Garrick Rochow
CMS ENERGYAbout Garrick Rochow
Garrick J. Rochow is President and CEO of CMS Energy and Consumers Energy and has served as a director since 2020; he is 50 and has more than 25 years in the utility industry with 20+ years at CMS/Consumers . Under his tenure, CMS reported 2024 adjusted EPS of $3.34 and achieved its 14th year with 5- and 10-year TSR at or above the median of its performance peer group; a $100 CMS investment measured for pay-versus-performance equaled 121 in 2024 vs 98 for the peer group . CMS reported 22 years of meeting or exceeding adjusted earnings guidance and continues to emphasize “triple bottom line” execution (people, planet, prosperity) alongside financial performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CMS Energy / Consumers Energy | President & CEO | 2020–present | Extensive utility leadership; Board notes deep experience and prior leadership roles . |
| CMS Energy / Consumers Energy | Executive Vice President | 2016–2020 | Senior leadership across operations; recognized utility expertise . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Hubbell Incorporated | Board Member | 2024–present |
| American Gas Association | Board Member | present |
| Edison Electric Institute | Board Member | present |
| Business Leaders for Michigan | Board & Executive Committee | present |
| The Right Place | Board & Executive Committee | present |
| Priority Health | Board Member | present |
| New Community Transformation Fund | Director | present |
| West Michigan Policy Forum | Director | present |
| Grand Rapids Economic Club | Director | present |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $1,150,000 | $1,235,000 | $1,250,000 |
| Target Bonus (% of Salary) | 125% | 125% | 125% |
| Actual Annual Incentive ($) | $1,987,200 | $1,945,125 | $2,078,125 |
Performance Compensation
Annual Incentive (2024)
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Annual Incentive EPS (Adjusted) | 70% | $3.29 | $3.34 | 133% | Cash; no vesting |
| Annual Incentive Utility (People/Planet/Prosperity goals) | 30% | Not disclosed | Achieved above target | 124% | Cash; no vesting |
| Total Plan Payout | — | — | — | 133% | — |
Key design details:
- Annual incentive allows Committee discretion and uses EPS and operational utility metrics aligned to strategy and peer practices .
- Adjusted EPS excludes specified unusual items per policy, with reconciliation in Appendix .
Long-Term Incentive (LTI) Design and 2024 Grants
| Component | Weighting | Metric | Performance Schedule | Award Mechanics |
|---|---|---|---|---|
| Performance-based RS (2024 grant) | 75% | Relative TSR and Relative LTI EPS (each 50%) | 30th percentile=50%; Median=100%; 70th=150%; 90th=200% | 3-year performance period (2024–2026); payout capped at target if absolute TSR or EPS is negative |
| Tenure-based RS (2024 grant) | 25% | Continued service | 100% vests at 3 years | Shares sold at vest for tax withholding |
Selected vesting outcomes:
- 2021 performance-based RS vested at 71.1% of target for TSR and 180.4% for LTI EPS (3-year period ended 2023) .
- 2022 performance-based RS TSR vested at 105.3% of target; 2022 LTI EPS component determination was pending until after March 21, 2025 .
2024 grant detail (Rochow):
| Grant Date | Type | Target Shares | Vest Date |
|---|---|---|---|
| 1/25/2024 | Performance-based RS | 84,850 | 3/25/2027 (post-performance service requirement) |
| 1/25/2024 | Tenure-based RS | 28,283 | 1/25/2027 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 540,155 CMS shares; includes restricted stock; no shares pledged . |
| Ownership as % of shares outstanding | Individual directors and officers each own <0.5%; group <0.5% . |
| Stock ownership guideline | CEO required to hold 6x base salary; all NEOs in compliance as of 12/31/2024 . |
| Hedging/pledging | Prohibited for directors and officers . |
| Options | None outstanding; no grants since 2003 . |
| Tax withholding at vest | Shares sold at vest to cover taxes . |
Unvested/Unearned equity by grant (Rochow, as of 12/31/2024):
| Grant/Vest | Type | Shares | Market Value ($) |
|---|---|---|---|
| 1/27/2022–1/29/2025 | Tenure-based RS | 20,573 | $1,371,190 |
| 1/27/2022–1/29/2025 | Performance-based RS (TSR; earned 105.3%) | 35,689 | $2,378,672 |
| 1/27/2022–3/21/2025 | Performance-based RS (EPS; pending) | 67,786 | $4,517,937 |
| 1/26/2023–1/26/2026 | Tenure-based RS | 23,393 | $1,559,143 |
| 1/26/2023–1/26/2026 | Performance-based RS (TSR) | 56,210 | $3,746,397 |
| 1/26/2023–3/26/2026 | Performance-based RS (EPS) | 74,946 | $4,995,151 |
| 1/25/2024–1/25/2027 | Tenure-based RS | 28,283 | $1,885,062 |
| 1/25/2024–1/25/2027 | Performance-based RS (TSR) | 65,705 | $4,379,238 |
| 1/25/2024–3/25/2027 | Performance-based RS (EPS) | 87,606 | $5,838,940 |
2024 stock vested (realized):
| Metric | Shares | Value ($) |
|---|---|---|
| Stock awards vested (Rochow) | 101,455 | $5,874,904 |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment agreement | No traditional employment agreement; OS (severance) and CIC agreements in place . |
| Severance (termination without cause) | 1.75x 2024 base salary ($2,187,500) plus pro-rata equity vesting and DC SERP amounts; total illustrated value $16,536,671 at 12/31/2024 . |
| Change-in-control (double trigger) | 2x 2024 base salary ($2,500,000) + 2x target incentive ($3,125,000) + pro-rata incentive ($1,562,500) + DC SERP + medical + pro-rata equity vesting at target; total illustrated $24,075,011 at 12/31/2024 . |
| Equity acceleration terms | Double-trigger under CIC; performance-based RS vests pro-rata at target; tenure RS pro-rata per service . |
| Non-compete | Included as consideration under CIC provisions . |
| Clawback | Dodd-Frank compliant clawback policy and plan-level clawbacks . |
| Tax gross-ups | None in separation or CIC agreements; “best net benefit” excise tax provision applies . |
Deferred compensation (2024):
| Plan | Exec Contributions ($) | Company Contributions ($) | Aggregate Earnings ($) | Aggregate Balance ($) |
|---|---|---|---|---|
| DSSP | $241,800 | $54,300 | $155,184 | $1,504,776 |
| DC SERP | — | $319,512 | $229,412 | $2,224,545 |
Perquisites and other (2024):
| Item | Amount ($) |
|---|---|
| Savings Plan + DCCP contributions | $42,202 |
| Nonqualified DC (DC SERP + DSSP) contributions | $373,812 |
| Life insurance premium | $1,764 |
| Executive physical | $4,000 |
| Total other compensation | $421,778 |
Pension (2024):
| Plan | Present Value of Accumulated Benefit ($) |
|---|---|
| Cash Balance Plan (Rochow) | $5,968 |
Performance & Track Record
- 2024 adjusted EPS achieved $3.34 under the annual incentive plan, above the $3.29 target, contributing to a 133% payout .
- Pay-versus-performance shows CMS $100 investment value at 121 in 2024 vs 98 for peer group; adjusted EPS in 2024 was $3.34; net income $993 million .
- “Triple bottom line” execution highlights include reliability improvements, customer assistance, clean energy progress, and continued dividend increases to $2.06 annualized in 2024, the 19th consecutive increase .
Board Governance
- Director since 2020; not independent due to employment; CEO and Chairman roles are separated; independent Chairman and a Presiding Director structure enhance oversight .
- Committees (Audit, Compensation, Finance, Governance) are 100% independent; employee director does not serve, though Rochow routinely attends committee meetings .
- Executive sessions of independent directors held four times in 2024; all directors attended >75% of Board and assigned committee meetings .
- No director compensation is paid to employee directors (Rochow); non-employee director compensation structure includes cash retainer and equity with one-year vest .
Say-on-pay and shareholder engagement:
- 2024 say-on-pay support was ~95%; CMS 8-K shows 235,442,409 for, 12,588,863 against, 2,923,032 abstain .
- CMS eliminated supermajority vote requirements via shareholder-approved charter amendment in May 2024 .
Compensation Committee Analysis
- Committee members: Ronald J. Tanski (Chair), Kurt L. Darrow, Laura H. Wright; all independent .
- Independent consultant Pay Governance advises the Committee; no conflicts; program targets median of a defined compensation peer group; performance peer group used for LTI .
Equity Ownership & Alignment Signals
- High equity alignment: majority of total pay in variable components (86% for CEO; 80% of variable is long-term), all LTI settled in equity .
- Ownership compliance: 6x salary guideline met; no hedging/pledging allowed; options not used, reducing leverage and repricing risks .
Employment Terms & Retention Risk
- Strong retention constructs: tenure-based RS vests over three years; performance RS tied to TSR and EPS vs peers with cap if absolute TSR/EPS is negative .
- Protection and alignment: double-trigger CIC, no tax gross-ups, clawbacks, and non-compete provisions balance retention with shareholder protections .
Investment Implications
- Alignment: High at-risk, equity-based pay (86%) and multi-year TSR/EPS performance conditions indicate strong pay-for-performance alignment; clawbacks and no gross-ups reduce governance risk .
- Potential selling pressure: Significant performance and tenure-based awards vest in Jan/March 2026 and Jan/March 2027; shares are sold at vest to cover tax withholding, which can create modest, predictable transaction flow around vest dates .
- Retention risk low: Double-trigger CIC and substantial unvested equity through 2027 provide retention incentives; no employment agreement but severance/CIC terms are competitive with peers .
- Governance quality: Independent chair plus presiding director, fully independent committees, prohibition on hedging/pledging, and strong say-on-pay support (~95%) mitigate dual-role concerns and reduce governance overhang .