8-KLeadership ChangesExhibits & Filings

American Water Works Company, Inc. 8-K Report, Executive Changes (Dec 13, 2013)

Filed December 13, 2013For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) has announced a CEO succession plan through an 8-K filing dated December 13, 2013. Effective at the 2014 Annual Meeting of Stockholders, current Senior Vice President and Chief Financial Officer Susan N. Story will succeed Jeffry E. Sterba as President and Chief Executive Officer. Mr. Sterba will transition to an advisory role until January 1, 2015, ensuring a smooth handover. The agreement details Mr. Sterba's compensation and benefits during this transition period, including continued base salary through May 2014, reduced salary thereafter, participation in incentive plans, and specific vesting terms for restricted stock units. This planned transition aims to provide leadership continuity and leverage Mr. Sterba's experience during the changeover.

Key Highlights

  • 1Susan N. Story appointed as the next President and CEO, effective at the 2014 Annual Meeting of Stockholders.
  • 2Current CEO Jeffry E. Sterba will continue in an advisory role until January 1, 2015.
  • 3Mr. Sterba will receive his current base salary through May 31, 2014, followed by a reduced salary for the remainder of 2014.
  • 4Mr. Sterba will remain eligible for the Annual Incentive Plan (AIP) and Long Term Incentive Plan (LTIP) during his transition period.
  • 5Specific vesting schedules are outlined for Mr. Sterba's restricted stock unit grants made in 2013 and 2014.
  • 6Mr. Sterba will not receive severance pay upon the end of his employment on January 1, 2015.
  • 7The company will fully vest employer defined contributions for Mr. Sterba under the Nonqualified Savings and Deferred Compensation Plan for 2011-2014 plan years.

Frequently Asked Questions

Susan N. Story, currently the Senior Vice President and Chief Financial Officer, will succeed Jeffry E. Sterba as President and Chief Executive Officer. This transition is planned to occur at the Company's 2014 Annual Meeting of Stockholders.

After the 2014 Annual Meeting, Mr. Sterba will continue as an employee of the Company until January 1, 2015, serving in an advisory capacity to Ms. Story. He will not retain a director position.

Mr. Sterba will receive his current base salary through May 31, 2014. For the remaining seven months of 2014, his base salary will be $20,000 per month. He will also continue to participate in the Company's AIP and LTIP, with awards based on his salary and performance during this period. Additionally, specific vesting terms apply to his restricted stock units and employer defined contributions under the Nonqualified Savings and Deferred Compensation Plan.

No, Mr. Sterba will not be entitled to any payments under the Company's severance policy upon the termination of his employment as of January 1, 2015.