8-KLeadership ChangesExhibits & Filings

AMEREN CORP 8-K Report, Executive Changes (Dec 13, 2017)

Filed December 13, 2017For Securities:AEE

Summary

Ameren Corporation (AEE) filed an 8-K on December 13, 2017, to announce changes to its executive compensation and severance policies. The company is updating its 2018 Long-Term Incentive Program (LTIP) to a 70% Performance Share Units (PSUs) and 30% Restricted Stock Units (RSUs) mix, a shift from the previous 100% PSU structure. This aims to balance performance-based incentives with a portion that vests based on continued employment. Additionally, a new severance plan for officers has been approved, detailing payments and benefits in case of termination without cause. For investors, the key takeaways are the evolution of executive pay towards a more diversified equity incentive structure and the clear framework for severance packages. The changes in the LTIP suggest a strategy to retain talent by incorporating a guaranteed component (RSUs) alongside performance-driven awards (PSUs), with modified payout caps for PSUs under negative TSR conditions. The severance plan provides transparency on how executives will be treated in specific separation scenarios, which can be a factor in overall corporate governance and executive retention strategies.

Key Highlights

  • 1Ameren is revising its 2018 Long-Term Incentive Program (LTIP) to include a mix of 70% Performance Share Units (PSUs) and 30% Restricted Stock Units (RSUs), a change from the previous 100% PSU structure.
  • 2The new PSU structure has a performance payout range of 0% to 200% of target stock units based on relative Total Shareholder Return (TSR).
  • 3PSU payouts will be capped at 150% of target if Ameren's TSR is negative during the performance period, an increase from the previous 100% cap.
  • 4Awards under the 2018 LTIP will vest upon continued employment through the payment date (no later than March 15, 2021), with pro-rata vesting for retirement or death.
  • 5A new Executive Severance Plan has been approved for officers, providing specific payments and benefits upon termination without 'Cause' (an 'Eligible Termination').
  • 6Severance benefits include a lump sum payment (one times salary plus target bonus), pro-rated annual incentive, up to 12 months of COBRA subsidy, and outplacement services.
  • 7To receive severance, eligible officers must sign a release agreement and comply with applicable restrictive covenants.

Frequently Asked Questions

The primary change is the shift in the equity award mix for 2018. Executives will now receive 70% of their award value in Performance Share Units (PSUs) and 30% in Restricted Stock Units (RSUs). Previously, 100% of the award was in PSUs.

The potential payout for PSUs will range from 0% to 200% of the target units based on Ameren's Total Shareholder Return (TSR) relative to its peers. Importantly, if Ameren's TSR is negative, the PSU payout will now be capped at 150% of target, an increase from the previous 100% cap under negative TSR conditions.

In the event of a termination by Ameren without Cause (an 'Eligible Termination'), officers are eligible for a lump sum payment equal to one times their annual base salary plus target annual cash incentive, a pro-rated bonus for the year of termination, a subsidy for COBRA continuation coverage for up to 12 months, and up to $25,000 in outplacement services.

Yes, eligible officers must sign a release agreement that is acceptable to Ameren and not revoke it. This agreement may also require compliance with certain restrictive covenants applicable to their position.