Stephen Coughlin
AESAbout Stephen Coughlin
Stephen Coughlin, 53, has served as Executive Vice President and Chief Financial Officer of The AES Corporation since October 15, 2021, after leading Corporate Strategy and FP&A and founding/serving as CEO of Fluence (AES/Siemens JV) . He joined AES in 2007 (renewables FP&A), holds a B.S. in Commerce/Finance (University of Virginia) and an MBA (UC Berkeley) . Under his finance leadership, AES’ annual incentive metrics for 2024 delivered a 130% payout driven by Adjusted EPS above guidance, Parent FCF near target, and execution milestones (3.7 GW COD), while three-year TSR metrics underperformed and PCUs did not pay out, signaling alignment of variable pay with outcomes . He has been a visible steward of guidance and capital markets discipline, reaffirming 2025 targets and citing strong Renewables SBU EBITDA growth, while also signing the Company’s 2025 restatement 8-K addressing a material weakness related to an impairment overstatement (a governance risk to monitor) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| AES | EVP & CFO | Oct 2021–present | Oversight of finance; reaffirmed guidance; investor communications |
| AES | VP, Corporate Strategy & FP&A; Chair of Investment Committee | 2020–2021 | Capital allocation discipline; enterprise planning |
| Fluence (AES/Siemens JV) | Founding CEO | 2018–Apr 2020 | Led energy storage platform during rapid scale-up |
| AES | VP, Energy Storage Platforms | 2016–2017 | Built storage growth platform |
| AES | Corporate Strategy & Investments | 2014–2016 | Portfolio strategy and investments |
| AES | Renewables FP&A | 2007– | Early career, renewables analytics foundation |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| AES Clean Energy Development Holdings, LLC | Board member | Current | Subsidiary board governance |
| AES U.S. Investments, Inc. | Board member | Current | Subsidiary board governance |
| AES U.S. Generation, LLC | Board member | Current | Subsidiary board governance |
| IPALCO | Board member | Current | Subsidiary board governance |
| Fluence | Director | 2018–Oct 2021 | Prior to CFO role, per 2022 Proxy |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 580,000 | 597,000 | 645,000 |
| Target Annual Bonus (% of Salary) | 100% | 100% | 100% |
| Actual Annual Bonus Payout ($) | 736,600 | 758,190 | 838,500 |
| All Other Compensation ($) | 49,302 | 70,063 | 114,545 |
| Total Compensation ($) | 2,445,980 | 3,126,922 | 3,215,723 |
Performance Compensation
Annual Incentive Plan (2024)
| Category | Metric | Weight | 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 | $2.14 | 200% |
| Financials | Adjusted EBITDA ($M) | 15% | 2,750 | 2,639 | 80% |
| Financials | Parent FCF ($M) | 15% | 1,120 | 1,107 | 94% |
| Green Growth | Growth (MW) | 12.5% | 4,500 | 4,381 | 95% |
| Green Growth | COD Achieved (MW) | 12.5% | 3,613 | 3,711 | 111% |
| New Business Models | New Business/Products | 10% | 100% | 125% | 125% |
| Final Corporate Payout | 130% |
Key design: Financial thresholds map 90% of target to 50% payout and 110% to 200% payout; Green Growth/CD thresholds map 75% to 50% and 125% to 200% . For 2024, PCUs (TSR-linked) did not pay out due to below-30th percentile TSR over 2022–2024; financial metrics met/exceeded guidance ranges .
Long-Term Incentive Structure and 2024 Grants (Coughlin)
- Instruments and metrics:
- PSUs: Cumulative Parent Free Cash Flow; payout schedule 0% (<90%), 50% (90%), 100% (100%), 200% (>110%) .
- PCUs: Relative 3-year TSR vs indices; payout schedule 0% (<30th), 50% (30th), 100% (50th), 200% (>90th percentile) .
- RSUs: Time-based, ratable over 3 years; no variable payout levels .
| Grant Date | Award | Threshold | Target | Max | Grant-Date Fair Value ($) |
|---|---|---|---|---|---|
| 2/22/2024 | PSUs | — | 39,375 | 78,750 | 630,000 |
| 2/22/2024 | PCUs | 315,000 | 630,000 | 1,260,000 | 447,678 |
| 2/22/2024 | RSUs (shares) | — | 33,750 | — | 540,000 |
2023 grants (reference for trend):
| Grant Date | Award | Threshold | Target | Max | Grant-Date Fair Value ($) |
|---|---|---|---|---|---|
| 2/24/2023 | PSUs | — | 18,037 | 36,074 | 456,697 |
| 2/24/2023 | PCUs | 380,588 | 761,175 | 1,522,350 | 523,384 |
| 2/24/2023 | RSUs (shares) | — | 10,221 | 12,025–13,829 range | 304,473 |
Vesting cadence:
- RSUs: 3-year ratable; 2024 grant vests 2025–2027; 2023 grant vests 2024–2026; final tranche of 2/24/2022 RSUs vested 2/24/2025 (ESG modifier applied at 100%) .
Equity Ownership & Alignment
- Stock ownership guidelines: CFO must hold shares equal to 3x base salary; all NEOs in compliance as of FY23 and FY24 .
- Anti-hedging/anti-pledging: Employees/officers/directors prohibited from hedging and from pledging/hypothecating or holding AES securities on margin .
- Clawback policy: Discretionary recoupment of incentive comp upon material restatement due to fraud/willful misconduct, applied to annual and long-term incentives .
Outstanding equity (unvested/unearned) at 12/31/2024 (Coughlin):
| Category | Units/Shares (#) | Value ($) |
|---|---|---|
| Unvested Stock Awards (primarily RSUs) | 44,122 | 567,850 |
| Unearned PSUs (shares) | 75,449 | 971,029 |
| PCUs (cash units; valued at $1) | 695,588 | 695,588 |
| Other (footnote (4) category) | 1,804 | 23,217 |
Outstanding equity at 12/31/2023 (reference):
| Category | Units/Shares (#) | Value ($) |
|---|---|---|
| Unvested Stock Awards (RSUs) | 19,864 | 382,382 |
| Unearned PSUs (shares) | 73,502 | 1,414,914 |
| PCUs (cash units; $1 per unit) | 1,413,675 | 1,413,675 |
| Other (footnote (5) category) | 3,675 | 70,744 |
Beneficial ownership (earlier reference point):
- Shares beneficially owned: 76,797 (as reported in 2023 Proxy; less than 1% of class) .
Form 4 compliance:
- One late Form 4 for Coughlin reported (tax withholding related to RSU vesting), filed Feb 26, 2024, due to administrative error .
Employment Terms
| Provision | Terms |
|---|---|
| Severance (no cause) | Lump sum equal to 1x (salary + target bonus), plus 12 months benefits continuation; outplacement assistance; pro-rata bonus eligibility |
| Change-in-Control (double-trigger) | If terminated without cause or for Good Reason within 2 years post-CIC: 2x (salary + target bonus), 18 months benefits continuation; outplacement; pro-rata bonus; equity subject to CIC provisions |
| Non-compete / Non-solicit | 12 months post-termination non-compete and non-solicit covenants |
| CIC equity vesting design | Company policy indicates double-trigger for equity vesting on CIC (no single-trigger) |
| Excise tax gross-ups | None under Executive Severance Plan |
| Severance policy (shareholder protection) | Company seeks shareholder ratification for new executive severance exceeding 2.99x salary + target bonus |
| Clawback | Discretionary recovery of incentive comp upon qualifying restatements tied to misconduct |
Illustrative potential payouts (12/31/2022 methodology):
| Scenario | Cash Severance | Benefits Continuation | Accelerated LTC | Outplacement | Total (illustrative) |
|---|---|---|---|---|---|
| Without Cause | $1,160,000 | $20,312 | $0 | $25,000 | $1,205,312 |
| CIC + Qualifying Termination | $2,320,000 | $30,468 | $2,004,777 | $25,000 | $4,380,245 |
Note: These values were computed using stock price and award status as of 12/31/2022 for disclosure purposes and serve as an indicative framework; the policy structure remains the key reference .
Performance & Track Record
- 2024 performance vs plan: Adjusted EPS above guidance top-end; Parent FCF above target; Adjusted EBITDA slightly below target; corporate AIP payout 130%; PCUs paid 0% (TSR below 30th percentile over 2022–2024) .
- Growth and execution: 6.8 GW of new contracts signed/awarded in 2024; 3.0 GW renewables completed; 670 MW Panama CCGT completed .
- 2025 Q2 commentary: Renewables SBU Adjusted EBITDA grew 56% YoY; guidance reaffirmed; highlighted resilient supply chain and data center PPA momentum .
- Governance event: 2025 restatement of 2024 Q2/Q3 unaudited quarterlies to correct an impairment overstatement related to AES Brasil; material weakness identified with remediation plan; no adverse impact on FY 2024 annual Net Income or Adjusted EBITDA/EPS metrics; signed by CFO .
Compensation Structure Analysis
- Mix and leverage: CFO target bonus 100% of salary; equity-heavy LTC (PSU/PCU/RSU) with three-year performance cycles—aligns realized pay to EPS/FCF/TSR outcomes; PCU zero payout in 2024 demonstrates downside sensitivity .
- Metric calibration: Financial AIP metrics use 90%/110% thresholds for 50%/200% payouts; Green Growth uses 75%/125%; structure appears rigorous and quantitatively defined .
- Plan integrity: Anti-hedging/pledging and clawback provisions reduce misalignment risks; say-on-pay historically strong (94% support in 2022) .
- Equity plan refresh: 2025 Equity & Incentive Plan approved (14,000,000 shares plus carryover), with minimum one-year vesting generally and broad menu of share/cash awards, including ESG and financial objectives—supports ongoing alignment and retention .
Risk Indicators & Red Flags
- Restatement/material weakness (2025): Control lapse around impairment estimation; monitoring remediation, any clawback triggers (if future rules/policy expansions) and auditor conclusions is warranted .
- Section 16 compliance: One late Form 4 (administrative) noted for Coughlin; minor but monitor for patterns .
- Hedging/pledging: Explicitly prohibited—reduces alignment risk from collateralized positions .
- No excise tax gross-ups; double-trigger CIC design; severance cap policy at 2.99x—mitigates shareholder unfriendly optics .
Equity Ownership & Alignment (Detail)
| Item | Status |
|---|---|
| Ownership multiple | 3x salary requirement; in compliance |
| Vested vs unvested | Significant unvested RSUs/PSUs and large PCU balance as of YE 2024 tie outcomes to future performance and tenure |
| Pledging | Prohibited |
| Beneficial ownership | 76,797 shares reported in 2023 Proxy (as of 2022 reference) |
| Upcoming vesting windows | RSU tranches annually around late Feb (2022, 2023, 2024 grants) may create liquidity windows but policy requires retention until guideline satisfied |
Employment Terms (Detail)
- Double-trigger CIC severance and equity vesting (no single-trigger equity); no CIC excise tax gross-ups .
- Non-compete and non-solicit obligations for 12 months post-termination; general release required .
- Severance policy requires shareholder ratification for new cash severance >2.99x salary+target bonus .
Investment Implications
- Alignment: High proportion of at-risk pay with clear financial and TSR levers; 2024’s zero PCU payout on weak TSR evidences downside accountability, while strong EPS/FCF delivery supported 130% cash bonus—balanced signal of execution discipline but market-relative pressure .
- Retention/overhang: Meaningful unvested RSUs/PSUs and sizable PCUs create multi-year retention hooks; expected annual vesting around February could add episodic selling liquidity but anti-pledging and ownership guidelines dampen forced-selling risk .
- Governance watch items: The 2025 restatement/material weakness elevates near-term governance risk; monitor remediation progress, Audit Committee disclosures, and any compensation policy updates (e.g., clawback expansions) that may affect realized pay or insider activity .
- Trading cues: Watch Form 4s around late-Feb/early-Mar vesting events and any 10b5-1 plan adoptions; given AIP/PSU design, developments affecting EPS/FCF guidance, PPA backlog conversion, and Renewables SBU EBITDA trajectory are likely to influence both compensation outcomes and insider selling windows .