8-KLeadership Changes

EVERSOURCE ENERGY 8-K Report, Executive Changes (Feb 13, 2009)

Filed February 13, 2009For Securities:ES

Summary

This 8-K filing from Northeast Utilities (now Eversource Energy) on February 13, 2009, details the approval of new incentive programs for named executive officers (NEOs) for 2009. The Compensation Committee approved the 2009 Annual Incentive Program and the 2009-2011 Long-Term Incentive Program, designed to align executive compensation with company performance and shareholder interests. The annual program focuses on adjusted net income, with potential payouts up to double the target for superior performance. The long-term program introduces a revised structure, emphasizing a greater connection to performance and shareholder returns. The revised long-term incentive structure for 2009-2011 shifts from a 50% restricted stock units (RSUs) and 50% performance cash model to a more diversified approach: 25% RSUs, 25% performance shares, and 50% performance cash. This change aims to balance total shareholder return (measured by share performance and dividends) with overall financial performance. RSUs vest in installments over three years, while performance shares and cash are tied to four equally-weighted metrics including adjusted net income, return on equity, credit rating, and relative total shareholder return.

Key Highlights

  • 1Northeast Utilities (now Eversource Energy) announced new executive incentive programs for 2009.
  • 2The 2009 Annual Incentive Program links cash bonuses to the company's adjusted net income and individual performance.
  • 3Potential annual incentive payouts can be up to double the target amount for exceptional performance.
  • 4The 2009-2011 Long-Term Incentive Program has been revised to increase performance linkage.
  • 5The new long-term incentive structure includes 25% Restricted Stock Units (RSUs), 25% Performance Shares, and 50% Performance Cash.
  • 6Performance metrics for the long-term program include adjusted net income, return on equity, credit rating, and relative total shareholder return.
  • 7RSUs granted under the new program will vest in three equal installments on February 25 of 2010, 2011, and 2012.

Frequently Asked Questions

The company approved a 2009 Annual Incentive Program and a revised 2009-2011 Long-Term Incentive Program. The long-term program shifted from 50% RSUs/50% performance cash to a more diversified 25% RSUs, 25% performance shares, and 50% performance cash, aiming to better align executive pay with company and shareholder performance.

The 2009 Annual Incentive Program is based on achieving a corporate goal for adjusted net income and individual performance metrics. The 2009-2011 Long-Term Incentive Program uses four equally-weighted metrics: cumulative adjusted net income, average adjusted return on equity, average credit rating, and relative total shareholder return compared to peer utilities.

Awards under the 2009 Annual Incentive Program, if any, are expected to be paid in cash during the first quarter of 2010. For the 2009-2011 Long-Term Incentive Program, performance share and performance cash awards will be determined and paid after the end of 2011. RSUs vest in installments on February 25 of 2010, 2011, and 2012.

The company revised the long-term incentive program to strengthen the connection between executive compensation and performance, and to better align the interests of named executive officers with those of stakeholders. The new structure is designed to balance total shareholder return with the company's financial performance.