Bill Fehrman
About Bill Fehrman
Bill Fehrman, 64, has served as AEP’s President and Chief Executive Officer since August 1, 2024 and joined the Board the same month; he is not an independent director and serves on the Board’s Executive Committee . He holds a B.S. in Civil Engineering from the University of Nebraska and an MBA from Regis University, and previously led Centuri Holdings, Berkshire Hathaway Energy, MidAmerican Energy, PacifiCorp Energy and Nebraska Public Power District . AEP’s 2024 operating earnings were $5.62 per share and the quarterly dividend was increased to $0.93 in October 2024, aligning pay programs to operating EPS and TSR performance measures .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Centuri Holdings, Inc. | President & CEO | 2024 (Jan–Jul) | Led public listing; partnered with utilities to build/maintain energy infrastructure . |
| Berkshire Hathaway Energy Company | President, CEO & Director | 2018–2023 | Drove financial growth; customer service initiatives across large utility platforms . |
| MidAmerican Energy Company | President & CEO | 2007–2018 | Led regulated utility operations; safety, regulatory and renewable energy execution . |
| PacifiCorp Energy | President & CEO | Prior to 2007 | Generation leadership; operational, regulatory and safety expertise . |
| BHE Renewables | President & CEO | Prior to 2007 | Renewable development; risk management and policy insight . |
| Nebraska Public Power District | President & CEO | Prior to 2007 | Public power leadership; reliability and operations . |
External Roles
| Organization | Role | Status (as disclosed) | Notes |
|---|---|---|---|
| Centuri Holdings, Inc. | Director | Prior 5 years | Listed as prior public company directorship in AEP’s proxy . |
| Vestas Wind Systems A/S | Director | Prior 5 years | Listed as prior public company directorship in AEP’s proxy . |
Fixed Compensation
| Component | 2024 Amount / Terms | Notes |
|---|---|---|
| Base Salary | $1,500,000 | Effective upon Aug 1, 2024 hire . |
| Sign-on Bonus | $2,000,000 | Negotiated hire bonus paid in 2024 . |
| Perquisites | $555 | Financial counseling/tax prep; plus director travel accident insurance allocation . |
| Relocation | $21,559 | Relocation assistance to Columbus HQ . |
| Aircraft Time Sharing Agreement | Full incremental cost reimbursement by Fehrman | TSA permits personal use with reimbursement; family allowed to accompany . |
| Director Compensation | None (employee directors receive no additional cash/equity retainer) | AEP policy for employees serving as directors . |
Performance Compensation
Annual Incentive (2024)
| Metric | Weight | Target | Actual | Payout / Score | Notes |
|---|---|---|---|---|---|
| Operating EPS | 60% | $5.63 | $5.6178 | 91.5% | EPS cap modifier applied to non-EPS metrics if below midpoint . |
| Safety (aggregate of CORE metrics) | 20% | Program targets (CORE engagement/learning) | 93.1% of target | 93.1% (modifier not applied due to incident circumstances) | Fatality modifier waived based on investigation; details in CD&A . |
| Compliance (NERC incidents) | 5% | Reduction vs 3-year baseline | Target (capped) | 100% (cap) | Capped due to EPS below midpoint . |
| Affordability (LIHEAP/HEAP participation) | 5% | +2% | +1.07% | 96.1% | Funding limits reached in several jurisdictions . |
| Reliability (SAIDI) | 5% | Five-year average | 219.9 minutes | 100% (cap) | Capped due to EPS below midpoint . |
| Employee Engagement (Survey) | 5% | 93% participation | 93% | 100% | Threshold 90%, max 96% . |
| Award Detail | Value |
|---|---|
| Target Bonus % (CEO) | 155% of base earnings . |
| Calculated Opportunity (2024) | $851,004 . |
| Actual Payout (2024) | $1,100,000 . |
Long-Term Incentives (Grants in 2024)
| Instrument | Grant Date | Target Value | Units Granted | Vesting | Performance Framework |
|---|---|---|---|---|---|
| Performance Share Units (PSUs) | Aug 1, 2024 | $8,700,000 (LTI mix aggregate) | 34,571 PSUs | 3-year performance (ends Dec 31, 2026) | 50% 3-yr cumulative operating EPS; 40% rTSR vs 25-utility peer group; 10% Reliability through clean energy transition . |
| RSUs (annual cycle) | Aug 1, 2024 | Included in $8,700,000 | 51,363 RSUs | Three equal installments on Feb 21, 2025/2026/2027 (approx.) | Time-based; dividends reinvested as RSUs . |
| New Hire RSUs | Aug 1, 2024 | Included in $8,700,000 | Included in RSU totals | Three equal installments on 1st/2nd/3rd anniversary of grant | Offset compensation forfeited at prior employer . |
| PSU Targets (2024–2026) | Threshold | Target | Max |
|---|---|---|---|
| 3-yr Cumulative Operating EPS | $17.111 (25% payout) | $18.012 (100%) | $18.912 (200%) . |
| rTSR vs Utility Peer Group | 20th percentile (0%) | 50th percentile (100%) | 80th percentile (200%) . |
| Reliability Through Clean Energy Transition | 50% of MW approvals (0%) | 75% (100%) | 100% (200%) . |
| Historical PSU Payout (Company-wide, 2022–2024) | Composite Score |
|---|---|
| EPS 107.3%; rTSR 129.3%; Non-emitting capacity 44.2% → Composite 109.8% | 109.8% . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership (Shares) | 2,802 shares as of Feb 23, 2025 . |
| Ownership % of Shares Outstanding | ~0.0005% (2,802 / 533,691,905; record date Mar 4, 2025) . |
| Unvested PSUs | 70,414 units shown at 200% maximum per SEC table methodology (reflects current cycles; payout subject to performance) . |
| Unvested RSUs (2024 cycle) | 12,071 units outstanding at year-end 2024 (first installment vested Feb 21, 2025) . |
| Unvested RSUs (New Hire cycle) | 40,237 units outstanding at year-end 2024 . |
| Options | No stock options outstanding . |
| Hedging/Pledging | Prohibited for directors and executives; none of the reported shares are pledged . |
| Ownership Guidelines | CEO must hold 6x base salary; expected to achieve within five years; career share deferrals used if shortfall persists . |
| Clawbacks | Mandatory SEC 10D-1 clawback and “no fault” policy for restatements/corrections; Board discretion to recover excess incentive pay . |
Employment Terms
| Term | Provision |
|---|---|
| Employment Start Date | August 1, 2024 (CEO); Board director since August 2024 . |
| Severance (Executive Severance Plan) | 2x base salary + 2x target annual incentive; payout over two years; non-compete 2 years; non-solicit/confidentiality/cooperation/non-disparagement required . |
| Change-in-Control (CIC) | Double-trigger; 2.99x base salary + 2.99x target annual incentive (CEO); accelerated vesting of PSUs/RSUs at target on qualifying termination; no excise tax gross-up . |
| Pension/SERP | Not eligible until one year of service; no pension accruals in 2024 . |
| Deferred Compensation | SRSP contributions $14,608; company match $10,956; aggregate balance $25,675 (2024) . |
| Perquisites/Relocation | Financial counseling/tax prep; relocation support; personal aircraft use via TSA with full incremental cost reimbursement . |
| Insider Trading Policy | Prohibits hedging and pledging; formal policy filed with 10-K . |
Board Governance and Director Service
- Board service history and roles: Director since August 2024; serves on the Executive Committee .
- Independence: Not independent while serving as President & CEO; Board has an independent Chair (Sara Martinez Tucker) and 11 of 12 nominees are independent .
- Committee ecosystem: Independent committees oversee HR, Audit, Corporate Governance, Finance, Nuclear Oversight and Technology; average director attendance in 2024 was 97.5% across Board/committee meetings .
- Employee director compensation: As an employee, Fehrman receives no additional director compensation or retainers .
Performance & Track Record under Fehrman’s Tenure (selected company outcomes)
| Theme | Highlight |
|---|---|
| Capital Plan & Growth | Announced $72B capital plan; new 7–9% long-term operating EPS growth rate; 28 GW load additions backed by agreements; rate base CAGR 10% to ~$128B by 2030 . |
| Regulatory/Execution | Emphasized customer-first operating company strategy; legislative/regulatory wins; large-load tariffs; acquisition approvals (e.g., Green Country plant) . |
| Financing & Grid Reliability | Secured $1.6B DOE loan guarantee to upgrade ~5,000 miles of transmission lines; estimated $275M customer savings; supports data center/AI/manufacturing load . |
| Supply Chain & Delivery | Strategic partnership with Quanta Services to execute 765 kV/high-voltage transmission and expand domestic EHV equipment manufacturing capacity . |
| Earnings/Dividend cadence | 3Q25 operating EPS $1.80; reaffirmed FY25 operating EPS guidance upper half; dividend raised to $0.95 in Oct 2025 (462nd consecutive) . |
Compensation Peer Group, Say-on-Pay, and Committee Practices
- Compensation peer group includes ~26 utilities plus large capital-intensive industrials (e.g., NextEra, Southern, Duke, Dominion, 3M, Sherwin-Williams); AEP targets median total direct compensation vs peers .
- Say-on-Pay: ~95% approval in April 2024; HR Committee continued philosophy and practices accordingly .
- Compensation oversight: HR Committee is independent; retains Meridian as independent compensation consultant; emphasis on performance-based equity and robust clawbacks .
Compensation Structure Analysis
- Mix shift in 2024: Higher RSU proportion due to hire-related offset and partial-year salary; PSUs remain 75% of LTI and RSUs 25% for core cycle, maintaining multi-year at-risk pay focus .
- Performance metrics: Balanced short-term scorecard with EPS (60%) plus safety/compliance/affordability/reliability/engagement; long-term PSUs tied to cumulative operating EPS (50%), rTSR (40%), and reliability through clean energy transition (10%) .
- Clawbacks/Alignment: Mandatory SEC 10D-1 and discretionary “no-fault” recovery; 6x salary ownership guidelines with deferrals via career shares if below thresholds; hedging/pledging prohibited .
Equity Ownership & Vesting Schedules (insider pressure lens)
- Scheduled RSU vesting cadence: Equal tranches on Feb 21 each year for annual-cycle RSUs and on each Aug 1 anniversary for new-hire RSUs, subject to continued employment; PSUs cliff-vest based on performance at end of 2026 .
- Upcoming delivery vectors: Multiple vest events across 2025–2027 create potential share deliveries; hedging/pledging and clawbacks mitigate misalignment risk .
Employment Terms Economics (severance and CIC)
| Scenario | Economics (Illustrative, per Dec 31, 2024 methodologies) |
|---|---|
| Executive Severance Plan (without cause or good reason resignation) | 2x salary ($3,000,000) + 2x target annual incentive ($2,325,000); pro-rata vesting of outstanding PSUs/RSUs; non-compete 2 years . |
| CIC Qualifying Termination (double-trigger) | 2.99x salary ($4,485,000) + 2.99x target annual incentive ($6,951,750); PSUs/RSUs vest at target; outplacement; no excise tax gross-up . |
Investment Implications
- Pay-for-performance alignment: CEO variable pay strongly tied to operating EPS and rTSR, with 2024 annual incentive payout reflecting a 93.3% score and PSUs governed by explicit 3-year EPS/rTSR targets, supporting alignment with shareholder returns .
- Retention risk manageable: Multi-year RSU/PSU schedules with career share deferrals toward a 6x salary ownership guideline and double-trigger CIC protection reduce turnover incentives while preserving shareholder protections via clawbacks .
- Insider selling pressure: Multiple RSU tranche deliveries through 2027 and PSU settlement post-2026 introduce share delivery windows; hedging/pledging bans and executive holding requirements limit misalignment risks .
- Governance quality: Independent Chair with executive sessions at every Board meeting, broad committee oversight, and ~95% say-on-pay approval provide confidence in compensation governance and oversight of CEO/Board dual roles .
- Strategic execution under Fehrman: Capital plan expansion, DOE-backed financing, and supply-chain partnerships signal operational execution and potential multi-year EPS growth drivers consistent with long-term guidance .