Garrick Rochow
About Garrick Rochow
Garrick J. Rochow is President and CEO of CMS Energy and Consumers Energy (director since 2020); age 50 as of the 2025 annual meeting, with more than 25 years of utility experience, including 20 years at CMS/Consumers . Under his leadership, CMS delivered 2024 adjusted EPS of $3.34 vs a $3.29 target (Annual Incentive EPS), contributing to a 133% annual incentive payout for NEOs . CMS reports 22 consecutive years of meeting or exceeding adjusted earnings guidance and marked the 14th year with 5- and 10-year TSR at or above the median of its performance peer group; the 2022–2024 TSR ranked at the 52nd percentile (105.3% payout on TSR PSUs) while final EPS-growth PSU results for that cycle are pending .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CMS Energy/Consumers Energy | President & CEO | 2020–present | Accountable for strategy and execution; performance tied to EPS growth and operational “People/Planet/Prosperity” goals driving 133% 2024 AIP payout . |
| CMS/Consumers | EVP (Electric & Gas ops incl. T&D, generation, compression, regulatory compliance) | 2016–2020 | Led core utility operations and reliability; foundation for operational metrics used in incentive design . |
| Consumers Energy | SVP, Distribution & Customer Operations | Prior to 2016 | Customer and network operations leadership . |
| Consumers Energy | VP roles: Customer Experience, Rates & Regulation & Quality; Chief Customer Officer; VP Energy Delivery | Prior roles pre-SVP | Customer/regulatory orientation that later shaped “Annual Incentive Utility” metrics . |
External Roles
| Organization | Role | Years | Strategic Relevance |
|---|---|---|---|
| Hubbell Incorporated | Director | 2024–present | Cross-industry electrical exposure; outside public board experience . |
| American Gas Association | Director | Current | Industry policy/standards – gas utility network . |
| Edison Electric Institute | Director | Current | Electric utility industry coordination and policy . |
| Business Leaders for Michigan | Board & Executive Committee | Current | State-level economic development influence . |
| The Right Place (West MI) | Board & Executive Committee | Current | Regional economic development; load growth support . |
| Priority Health; New Community Transformation Fund; West Michigan Policy Forum; Grand Rapids Economic Club | Director | Current | Community, capital formation, policy networks supporting state growth agenda . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,150,000 | 1,235,000 | 1,250,000 |
| Target Bonus (% of Salary) | — | 125% (derived from CIC target incentive) | 125% (derived from CIC target incentive) |
| Actual Annual Incentive ($) | 1,987,200 | 1,945,125 | 2,078,125 |
| Stock Awards Grant-Date Fair Value ($) | 5,265,456 | 6,033,036 | 6,651,245 |
| All Other Compensation ($) | 303,431 | 423,851 | 421,778 |
| Total Compensation ($) | 8,706,194 | 9,637,210 | 10,401,409 |
Notes
- CMS states cash-based comp equals ~31% of CEO target total direct compensation; variable pay and equity dominate mix (86% variable for CEO at target) .
Performance Compensation
Annual Incentive (AIP) – 2024 design and payout
| Metric | Weight | Target | Actual | Payout (%) | Weighted Contribution |
|---|---|---|---|---|---|
| Annual Incentive EPS (Adjusted) | 70% | $3.29 | $3.34 | 136% | 95% (136% × 70%) |
| Annual Incentive Utility (People/Planet/Prosperity) | 30% | Multiple operating goals | Achieved 124% | 124% | 37% (124% × 30%) |
| Total AIP Payout | — | — | — | — | 133% |
Design features and adjustments:
- EPS is GAAP-adjusted for specified unusual items (e.g., large asset sale gains/losses ≥2% of adjusted EPS; restructuring >$5M; certain tax and accounting changes; specified mark-to-market) .
- AIP target opportunities for NEOs range 65%–125% of base; CEO at 125% (implied by CIC table) .
Long-Term Incentive (LTI) – structure and results
- Mix: 75% performance-based restricted stock (PSUs), 25% tenure-based restricted stock (RS); 3-year performance period; tenure RS vests at 3 years .
- PSU metrics: Relative TSR and relative “LTI EPS” growth, equally weighted; payout schedule: 50% at 30th percentile, 100% at median, 150% at 70th, 200% at 90th; dividends not paid on unvested PSUs (accrue as additional performance shares) .
- Payout cap: If 3-year absolute TSR or LTI EPS growth is negative, payout cannot exceed 100% .
LTI cycle outcomes
| Cycle | Metric | CMS Result | Peer Median/Rank | Payout |
|---|---|---|---|---|
| 2021–2023 | TSR | 7% | 12% (38th percentile) | 71.1% (TSR tranche) |
| 2021–2023 | EPS Growth | 26% | 13% | 180.4% (EPS tranche) |
| 2022–2024 | TSR | 15% | 13% (52nd percentile) | 105.3% (TSR tranche) |
| 2022–2024 | EPS Growth | Pending determination (post Mar 21, 2025) | — | — |
Realized vesting in 2024 (stock vested):
| Executive | Shares Vested | Value Realized ($) |
|---|---|---|
| Garrick J. Rochow | 101,455 | 5,874,904 (based on Jan 19 and Mar 22, 2024 prices; cycle-specific payouts noted above) |
Equity Ownership & Alignment
| Item | As of Mar 5, 2024 | As of Mar 4, 2025 |
|---|---|---|
| Beneficially Owned Shares (includes restricted) | 452,581 | 540,155 |
| Restricted Shares Held (subset of above) | 329,936 | 352,882 |
| Ownership as % of CMS outstanding | <0.5% (individual; directors/officers as group <0.5%) | <0.5% (individual; group <0.5%) |
| Pledging/Hedging | Prohibited; no shares pledged | Prohibited; no shares pledged |
| CEO Ownership Guideline | 6× base salary; all NEOs compliant |
Insider selling pressure and vesting cadence:
- Tenure RS vests at 3 years; PSU cycles are 3-year performance periods with post-performance vest timing (2022 grant cycle service vesting in early 2025; 2023 cycle in 2026; 2024 cycle in 2027). Shares are sold at vest to cover tax withholdings, creating periodic supply around vest dates .
Employment Terms
Separation and change-in-control framework:
- No traditional employment agreements; executives are party to Officer Separation (OS) and Change-in-Control (CIC) agreements .
Key economics for Rochow (assumes Dec 31, 2024 event):
| Scenario | Cash Multiple(s) | Pro-rata Bonus | Equity Treatment | DC SERP Vesting | Medical | Total ($) |
|---|---|---|---|---|---|---|
| Termination Without Cause (Non-CIC) | 1.75× base salary = 2,187,500 | — | Tenure RS pro-rata; PSUs pro-rata at actual performance; unvested RS awards value shown 12,833,324 | Unvested 1,515,847 vests | — | 16,536,671 |
| CIC + Qualifying Termination (Double Trigger) | 2× base = 2,500,000; 2× target AIP = 3,125,000 | 1,562,500 | PSUs vest pro-rata at target; tenure RS per terms; unvested RS awards value 14,609,747 | 2,234,597 vests | ~2 years coverage = 43,167 | 24,075,011 |
Other protections and constraints:
- Double-trigger for equity under CIC; non-compete forms part of CIC consideration; “best net benefit” cutback for 280G/4999; no excise tax gross-ups .
- Clawback policy compliant with SEC/NYSE; additional plan-level clawbacks at Committee discretion for errors/restatements .
- Perquisites limited (no planes/cars/clubs/financial planning); principal perq is annual executive physical; security/technology services and potential relocation; overall limited perqs policy reaffirmed .
Retirement and deferrals:
- DC SERP employer contributions vest at age 55 with 5 years participation (post-2019 contributions); Rochow receives 10% on regular earnings and AIP under DC SERP; 2024 employer DC SERP contribution $319,512; DSSP employer match $54,300; Rochow 2024 DSSP executive deferral $241,800; aggregate balances: DSSP $1,504,776; DC SERP $2,224,545 .
- Cash Balance Pension: small legacy benefit; 2024 present value $5,968 .
Board Governance
- Role and tenure: Director since 2020; not independent due to employment .
- Committees: None (CEO directors do not serve on Audit/Comp/Finance/Governance; those committees are 100% independent) .
- Board leadership: Chairman is independent and separate from CEO; 90% of directors independent; independent executive sessions and governance practices in place .
- External public board service: Hubbell Incorporated (2024–present) .
Director and Shareholder Oversight Signals
- Say-on-Pay support: ~96–100% in 2023 and ~95% in 2024, with no program changes in response to the strong approval .
- Compensation benchmarking: Target total compensation generally around 50th percentile of compensation peer group; cash comp ~31% of CEO target TDC; 80% of variable at-risk compensation in long-term incentives for CEO .
- LTI risk guardrails: No option grants since 2003; anti-repricing; PSU payout cap if absolute performance negative .
Compensation Structure Analysis
- Mix shifts and pay-for-performance: CEO base grew modestly (+1.2% in 2024 to $1.25M) while AIP paid above target (133%) on EPS and operational outperformance; equity remains majority of TDC (stock awards $6.65M in 2024) aligning wealth to multi-year relative TSR/EPS vs peers .
- Performance string: 2021–2023 PSU results showed strong EPS-growth outperformance (180.4% payout) offset by below-median TSR (71.1%); 2022–2024 TSR tranche paid slightly above target at 105.3% while EPS-growth results are pending, indicating balanced pay sensitivity to relative factors .
- Governance quality: Double-trigger CIC, no tax gross-ups, clawbacks, anti-hedge/pledge, independent chair and fully independent key committees reduce shareholder risk .
Risk Indicators & Red Flags
- Pledging/hedging prohibited; no shares pledged; reduces alignment risk .
- No option repricing; LTI payout capped if absolute performance negative; mitigates windfall risk in down cycles .
- Related-party transaction policy overseen by Audit Committee; no specific red-flag RPTs disclosed relating to Rochow .
- Strong and consistent Say-on-Pay support (~95–100%) suggests low external compensation controversy risk .
Say-on-Pay & Compensation Peer Groups
- Say-on-Pay: ~95% approval in 2024; ~96–100% in 2023 (CMS and Consumers) .
- Compensation Peer Group (2024): AEE, AEP, ATO, CNP, ED, EIX, ETR, EVRG, EXC, HE, NEE, NI, OGE, PNW, PPL, PEG, SRE, WEC, XEL, DTE, CNP et al (full list in proxy); compensation targeted near 50th percentile .
- Performance Peer Group: Broader S&P 500 & S&P MidCap 400 utilities set for relative TSR/EPS comparisons (exclusions for delisted peers at vesting) .
Investment Implications
- Incentive alignment: High equity mix with three-year, relative TSR and EPS-growth metrics and payout caps ties CEO wealth to peer-relative value creation and sustained earnings expansion; AIP places 70% weight on adjusted EPS, ensuring annual financial accountability .
- Retention vs. overhang: Large unvested restricted stock balance (352,882 shares as of Mar 4, 2025) and multi-year vesting are strong retention levers but create predictable vest-related sell-to-cover flows around vest dates (potential, modest technical pressure) .
- Downside protections for shareholders: Double-trigger CIC, absence of tax gross-ups, clawback structure, anti-hedge/pledge, and independent board leadership reduce governance and payout risk during adverse scenarios .
- Execution track: Long record meeting/exceeding guidance and at/above-median multi-period TSR; 2024 EPS beat vs target and dividend growth (19th consecutive increase) support a stable utility growth/returns profile under Rochow’s tenure .
Data appendix references
- Biographical/board data:
- Compensation tables and plan design:
- LTI outcomes and vesting:
- Ownership and guidelines:
- Separation/CIC:
- Governance/policies: