8-KLeadership Changes

FIRSTENERGY CORP 8-K Report, Executive Changes (Feb 28, 2019)

Filed February 28, 2019For Securities:FE

Summary

This Form 8-K filing from FirstEnergy Corp. (FE) on February 28, 2019, primarily details the retirement of Donald R. Schneider, President of its subsidiary FirstEnergy Solutions Corp. (FES). Mr. Schneider's retirement is effective May 1, 2019, after a transition period where he steps down as FES President on March 2, 2019, but remains executive chairman. This development occurs amidst the ongoing Chapter 11 bankruptcy proceedings of FES and its subsidiaries, which were filed in March 2018. Investors should note the financial implications of Mr. Schneider's retirement package, which includes a significant lump-sum payment, continued healthcare benefits, and a temporary pension enhancement. These benefits are consistent with the FES Voluntary Early Retirement Option (VERO) and comply with bankruptcy code provisions. The filing also reiterates the inherent risks and uncertainties associated with the FES bankruptcy and FirstEnergy's broader strategic transition to a fully regulated business model.

Key Highlights

  • 1Donald R. Schneider, President of FES and a named executive officer, will retire effective May 1, 2019.
  • 2Mr. Schneider will step down as FES President on March 2, 2019, and serve as executive chairman until retirement.
  • 3Mr. Schneider is eligible for the FES Voluntary Early Retirement Option (VERO).
  • 4Retirement package includes an estimated lump sum payment of $1,009,934, plus unused paid time off.
  • 5Continuation of health care benefits for up to 18 months will be provided to Mr. Schneider.
  • 6A temporary monthly pension enhancement of $1,500 up to age 65 is part of the retirement terms.
  • 7The retirement occurs while FES and its subsidiaries are under Chapter 11 bankruptcy protection.

Frequently Asked Questions

The primary reason for this filing is to announce the retirement of Donald R. Schneider, President of FirstEnergy Solutions Corp. (FES), a subsidiary of FirstEnergy Corp., and to detail the terms of his separation package.

Mr. Schneider will receive an estimated lump sum payment of $1,009,934 (less withholdings), equivalent to his severance under the FES Voluntary Early Retirement Option (VERO) and for unused paid time off. He will also receive up to 18 months of continued healthcare benefits and a temporary monthly pension enhancement of $1,500 until age 65.

Mr. Schneider's retirement is being managed within the context of FES's Chapter 11 bankruptcy proceedings. The payment structure, particularly the severance benefit, is calculated in accordance with the terms of the FES VERO and specific bankruptcy code provisions (11 U.S.C. § 503(c)(2)).

Yes, Mr. Schneider will remain executive chairman until his retirement date of May 1, 2019, with no changes to his current compensation during this period.