James McHugh
Executive Vice President and Chief Commercial Officer at CEG
Executive
About James McHugh
James McHugh, 53, is Executive Vice President and Chief Commercial Officer of Constellation Energy (CEG), a role he has held since the 2022 separation from Exelon after serving as EVP & CCO at Exelon Generation (2021–2022) and CEO of Exelon’s competitive retail and commodities business (2018–2021) . Under CEG’s leadership team, shareholder value creation has been exceptional: TSR was 362.61% from the 2022 separation through Dec 31, 2024, and 92.73% in 2024, far outpacing peers and the S&P 500; 2024 revenues were $23.568B with total assets of $52.926B . Commercial execution remains a core lever: in 2024 CEG served ~144 TWh retail power, ~800 Bcf gas, ~58 TWh wholesale power, with C&I renewal rates of 78% (power) and 88% (gas) and a direct C&I market share >32% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Constellation Energy (CEG) | EVP & Chief Commercial Officer | 2022–Present | Leads integrated retail/wholesale sales and product strategy during period of outsized TSR, strong renewal rates, and scaled sustainability offerings (e.g., Hourly CFE, CORe+) . |
| Exelon Generation Company, LLC | EVP & Chief Commercial Officer | 2021–2022 | Led commercial operations pre-separation, positioning the retail and commodities platform for CEG’s standalone launch . |
| Exelon (Competitive Retail & Commodities) | CEO | 2018–2021 | Ran Exelon’s competitive retail/commodities business, building the direct-sales leadership and product breadth now carried into CEG . |
External Roles
- Not disclosed in CEG filings reviewed.
Fixed Compensation
| Item | 2024 | 2023 |
|---|---|---|
| Base Salary | $732,123 | $707,366 |
| AIP Target (% of Salary) | 85% | 85% |
| Total Salary Earned (Summary Comp Table) | $727,584 | $702,453 |
Notes: 2024 salary increase of 3.5% effective March 1, 2024 .
Performance Compensation
Annual Incentive Plan (AIP) – Structure and 2024 Outcomes
- Corporate AIP metrics and weights (2024): Operating Net Income 70%; Customer Satisfaction 10%; Fleetwide Capacity Factor 10%; Dispatch Match 7%; Renewable Energy Capture 3% .
- Formulaic 2024 company-wide payout: 168.85% of target; no discretion applied .
| Metric | Weight | 2024 Payout Mechanics | Result |
|---|---|---|---|
| Operating Net Income | 70% | Financial performance vs plan | Included in 168.85% factor |
| Customer Satisfaction | 10% | Surveys/indices | Included in 168.85% factor |
| Fleetwide Capacity Factor | 10% | Nuclear ops KPI | Included in 168.85% factor |
| Dispatch Match | 7% | Fossil/renewables responsiveness | Included in 168.85% factor |
| Renewable Energy Capture | 3% | Renewables capture KPI | Included in 168.85% factor |
| Executive | AIP Target % | AIP Target ($) | 2024 Formulaic Factor | Actual AIP ($) |
|---|---|---|---|---|
| James McHugh | 85% | $618,856 | 168.85% | $1,044,939 |
Long-Term Incentive Plan (LTIP)
- Mix: 33% time-based RSUs; 67% Performance Shares (PShares) .
- 2024 LTIP grant values for McHugh: RSUs $660,000; PShares $1,340,000; Total $2,000,000 .
- 2024 share counts for McHugh: RSUs 5,196; PShares 10,549 .
- PShare metrics: Free Cash Flow before Growth and Relative TSR (with a credit ratings-based negative modifier); payout range 50%–200% of target .
- 2022–2024 PShare cycle paid at 200%; McHugh target 21,937 → actual 43,874 .
| LTIP Component | Metric(s) | Vest/Performance | McHugh 2024 Grant | Notes |
|---|---|---|---|---|
| RSUs | Time-based | Ratable over 3 years; dividend equivalents reinvested | 5,196 sh | Settled in stock on vest; subject to continued service . |
| PShares (2024–2026) | FCF before Growth; Relative TSR; ratings modifier | 3-year performance; 50%–200% payout | 10,549 sh target | Settlement form varies with ownership guideline attainment . |
| PShares (2022–2024) | As above | Earned at 200% | 43,874 sh earned | Vested Feb 10, 2025 . |
Equity Ownership & Alignment
| Item | Amount | Context |
|---|---|---|
| Beneficially Owned Shares (3/1/2025) | 58,876 | <1% of outstanding; shares outstanding 313,309,685 (3/1/2025) . |
| Unvested RSUs (12/31/2024) | 37,087 | Includes regular RSUs and retention RSUs; valued at $223.71 as of 12/31/2024 . |
| Unearned PShares (max basis) (12/31/2024) | 94,400 | Disclosure reflects awards increased to 200% performance basis for reporting . |
| 2024 Stock Vested | 81,850 sh; $10,397,377 value | RSU and PSU tranches vested 2/5/2024 at $127.03 per share . |
| Ownership Guidelines | 3x base salary for NEOs; all NEOs in compliance | Strengthens alignment with shareholders . |
| Hedging/Pledging | Prohibited for directors/officers/employees | Insider trading policy bans hedging, short sales, derivatives, and pledging . |
Vesting calendar signals (potential supply windows):
- RSUs: one-third vested 2/10/2025; remaining vests at first regular Compensation Committee meetings in 2026 and 2027 .
- Retention RSU: McHugh’s April 5, 2021 grant cliff-vests April 5, 2025 .
- PShares: 2022–2024 vested 2/10/2025; 2023–2025 and 2024–2026 continue toward 3-year performance settlements .
Employment Terms
| Topic | Key Terms |
|---|---|
| Employment Agreement | Company policy indicates no executive employment agreements; compensation governed by plans/Committee actions . |
| Severance (Non-CIC) | Senior Management Severance Plan (SMSP): 24 months base salary; target AIP for severance period; pro-rated current-year AIP; RSUs/PShares pro-ration/acceleration per retiree eligibility; SMRP pension credit; continued benefits; outplacement/financial planning . |
| Estimated Non-CIC Payouts (12/31/2024) | McHugh: Cash $3,754,000; Retirement enhancement $217,000; Unvested equity $19,258,000; Health/Welfare $51,000; Perqs/Other $40,000; Total $23,320,000 . |
| Change-in-Control (Double-Trigger) | 2.99x base + target AIP; pro-rated current-year AIP; full vesting of RSUs; PShares vest based on performance through cycle; SMRP credited with +2.99 years age/service; continued benefits; outplacement . |
| Estimated CIC Payouts (12/31/2024) | McHugh: Cash $5,095,000; Retirement enhancement $394,000; Unvested equity $23,764,000; Health/Welfare $76,000; Perqs/Other $40,000; 280G scaleback $(1,008,000); Total $28,361,000 . |
| Clawbacks | Dodd-Frank/Nasdaq-compliant recovery for accounting restatements (3-year lookback) plus broader misconduct/disrepute recoupment policy . |
| Deferred Comp (2024) | Exec contributions $19,828; Company contributions $23,794; 2024 earnings $96,163; 12/31/2024 balance $425,643 . |
| Pension (Present Value at 12/31/2024) | CBPP $606,108; SMRP $1,108,490; Credited service 21.79 years . |
| Perquisites (2024) | Total $78,703 (Perqs $29,818; Tax reimbursement $829; Savings plan contributions $43,680; LTD premiums $4,376) . |
Performance Context and Execution
- Company TSR and Financials: TSR since separation 362.61% and 1-year TSR 92.73% (to 12/31/2024); 2024 revenue $23.568B; total assets $52.926B .
- Strategic Commercial Wins: 20-year Microsoft PPA enabling restart of Crane Clean Energy Center (Three Mile Island Unit 1) and GSA contracts >$1B (including a $840M, 10-year award), broadening 24/7 clean energy offerings and customer scale .
- Retail/Wholesale Scale and Quality: ~144 TWh retail power, ~800 Bcf retail gas, ~58 TWh wholesale power served in 2024; renewal rates 78% (C&I power) and 88% (C&I gas); high direct C&I share >32%; industry-leading service rankings cited .
Compensation Structure Analysis
- Pay mix and leverage: For McHugh, 2024 target TDC $3.354M with 60% LTIP (RSUs/PShares) and 40% cash (base + AIP target), emphasizing multi-year equity at 67% PShares tied to FCF and relative TSR .
- AIP rigor: Heavy 70% weighting to Operating Net Income with balanced operational KPIs (capacity, dispatch, renewables capture, customer satisfaction) produced a high but formulaic 168.85% payout in 2024; McHugh’s AIP paid $1.045M vs $0.619M target .
- PShare alignment: 2022–2024 PShare cycle paid at the maximum 200% on strategic/financial outperformance; McHugh earned 43,874 shares . Future cycles continue to hinge on FCF before Growth and rTSR with credit-rating discipline .
- Governance safeguards: Robust stock ownership rules (NEOs at 3x salary; all NEOs compliant), strict prohibitions on hedging/pledging, and dual clawbacks respond to pay risk and alignment concerns .
Risk Indicators & Red Flags
- Insider selling pressure: Multiple vesting events in 2025–2027 (RSU tranches, retention RSU cliff on 4/5/2025, and PShare payouts) may create trading windows; 81,850 shares vested in 2024 (value $10.4M) .
- 280G exposure: CIC table includes a potential Section 280G scaleback for McHugh of $(1.008) million, indicating payouts near excise tax thresholds .
- No employment agreements: While aligned with best practice, absence of individual agreements places more weight on plan terms for retention; however, SMSP/CIC economics are competitive (24 months non-CIC; 2.99x CIC) .
Investment Implications
- Alignment strong, bias to performance: McHugh’s pay design is heavily equity-based with PShare metrics (FCF and rTSR) that directly map to shareholder returns and balance-sheet quality; 200% payout on 2022–2024 validates recent execution .
- Near-term supply from vesting: Concentrated vesting events in 2025 (retention RSU; 2022–2024 PShares) and ongoing RSU tranches could add episodic selling pressure despite anti-hedging/pledging policies .
- Retention and continuity: With no individual employment agreements but robust SMSP/CIC protections and high unvested equity value ($19.258M non-CIC; $23.764M CIC for McHugh), retention risk appears mitigated under current market strength and strategic tailwinds .
- Commercial execution leverage: McHugh’s remit covers a scaled retail/wholesale platform with strong renewal rates and product innovation (e.g., Hourly CFE) supporting sustainable growth—key as demand from data centers and 24/7 clean energy customers accelerates .
All data and quotations are sourced from Constellation Energy’s 2025 DEF 14A Proxy Statement and 2024 Form 10-K, as cited above.