8-KLeadership ChangesExhibits & Filings

FIRSTENERGY CORP 8-K Report, Executive Changes (Jan 17, 2017)

Filed January 17, 2017For Securities:FE

Summary

FirstEnergy Corp. (FE) announced in an 8-K filing on January 17, 2017, the immediate election of two new independent directors to its Board of Directors: Steven J. Demetriou and James F. O’Neil III. This expansion increased the Board size from 14 to 16 members. Mr. Demetriou brings extensive executive experience, having served as CEO of Jacobs Engineering Group Inc. and Aleris Corporation, among other leadership roles. Mr. O’Neil has a background as a partner at Western Commerce Group and previously as CEO of Quanta Services, Inc. Both new directors are expected to serve terms expiring at the 2017 annual shareholder meeting and will be compensated in line with existing board members, receiving annual retainers and per-meeting fees. The appointment of these directors is significant as it brings new perspectives to the board. Investors should note that while Mr. O'Neil has a past executive role at Quanta Services, a company that has received significant payments from FirstEnergy, the filing states there are no other related party transactions requiring disclosure involving Mr. Demetriou, and the payments to Quanta were primarily competitively bid. The company also entered into standard Director Indemnification Agreements with both new appointees. This filing primarily focuses on board composition changes and does not contain new financial results or operational guidance, but the addition of experienced leaders could influence future strategic decisions.

Key Highlights

  • 1FirstEnergy Corp. appointed two new independent directors, Steven J. Demetriou and James F. O’Neil III, to its Board of Directors, effective January 17, 2017.
  • 2The Board size was expanded from 14 to 16 members to accommodate the new directors.
  • 3Steven J. Demetriou has a background as CEO of Jacobs Engineering Group Inc. and Aleris Corporation.
  • 4James F. O’Neil III has experience as a partner at Western Commerce Group and former CEO of Quanta Services, Inc.
  • 5Both new directors were determined to be independent under SEC regulations and NYSE listing standards.
  • 6New directors will receive standard board compensation, including annual cash and equity retainers, and meeting fees.
  • 7Standard Director Indemnification Agreements were entered into with both new appointees.

Frequently Asked Questions

FirstEnergy appointed Steven J. Demetriou and James F. O’Neil III to its Board of Directors to add new perspectives and expertise. This action was based on the recommendation of the Company's Corporate Governance Committee.

Steven J. Demetriou previously served as CEO of Jacobs Engineering Group Inc. and Aleris Corporation. James F. O’Neil III has experience as a partner at Western Commerce Group and was formerly the CEO of Quanta Services, Inc.

The new directors will be compensated in the same manner as other board members, which includes an annual cash retainer of $95,000 and an annual equity retainer valued at $135,000. They will also receive $1,500 for each in-person attendance at committee meetings and/or site visits held off-cycle.

The filing states there are no arrangements or understandings under which either Mr. Demetriou or Mr. O'Neil were selected that would indicate a conflict. While Mr. O'Neil's former company, Quanta Services, has received significant payments from FirstEnergy, these were primarily competitively bid, and no related party transactions requiring disclosure under Item 404(a) of Regulation S-K were identified for Mr. Demetriou.