FIRSTENERGY CORP appointed Brian X. Tierney as new CEO

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


Appointment of President and Chief Executive Officer


On March 22, 2023, the Board of Directors (the "Board") of FirstEnergy Corp. (the "Company") appointed Brian X. Tierney to the position of President and Chief Executive Officer of the Company, effective as of June 1, 2023. Mr. Tierney, 55, currently serves as Senior Managing Director and Global Head of Infrastructure Operations and Asset Management at Blackstone Inc. ("Blackstone") where he leads the team that partners with executives of Blackstone Infrastructure's portfolio companies to create and accelerate value. Prior to joining Blackstone in July 2021, Mr. Tierney spent 23 years with American Electric Power Company Inc. ("AEP"), having served most recently as the Executive Vice President of Strategy in 2021. In that role he had responsibility for AEP's corporate strategy as well as its operational and performance management function. From 2009 to 2020, he served as the Executive Vice President and Chief Financial Officer of AEP. In that role, in addition to traditional finance and accounting activities, he was also responsible for strategy, procurement, supply chain, and fleet operations.


On March 22, 2023, at the recommendation of the Compensation Committee of the Board, the Board approved the following compensation package for Mr. Tierney in connection with his new position, subject to applicable tax withholding:


-Annual base salary rate of $1,500,000, which will be reviewed annually;


-An annual short-term incentive award target opportunity equal to 150% of base salary (this award for 2023 can be earned from 0% to 200% of target, depending on actual performance, but will be prorated for actual service during 2023);


-Starting in 2024, an annual long-term incentive awards target opportunity equal to 683% of base salary (weighted one- third in cash-based performance-adjusted restricted stock units and two-thirds in stock-based performance-adjusted restricted stock units), with awards generally earned from 0% to 200% of target, depending on actual performance;


-Pro-rated awards of stock-based performance-adjusted restricted stock units for the 2021-2023 and 2022-2024 performance periods (Mr. Tierney's target opportunity, generally equal to $10,245,000, will be pro-rated for nine out of 36 months for the 2021-2023 award and for 21 out of 36 months for the 2022-2024 award), with each award generally earned from 0% to 200% of the pro-rated target, depending on actual performance and the specific terms of the award;


-A pro-rated award for the 2023-2025 performance period (weighted one-third in cash-based performance-adjusted restricted stock units and two-thirds in stock-based performance-adjusted restricted stock units), with Mr. Tierney's target opportunity of $10,245,000 pro-rated for 31 out of 36 months and the award generally earned from 0% to 200% of the pro-rated target, depending on actual performance and the specific terms of the award;


-A hiring bonus equal to $1,500,000 (subject to repayment before June 1, 2024 under certain conditions);


-A service-based restricted stock award equal to $5,000,000 that will vest in equal amounts over four years; and


-Participation in the Company's 2017 Change in Control Severance Plan, Cash Balance Pension Plan and Cash Balance Restoration Plan.


Each of the (i) pro-rated awards of stock-based performance-adjusted restricted stock units for the 2021-2023 and 2022-2024 performance periods, (ii) hiring bonus, and (iii) service-based restricted stock award is included in the compensation package as a partial make-whole for awards and compensation being forfeited by Mr. Tierney due to his departure from Blackstone.


Mr. Tierney 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.


Mr. Tierney will be subject to the Company's share ownership guidelines, under which his target share ownership after five years will be 700% of his annual base salary rate.


There are no related party transactions involving Mr. Tierney that would require disclosure pursuant to Item 404(a) of Regulation S-K.


The Company expects to enter into a Director and Officer Indemnification Agreement with Mr. Tierney on or before June 1, 2023, substantially in the form of the Director and Officer Indemnification Agreement previously filed with the SEC on May 16, 2018, as Exhibit 10.1 to the Company's Current Report on Form 8-K, which is incorporated herein by reference.


Interim President and Chief Executive Officer


With the Board's appointment of Mr. Tierney to the position of President and Chief Executive Officer of the Company, effective as of June 1, 2023, John W. Somerhalder II will end his role as Interim President and Chief Executive Officer of the Company at the conclusion of May 31, 2023. Mr. Somerhalder will continue after such date to serve as the Chairman of the Board and will be eligible to receive the same compensation as the Company's other non-employee directors, which is described from year to year in the Company's definitive proxy statements for its Annual Meetings of Shareholders.