Ricardo Falu
Executive Vice President, Chief Operating Officer and President, New Energy Technologies at 
AES
AESExecutive
About Ricardo Falu
Ricardo Manuel Falú is Executive Vice President, Chief Operating Officer and President, New Energy Technologies at AES. He has served as COO since July 24, 2023, and President of New Energy Technologies since March 2023; he joined AES in 2003 and previously led AES Andes as CEO and held finance leadership roles in the Andes region . Age disclosure shows he was 43 in July 2023 . Company performance metrics tied to his incentive pay include Adjusted EPS ($2.14 vs $1.92 target), Adjusted EBITDA ($2,639M vs $2,750M target), Parent FCF ($1,107M vs $1,120M target), culminating in a 130% Corporate Performance Score for 2024 annual incentives . Over 2020–2024, AES delivered 7.6% cumulative TSR, materially below the S&P 500 Utilities peer TSR of 37.8%; three-year 2022–2024 PSU performance paid at 169% on cumulative Parent FCF, while PCUs paid 0% due to TSR underperformance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| AES Corporation | Senior Vice President & COO | Effective July 24, 2023 | Elevated to lead global operations; no changes to compensatory arrangements at appointment |
| AES Corporation | SVP & Chief Strategy and Commercial Officer | Aug 2022–Jul 2023 | Drove strategy, commercial execution across portfolio |
| AES Corporation | President, New Energy Technologies SBU | Since March 2023 | Built and incubated new business lines (e.g., AI-enabled robotics; hydrogen) informing New Business Models metric |
| AES Andes (AES Chile, Colombia, Argentina) | Chief Executive Officer | Apr 2018–Aug 2022 | Led regional turnaround and growth; prior CFO for Andes businesses |
| AES Andes | Chief Financial Officer (Andes Region) | 2014–Apr 2018 | Led finance and capital allocation for multi-country portfolio |
External Roles
No external public directorships or outside board roles disclosed for Mr. Falu. If future filings disclose such roles, they can be added.
Fixed Compensation
| Component | 2024 Amount | Notes |
|---|---|---|
| Base Salary | $555,000 | 5% increase vs. 2023 to move closer to 50th percentile |
| Annual Incentive Target (% of Salary) | 100% | Target unchanged vs. 2023 |
| Annual Incentive Payout | $721,500 | Based on 130% Corporate Performance Score |
| All Other Compensation (Total) | $249,412 | Includes qualified DC plan ($31,050), non-qualified RSRP ($60,586), relocation-related benefits ($157,776) |
| Relocation details | $75,897 tax gross-up; $81,879 relocation expenses | Related to relocation from Chile to USA |
Performance Compensation
Annual Incentive Plan – 2024 Corporate Metrics, Targets, Results, Payout
| Category | Metric | Weighting | Target | Actual | Payout % |
|---|---|---|---|---|---|
| Safety | Serious Safety Incidents | 5% | No Incidents | No Incidents | 200% |
| Safety | Non-Injury SIP Rate | 5% | 0.95 | 1.72 | 120% |
| Financials | Adjusted EPS | 25% | $1.92 | $2.14 | 200% |
| Financials | Adjusted EBITDA | 15% | $2,750M | $2,639M | 80% |
| Financials | Parent FCF | 15% | $1,120M | $1,107M | 94% |
| Green Growth | Growth (MW signed/acquired) | 12.5% | 4,500 MW | 4,381 MW | 95% |
| Green Growth | COD Achieved (MW) | 12.5% | 3,613 MW | 3,711 MW | 111% |
| New Business Models | Strategic milestones | 10% | 100% | 125% | 125% |
| FINAL Corporate Performance Score | 130% |
2024 Grants of Plan-Based Awards (Granted Feb 22, 2024)
| Award Type | Threshold (#) | Target (#) | Maximum (#) | Grant-Date Fair Value ($) |
|---|---|---|---|---|
| PSUs (Cumulative Parent FCF) | — | 32,813 | 65,626 | $525,008 |
| PCUs (Relative TSR) | 262,500 | 525,000 | 1,050,000 | $373,065 |
| RSUs (time-based) | — | 28,125 | — | $450,000 |
- PSU Payout Curve: 0% below 90% of target Parent FCF; 50% at 90%; 100% at 100%; 200% above 110% .
- PCU Payout Curve: 0% below 30th percentile TSR; 50% at 30th; 100% at 50th; 200% above 90th vs S&P 500, S&P 500 Utilities, and custom clean energy peers .
- RSUs vest ratably over three years on the anniversary of grant in 2025, 2026, 2027 .
2022–2024 Long-Term Compensation Performance Results
| Award | Measure | Period | Company Performance | Payout |
|---|---|---|---|---|
| PSUs | Cumulative Parent FCF | 2022–2024 | $3,016M (106.87% of target) | 169% of target |
| PCUs | Relative TSR | 2022–2024 | TSR −33%; bottom quartile vs indices | 0% (no vesting) |
| RSUs (2022 tranche 3) | ESG modifier | Vesting Feb 24, 2025 | ESG goals earned at 100% | 100% of target |
- Mr. Falu’s 2022 PCUs were uniquely tied to Parent FCF and settled for $301,805 cash (performance period Jan 1, 2022–Dec 31, 2024) .
Stock Vested in 2024
| Name | Shares Vested (#) | Value Realized ($) |
|---|---|---|
| Ricardo Falu | 17,299 | $255,492 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 117,431 shares; listed as less than 1% of class (*) |
| Outstanding, Unvested Awards at 12/31/2024 | RSUs: 54,754 shares ($704,684); PSUs unearned: 52,783 ($679,317); PCUs unearned: $473,175; RSUs subject to +/-15% ESG modifier: 998 ($12,844) |
| Stock Ownership Guidelines | 3x base salary for Mr. Falu; all NEOs in compliance; net shares retention until guideline met |
| Hedging/Pledging | Prohibited; employees and Directors cannot hedge, hold in margin accounts, or pledge AES securities |
| Insider Filings | Two late Form 4s for Mr. Falu in 2024 due to administrative errors (tax withholding vest on Feb 26; open market purchases on Apr 15) |
| Options | No options outstanding; AES did not grant options in 2024 |
Employment Terms
| Provision | Base Case | Change-in-Control (CIC) |
|---|---|---|
| Cash Severance | 1x base salary + target bonus (paid over non-compete period) | 2x base salary + target bonus (lump sum) |
| Benefits Continuation | 12 months | 18 months |
| Non-Compete/Non-Solicit | 12 months | 12 months |
| Treatment of RSUs | Forfeited if unvested; CIC: vest at target | Vest at target on Qualifying Event |
| Treatment of PSUs/PCUs | Vested awards pay on original schedule; unvested forfeited; CIC: full awards vest at target | Full awards vest at target on Qualifying Event |
| Clawback | NYSE-compliant clawback for erroneously awarded incentive compensation; 2024 interim restatement required no recovery (metrics unaffected) |
Potential Payments Upon Termination (as of 12/31/2024)
| Scenario | Cash Severance ($) | Accelerated Vesting of LTC ($) | Benefits Continuation ($) | Outplacement ($) | Total ($) |
|---|---|---|---|---|---|
| Involuntary Not For Cause / Good Reason | 1,110,000 | — | 22,261 | 25,000 | 1,157,261 |
| CIC with Termination or Qualifying Event | 2,220,000 | 2,214,688 | 33,392 | 25,000 | 4,493,080 |
| Death | — | 2,214,688 | — | — | 2,214,688 |
| Disability | — | 2,214,688 | — | — | 2,214,688 |
- AES severance policy caps “cash severance benefits” above 2.99x salary+target bonus without shareholder ratification for new arrangements (post Oct 6, 2022) .
Performance Compensation – Detailed Metrics, Weighting, Targets, Payout, Vesting
| Metric | Weight | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Adjusted EPS | 25% | $1.92 | $2.14 | 200% | Annual cash, paid Q1’25 |
| Adjusted EBITDA | 15% | $2,750M | $2,639M | 80% | Annual cash, paid Q1’25 |
| Parent Free Cash Flow | 15% | $1,120M | $1,107M | 94% | Annual cash, paid Q1’25 |
| Safety | 10% | Multi-factor (incidents, SIP, meetings, walks) | Mixed | 200%/120% components | Annual cash |
| Green Growth | 25% | 4,500 MW growth; 3,613 MW COD | 4,381 MW; 3,711 MW | 95%/111% | Annual cash |
| New Business Models | 10% | 100% | 125% | 125% | Annual cash |
| 2024 PSUs | — | Parent FCF (3-yr) | Payout TBD (2024–2026 period) | Target included to-date | Cliff vest in 2027 upon certification |
| 2024 PCUs | — | Relative TSR (3-yr) | Below threshold to-date | Threshold included to-date | Cash-settle in 2027 upon certification |
| 2024 RSUs | — | Time-based | — | — | 1/3 vest each in 2025, 2026, 2027 |
Investment Implications
- Alignment: Falu’s pay mix is majority variable with AIP and PSU/PCU/RSU awards; other NEOs average 78% variable vs 22% fixed, indicating strong pay-for-performance alignment across the team . Hedging and pledging are prohibited, and stock ownership guidelines require 3x salary; he is in compliance, strengthening alignment with shareholders .
- Near-term vesting and selling pressure: RSUs vest in 2025/2026/2027; outstanding PSUs and PCUs from 2023 and 2024 cycles will certify in early 2026/2027. PCUs are tracking below threshold to-date, reducing cash-settlement risk; PSUs are tracking between threshold and target, implying moderate share issuance contingent on Parent FCF performance . 2024 saw 17,299 shares vest for Falu ($255,492), while a unique 2022 PCU tied to Parent FCF paid $301,805 cash, highlighting limited near-term forced selling catalysts absent option exercises (none outstanding) .
- Retention and change-in-control economics: Base-case severance of ~1x salary+bonus and CIC multiple of ~2x, plus accelerated vesting at target on CIC, provide retention hooks but are not excessive relative to market; total CIC package estimate of $4.49M as of 12/31/2024 is balanced by non-compete obligations .
- Execution risk vs incentives: AIP overachieved on Adjusted EPS while EBITDA and Parent FCF were near target, producing a 130% payout; however, sustained TSR underperformance versus utilities peers led to 0% PCU vesting for 2022–2024, creating a clear line-of-sight between shareholder returns and long-term cash outcomes .
- Governance and clawbacks: NYSE-compliant clawback in place; 2024 interim restatement did not trigger recovery as incentive metrics were unaffected, limiting governance overhang . Say-on-pay support was >96% in 2024, suggesting broad investor acceptance of the compensation framework .