Trevor Mihalik
Executive Vice President and Chief Financial Officer at AEP
Executive
About Trevor Mihalik
Trevor I. Mihalik, 58, is Executive Vice President and Chief Financial Officer (principal financial officer) of American Electric Power, effective January 20, 2025. He holds a B.S. in Accounting (Creighton University), an MBA (Rice University), and is a CPA (Texas). Prior to AEP, he served as Group President (2024) and CFO (2018–2023) of Sempra, with earlier senior finance roles at Iberdrola Renewables, Chevron Natural Gas, Bridgeline Holdings, and PwC. As CFO, he has emphasized earnings momentum (Q1 operating EPS of $1.43 vs. $1.25 YoY), confidence in achieving the upper half of 2025 operating EPS guidance ($5.75–$5.95), resolution of NOLC rate treatment (FERC decision adding ~$480 million/$0.90 to GAAP EPS, excluded from operating EPS), and an increased five‑year capital plan target up to $70 billion, with financing details to follow later in 2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sempra | Executive Vice President & Group President | 2024 | Led SDG&E and SoCalGas operations; senior P&L responsibility at a major utility holding company . |
| Sempra | Executive Vice President & Chief Financial Officer | 2018–2023 | Oversaw enterprise finance, capital allocation, and investor engagement for a large-cap utility . |
| Sempra | SVP – Controller & Chief Accounting Officer | 2012–2018 | Led accounting/controls, SEC reporting, and financial governance . |
| Iberdrola Renewables Holdings | SVP – Finance | Prior to 2012 | Senior finance leadership in renewables . |
| Chevron Natural Gas | Vice President – Finance | Prior to 2012 | Finance leadership in energy trading/marketing . |
| Bridgeline Holdings (Chevron/Targa JV) | VP & Chief Financial Officer | Prior to 2012 | CFO for midstream JV; capital discipline . |
| PricewaterhouseCoopers | Assurance (early career) | Prior to industry roles | Audit/assurance foundation . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| WD‑40 Company (NASDAQ: WDFC) | Director; Chair, Finance Committee | Current | Board service and committee leadership indicate depth in oversight of capital allocation and financial policy . |
Fixed Compensation
| Component | Terms |
|---|---|
| Base Salary | $975,000 annual base salary (effective with appointment) . |
| Target Short‑Term Incentive (STIP) | Target = 100% of base salary paid during the calendar year; for 2025, equals 95% of annual base salary given start date . |
| Target Long‑Term Incentive (LTI) | $3,800,000 annually; mix: 75% performance shares, 25% RSUs; grant on 2/17/2025 based on prior-day close . |
| Sign‑On Equity | $1,500,000 in RSUs granted at hire; vests in three equal installments on 2/21/2026, 2/21/2027, 2/21/2028 (continued employment) . |
Performance Compensation
| Program | Metric | Weighting | Target/Structure | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Annual Incentive Plan (AIP) – AEP framework (2024 design) | Operating EPS | 60% | Target $5.63; Threshold $5.53; Max $5.81; non‑EPS metrics capped at target unless EPS ≥ midpoint . | 2024 Operating EPS of $5.6178 yielded 91.5% score for the EPS component; non‑EPS scores adjusted per EPS cap . | Annual, cash; subject to clawback . |
| Safety | 20% | Multi‑component CORE engagement metrics; safety modifier (50% reduction) applied only for employee/contractor fatality unless facts warrant waiver . | 93.1% score; modifier not applied due to circumstances of contractor incident . | ||
| Compliance | 5% | NERC incident reduction vs. baseline . | Target due to EPS cap . | ||
| Affordability | 5% | LIHEAP/HEAP participation uplift (state‑weighted) . | 96.1% of target . | ||
| Reliability | 5% | SAIDI vs. 5‑yr average (excl. major events) . | Reduced to target due to EPS cap . | ||
| LTI – Performance Shares (2025 grant) | Cumulative operating EPS | 50% | 3‑year performance (2025–2027) vs. Board‑approved target . | To be determined at cycle end. | Vests 12/31/2027 (continuous employment) . |
| Relative TSR (custom utility peer group) | 50% | 3‑year TSR percentile . | To be determined at cycle end. | ||
| LTI – RSUs (2025 cycle) | Time‑based RSUs | 25% of LTI target | Fixed grant; time-based vesting . | N/A | Vests in thirds on 2/21/2026, 2/21/2027, 2/21/2028 . |
| Historical LTI Outcome (Company, 2022–2024) | TSR percentile | 40% | 3‑yr peer‑relative TSR . | 59th percentile; 129.3% payout for this component . | Vested 12/31/2024 . |
| Cumulative operating EPS | 50% | 3‑yr EPS vs. target . | $15.958; 107.3% payout . | ||
| Non‑emitting capacity | 10% | Share of non/low‑emitting capacity . | 31.1%; 44.2% payout; weighted total payout = 109.8% . |
Notes:
- AEP eliminated the “Reliability” LTI metric for 2025; 2025 LTI weighting is 50% EPS / 50% TSR .
- Clawbacks: AEP maintains both a “no‑fault” discretionary clawback and a mandatory SEC Rule 10D‑1/NASDAQ compliant clawback covering erroneously paid performance‑based incentives .
Equity Ownership & Alignment
- Stock ownership guidelines: CEO = 6x base salary; other NEOs (including CFO) = 3x base salary. Executives have five years to achieve compliance; unmet guidelines trigger mandatory deferral of performance shares into “Career Shares” until after employment ends; the HR Committee may also require deferral of a portion of AIP into Career Shares if non‑compliant after five years .
- Hedging and pledging: Prohibited for directors and executive officers under AEP’s insider trading policy .
- Beneficial ownership: The 2025 proxy’s ownership tables predate Mihalik’s appointment; initial holdings for Mihalik will be driven by his 2025 grants and any open‑market purchases (no Form 4 data cited here).
- Lock‑up: A March 2025 forward equity program included a list of “Persons Subject to Lock‑Up” that names Trevor I. Mihalik, indicating a lock‑up restriction in connection with the offering documentation .
- Upcoming vesting/sale windows: 1/3 of sign‑on/annual RSUs vest on 2/21/2026, 2/21/2027, 2/21/2028; 2025–2027 performance shares settle after 12/31/2027, creating potential liquidity events subject to blackout windows and policy .
Employment Terms
- Appointment: Elected EVP & CFO effective January 20, 2025; serves as principal financial officer .
- Compensation package on appointment: $975,000 base salary; STIP target of 100% of base salary paid during calendar year (95% of annual base for 2025 due to start date); annual LTI target $3.8 million (75% PSUs/25% RSUs); $1.5 million hire‑date RSUs vesting in thirds on 2/21/2026–2028; PSUs vest 12/31/2027 (continued employment) .
- No related‑party arrangements: No arrangements/understandings for his appointment; no family relationships; no transactions requiring Item 404(a) disclosure .
- Severance policy (companywide): Under AEP’s General Severance Plan for eligible employees, lump sum severance equals two weeks of base per year of service (min 8 weeks; max 52), up to 12 months of benefits at active rates, and outplacement services (incremental cost up to $15,650 for NEOs). Bridging to retiree medical may apply based on age/service. Actual payments depend on circumstances and required release .
- Change‑in‑control (CIC): AEP LTI awards feature double‑trigger vesting (CIC plus qualifying termination). No excise tax gross‑ups for change‑in‑control .
- Clawbacks: Mandatory and discretionary clawbacks apply to senior executives, including Section 16 officers .
- Insider trading: Prohibits hedging/pledging; structured to promote compliance with laws and exchange listing standards .
Additional Context on Performance and Execution
- 2024 operating EPS was $5.62 (GAAP EPS $5.60); dividend increased to $0.93 per quarter in October 2024 (458th consecutive dividend), consistent with 6–8% long‑term growth and 55–65% payout ratio .
- On the Q2 2025 call, Mihalik highlighted operating strength and regulatory progress (notably FERC’s NOLC ruling) and guided to the upper half of 2025 operating EPS range ($5.75–$5.95). He also previewed an expanded five‑year capital plan up to $70 billion, with financing details to be provided on the Q3 2025 call .
Compensation Structure Analysis
- Alignment: Heavy emphasis on multi‑year operating EPS and relative TSR directly ties realized pay to shareholder value creation; RSU mix provides retention and stock‑price linkage .
- Risk controls: Caps, diversified scorecard (safety, reliability, compliance, affordability), clawbacks, and anti‑hedging/pledging policies mitigate incentive risk .
- 2024 outcomes: Company LTI cycle (2022–2024) paid above target (109.8%) on TSR/EPS performance, while non‑emitting capacity under‑achieved; AIP EPS came in modestly below target midpoint, constraining non‑EPS payouts via the cap, evidencing formulaic discipline .
- Shareholder sentiment: Say‑on‑pay approval ~95% in April 2024 supports overall program design and pay‑for‑performance credibility .
Potential Insider Selling Pressure and Liquidity Timing
- Near‑term selling constrained by: (1) offering‑related lock‑up inclusion; (2) stock ownership guidelines; (3) blackout/compliance windows; (4) anti‑hedging/pledging policy .
- Future potential liquidity points: Annual RSU vests on 2/21 each year (2026–2028) and PSU cycle settlement after 12/31/2027, subject to policy and personal diversification needs .
Investment Implications
- Pay‑for‑performance structure is robust: CFO compensation is heavily tied to multi‑year EPS and relative TSR, reinforcing discipline on earnings quality, regulatory execution, and capital allocation—key value drivers for a regulated utility with an expanding capital plan .
- Retention risk appears contained: Multi‑year RSU/PSU vesting, lock‑up constraints, and 3x salary ownership requirements support continuity through critical execution milestones (rate case cadence, interconnection build‑out, and financing) .
- Trading signals: Watch standard vesting windows (Feb 21 cycles; cycle‑end PSUs) for potential incremental supply, though policy constraints and ownership guidelines may limit near‑term selling; also monitor forward sale settlements (potential EPS dilution) and financing cadence communicated by CFO .
- Governance risk mitigants: Double‑trigger CIC, no CIC tax gross‑ups, strong clawbacks, and anti‑hedging/pledging reduce shareholder‑unfriendly outcomes; 2024 say‑on‑pay support adds confidence in program stability .