Cheryl Norton
Executive Vice President and Chief Operating Officer at AWK
Executive
About Cheryl Norton
Cheryl Norton (age 60) is Executive Vice President and Chief Operating Officer (COO) of American Water (AWK). She has 36 years with the company across operations, environmental stewardship, laboratory management, and research, serving as EVP & COO since March 2021; on August 1, 2024 her scope expanded to include Business Development . Under AWK’s recent performance, full-year diluted EPS grew from $4.89 (2023) to $5.39 (2024), and Net Income rose from $944M (2023) to $1,051M (2024) . The company reports its $100 investment grew to $110.80 over 2019–2024, lagging the S&P 500 and PHLX Utilities over that period .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| American Water – Corporate | EVP & COO | Mar 2021–present | Leads national operations; added leadership of Business Development effective Aug 1, 2024 . |
| American Water – Corporate | SVP, Chief Environmental Officer | Mar 2020–Mar 2021 | Enterprise environmental leadership and compliance . |
| New Jersey American Water / Eastern Division | SVP, Eastern Division & President, New Jersey | Mar 2019–Mar 2021 | State P&L, regulatory and operational execution in NJ/Eastern Division . |
| Missouri American Water | President | Nov 2015–Mar 2019 | State leadership, execution of capital plans and regulatory strategy . |
| Kentucky American Water | President | Jan 2011–Nov 2015 | State leadership, operations and customer/regulatory outcomes . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Water Research Foundation | Board of Directors (member) | Not stated (current) |
Fixed Compensation
| Item | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 613,750 | 668,088 | 710,000 (increased effective Aug 1, 2024) |
| Perquisites (Exec physical, life insurance, etc.) ($) | 37,887 | 50,362 | 54,794 |
| Defined Benefit Pension – ERP Present Value ($) | — | — | 6,086,970 (Dec 31, 2024) |
| Defined Benefit Pension – AWWPP Present Value ($) | — | — | 2,155,945 (Dec 31, 2024) |
Performance Compensation
Annual Performance Plan (APP) – 2024 (corporate framework and Norton payout)
| Measure | Weight | Threshold | Target | Max | Actual | Earned % |
|---|---|---|---|---|---|---|
| Adjusted EPS | 50.0% | $5.05 | $5.15 | $5.25 | $5.32 | 100.0% |
| Customer Satisfaction (states in top quartile) | 15.0% | 0 | 4 | 8 | 3 | 11.25% |
| Safety – ORIR | 5.0% | 1.11 | 0.61 | 0.40 | 0.40 | 10.0% |
| Safety – DART Severity Rate | 10.0% | 0.67 | 0.29 | 0.20 | 0.14 | 20.0% |
| Environmental – Drinking Water Compliance NOVs | 5.0% | 13 | 6 | 4 | 8 | 3.57% |
| Environmental – Drinking Water Quality NOVs | 10.0% | 4 | 2 | 0 | 2 | 10.0% |
| People – Women Representation | 2.5% | 24.0% | 25.0% | 27.0% | 24.5% | 1.25% |
| People – Ethnic & Racial Diversity Rep. | 2.5% | 20.0% | 21.0% | 23.0% | 20.5% | 1.25% |
| Total APP Payout % | 157.32% |
| Executive | APP Target (% of Salary) | 2024 APP Target ($) | APP Payout % | APP Paid ($) |
|---|---|---|---|---|
| Cheryl Norton | 90% (raised from 75% to 85%, then to 90% effective Aug 1, 2024) | 607,784 (prorated) | 157.32% | 956,166 |
Notes:
- 2024 APP targets included growth (Adjusted EPS), customer satisfaction, safety, environmental NOVs, and people metrics .
- Max payout per metric is 200% (non-financial caps increased from 150% to 200% for 2024) .
Long-Term Performance Plan (LTPP) – 2024 Structure and Norton Grants
- Structure: 30% time-based RSUs; 70% PSUs weighted to EPS CAGR (35%), relative TSR vs 2024 peer group (20%), and ROE (15%). PSUs measured over 3 years; RSUs vest ratably over ~3 years; no stock options since 2017 .
- 2024 targets for Norton increased to 245% of salary effective Aug 1, 2024; aggregate 2024 LTPP target market value $1,535,802 (RSUs $460,762; PSUs TSR $307,079; PSUs EPS $537,580; PSUs ROE $230,381) .
| Grant (Norton) | Grant Date | Instrument | Threshold (#) | Target (#) | Max (#) | Grant Date FV ($) |
|---|---|---|---|---|---|---|
| Annual | 2/13/2024 | RSU | — | 3,480 | — | 416,834 |
| Annual | 2/13/2024 | PSU (TSR) | 580 | 2,320 | 4,640 | 274,433 |
| Annual | 2/13/2024 | PSU (EPS) | 1,015 | 4,061 | 8,122 | 486,427 |
| Annual | 2/13/2024 | PSU (ROE) | 435 | 1,740 | 3,480 | 208,417 |
| Incremental (promotion scope) | 8/01/2024 | RSU | — | 304 | — | 43,928 |
| Incremental | 8/01/2024 | PSU (TSR) | 51 | 202 | 404 | 27,195 |
| Incremental | 8/01/2024 | PSU (EPS) | 89 | 354 | 708 | 51,153 |
| Incremental | 8/01/2024 | PSU (ROE) | 38 | 152 | 304 | 21,964 |
- 2022 PSU results: Relative TSR tranche paid 0% (9th percentile); Adjusted EPS CAGR tranche paid 192.33% (7.77% CAGR) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 15,266 shares (as of Mar 17, 2025) |
| Unvested RSUs (not yet delivered) | 7,728 (market value summarized below) |
| Unvested PSUs (performance-contingent) | 24,798 |
| Ownership Guidelines | EVPs: 3x base salary; CEO/President: 6x; SVP/SLT: 2x |
| Compliance Status | Norton is in compliance with guidelines as of record date |
| Hedging/Pledging | Hedging, short sales, and pledging are prohibited for insiders |
| 2024 Vesting Activity | 5,510 shares vested; $668,905 value realized (aggregate RSU/PSU vesting) |
Outstanding awards at 12/31/2024 (market value at $124.49):
- RSUs: 3,480 (2/13/2024), 304 (8/1/2024), plus earlier grants; total RSUs not vested market value $433,225 + $37,845 shown for 2024 awards (excludes prior-year RSUs in proxy table summary) .
- PSUs unearned at 12/31/2024: 13,922 (2024 grants target), 1,214 (incremental 2024 grants target), plus prior-year cycles; total PSUs unearned market value $1,733,150 + $151,131 shown for 2024 awards (excludes prior-year PSU cycles in proxy table summary) .
Ownership as % of Shares Outstanding:
- 15,266 / 195,010,945 ≈ 0.008% (shares outstanding as of Mar 17, 2025) .
Employment Terms
| Provision | Summary | Norton-Specific Quantification (Dec 31, 2024) |
|---|---|---|
| Executive Severance Policy (non-CoC) | Involuntary termination without cause: 12 months base salary (CEO/President 18 months), pro rata APP if earned, company-paid welfare benefits (8–16 weeks based on service), up to 12 months outplacement; credit of severance period toward vesting in certain plans . | Cash severance: $710,000; APP: $607,784; outplacement: $15,000; Deferred comp benefits: $1,921,608; COBRA premiums: $0 in this scenario per table; equity not accelerated absent retirement criteria . |
| Change-of-Control Severance Policy | Double-trigger within 24 months: 2x (CEO/President 3x) base salary + greater of last APP or 3-year average; paid COBRA for max statutory period; up to 12 months outplacement; deferred comp fully vested . | Cash severance: $2,728,110; COBRA premiums: $38,962; equity acceleration/vesting value: $2,721,394 (plus pension/other as shown) . |
| Equity Plan CoC Mechanics | Awards assumed and continue; if not assumed → accelerate/vest at CoC; if assumed and terminated without cause or for good reason within 12 months → accelerate/vest (double-trigger). ED&CC may settle/accelerate . | See quantifications above . |
| Continued Vesting Post-Retirement (COO role) | For CEO/President/CFO/COO with ≥3 years in covered roles: 100% continued vesting upon normal retirement (age ≥60, 5 years); 75% upon early retirement (age ≥55, 5 years). PSUs settle based on actual performance . | Norton meets the normal retirement age threshold; continued vesting provisions apply per policy . |
| Clawback | Incentive compensation subject to recovery for restatements or certain misconduct; policy exceeds NYSE/SEC requirements . | Applicable . |
| Tax Gross-Ups | No excise tax gross-ups in CoC context . | None . |
| Restrictive Covenants | Severance contingent on signing severance agreement and restrictive covenants; specifics not disclosed . | Required . |
Performance & Track Record
AWK financial trend during Norton’s COO tenure (FY 2021–FY 2024):
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Revenues ($) | 3,930,000,000 | 3,792,000,000 | 4,234,000,000 | 4,684,000,000 |
| Net Income ($) | 1,263,000,000 | 820,000,000 | 944,000,000 | 1,051,000,000 |
| Diluted EPS – Continuing Ops ($) | 6.9396* | 4.5055 | 4.8912 | 5.3897 |
Values marked with * retrieved from S&P Global.
Additional context:
- 2024 adjusted EPS achieved above target in APP (actual $5.32 vs target $5.15) .
- 2019–2024 TSR: $100 → $110.80 vs S&P 500 $197.02 and PHLX Utility $134.24 (both with dividend reinvestment) .
- Norton’s responsibilities broadened to Business Development in 2024; management cites momentum in regulated acquisitions across states (e.g., commentary on PA fair market value deals and broader platform) .
Say-on-Pay & Governance Signals
- Say-on-Pay approval (2024 vote on 2023 compensation): 87.3% “FOR” .
- Independent consultant (Aon) and regulated peer benchmarking; equity tilted to PSUs; no stock options since 2017 .
Investment Implications
- Pay-for-performance alignment is strong: 2024 APP paid at 157% on above-target EPS and safety outcomes; LTPP is 70% PSUs tied to EPS CAGR, relative TSR, and ROE, with demonstrated downside in TSR (0% payout for 2022 TSR PSUs) and upside in EPS CAGR (192% for 2022 EPS PSUs) . This supports disciplined capital/regulatory execution but limits windfalls if relative equity performance lags.
- Retention risk appears contained: substantial pension value (ERP $6.09M; AWWPP $2.16M) and continued vesting provisions for COO upon retirement reduce incentives to depart prematurely; Norton is compliant with 3x salary ownership guidelines and cannot hedge/pledge shares, aligning interests with shareholders .
- Potential selling pressure from vesting is moderated by retention/ownership rules: RSUs/PSUs vest ratably, executives must comply with ownership thresholds to sell, and no pledging/hedging is permitted; 2024 vesting (5,510 shares; $668,905) reflects ongoing equity realization but within policy constraints .
- CoC/change dynamics: Double-trigger CoC severance (2x salary+bonus construct) and equity treatment could produce meaningful one-time realizations (e.g., Norton CoC termination scenario total values include $2.73M cash and $2.72M equity), but the plan design avoids single-trigger accelerations and excise tax gross-ups, mitigating governance risk .
- Execution track record: Under Norton’s operations leadership, AWK increased EPS and net income in 2024, with management citing sustained regulated investment and acquisition momentum; relative TSR remains a watch item per proxy disclosure, which the LTPP directly addresses via a 20% weighting .