FirstEnergy updates executive severance and change in control plans

FirstEnergy Corp. (NYSE:FE), a $26.23 billion utility company whose stock is currently trading near its 52-week high of $45.47, announced Monday that its board of directors has approved amendments to its executive severance and change in control plans, as well as new forms of restricted stock unit (RSU) award agreements, to take effect January 1, 2026. According to InvestingPro data, the company has demonstrated strong price momentum recently, with a 15.77% return over the past six months. The changes were disclosed in a press release statement and detailed in a filing with the U.S. Securities and Exchange Commission.

Under the revised Executive Severance Benefits Plan, the company’s chief executive officer, officers as defined by SEC rules, and members of the Executive Council will be eligible for severance pay equal to one and one-half times their base salary in the event of certain involuntary terminations, such as facility closures, mergers, or job eliminations. Previously, the CEO was not included in the plan, and severance was calculated based on years of service, with a minimum of 52 weeks and a maximum of 104 weeks of base salary.

Other executives, such as presidents and vice presidents, will be entitled to severance pay equal to their base salary. Director-level participants will receive severance based on three weeks of base salary per year of service, up to a maximum of their annual base salary. Executives who qualify for healthcare continuation under COBRA will have a portion of their premiums waived for up to 18 months or until COBRA eligibility ends.

The amended Change in Control Severance Plan maintains existing benefits for most participants. These include cash severance equal to two times base salary plus target short-term incentive, prorated short-term incentive awards, two years of health and welfare coverage, and up to $30,000 in outplacement services. For the CEO, the cash severance multiple increases to 2.99 times base salary plus target short-term incentive in the event of a qualifying termination within 24 months following a change in control.

The company also approved new RSU award agreements. Under the new agreements, unvested time-based RSUs will vest in full, and unvested performance-based RSUs will vest at target levels, upon a change in control if not replaced with equivalent awards.

These updates align the company’s executive compensation programs with current practices. All changes are contingent upon executives signing a general release and waiver of claims. The information is based on a press release statement and the company’s SEC filing.

In other recent news, FirstEnergy Corp. reported its second-quarter earnings for 2025, achieving an earnings per share (EPS) of $0.52, which aligned with analysts’ expectations. The company also slightly exceeded revenue forecasts, reporting $3.4 billion compared to the anticipated $3.39 billion. Following these results, Barclays upgraded FirstEnergy’s stock to Overweight, citing an undervalued growth plan after meetings with the company’s executives. Additionally, Jefferies and Mizuho both raised their price targets for FirstEnergy to $45 from $43, maintaining Hold and Neutral ratings, respectively. Jefferies mentioned a potential "clean path" for the stock’s future, contingent on regulatory decisions in Ohio. Mizuho’s target adjustment came after FirstEnergy’s strong performance in the distribution business contributed to its earnings beat. Furthermore, FirstEnergy announced a quarterly dividend of 44.5 cents per share, payable on December 1, 2025, to shareholders recorded by November 7, 2025.

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