8-KLeadership Changes

EVERSOURCE ENERGY 8-K Report, Executive Changes (Dec 8, 2023)

Filed December 8, 2023For Securities:ES

Summary

Eversource Energy (ES) announced on December 8, 2023, through an 8-K filing, the approval of new Executive Change-in-Control and Involuntary Termination (Not For Cause) Severance programs by its Compensation Committee. These programs are designed to provide specific compensation and benefits to certain senior executives under defined circumstances, aiming to ensure executive retention and provide financial security. The new programs detail severance packages in two key scenarios: a termination following a change in control, and an involuntary termination without cause. These packages include lump-sum cash payments based on base salary and target annual incentives, accelerated equity awards (performance shares and RSUs) in change-in-control scenarios, and continued healthcare benefits. Notably, existing agreements for certain top executives like Joseph R. Nolan, Jr. and Christine M. Carmody will remain in effect, and they will not be eligible for these new programs. John M. Moreira, the CFO, is expected to enter into a separate agreement to be eligible.

Key Highlights

  • 1Eversource Energy established new severance programs for senior executives related to Change-in-Control (CIC) events and involuntary termination without cause.
  • 2Under CIC, eligible executives receive lump-sum cash (2.99x salary + target incentive for CEO, 2.00x for others), prorated annual incentive, accelerated performance shares (at target) and RSUs, and extended healthcare benefits.
  • 3In case of involuntary termination without cause, eligible executives receive lump-sum cash (2.00x salary for CEO, 1.00x for others) and extended healthcare benefits.
  • 4Existing CIC agreements for key executives like the CEO and EVP-HR remain in place and supersede these new programs.
  • 5The CFO is expected to enter a separate agreement to be eligible for these new severance benefits.
  • 6Severance benefits are contingent upon the executive signing a separation and release agreement.
  • 7Executives will not receive excise tax gross-up payments under these new programs.

Frequently Asked Questions

Eversource Energy has approved two new executive severance programs: one for 'Change-in-Control' (CIC) events and another for 'Involuntary Termination (Not For Cause)'. These programs outline compensation and benefits for eligible senior executives under these specific circumstances.

Following a CIC event, eligible executives receive a lump-sum cash payment (multiples of base salary plus target incentive), a prorated annual incentive, acceleration of performance share grants at target and unvested RSU grants, and extended healthcare benefits. The multiples are higher for the CEO (2.99x) compared to other Senior Team members (2.00x).

If an eligible executive is involuntarily terminated without cause, they will receive a lump-sum cash payment (2.00x salary for CEO, 1.00x for others) and continued healthcare benefits. Unvested equity awards are typically forfeited unless the executive is eligible for retirement.

No, not all senior executives are immediately eligible. Existing Change-in-Control agreements for the CEO, Chairman, President (Joseph R. Nolan, Jr.), and the Executive Vice President-Human Resources and Information Technology (Christine M. Carmody) will remain in effect. The Chief Financial Officer (John M. Moreira) is expected to enter into a separate agreement to be eligible for these new severance benefits.