Compensation for four of the five highest-paid executives at FirstEnergy Corp. went up in 2013 while its CEO’s salary remained largely the same, but appeared to take a large hit, according to the way numbers are required to be reported.
Anthony J. Alexander, president and chief executive officer of the Akron-based electric utility, appeared to take a large pay cut in 2013 because of the way a three-year incentive was recorded. The incentive came in 2012 in return for Alexander agreeing to remain with the company. The filings regarding compensation were recorded with the U.S. Securities and Exchange Commission.
The executives’ salaries ranged from $1.9 million to $11.7 million in total compensation, using a public company compensation formula used by the Associated Press.
The AP formula is intended to show what executives actually received in a given fiscal year and differs from totals that may be listed in a company’s proxy statement to shareholders.
The AP’s total pay calculations include executives’ salary, bonus, incentives, items called perks and the estimated value of stock options and awards granted during the year.
For Alexander, his base salary, long-term and short-term incentives were all largely the same year over year, said company spokeswoman Tricia Ingraham. “There was one unusual component of his pay in the last proxy. The bulk amount of the potential amount he could receive was reflected in last year’s total,” she said.
In the spring of 2012, the company’s board of directors awarded 200,000 shares of stock to Alexander, who was contemplating retirement, to stay on to head the utility, which is the parent company of Ohio Edison in Akron. The grant is being paid out in increments over a three-year period. It was valued at $9.3 million based on the stock price at the time. Alexander’s employment agreement continues through the spring of 2016.
Ingraham said Alexander did take the 25 percent of the stock he earned in 2013, but it is not reflected in the AP’s compensation formula.
According to the AP formula, Alexander was compensated $11.7 million in 2013, down 41 percent from $19.9 million in 2012.
The other top wage earners at FirstEnergy for 2013 were:
• Mark T. Clark, who retired on Dec. 31 as executive vice president of finance and strategy after working for the company for 37 years. He was paid $3.7 million in 2013, an increase of 7.9 percent from $3.4 million in 2012.
• Leila L. Vespoli, executive vice president of markets and chief legal officer, was compensated $2.8 million in 2013, an increase of 8.5 percent from $2.6 million in 2012.
• Charles E. Jones Jr., executive vice president and president of FirstEnergy Utilities, was compensated $2.5 million in 2013, an increase of 10 percent from $2.2 million in 2012.
• James F. Pearson, who was promoted Jan. 1 to senior vice president and chief financial officer, was compensated $1.9 million in 2013. He was not among the top five wage earners in 2012.
Of the executives’ compensation, Ingraham said “the board [of directors at FirstEnergy] is always assessing what best practices are. They work with outside consultants to determine best compensation policies.”
The company announced in its proxy statement that it would hold its annual meeting back in Akron. The meeting will be at 8 a.m. May 20 at the John S. Knight Convention Center. Last year’s annual meeting was held in Morgantown, W.Va. and was 16 minutes long without remarks from Alexander.
The previous year’s annual meeting in Akron was marked by protests both inside and outside of the meeting. That meeting lasted 10 minutes and Alexander also did not make public remarks in front of shareholders.
Said Ingraham, “We said we would change the locations up, but we are back in Akron this year.”