8-KLeadership Changes

FIRSTENERGY CORP 8-K Report, Executive Changes (May 21, 2010)

Filed May 21, 2010For Securities:FE

Summary

This 8-K filing from FirstEnergy Corp. (FE) on May 21, 2010, details a modification to the employment agreement of Gary R. Leidich, Executive Vice President and President – FirstEnergy Generation. Specifically, Mr. Leidich has waived his right to a tax gross-up payment associated with a lump sum cash retirement benefit. This benefit, originally established under a 1996 agreement with Centerior Energy Corporation (prior to the FirstEnergy merger) and referenced in his 2008 employment agreement with FirstEnergy Service Company, was set to be paid at age 62 and included a provision to cover any applicable excise tax. The decision to waive the tax gross-up aligns the company's compensation practices with the publicly stated proxy voting guidelines of one of FirstEnergy's significant institutional shareholders. All other terms of Mr. Leidich's February 26, 2008 employment agreement remain unchanged, with the agreement having been extended through June 30, 2011.

Key Highlights

  • 1Executive Gary R. Leidich has agreed to waive his right to a tax gross-up benefit.
  • 2The waived benefit pertains to a lump sum cash retirement payment originally established in a 1996 agreement.
  • 3The waiver was made to align with the proxy voting guidelines of a key institutional shareholder.
  • 4Mr. Leidich's employment agreement, extended to June 30, 2011, remains otherwise unchanged.
  • 5This action addresses a specific aspect of executive compensation to satisfy shareholder expectations regarding corporate governance and compensation practices.

Frequently Asked Questions

Mr. Leidich waived his right to a tax gross-up payment, which was part of a lump sum cash retirement benefit. This gross-up was intended to cover any applicable excise taxes on the retirement payment.

The waiver was initiated to ensure that a provision in his employment agreement conformed to the publicly stated proxy voting guidelines of one of FirstEnergy's significant institutional shareholders, demonstrating responsiveness to shareholder feedback on compensation matters.

No, all other terms of Mr. Leidich's employment agreement dated February 26, 2008, remain the same. His agreement has also been extended through June 30, 2011.

The original severance and employment agreement that provided for this lump sum cash retirement benefit was established on July 1, 1996, between Centerior Energy Corporation and Mr. Leidich, prior to the merger that formed FirstEnergy Corp.