8-KLeadership ChangesOther EventsExhibits & Filings

EVERSOURCE ENERGY 8-K Report, Executive Changes (Feb 11, 2011)

Filed February 11, 2011For Securities:ES

Summary

Eversource Energy (formerly Northeast Utilities) filed an 8-K on February 11, 2011, primarily to report on the approval of its 2011 Annual Incentive Program and the 2011-2013 Long-Term Incentive Program by its Compensation Committee. These programs are designed to incentivize named executive officers (NEOs) through cash bonuses and equity awards based on corporate and individual performance metrics. The annual incentive program is tied to adjusted net income targets, with potential payouts up to double the target amount for superior performance. The long-term incentive program has been revised from previous years, now comprising 25% Restricted Share Units (RSUs) and 75% performance shares, with a shift away from performance cash. This structure aims to better align executive compensation with shareholder interests and corporate financial performance.

Key Highlights

  • 1Approval of the 2011 Annual Incentive Program for NEOs, offering cash bonuses based on corporate and individual performance.
  • 2The 2011 Annual Incentive Program has a minimum performance threshold: adjusted net income must reach at least 80% of the target for any payout.
  • 3Approval of the 2011-2013 Long-Term Incentive Program for NEOs, with a revised structure of 25% RSUs and 75% performance shares.
  • 4The Long-Term Incentive Program eliminates performance cash, increasing the weighting of RSUs and performance shares.
  • 5Performance shares are based on four metrics: cumulative adjusted net income, average adjusted return on equity, average credit rating, and relative total shareholder return.
  • 6Announcement of a quarterly dividend increase to $0.275 per share, payable on March 31, 2011.
  • 7A special grant of 76,406 RSUs was approved for the CEO, Charles W. Shivery, recognizing his role in the NSTAR merger and post-merger integration.

Frequently Asked Questions

The primary purpose of the 2011 Annual Incentive Program is to incentivize named executive officers (NEOs) to achieve specific corporate and individual performance goals during 2011, with the potential to earn cash bonuses based on these achievements. Performance is measured against adjusted net income targets and individual metrics.

The 2011-2013 Long-Term Incentive Program has been restructured to consist of 25% Restricted Share Units (RSUs) and 75% performance shares, eliminating the performance cash component. This change aims to strengthen the link between executive compensation and corporate performance, particularly total shareholder return and financial metrics.

The long-term incentive program uses four key metrics: cumulative adjusted net income, average adjusted return on equity, average credit rating, and relative total shareholder return compared to a peer group of utility companies. Total shareholder return has a 40% weighting, while the other three metrics each have a 20% weighting.

In addition to the incentive programs, Northeast Utilities announced an increase in its quarterly dividend to $0.275 per share, payable on March 31, 2011, to shareholders of record on March 1, 2011.