Four of the five highest-paid executives of FirstEnergy Corp. received significantly less in total compensation in 2012 than the previous year, with the exception of the utility’s president and chief executive officer.
The salaries ranged from $1.9 million to $19.9 million in total compensation, using a public company executive compensation formula adopted by the Associated Press. Those numbers ranged from a 32 percent decrease to a 38 percent increase for Anthony J. Alexander, FirstEnergy’s CEO and president.
The figures were disclosed in the company’s 2012 proxy statement. The company’s 2013 shareholders meeting will be Tuesday.
Long-term incentives for the top wage earners were up, based on three-year results, but short-term incentives, based on one-year results, were down across the board since they are tied to financial and operational results, said spokeswoman Tricia Ingraham. Net income for the year was down 11.3 percent to $771 million from $869 million the previous year, due to the challenging economy, she said.
Alexander’s total compensation went up for a different reason.
In March 2012, Alexander was given 200,000 shares of stock as an incentive to stay on to head the Akron-based utility and parent company of Ohio Edison. According to the company’s proxy, the board awarded the stock over a three-year period — 25 percent at the end of 2013, 25 percent at the end of 2014 and 50 percent at the end of 2015, as an incentive for Alexander to remain.
The agreement, which is valued at $9.3 million based on the stock price at the time of the grant, was put in place by the board “because Tony has 40 years with the company, is 62 and has been in management positions for 23 years and contemplating his retirement,” said Ingraham. “The board felt it was important to maintain his leadership, especially because it’s been a challenging period with a soft economy.”
While the stock award will not be paid in full until Alexander satisfies the three-year period, according to the U.S. Securities and Exchange Commission, the full value of the grant must be recorded now, said Ingraham.
Alexander was the highest paid executive at FirstEnergy, earning total compensation of $19.9 million in 2012. That was a $5.6 million, or 38.5 percent, increase from his 2011 compensation of $14.4 million.
The Associated Press compensation formula is intended to show what executives actually received in a given fiscal year and differs from totals 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.
The other top FirstEnergy earners in 2012 were:
• Mark T. Clark, executive vice president and chief financial officer.
His compensation in 2012 was $3.4 million. That’s down $1.6 million or 32 percent from $5 million in 2011.
• Leila L. Vespoli, executive vice president and general counsel.
Her compensation for 2012 was $2.6 million, down $1.8 million or 40.6 percent from $4.4 million in 2011.
• Charles E. Jones Jr., senior vice president, FirstEnergy Service Company and President, FirstEnergy Utilities.
His compensation for 2012 was $2.2 million, down $1.2 million or 35 percent from $3.5 million in 2011.
• James H. Lash, president, FirstEnergy Generation.
His compensation in 2012 was $1.9 million. This was Lash’s first appearance on the top five wage-earners list.