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Posted 15 September, 2022

FIRSTENERGY CORP appointed Mr. John W. Somerhalder II as new CEO

NYSE:FE appointed new Chief Executive Officer Mr. John W. Somerhalder II in a 8-K filed on 15 September, 2022.


  On September 15, 2022, FirstEnergy Corp. ("FirstEnergy" or the "Company") announced that the Board of Directors (the "Board") of the Company has appointed Mr. John W. Somerhalder II to serve as Interim President and Chief Executive Officer of the Company, effective as of September 16, 2022.  

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Overview of FIRSTENERGY CORP
Companies on the Energy Service • Electric Utilities
FirstEnergy Corp. engages in the generation, transmission, and distribution of electricity as well as energy management and other energy-related services through its subsidiaries. It operates through the following business segments: Regulated Distribution, Regulated Transmission, and Corporate or Other. The Regulated Distribution segment distributes electricity through FirstEnergy's utility operating companies, serving various customers. The Regulated Transmission segment transmits electricity through transmission facilities owned and operated by FirstEnergy's utilities. The Corporate or Other segment reflects corporate support and other costs not charged or attributable to the utilities or transmission companies. The company was founded in 1996 and is headquartered in Akron, OH.
Market Cap
$21.4B
View Company Details
Relevant filing section
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


Appointment of Interim President and Chief Executive Officer


On September 15, 2022, FirstEnergy Corp. ("FirstEnergy" or the "Company") announced that the Board of Directors (the "Board") of the Company has appointed Mr. John W. Somerhalder II to serve as Interim President and Chief Executive Officer of the Company, effective as of September 16, 2022. In connection with his appointment as Interim President and Chief Executive Officer, Mr. Somerhalder will continue to serve as Chair of the Board. The Board will conduct a search of external candidates to identify a permanent President and Chief Executive Officer of the Company. Mr. Somerhalder's appointment follows the decision by Steven E. Strah on September 15, 2022 to retire as the President and Chief Executive Officer of the Company, effective as of September 16, 2022, as further described below.


Mr. Somerhalder, age 66, has served as Chair of the Board since May 2022, and previously served as Vice Chair and Executive Director of the Company from March 2021 to May 2022. Prior to joining the Company, Mr. Somerhalder served as interim president and chief executive officer of CenterPoint Energy, Inc., an electric and natural gas utility serving several U.S. markets, from February 2020 to July 2020, and served as a member of the CenterPoint Energy board of directors from 2016 through July 2020. Mr. Somerhalder also served as interim president and chief executive officer of Colonial Pipeline Company, a U.S. refined products pipeline company, from February 2017 to October 2017. Prior to that, Mr. Somerhalder served as president and chief executive officer of AGL Resources Inc., an energy services holding company in the southeastern United States, from March 2006 through his retirement in December 2015, and served as chairman of the company's board from November 2007 until December 2015. Prior to joining AGL Resources, Mr. Somerhalder served in a number of roles with El Paso Corporation, a publicly traded natural gas and related energy products provider, where he spent almost 30 years, starting his career as an engineer and progressing through leadership roles before being named president of El Paso Pipeline Group and executive vice president of El Paso Corporation. Mr. Somerhalder also previously held directorships with Gulfport Energy Corp., Crestwood Equity Partners LP, Enable Midstream Partners, LP, and SunCoke Energy Partners GP LLC.


In connection with Mr. Somerhalder's appointment as Interim President and Chief Executive Officer of the Company, at the recommendation of the Compensation Committee, the Board approved the following compensation package for Mr. Somerhalder for his interim executive service:


-base salary at an annual rate of $1,250,000 per year; and

-annual participation in the Company's short-term incentive program, with a target value equal to 125% of Mr. Somerhalder's annual base salary rate and a maximum value equal to 200% of the target award, on performance terms substantially similar to those in effect for other senior executive officers of the Company (with such award prorated for partial interim executive service during the year).


The Board also expects to provide Mr. Somerhalder with the right to receive payments in Company common stock for his interim executive service ("Share Payments"), which Share Payments would be based on $600,000 for each month of his interim executive service (prorated for partial months of service), determined based on the Company's average of the high and low closing stock price during each such month or partial month of service. In January of each year, Mr. Somerhalder would receive Share Payments for the months during the prior year in which he provided interim executive service. The Share Payments are expected to be fully vested, but subject to (net of taxes) a one-year holding period following his interim executive service.


Mr. Somerhalder is also expected to be eligible to participate in the Company's executive relocation program, executive deferred compensation plan, 401(k) plan, vacation and paid time off program, and standard health and welfare benefits, but is not expected to vest in the Company's Cash Balance Pension Plan and will not be subject to the Company's share ownership guidelines. Mr. Somerhalder's compensation will be subject to applicable tax withholding. While Mr. Somerhalder serves in his interim role he will not be entitled to receive director compensation.


Retirement of President and Chief Executive Officer; Director Resignation


On September 15, 2022, Mr. Strah decided to retire, as the President and Chief Executive Officer of the Company, effective as of September 16, 2022. Mr. Strah also resigned from the Board on September 15, 2022, effective as of September 16, 2022, and the size of the Board was reduced from twelve to eleven directors.


Mr. Strah will receive no severance payments or severance benefits. However, as is the case generally for executive officers who retire from the Company, Mr. Strah is eligible to receive certain retirement benefits, generally described in the Company's most recent definitive proxy statement filed with the Securities and Exchange Commission. These other retirement benefits generally include vested amounts and payments under the FirstEnergy Corp. Master Pension Plan and the FirstEnergy Corp. Amended and Restated Executive Deferred Compensation Plan, a prorated award for 2022 under the Company's Short-Term Incentive Program, certain prorated performance-based award payouts (based on actual performance) under the Company's Long-Term Incentive Program, and the value of Mr. Strah's unused banked and frozen vacation at the time of his retirement.