8-KEarnings & ResultsLeadership ChangesMaterial Agreements+1

CONSOLIDATED EDISON INC 8-K Report, Material Agreement (Jul 27, 2005)

Filed July 27, 2005For Securities:ED

Summary

This SEC Form 8-K filing from Consolidated Edison, Inc. (ED) on July 27, 2005, primarily details significant changes in executive leadership and their associated compensation arrangements. The most notable event is the entry into a new employment agreement for Kevin Burke, who is set to become President and Chief Executive Officer of Con Edison and CEO of Con Edison of New York effective September 1, 2005. The report outlines the terms of his compensation, including base salary, bonus targets, long-term incentives, and robust severance provisions in cases of termination without cause or resignation for good reason, or in the event of a change in control. Additionally, the filing reports amendments to the employment agreements of Eugene R. McGrath and Joan S. Freilich, reflecting their transitions into new roles: Mr. McGrath will become Executive Chairman, and Ms. Freilich will become Vice Chairman. These amendments also detail their respective compensation and benefits upon retirement or termination, including accelerated vesting of equity awards. The report also announces board appointments and other executive officer changes, indicating a significant organizational shift at the senior management level.

Key Highlights

  • 1Kevin Burke appointed as the new President and CEO of Consolidated Edison, Inc. and CEO of Con Edison of New York, effective September 1, 2005.
  • 2Kevin Burke's new employment agreement includes an initial base salary of $925,000, with a target bonus of 100% of base salary.
  • 3Significant severance provisions are detailed for Kevin Burke in case of termination without cause, resignation for good reason, or change in control, including extended benefits and accelerated vesting of equity.
  • 4Eugene R. McGrath transitions to Executive Chairman, with his employment agreement amended to reflect this role and potential early termination.
  • 5Joan S. Freilich transitions to Vice Chairman, with her employment agreement amended to detail compensation and benefits upon retirement, including accelerated equity vesting and additional service credit for retirement plans.
  • 6Robert N. Hoglund appointed as Senior Vice President and Chief Financial Officer.
  • 7Louis Rana appointed as President and Chief Operating Officer of Con Edison of New York.

Frequently Asked Questions

The filing announces that Kevin Burke will become President and CEO of Consolidated Edison, Inc. and CEO of Con Edison of New York starting September 1, 2005. Eugene R. McGrath will move to the role of Executive Chairman, and Joan S. Freilich will become Vice Chairman. Robert N. Hoglund has been appointed Senior Vice President and Chief Financial Officer, and Louis Rana will be President and Chief Operating Officer of Con Edison of New York.

Kevin Burke's new employment agreement provides for an initial base salary of $925,000. His target bonus is set at 100% of his base salary, with a maximum bonus of 150%. He will also receive awards under the Long Term Incentive Plan and standard benefits for senior executives.

In the event of termination without 'cause' or resignation for 'good reason,' Kevin Burke is entitled to accrued salary and bonus, an amount equivalent to two additional years of defined benefit retirement plan accruals, a lump sum cash payment equal to two times his base compensation and target bonus, and two years of continued medical, dental, and life insurance benefits. These benefits are enhanced to three years in the event of a 'change in control' termination.

For both Mr. McGrath and Ms. Freilich, their amended employment agreements provide that upon retirement or termination, their performance-based equity awards will fully vest and be paid out based on targeted performance. Non-performance-based awards, including restricted stock and options, will also fully vest and be paid out. Specific terms for option exercisability after termination are also detailed. Ms. Freilich will also receive credit for eighteen months of additional service for retirement plan purposes.