LeeRoy Wells Jr.
About LeeRoy Wells Jr.
Senior Vice President, Operations at CMS Energy/Consumers Energy since December 1, 2020; joined Consumers Energy in 2006 with progressive leadership roles across gas and electric operations. Education: B.S. Electrical Engineering (Michigan Technological University, 2002) and M.S. Organizational Leadership & Management (Lourdes College), with business certifications from George Washington University and the University of Michigan – Ross School of Business . Age 42 at appointment in 2020, indicating mid-career tenure with deep utility operations expertise . Company performance context tied to incentive metrics: 2024 adjusted EPS of $3.34 exceeded the $3.29 target under the Annual Incentive Plan; long-term incentive TSR portion for the 2022 grant paid out at 105.3% of target, while EPS LTI results were pending as of the proxy, and the AIP paid at 133% of target for 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CMS Energy / Consumers Energy | Senior Vice President, Operations | Effective Dec 1, 2020 – present | Oversees company-wide operations; expected to champion safety, operational performance, and customer service |
| Consumers Energy | Vice President, Gas Operations | 2019 – Nov 2020 | Responsible for gas transmission, distribution, and integrity of the gas system |
| Consumers Energy | Vice President, Operations Support | Prior to 2019 (date not specified) | Oversaw supply chain, corporate safety & health, fleet, facilities, and real estate to ensure infrastructure reliability and safety |
| Consumers Energy | Executive Director, Electric Operations | Prior to VP roles (date not specified) | Led ~480 employees in low-voltage distribution, construction, and service restoration |
| Consumers Energy | Electric Generation Operations (early career) | Joined in 2006 | Focused on electric infrastructure reliability |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $545,000 | $575,000 |
| Target Annual Bonus (% of salary) | 70% (5% below 2024) | 75% |
| Actual Annual Incentive Paid ($) | $480,690 | $573,562 |
| All Other Compensation ($) | $132,003 | $135,586 |
| Total Compensation ($) | $2,112,832 | $2,351,505 |
2024 All Other Compensation breakdown:
| Component | Amount ($) |
|---|---|
| Savings Plan & DCCP contributions (incl. $24,150 DCCP) | $42,262 |
| DC SERP (nonqualified deferred comp) | $88,319 |
| Life Insurance Premium | $1,005 |
| Executive Physical | $4,000 |
| Total | $135,586 |
2024 Nonqualified Deferred Compensation balances:
| Plan | Executive Contributions (2024) ($) | Registrant Contributions (2024) ($) | Aggregate Earnings (2024) ($) | Aggregate Balance at FYE ($) |
|---|---|---|---|---|
| Deferred Salary Savings Plan (DSSP) | — | — | 1,532 | 13,917 |
| DC SERP | — | 88,319 | 51,564 | 468,419 |
Compensation mix (target TDC, 2024):
| Category | Wells Jr. |
|---|---|
| Variable At-risk | 72% |
| Fixed | 28% |
| Variable split: Annual vs Long-term | Annual 30%; Long-term 70% |
| Cash vs Equity | Cash 50%; Equity 50% |
Performance Compensation
Annual Incentive framework (2024):
- Metrics: EPS and Utility Operating goals; EPS target $3.29 vs actual $3.34; overall plan paid 133% of target .
- Payout ranges: EPS goal 17.5%–200% of target; Utility goal 0.8%–175% of target .
- Individual formula: Base Salary × Target Award % × Plan Performance Factor; Wells Jr. Target Award increased to 75% in 2024 (from 70% in 2023) .
2024 Grants of Plan-Based Awards (Wells Jr.):
| Award Type | Threshold | Target | Maximum | Grant Date Shares | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|---|
| Annual Incentive (Cash) | $3,450 | $431,250 | $830,156 | — | — | Earned at 133% of target; paid Mar 2025 |
| Performance-based RS (TSR/EPS) | 6,808 sh | 13,616 sh | 27,232 sh | — | $811,085 | 100% after 3 years; perf Jan 1, 2024–Dec 31, 2026; TSR and LTI EPS equally weighted |
| Tenure-based RS | — | — | — | 4,539 sh | $256,272 | Vest on 3-year anniversary of award date |
LTI program design:
- 75% performance-based equity; 25% tenure-based; performance vesting contingent on relative TSR and relative LTI EPS growth, weighted 50/50, over 3-year periods (e.g., 2024 grant: Jan 1, 2024–Dec 31, 2026) .
- 2022 LTI TSR payout: 105.3% of target (vesting Jan 29, 2025); EPS portion pending as of proxy (performance period ended Dec 31, 2024) .
Equity Ownership & Alignment
Beneficial ownership (as of Mar 4, 2025):
| Holder | Shares Beneficially Owned | Notes |
|---|---|---|
| LeeRoy Wells Jr. | 84,478 | Includes 55,676 restricted shares; no shares pledged; each NEO <0.5% of outstanding CMS common stock; group <0.5% |
Stock ownership guidelines:
- Requirement: 2× base salary for Wells Jr.; compliance achieved by all NEOs as of Dec 31, 2024 .
- Anti-hedging/pledging: Officers prohibited from pledging or hedging company securities .
Outstanding equity awards at FYE 2024 (Wells Jr.):
| Grant Date – Vest Date | Unvested RS (#) | Market Value ($) | Unearned Perf RS (#) | Market/Payout Value ($) |
|---|---|---|---|---|
| 1/27/2022 – 1/29/2025 | 2,869 | 191,219 | — | — |
| 1/27/2022 – 1/29/2025 (TSR earned at 105.3%) | 4,974 | 331,517 | — | — |
| 1/27/2022 – 3/21/2025 (EPS; shown at 200% for table) | 9,448 | 629,709 | — | — |
| 1/26/2023 – 1/26/2026 | 3,704 | 246,872 | — | — |
| 1/26/2023 – 1/26/2026 | — | — | 8,900 | 593,185 |
| 1/26/2023 – 3/26/2026 | — | — | 11,866 | 790,869 |
| 1/25/2024 – 1/25/2027 | 4,539 | 302,524 | — | — |
| 1/25/2024 – 1/25/2027 | — | — | 10,545 | 702,824 |
| 1/25/2024 – 3/25/2027 | — | — | 14,060 | 937,099 |
| Notes: Market value at year-end price $66.65/sh; performance-based awards shown per SEC at next higher level above target (150% for TSR 2023/2024, 200% for EPS 2023/2024), with performance periods of 2022: 1/1/2022–12/31/2024; 2023: 1/1/2023–12/31/2025; 2024: 1/1/2024–12/31/2026 . |
2024 stock vested:
| Shares Vested (#) | Value Realized ($) |
|---|---|
| 10,986 | 636,161 |
| Value based on closing prices of $56.44 (Jan 19, 2024) and $58.97 (Mar 22, 2024); TSR for Jan 2021–Dec 2023 was 7% vs peer median 12% (vesting at 71.1% on Jan 19, 2024); EPS growth 26% vs peer median 13% (vesting at 180.4% on Mar 22, 2024) . |
Employment Terms
- Agreements: No traditional employment agreement; has Officer Separation Agreement (OS) and Change-in-Control Agreement (CIC) .
- OS Terms: Lump-sum severance on termination without cause; requires release, non-disparagement, confidentiality; tenure-based RS vests pro-rata; performance RS vests at end of period pro-rata based on service and actual performance .
- CIC Terms: Double-trigger required (CIC + qualifying termination within two years); includes non-compete consideration; no tax gross-up; “best net benefit” provision for 280G/4999; performance RS vests pro-rata at target upon CIC with qualifying termination .
Potential payments (as of Dec 31, 2024):
| Scenario | Base Multiple ($) | Incentive Multiple ($) | Pro-rata Incentive ($) | DC SERP ($) | Medical ($) | Unvested RS ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| Termination without Cause (OS) | 862,500 (1.5× base) | — | — | 402,568 | — | 1,925,963 | 3,191,031 |
| Change-in-Control (CIC) | 1,150,000 (2× base) | 862,500 (2× incentive at 100% target) | 431,250 | 646,943 | 43,167 | 2,209,936 | 5,343,796 |
| Disability | — | — | 431,250 | 402,568 | — | 1,925,963 | 2,357,213 |
| Death | — | — | 431,250 | — | — | 3,098,292 | 3,529,542 |
Retirement/Disability/Death vesting rules: death → 100% restricted stock vests, performance RS vests at target; retirement/disability → tenure-based RS pro-rata; performance RS pro-rata at end of performance period based on service and actual performance (Committee may waive forfeiture in exceptional cases) .
Investment Implications
- Alignment: High at-risk pay (72% of target TDC) with equal weighting on TSR and EPS for LTI, plus EPS/utility outcomes driving AIP; ownership guidelines at 2× base and anti-pledging policy enhance alignment and reduce hedging/selling risks .
- Retention: OS and CIC protections with moderate cash multiples (1.5× base under OS; 2× base and 2× incentive under CIC), DC SERP balances accruing, and multi-year unvested/unearned RS through 2027 support retention while tying outcomes to performance .
- Near-term vesting calendar: 2022 TSR/EPS grants reached end of performance period (vesting dates Jan 29, 2025 and Mar 21, 2025), with additional 2023 and 2024 grants vesting in 2026–2027; these events create potential liquidity windows but are subject to performance outcomes and anti-hedging/pledging constraints .
- Pay-for-performance: 2024 AIP paid 133% on EPS/utility execution as adjusted EPS exceeded target; LTI TSR payout for 2022 grant at 105.3% underscores consistent relative performance, with EPS LTI finalization pending at time of filing—constructive signals for operations execution quality under Wells Jr.’s purview .
- Governance context: Strong say-on-pay support (~95% CMS; ~100% Consumers), no tax gross-ups, double-trigger equity vesting on CIC, and balanced metrics cap LTI payouts at target if absolute performance over 3 years is not positive—shareholder-friendly features that temper windfalls and emphasize durability of results .