performance described above, the TVA Board determined to apply a 1.0 multi plier to the calculated EAIP payout.

Corporate Multiplier Factors

Note

(1) "Jobs created" in the TVA fiscal year are newly created, paid positions at a facility of a TVA customer, meaning any entity that purchases power from TVA or a distributor of TVA power. "Jobs retained" are paid positions at a facility of a TVA customer that were created prior to the current TVA fiscal year and that continue to be filled in the current TVA fiscal year. See Part I, Item 1, Business — Economic Development Activities for additional information.

2024 CORPORATE MULTIPLIER MEASURES (0.0 – 1.1 MULTIPLIER)

Note

(1) Includes impact of partnership credits. Partnership credits are wholesale bill credits provided to LPC customers who have signed long-term Partnership Agreements with TVA. For more information, see Part I, Item 1, Business—Customers.

Individual Performance Multiplier Reinforces Pay for Performance

Annually, individual goals for the NEOs are established at the beginning of each performance cycle. These goals tie to the achievement of TVA's mission and strategic priorities.

At the end of the performance period, the CEO assesses the performance of the other NEOs and determines any individual multiplier, in consultation with the Committee. The CEO reviews his or her direct reports' performance with the Committee prior to finalizing end of year payouts for the CEO's direct reports, informs the Committee of any discretion under consideration, and determines final payouts after informing the Committee Chair and the Committee's independent compensation consultant.

For the CEO individual performance multiplier, each TVA Board member assesses the CEO's performance at the end of a performance period (fiscal year-end). Results of the assessment are provided to the Committee Chair who, with concurrence of the TVA Board Chair and input from other TVA Board members, determines the CEO's annual performance rating. The Committee then recommends to the full TVA Board payouts to the CEO under the EAIP. For each NEO, the individual performance multiplier can range between 0 percent to 150 percent of the calculated payout and can be used to reduce (multiplier below 100 percent) or increase (multiplier above 100 percent) the amount of the award.

For 2024, the NEOs were evaluated on individual performance goals and the following leadership competencies:

Award payouts under the 2024 EAIP are below and are reported in the "Non-Equity Incentive Plan Compensation" column in the Executive Compensation Tables and Narrative Disclosures— Summary Compensation Table. TVA's achievement against its Enterprise Scorecard, with approved corporate multiplier, is reflected below, as well as individual performance multipliers by NEO.

Notes

(1) This column reflects the percent of Enterprise Scorecard approved by the TVA Board. The EAIP Award for Mr. Lyash was calculated in the same manner as that of each NEO, except that his award was calibrated using a Scorecard Achievement range of 0 percent to 150 percent instead of 0 percent to 200 percent.

(2) The maximum EAIP payout for the CEO cannot exceed 150 percent of target. Mr. Lyash's individual performance multiplier of 100 percent was based on an evaluation of hisperformance during the fiscal year by the Committee and the TVA Board.

(3)The IPM for Mr. Thomas recognizes strong performance, with achievements at or near stretch for five key financial measures (TVA Total Spend, TFO, Operating Cash Flow, Net Income, and Non-Fuel Delivered Cost of Power). In addition, Financial Services exceeded the renewable and storage MW added metric, launched new interruptible products yielding 850 MW, and supported TVA efforts in bringing federal funding to the Valley and its stakeholders.

(4) The IPM for Mr. Moul recognizes operational performance above expectations, with achievements at stretch on three key operational measures. In addition, the Chief Operating Office maintained a zero SIIR for 2024 while also demonstrating year-over-year improvement in asset performance.

Long-Term Incentive Plan ("LTIP")

TVA executives, including the NEOs, participate in the company's LTIP. These individuals make decisions that significantly influence the development and execution of TVA's long-term strategic objectives. As such, awards under TVA's LTIP are designed to reward executives for sustainable success. Since long-term success is supported by a commitment to continued employment, the NEOs are incentivized to remain with the company through the vesting of the LTP awards and LTR awards, as discussed below.

For 2024 compensation decisions, the TVA Board and Mr. Lyash evaluated the appropriateness of the LTI award opportunities for the CEO and other NEOs, respectively. As a result, the values of the Total LTI grants (LTP awards at target and the LTR awards) were increased from 2023 levels, near market median, following a review of benchmarking and individual performance and reflective of increased tenure and experience. Accordingly, target LTI award opportunities of the NEOs for 2024 were as follows:

LTIP Grant and Vested Awards

TVA's executive compensation program provides for an annual LTP grant, which yields a vested award following a three-year performance period. During 2024, there were three overlapping LTP awards:

The performance measures and threshold, target, and stretch goals for each measure are determined annually by the TVA Board. In setting the goal for each measure, the TVA Board considers budgeted amounts in the company's approved business plans, actual performance in recent years, and level of attainment. The TVA Board also considers TVA's strategic business plan priorities and strategic benchmarking goals, customer and stakeholder feedback, environmental and regulatory concerns and goals, and the competitive environment.

Following the TVA Board's approval of performance achievement at the end of each three-year performance period, awards are paid out in cash early in the subsequent fiscal year, or upon death, disability, or retirement, as described in TVA's LTIP. For the 2022-2024 LTP award cycle, target performance provides for a 100 percent payout opportunity, performance below threshold provides for no payout, performance at threshold provides for a 50 percent payout opportunity, and performance at stretch provides for a 200 percent payout opportunity (for all eligible participants, except the CEO).

LTP Incentive awards for the CEO are calculated in the same manner except that the scorecard achievement ranges from 0 percent to 150 percent instead of 0 percent to 200 percent(see "Notable 2024 Actions"for additional information regarding change). Linear interpolation is used for results between threshold and stretch goals. The TVA Board may apply discretion, based on consideration of corporate factors and events that are significant during the Performance Cycle but not included or captured in the performance goals and performance measures, to reduce or increase the final LTP incentive awards for any or all participants as long as the final awards do not exceed the maximum amounts described above.

For the three-year performance period ended September 30, 2024, the TVA Board previously approved four overall TVA performance measures to be applied to all participants in the LTP. The 2022–2024 performance measures, along with the weighting ascribed to each, are shown below as a percentage of the total LTP award opportunity at target-level performance.

Consistent with its public power mission, TVA's LTP measures include the results of surveys that assess the external reputation and perception of TVA and TVA's effectiveness in carrying out its mission and strategic objectives. These measures reflect TVA's focus on meeting or exceeding customer expectations and identifying areas for continuous improvement.

2022–2024 LTP Award Performance Results

The performance results under the 2022-2024 TVA Long-Term Performance Scorecard are set forth below. TVA's LTP Scorecard is based on a range of 0 percent to 200 percent for all participants other than the CEO and resulted in a payout of 143 percent of target opportunity. For the CEO, TVA's LTP Scorecard is based on a scale of 0 percent to 150 percent, and resulted in anadjusted payout of 82 percent of target oppor tunity.

Notes

(1)Non-Fuel Delivered Cost of Power = (Non-Fuel Operating and Maintenance Expense + Base Capital Cost + Interest Expense + Other Expense) / Budgeted Electric Power Sales. For the 2022–2024 performance cycle, the Non-Fuel Delivered Cost of Power measure was calculated using an average of the 2022, 2023, and 2024 results.

(2)Load Not Served = (Percentage of Total Load Not Served) x (Number of Minutes in the Period). For the 2022–2024 performance cycle, the Load Not Served measure was calculated using an average of the 2022, 2023, and 2024 results.

(3)The External Performance Indicators for TVA Nuclear Fleet measure is calculated using a weighted combination of key performance indicators based on standard nuclear industry definitions for station performance, with the maximum obtainable being 100 points. For the 2022–2024 performance cycle, the External Performance Indicators for the TVA Nuclear Fleet measure was calculated using the 2024 results.

(4)The Powerful Partnerships Survey is conducted among customers, elected officials, business and economic development leaders, and the general public in the TVA service area to assess the strength of various stakeholder relationships with TVA. For the 2022–2024 performance cycle, the Powerful Partnerships Survey measure was calculated using an average of the 2022, 2023, and 2024 results.

In reviewing the 2022–2024 performance period, the TVA Board considered strong performance in two areas along with below threshold performance for External Performance Indicators for the TVA Nuclear Fleet and slightly below target performance for Powerful Partnerships Survey in 2024. Below are key highlights for this performance period:

ü Strong transmission grid system reliability performance

ü Financial performance

•Debt continued to be consistent with long-term financial plan

•Residential rates are lower than those paid by over 80% of customers of the top 100 U.S. utilities

•Industrial rates are lower than those paid by over 90% of customers of the top 100 U.S. utilities

ü Nuclear performance

•Browns Ferry Unit 1 achieved 50 years of operation

•Initiated the preservation of 8,232 MW of carbon free generation for a total of 80 years with approval of the Nuclear Life Extension Program

•Partnerships for advancing new technologies

•External Performance Indicators for TVA Nuclear Fleet performed below threshold for 2024

ü Customer relationships

•97% of 153 LPCs have signed 20-year Partnership Agreements with TVA

•Supporting federal funding opportunities

•Powerful Partnerships Survey - performed just below target for 2024 as TVA continues to actively engage stakeholders across the Tennessee Valley

ü Continued economic development efforts have been successful (2022-2024)

•Companies have announced $28.3 billion in projected investments

•Approximately 177,600 jobs (49,100 jobs expected to be created and 128,500 jobs expected to be retained)

In light of operational performance challenges during the three-year performance cycle of the LTIP and concerns regarding TVA's ability to manage costs in light of future financial needs, the TVA Board exercised discretion to adjust the calculated 2022-2024 LTP Award payout from 114 percent to 82 percent, which is 72 percent of the calculated payout, for Mr. Lyash. For the remaining participants other than the CEO, the TVA Board determined that the calculated payout appropriately reflected executive performance in executing on TVA's long-term priorities and did not exercise its discretion to adjust the calculated payout. Award payouts for NEOs are reported below and in the Executive Compensation Tables and Narrative Disclosures – Summary Compensation Table under "Non-Equity Incentive Plan Compensation."

Note

(1)Mr. Lyash's LTP award was calculated in the same manner as that of each NEO, except that his award was calibrated using a Scorecard Achievement range of 0 percent to 150 percent instead of 0 percent to 200 percent. For the CEO, the maximum LTP award is 150 percent of the LTP incentive target.

2023–2025 Outstanding LTP Performance Cycle

The TVA Board previously approved the following overall LTP measures of TVA performance for all participants for the three-year cycle ending September 30, 2025 (awards to be paid in November 2025):

Notes

(1)Non-Fuel Delivered Cost of Power measure has same definition as for the 2022-2024 LTP awards. For the 2023-2025 performance cycle, the Non-Fuel Delivered Cost of Power measure will be calculated using an average of the 2023, 2024, and 2025 results.

(2)Load Not Served measure has same definition as for the 2022-2024 LTP awards. For the 2023-2025 performance cycle, the Load Not Served measure will be calculated using an average of the 2023, 2024, and 2025 results.

(3)The External Performance Indicators for the TVA Nuclear Fleet measure has same definition as for the 2022-2024 LTP awards. For the 2023-2025 performance cycle, the External Performance Indicators for the TVA Nuclear Fleet measure will be calculated based on 2025 results.

(4)The Powerful Partnerships Survey measure is conducted among customers, elected officials, business and economic development leaders, and the general public in the TVA service area to assess the strength of various stakeholder relationships with TVA. For the 2023-2025 performance cycle, the Powerful Partnerships Survey measure will be calculated using an average of the 2023, 2024, and 2025 results.

(5)The Stretch Payout for the CEO is 150 percent.

2024–2026 Outstanding LTP Performance Cycle

In September 2024, the TVA Board approved the following overall LTP measures of TVA performance for all participants for the three-year cycle ending September 30, 2026 (awards to be paid in November 2026):

Notes

(1)Total Spend represents total Non-Fuel O&M, Capital, Non-Fuel Inventory, and Cloud Implementation expenses for corporate and operational SBU organizations (excludes TVA Board). This measure will support the overall TVA goal of maintaining costs and managing rates based on spending levels approved by TVA management and the TVA Board.

(2)Carbon-Free Performance Indicator measures renewable megawatts ("MW") added to the TVA system, energy program savings gigawatt hour ("GWh") and capacity MW provided by energy programs, and the ability to meet TVA's operational needs through demand response ("DR") event performance. This measure supports the evolution of TVA's reliability and clean energy supply into the energy system of the future as well as helps manage the impact of TVA's identified enterprise risk related to planning and execution of the power system.

(3)The Powerful Partnerships Survey is conducted among customers, elected officials, business/economic development leaders, and the general public in the TVA service area to assess the strength of various stakeholder relationships with TVA. This measure supports the effective management of TVA's reputation and ability to achieve desired outcomes and deliver on strategic priorities with stakeholders.

(4)The Stretch Payout for the CEO is 150 percent.

LTR Grant and Vested Awards

As a corporate agency of the U.S., TVA does not have equity securities that it can use to provide stock awards, options, or other equity-based awards as compensation for its employees. The purpose of the retention grants under the LTIP is to provide a "fixed" retention incentive similar to restricted stock or restricted stock units. These grants are intended to encourage executives to remain with TVA and to provide, in combination with salary, EAIP, and LTP grants, a competitive level of TDC. Grants are generally effective as of October 1 and will become one-third vested on each subsequent September 30 or upon death, disability, or retirement if earlier on a pro-rated basis. Each award will be paid in a lump sum within two months of vesting.

2024 LTR Grant

Following the market assessment conducted by FW Cook, effective October 1, 2023, TVA approved LTR grants to the NEOs. These grants vest in three equal tranches on September 30, 2024, September 30, 2025, and September 30, 2026, contingent upon continued employment on each vesting date. The amounts of these grants are set forth under Long-Term Incentive Plan ("LTIP")above.

2024 Vesting of Outstanding LTR Awards

LTR awards that vested in 2024 are described below and reported in the Executive Compensation Tables and Narrative Disclosures— Summary Compensation Table under "Non-Equity Incentive Plan Compensation."

Note

(1) Awards reflect vested tranches of 2022, 2023, and 2024 LTR program awards. LTR awards vest ratably over a three-year period, subject to continued employment on each vesting date.

The vesting schedule for the three LTR awards outstanding in 2024 is set forth below.

2024 VESTING OF OUTSTANDING LTR AWARDS

2024 CEO Pay Decisions - Overview and Analysis

CEO TDC EARNED IN 2024 - $8,135,558

Each year, the Committee makes compensation decisions with respect to CEO compensation for two separate earning periods: the amount of TDC opportunity (which is forward-looking and incentivizes the CEO performance for the upcoming fiscal year), and the amount of TDC earned (which rewards CEO performance for the fiscal year period that just concluded).

2024 CEO Total Direct Compensation Analysis

On November 9, 2023, the TVA Board approved no compensation adjustment for Mr. Lyash for 2024. The 2024 target TDC opportunity for Mr. Lyash, which remains equal to that of 2023, is illustrated below:

2024 CEO TARGET TDC OPPORTUNITY - YEAR OVER YEAR CHANGE RELATIVE TO MARKET(1)(2)(3)(4)

Notes

(1)Target market assessment effective October 2023 and included market composite of WTW survey sample and proxy peer group. This composite group includes 44 investor-owned utilities and government/non-profit entities further described in Item 11, Executive Compensation— Compensation Discussion and Analysis— Compensation Setting Process — Establishing Competitive Compensation — List of Compensation Peer Companies. For 2024, CEO compensation reflects the same for “TVA 2023” and “TVA 2024” components.

(2) Market 50th Percentile amounts are benchmarks for each compensation component which are determined independently and do not sum together.

(3) Total Annual Compensation is calculated by adding Base Salary and EAIP. For 2024, Base Salary of $1,227,000 plus EAIP of $1,840,500 equals $3,067,500. For 2023, Base Salary of $1,227,000 plus EAIP of $1,840,500 equals $3,067,500.

(4) Total Long-Term Incentives are calculated by adding LTP and LTR. For 2024, LTP of $3,983,000 plus LTR of $1,707,000 equals $5,690,000. For 2023, LTP of $3,983,000 plus LTR of $1,707,000 equals $5,690,000.

2024 CEO TARGET TDC OPPORTUNITY - RELATIVE TO MARKET PERCENTILE(1)(2)

Note

(1)Target market assessment effective October 2023 and included market composite of WTW survey sample and proxy peer group. This composite group includes 44 investor-owned utilities and government/non-profit entities further described in Item 11, Executive Compensation— Compensation Discussion and Analysis— Compensation Setting Process —Establishing Competitive Compensation —List of Compensation Peer Companies.

(2)Market 25th and 50th Percentile amounts are benchmarks for each compensation component which are determined independently and do not sum together.

2024 CEO Total Direct Compensation - Target Versus Earned(1)(2)

The TDC that Mr. Lyash earned for 2024 reflected individual and company performance that met and exceeded most targets and was approximately 65% perf ormance-based compensation.

Notes

(1)2022-2024 LTP award reflects a three-year performance cycle.

(2)LTR amount reflects the 2024 tranches of the 2022, 2023, and 2024 LTR awards.

CEO Pay Ratio Disclosure

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Item 402(u) of Regulation S-K, TVA is providing the following information regarding the annual total compensation of TVA's CEO position and the annual total compensation of the median employee of the company:

•The total compensation for the CEO position for 2024 was $10,536,962.

•For 2024, the median employee's annual total compensation was $163,779.

Based on this information, the pay ratio of the total compensation for the CEO position to the median employee was approximately 64 to 1.

To identify the median employee and to determine the annual total compensation of the median employee, TVA took the following steps:

•TVA selected September 30, 2024, as the date on which to identify its median employee. On September 30, 2024, TVA's employee population that had earnings in 2024 (including full-time, part-time, and temporary employees) consisted of 11,267 individuals located in the U.S.

•In order to identify the median employee from its employee population, TVA compared the compensation that would be included in Box 5 (Medicare Wages and Tips) of Form W-2, which includes salary, overtime, and incentive compensation, for the period from October 1, 2023 to September 30, 2024. Box 5 compensation was used as it is representative of the compensation received by all employees and is readily available and objective.

•After identifying its median employee, TVA calculated that employee's compensation for 2024 as though that compensation was being calculated for purposes of the Summary Compensation Table, resultingin annual total compensationof $163,779.

TVA believes that the above pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Because Item 402(u) provides companies with flexibility to select the methodology and assumptions used to identify the median employee and to calculate the pay ratio, the pay ratio reported by TVA may not be comparable to the pay ratios reported by other companies.

Executive Compensation Tables and Narrative Disclosures

Summary Compensation and Grants of Plan-Based Awards

The following table provides earned compensation information for each NEO in 2024 (and 2023 and 2022, as applicable).

SUMMARY COMPENSATION TABLE

Notes

(1) There were no bonus awards in 2024

(2) The 2024 data is outlined in the Non-Equity Incentive Plan Compensation table below.

(3) The 2024 data is outlined in the Change in Pension Value and Nonqualified Deferred Compensation Earnings table below.

(4) The 2024 data is outlined in the All Other Compensation table below.

(5) The total compensation amount reflected in this column, determined under applicable SEC rules, may differ substantially from compensation amounts actually earned within the fiscal year reflected. Change in Pension Value and Nonqualified Deferred Compensation Earnings can substantially impact this total, which are affected by external variables such as interest rates, assumptions about life expectancy, and changes in discount rate, which are functions of the economy and actuarial calculations not related to Company performance nor controlled or approved by the TVA Board or People Committee.

NON-EQUITY INCENTIVE PLAN COMPENSATION

Notes

(A) LTR grant representing the third tranche of the 2022 LTR award effective October 1, 2021.

(B) LTR grant representing the second tranche of the 2023 LTR award effective October 1, 2022.

(C) LTR grant representing the first tranche of the 2024 LTR award effective October 1, 2023.

CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMPENSATION EARNINGS

Notes

(A) The present value of the TVARS Plans and SERP are impacted by plan assumption changes and actual plan experience which may be different than previously assumed.

ALL OTHER COMPENSATION

Notes

(A) Mr. Moul is required to repay to TVA a deferred cash recruitment and relocation incentive payment in the amount of $100,000 if, prior to June 21, 2025, he (1) voluntarily terminates employment unless the separation is for reasons beyond his control and acceptable to TVA, or (2) is terminated for cause.

The following table provides information on non-equity incentive plan opportunities and grants provided to NEOs and the possible range of payouts associated with the opportunities and grants. Awards under the EAIP, LTP, and LTR that vested as of September 30, 2024, will be paid in cash during the first quarter of 2025.

GRANTS OF PLAN-BASED AWARDS TABLE

as of September 30, 2024

Notes

(1) TVA does not have any equity securities and therefore has no equity-based awards.

(2) Threshold, Target, and Maximum represent amounts that could be earned by an NEO based on performance during the applicable performance cycle. Threshold, Target, and Maximum targets for EAIP and LTIP were 50 percent, 100 percent, and 200 percent for 2024 (for all eligible participants, except the CEO). EAIP and LTIP Incentive awards for the CEO are calculated in the same manner except that the scorecard achievement ranges from 0 percent to 150 percent instead of 0 percent to 200 percent.

(3) Target incentive opportunities as a percentage of salaries were as follows: Mr. Lyash, 150 percent; Mr. Thomas, 80 percent; Mr. Moul, 80 percent; Mr. Fountain, 70 percent; and Mr. Rausch, 70 percent. Additionally, a corporate multiplier ranging between 0 and 1.1 may be applied which can reduce the award to $0. An individual performance multiplier of up to 150 percent may also be applied which may increase the award to 225 percent of target for all NEOs except for the CEO, whose maximum award is 150 percent of target. Actual EAIP awards earned for performance in 2024 are reported for each of the NEOs under the "Non-Equity Incentive Plan Compensation" column in the Summary Compensation Table.

(4) At the end of the performance period, TVA's LTIP Scorecard was applied to the grants in order to determine LTP award payouts. For 2024, the TVA Board exercised discretion to adjust the CEO's calculated LTP payout percentage from 114 percent to 82 percent. Award payouts are reported for each of the NEOs under the "Non-Equity Incentive Plan Compensation" column in the Summary Compensation Table.

(5) All LTR awards will be paid in a lump sum within two months of the September 30th vesting date except in the case of death, disability, or retirement. The awards will be paid in cash after deducting applicable federal, state, and local withholding taxes. In the case of death, the beneficiary will be paid as soon as administratively practicable but in no event later than the last day of the second full calendar month following the participant's death. Disability awards will be paid as soon as administratively practicable but in no event later than the last day of the second full calendar month following the participant's separation from service due to disability. Actual LTR awards earned in 2024 are reported for each of the NEOs under the "Non-Equity Incentive Plan Compensation" column in the Summary Compensation Table.

(6) At the end of the performance period, TVA's LTIP Scorecard will be applied to the grants in order to determine LTP award payouts. The final award may be adjusted by the TVA Board in its discretion in appropriate circumstances.

Retirement and Pension Plans

The table below provides the actuarial present value of the NEOs' accumulated benefits, including the number of years of credited service, under TVA's retirement and pension plans as of September 30, 2024, determined using a methodology and interest rate and mortality rate assumptions consistent with those used in the financial statements in this Annual Report, set forth in Note 20— Benefit Plans.

PENSION BENEFITS TABLE

Notes

(1) Limited to 24 years when determining supplemental benefits available under SERP Tier 1, described below.

(2) Mr. Lyash was granted ten years of credited service for calculating his SERP benefit: five years upon the commencement of his employment with TVA and an additional five years after five years of actual service. As of September 30, 2024, Mr. Lyash had 5.417 years of actual service and 15.417 years of credited service. The present value of the accumulated SERP benefit with 15.417 years of credited service is $16,796,744.

(3) Mr. Lyash, Mr. Moul, Mr. Fountain, and Mr. Rausch are not eligible to participate in the TVARS pension plan since they were hired after June 30, 2014.

Qualified Retirement Plans

The retirement benefits for which employees are eligible and receive under the TVARS pension plan and 401(k) plan depend on the employee's hire date, years of service, and individual elections, as follows:

•Employees who were first hired prior to January 1, 1996, receive (1) a traditional pension benefit calculated based on the employee's creditable service, the employee's average monthly salary for the highest three consecutive years of eligible compensation, and a pension factor based on the employee's age and years of service, less a Social Security offset, and (2) 401(k) plan matching contributions from TVA. The 401(k) plan matching contribution is $0.25 on every dollar contributed by the employee up to six percent of eligible compensation, for a maximum matching contribution of 1.5 percent of eligible compensation. None of the NEOs are in this group.

•Employees who were first hired prior to January 1, 1996, and who elected to switch pension structures from traditional to cash balance, receive (1) a cash balance pension benefit calculated based on (a) pay-based credits and interest that accrue over time in the employee's account and (b) the employee's age at the time of retirement, and (2) 401(k) plan matching contributions from TVA. The monthly pay credits are equal to six percent of eligible compensation, and monthly interest is credited at an annual interest rate equal to the change in the CPI-U plus three percent (with a minimum of six percent and maximum of 10 percent). The interest rate during 2024 was 7.69 percent. The 401(k) plan matching contribution is $0.75 on every dollar contributed by the employee up to six percent of eligible compensation, for a maximum matching contribution of 4.5 percent of eligible compensation. None of the NEOs are in this group.

•Employees who were first hired on or after January 1, 1996, and who had 10 or more years of service as of October 1, 2016, receive (1) a cash balance pension benefit calculated based on (a) pay-based credits and interest that accrue over time in the employee's account and (b) the employee's age at the time of retirement, and (2) 401(k) plan non-elective and matching contributions from TVA. The monthly pay credits are equal to three percent of eligible compensation, and monthly interest is credited at an annual interest rate equal to the change in the CPI-U plus two percent (with a minimum of 4.75 percent and a maximum of 6.25 percent). The interest rate during 2024 was 6.25 percent. The 401(k) plan automatic, non-elective contribution is equal to three percent of eligible compensation, and the matching contribution is $0.75 on every dollar contributed by the employee up to six percent of eligible compensation, for a maximum matching contribution of 4.5 percent of eligible compensation. Mr. Thomas is in this group.

•Employees who were first hired on or after January 1, 1996, and who had less than 10 years of service as of October 1, 2016, receive (1) a cash balance pension benefit calculated based on pay-based credits and interest that accrue over time in the employee's account and the employee's age at the time of retirement, and (2) 401(k) plan non-elective and matching contributions from TVA. As of October 1, 2016, the cash balance accounts of these employees receive no additional pay-based credits; however, the accounts continue to receive monthly interest credits at an annual interest rate equal to the change in the CPI-U plus two percent (with a minimum of 4.75 percent and a maximum of 6.25 percent). The interest rate during 2024 was 6.25 percent. The 401(k) plan automatic, non-elective contribution is equal to six percent of eligible compensation, and the matching contribution is dollar-for-dollar on employee contributions up to six percent of eligible compensation, for a maximum matching contribution of six percent of eligible compensation. None of the NEOs are in this group.

•Employees who were hired prior to July 1, 2014, and who elected to waive their cash balance retirement benefit and transfer their cash balance account to the 401(k) plan effective October 1, 2018, receive a retirement benefit in the 401(k) plan only. The 401(k) plan is an automatic, non-elective contribution that is equal to six percent of eligible compensation, and the matching contribution is dollar-for-dollar on employee contributions up to six percent of the eligible compensation, for a maximum matching contribution of six percent of eligible compensation. None of the NEOs are in this group.

•Employees who were first hired on or after July 1, 2014 (or who were rehired and were either previously not vested in the pension plan or cashed out their pension benefit) receive a retirement benefit in the 401(k) plan only. The 401(k) plan automatic, non-elective contribution is equal to 4.5 percent of eligible compensation, and the matching contribution is $0.75 on every dollar contributed by the employee up to six percent of eligible compensation, for a maximum matching contribution of 4.5 percent of eligible compensation. Mr. Lyash, Mr. Moul, Mr. Fountain, and Mr. Rausch are in this group.

Cash Balance Pension. For NEOs who are eligible for retirement benefits under the pension plan, which includes Mr. Thomas, eligible compensation is defined as annual salary only for benefit calculation purposes and is shown under the column titled "Salary" in the Summary Compensation Table. The eligible compensation in 2024 could not exceed $330,000 pursuant to the IRS annual compensation limit applicable to qualified plans. Employees with cash balance benefits who have at least five years of cash balance service are eligible at retirement or termination of employment to receive an immediate benefit in the form of a monthly pension with survivor benefit options or in a lump-sum payment with cash out or rollover options. The pension plan does not provide for early retirement benefits to any NEO or any other employee eligible for cash balance benefits.

401(k) Plan. All employees eligible to participate in the 401(k) plan, including the NEOs, may elect to contribute to the 401(k) plan on a before-tax, Roth, and/or after-tax basis, and in-plan Roth rollovers by participant election are available. Contributions to a participant's 401(k) plan account by TVA and the participant during 2024 could not exceed $69,000 pursuant to the IRS annual contribution limit applicable to qualified plans. For purposes of matching and non-elective contributions from TVA to the 401(k) accounts of the NEOs, eligible compensation is defined as annual salary only for benefit calculation purposes and is shown under the column titled "Salary" in the Summary Compensation Table. The eligible compensation in 2024 could not exceed $330,000 pursuant to the IRS annual compensation limit applicable to qualified plans. Any participant in the 401(k) plan must have three years of TVA service to be vested in matching and non-elective contributions from TVA.

Supplemental Executive Retirement Plan

All NEOs are participants in the SERP. The SERP is a non-qualified defined benefit pension plan similar to those typically found in other companies in TVA's peer group and is provided to a limited number of executives, including the NEOs. TVA's SERP was created to recruit and retain key executives. The plan is designed to provide a competitive level of retirement benefits in excess of the limitations on contributions and benefits imposed by TVA's qualified defined benefit plan and Internal Revenue Code Section 415 limits on qualified retirement plans.

The SERP provides two distinct levels of participation, Tier 1 and Tier 2. Each participant is assigned to one of the two tiers at the time he or she is approved to participate in the SERP. The level of participation ("Tier") defines the level of retirement benefits under the SERP at the time of retirement.

Under the SERP, normal retirement eligibility is age 62 with five years of vesting service. No vested and accrued benefits are payable prior to age 55, and benefits are reduced for retirements prior to age 62. The level of reduction in benefits for retirements prior to age 62 depends on whether a participant's termination is "approved" or "unapproved." In the event of an approved termination of TVA employment, any vested and accrued benefits are reduced by 5/12 percent for each month that the date of benefit commencement precedes the participant's 62nd birthday, up to a maximum reduction of 35 percent. In the event of an unapproved termination of TVA employment, the participant's accrued benefits are first subject to a reduced percentage of vesting if the participant's years of service are between five and 10. At five years of vesting service, the vested percentage of retirement benefits is 50 percent and increases thereafter by 10 percent for each full additional year of service, reaching 100 percent vesting for 10 or more years of vesting service. Thereafter, any vested and accrued benefits are reduced by 10/12 percent for each month that the date of benefit commencement precedes the participant's 62nd birthday up to a maximum reduction of 70 percent.

For purposes of the SERP, an "approved" termination means termination of employment with TVA due to (1) retirement on or after the participant's 62nd birthday, (2) retirement on or after attainment of actual age 55, if such retirement has the approval of the TVA Board or its delegate, (3) death in service as an employee, (4) disability (as defined under the Rules and Regulations of the TVARS) as determined by the Retirement Committee, or (5) any other circumstance approved by the TVA Board or its delegate. For purposes of the SERP, an "unapproved" termination means a termination of employment with TVA when such termination does not constitute an "approved" termination as defined in the preceding sentence.

SERP Tier 1. The Tier 1 structure is designed to replace 60 percent of the amount of a participant's compensation at the time the participant reaches age 62 and has accrued 24 years of TVA service. Tier 1 benefits are based on a participant's highest average compensation during three consecutive SERP years and a pension multiple of 2.5 percent for each year of credited service up to a maximum of 24 years. Compensation is defined as salary and EAIP for benefit calculation purposes. Tier 1 benefits are offset by Social Security benefits, benefits provided under TVA's qualified defined benefit pension plan, and prior employer pension benefits when applicable.

SERP Tier 2. The purpose of this restoration plan is to adjust qualified plan benefits to executives when benefits are lost due to IRS limits. Pension benefits are based on a participant's average compensation over three consecutive fiscal years and a pension multiplier of 1.3 percent for each year of service. For benefit calculation, pension includes salary and annual incentives.

Nonqualified Deferred Compensation

The following table provides information regarding deferred contributions, earnings, and balances for each of the NEOs. The amounts reported under this table do not represent compensation in addition to the compensation that was earned in 2024 and already reported in the Summary Compensation Table, but rather the amounts of compensation earned by the NEOs in 2024 or prior years that were or have been deferred.

NONQUALIFIED DEFERRED COMPENSATION TABLE

Notes

(1) Includes vested contributions. None of these amounts are included in the Summary Compensation Table as compensation for 2024.

(2) Includes vested earnings. Because none of the amounts are above market or preferential earnings under SEC rules, none of these amounts are included in the Summary Compensation Table.

(3) Includes vested contributions and earnings. $36,396 of this amount has been reported in the Summary Compensation Table as compensation for a prior fiscal year.

(4) Includes vested contributions and earnings. $80,717 of this amount has been reported in the Summary Compensation Table as compensation for a prior fiscal year.

TVA's compensation plans may allow participants to defer all or a portion of compensation earned under the plans as defined by plan terms and IRS regulations. All deferrals are credited to each participant in a deferred compensation account, and the deferral amounts are then funded into a rabbi trust. Each participant may elect one or more investment options made available by TVA or allow some or all funds to accrue interest at the rate established by the beginning of each fiscal year equal to the composite rate of all Treasury issues. Participants may elect to change from either one notional investment option or the TVA interest bearing option to another at any time. Generally, upon termination of employment, funds are distributed pursuant to elections made in accordance with applicable IRS regulations.

Executive Severance Plan

All NEOs are participants in the TVA Executive Severance Plan (the "Severance Plan"). The Severance Plan provides that if TVA terminates an NEO’s employment other than for Gross Misconduct (as defined below) or such participant terminates employment for Good Reason (as defined below), such participant will be eligible to receive the following benefits in addition to his or her accrued compensation:

•For the CEO, a lump sum severance payment equal to the applicable multiplier times the employee's annual base salary, and continued healthcare benefits for a number of complete or partial years equal to such multiplier. The applicable multiplier is 1.0 for the CEO.

•For the other NEOs, a lump sum severance payment equal to the applicable multiplier times the sum of the employee’s annual base salary and target annual incentive, and continued healthcare benefits for a number of complete or partial years equal to such multiplier. The applicable multiplier is 1.0 for the other NEOs.

•Any earned but unpaid incentive payments, and a prorated annual incentive payment for the year of termination based on actual achievement of performance goals.

In order to receive severance benefits under the Severance Plan, participants must timely execute (and not revoke) a release of claims in favor of TVA and comply with all applicable post-separation restrictive covenants. The terms of the Severance Plan will supersede rights and obligations with respect to severance under existing agreements to which Severance Plan participants are a party.

Under the Severance Plan, Good Reason shall mean the occurrence of any of the following:

•a material adverse change in the participant’s authority, duties, or responsibilities (excluding during any period of participant’s physical or mental incapacity) with respect to his or her employment with TVA without the participant’s prior written consent;

•a material reduction in the participant’s base salary without the participant’s prior written consent (other than any reduction applicable to management employees generally);

•an actual change in the participant’s principal work location by more than 50 miles and more than 50 miles from the participant’s principal place of abode as of the date of such change in job location without the participant’s prior written consent; or

•a material breach by TVA of any term or provision of the Severance Plan without the participant’s prior written consent.

A participant may be considered to have Good Reason to terminate employment for purposes of the Severance Plan only if the participant provides written notice to TVA of termination within 30 days of the occurrence of the applicable event(s) or, if later, within 30 days of the date the participant has knowledge that such event(s) occurred. An event constituting Good Reason shall no longer constitute Good Reason if the circumstances described in the Good Reason notice are cured by TVA within 30 days following receipt of the Good Reason notice.

Under the Severance Plan, Gross Misconduct shall mean any of the following:

•misconduct involving dishonesty, fraud, or gross negligence that directly results in significant economic or reputational harm to TVA;

•insubordination, intentional neglect of duties, or refusal to cooperate with investigations of TVA’s business practices;

•conviction of a crime amounting to a felony under the laws of the United States or any of the several states, or a crime of moral turpitude;

•a significant violation of TVA’s Code of Ethics or Code of Conduct; or

•disclosure without authorization of proprietary or confidential information of TVA.

Potential Payments on Account of Resignation, Retirement, Termination without Cause, Termination with Cause, Death, or Disability

The tables below show certain potential payments that would have been made to each NEO if his or her employment had been terminated on September 30, 2024, under various scenarios: retirement, resignation, resignation for Good Reason, termination without Cause, termination with Cause, death, and Disability. The tables below also include payments from the following sources: Severance Plan, SERP, EAIP, deferred cash recruitment/relocation incentive, LTR, LTP, and deferred compensation.

The following provides background information on certain payments included in the termination tables:

•Resignation. The Resignation column covers resignations that do not qualify as resignations for Good Reason under TVA's Severance Plan. See Executive Compensation Tables and Narrative Disclosures - Executive Severance Plan for a definition of Good Reason.

•Retirement. The Retirement column covers situations where an employee separates from service after having met one of the following criteria: (1) the employee has reached the age of 55 with at least 10 years of full-time TVA service, (2) the employee has reached the age of 60 with at least five years of full-time TVA service, or (3) the employee is in the Civil Service Retirement System or Federal Employees Retirement System and is eligible for an immediate retirement benefit upon termination as outlined in the applicable plan.

•Severance Plan and Termination without Cause or Resignation for Good Reason. The Severance Plan provides that if TVA terminates an NEO's employment other than for Gross Misconduct or such participant terminates employment for Good Reason, such participant will be eligible to receive certain benefits in addition to his or her accrued compensation. See Executive Compensation Tables and Narrative Disclosures - Executive Severance Plan for definitions of Gross Misconduct and Good Reason, and for a discussion of the benefits provided to NEOs under the Severance Plan.

•SERP. The SERP payments in the tables represent the present value of the accumulated benefit unless otherwise noted.

•SERP Payment in Event of Death. In the event of a participant’s death while employed by TVA, the participant’s beneficiary will receive a lump sum payment equal to the actuarial equivalent of the benefit that would have been paid had the participant terminated employment on the date of death and elected a joint and 50 percent survivor benefit. The beneficiary will receive 50 percent of the reported value.

•LTR Payment in Event of Retirement. The LTIP provides that if a participant retires, the participant is entitled to any portion of a LTR award that had vested at the time of the separation from service but not been paid as well as a prorated portion of any LTR grant that had not vested at the time of the participant's separation from service, provided the amount of any such LTR award for each vesting period within the retention cycle is prorated based on the number of whole months the participant was employed by TVA during such vesting period.

•LTR Payment in Event of Death. The LTIP provides that in the event of the death of a participant, the participant's beneficiary is entitled to any portion of a LTR award that had vested at the time of the participant's death but not been paid as well as a prorated portion of any LTR grant that had not vested at the time of the participant's separation from service, provided that the LTR award for each vesting period will be prorated based on the number of whole months the participant was employed by TVA during the vesting period in which the participant separated from service as compared to (1) 12 months for the vesting period that includes the day that the participant separated from service, (2) 24 months for the vesting period that immediately follows the vesting period during which the participant separated from service, and (3) 36 months for the second vesting period that follows the vesting period during which the participant separated from service.

•LTR Payment in Event of Disability. The LTIP provides that if a participant separates from service due to a disability, the participant is entitled to any portion of a LTR award that had vested at the time of the separation from service but not been paid as well as a prorated portion of any LTR grant that had not vested at the time of the participant's separation from service, provided that the LTR award will be prorated based on the number of whole months the participant was employed by TVA during the vesting period in which the participant separated from service as compared to (1) 12 months for the vesting period that includes the day that the participant separated from service, (2) 24 months for the vesting period that immediately follows the vesting period during which the participant separated from service, and (3) 36 months for the second vesting period that follows the vesting period during which the participant separated from service.

•LTP Payment in the Event of Retirement. The LTIP provides that if a participant retires, the participant is entitled to (1) any LTP award that had vested at the time of the participant's separation from service but not been paid and (2) a prorated portion of any LTP awards that had not vested at the time of the participant's separation from service, provided that the amount of any such LTP award (a) is calculated using the actual percent of opportunity achieved and (b) is prorated based on the number of whole months the participant is employed by TVA during the applicable performance cycle. Jeff Lyash and John Thomas are the only NEOs who were eligible to retire as of September 30, 2024, and the LTP amounts included in their Retirement columns assume that the percent of opportunity achieved will be 100 percent of target for the performance cycles ending on September 30, 2025 and September 30, 2026.

•LTP Payment in Event of Death. The LTIP provides that in the event of the death of a participant, the participant's beneficiary is entitled to (1) any LTP award that had vested at the time of the participant's death but not been paid and (2) any LTP awards that had not vested at the time of the participant's death and that covered a performance cycle for which the participant had received a LTP grant, provided that the amount of any such LTP award (a) will be calculated assuming that the percent of opportunity achieved is 100 percent of target and (b) will be prorated based on the number of whole months the participant was participating in the plan during the applicable performance cycle.

•LTP Payment in Event of Disability. The LTIP provides that if a participant separates from service due to a disability, the participant is entitled to (1) any LTP award that had vested at the time of the participant's separation from service but not been paid and (2) any LTP awards that had not vested at the time of the participant's separation from service and that covered a performance cycle for which the participant had received a LTP grant, provided that the amount of any such LTP award (a) will be calculated assuming that the percent of opportunity achieved is 100 percent of target and (b) will be prorated based on the number of whole months the participant was employed by TVA during the applicable performance cycle.

In addition to the amounts set forth in the termination tables, all NEOs would also be entitled to payments from plans generally available to TVA employees under the specific circumstances of termination of employment, including the health and welfare and pension plans and amounts in the 401(k) plan.

Notes

(1) In February 2019, TVA entered into an arrangement with Mr. Lyash that provides that he will be granted five years of credited service for calculating his SERP benefit upon commencement of his employment with TVA and will be granted an additional five years of credited service after five years of actual service. As of September 30, 2024, Mr. Lyash had 5.417 years of actual service and 15.417 years of credited service.

Notes

(1) Actual benefit would be paid in five annual installments beginning upon separation from service.

(2) Assumes that the TVA Board or its delegate determines that the termination is an approved termination under SERP. See Executive Compensation Tables and Narrative Disclosures — Retirement and Pension Plans — Supplemental Executive Retirement Plan above for a discussion of approved and unapproved terminations under SERP.

Notes

(1) The five-year vesting requirement has not been met.

(2) Under the terms of his offer letter, Mr. Moul is required to repay to TVA deferred cash recruitment and relocation incentive payment in the amount of $100,000 if, prior to June 21, 2025, he (1) voluntarily terminates employment unless the separation is for reasons beyond his control and acceptable to TVA, or (2) is terminated for cause.

(3) Is not eligible to retire based on definition in the LTIP plan.

Notes

(1) The five-year vesting requirement has not been met.

(2) Is not eligible to retire based on definition in LTIP plan.

Notes

(1) Is not eligible to retire based on definition in LTIP plan.

Other Agreements

Except as described above and in the Compensation Discussion and Analysis, there are no other agreements between TVA and any of the NEOs.

Director Compensation

The TVA Act provides for up to nine directors on the TVA Board. As of November 13, 2024, the TVA Board consisted of eight members. Under the TVA Act, each director receives certain stipends that are increased annually by the same percentage increase applicable to adjustments under 5 U.S.C. § 5318, which adjusts the annual rates of pay of employees on the Executive Schedule of the U.S. Government. Effective January 1, 2024, the annual stipend for TVA directors was increased from $58,400 to $61,100 per year unless (1) the director chairs a TVA Board committee, in which case the stipend was increased from $59,500 to $62,300 per year, or (2) the director is the Chair of the TVA Board, in which case the stipend was increased from $65,000 to $68,100 per year. Directors are also reimbursed under federal law for travel, lodging, and related expenses while attending meetings and for other official TVA business.

The annual stipends provided by the TVA Act for each director and for the Chair of the TVA Board as of November 13, 2024, are listed below:

TVA BOARD ANNUAL STIPENDS

The following table provides information on the compensation received by TVA's directors during 2024:

DIRECTOR COMPENSATION

Notes

(1) TVA directors do not participate in the TVARS Retirement Plans, TVA's SERP, or any non-qualified deferred compensation plan available to TVA employees. However, as appointed officers of the U.S. government, the directors are members of FERS. FERS is administered by the federal Office of Personnel Management, and information regarding the value of FERS pension benefits is not available to TVA.

(2) These amounts include TVA's non-elective and matching contributions to the Thrift Savings Plan.

The directors are not eligible to participate in any incentive programs available to TVA employees. The directors do not participate in the TVARS Retirement Plans and do not participate in TVA's SERP. However, as appointed officers of the U.S. government, the directors are members of the Federal Employees Retirement System ("FERS"). FERS is a tiered retirement plan that includes three components: (1) Social Security benefits, (2) the Basic Benefit Plan, and (3) the Thrift Savings Plan ("TSP"). As members of FERS, each director is required to make a mandatory percentage contribution of his or her stipend to the Basic Benefit Plan in the amount of 0.8 percent for those directors appointed prior to January 1, 2013, 3.1 percent for those directors appointed between January 1, 2013, and December 31, 2013, and 4.4 percent for those directors appointed on or after January 1, 2014.

The FERS Basic Benefit Plan is a qualified defined benefit plan that provides a retirement benefit based on a final average pay formula that includes age, highest average salary during any three consecutive years of service, and years of creditable service. A director must have at least five years of creditable service to be eligible to receive retirement benefits. Directors are eligible for immediate, unreduced retirement benefits once (1) they reach age 62 and have five years of FERS creditable service, (2) they reach age 60 and have 20 years of FERS creditable service, or (3) they attain the minimum retirement age and accumulate the specified years of service as set forth in the FERS regulations. Generally, benefits are calculated by multiplying 1.0 percent of the highest average salary during any three consecutive years of service by the number of years of creditable service. Directors who retire at age 62 or later with at least 20 years of FERS creditable service receive an enhanced benefit (a factor of 1.1 percent is used rather than 1.0 percent).

Each director is also eligible to participate in the TSP. The TSP is a tax-deferred retirement savings and investment plan that offers the same type of savings and tax benefits offered under 401(k) plans. Once a director becomes eligible, TVA contributes an amount equal to one percent of the director's stipend into a TSP account for the director. These contributions are made automatically every two weeks regardless of whether the director makes a contribution of his or her own money. Directors are eligible to contribute up to the TSP elective deferral limit. Directors receive matching contributions of 100 percent of each dollar for the first three percent of the director's stipend and 50 percent of each dollar for the next two percent of the director's stipend.

TVA offers a group of health and other benefits (medical, dental, vision, life and accidental death and disability insurance, and long-term disability insurance) that are available to a broad group of employees. Directors are eligible to participate in TVA's health benefit plans and other non-retirement benefit plans on the same terms and at the same contribution rates as other TVA employees.

Compensation Committee Interlocks and Insider Participation

The People and Governance Committee of the TVA Board currently consists of the following four directors: Brian E. Noland, Beth Harwell, Robert P. Klein, and Joe H. Ritch.

No member of this Committee was at any time during 2024 or at any other time an officer or employee of TVA, and no member of this committee had any relationship with TVA requiring disclosure under Item 404 of Regulation S-K. No executive officer of TVA has served on the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of the People and Governance Committee during 2024.

Compensation Committee Report

The People and Governance Committee has reviewed and discussed the Compensation Discussion and Analysis with management, and based on the review and discussions, the Committee recommended to the TVA Board that the Compensation Discussion and Analysis be included in this Annual Report.

PEOPLE AND GOVERNANCE COMMITTEE

Brian E. Noland, Chair

Beth Harwell

Robert P. Klein

Joe H. Ritch