LeeRoy Wells Jr.
CMS ENERGYAbout LeeRoy Wells Jr.
LeeRoy Wells Jr. is Senior Vice President, Operations at CMS Energy and Consumers Energy, serving in this role since December 2020; he was Vice President from August 2017 to December 2020 and Executive Director of Electric Systems Operations & Maintenance from December 2015 to August 2017 . He is 46 years old as of February 11, 2025 . CMS delivered adjusted EPS of $3.34 in 2024 versus a $3.29 target, resulting in a 133% annual incentive payout; long-term incentives are tied to three-year relative TSR and EPS growth with recent award cycles paying at 105.3% of target for the TSR portion (2022 grant) and 71.1%/180.4% for the 2021 TSR/EPS components . CMS reported 2024 revenue of $7.5 billion and adjusted net income of $998 million, marking 22 consecutive years of meeting or exceeding adjusted earnings guidance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Consumers Energy | SVP, Operations | 12/2020 – Present | Executive leadership of operations; aligned with CMS’ utility-focused strategy |
| Consumers Energy | Vice President | 8/2017 – 12/2020 | Senior management progression supporting operational execution |
| Consumers Energy | Executive Director, Electric Systems Operations & Maintenance | 12/2015 – 8/2017 | Oversight of electric systems O&M functions |
External Roles
No external public company directorships or external roles are disclosed for Wells in CMS’ executive officer biographies and proxy materials .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $545,000 | $575,000 |
| Target Bonus (% of Salary) | 70% (inferred prior year; increased by 5% in 2024) | 75% (increase of 5 pts vs 2023) |
| Actual Annual Incentive ($) | $480,690 | $573,562 |
| Stock Awards – Grant Date Fair Value ($) | $955,139 | $1,067,357 |
| All Other Compensation ($) | $132,003 | $135,586 |
2024 All Other Compensation detail:
- DCCP (company contribution): $24,150
- DC SERP (company contribution): $88,319
- Life insurance premium: $1,005
- Executive physical: $4,000
Performance Compensation
Annual Incentive (2024)
| Metric | Weighting | Target | Actual | Payout % | Vesting/Payout |
|---|---|---|---|---|---|
| Adjusted EPS | 70% | $3.29 | $3.34 | 136% | Cash; paid March 2025 after late-Jan approval |
| Utility Operating Goals (People/Planet/Prosperity) | 30% | Approved annually | 124% payout | 124% | Cash; paid March 2025 |
| Plan Performance Factor (Total) | — | — | — | 133% | Cash; paid March 2025 |
Annual incentive design: EPS 70% and Utility operating metrics 30%; EPS adjusted for specified unusual items per plan; Committee retains discretion to modify payouts within constraints .
Long-Term Incentive (Equity)
Design: 75% performance-based restricted stock; 25% tenure-based restricted stock; performance portion split 50/50 between relative TSR and relative LTI EPS growth vs an S&P utilities peer group; tenure-based vests at third anniversary. Cap: If absolute TSR or LTI EPS over three years is negative, payout cannot exceed target .
2024 Grants (award date Jan 25, 2024):
- Performance-based restricted stock: 13,616 target shares (vest after 3 years; metrics 50% TSR, 50% EPS) .
- Tenure-based restricted stock: 4,539 shares (vest on Jan 25, 2027) .
Recent LTI performance outcomes:
- 2021 grant (performance period 1/1/2021–12/31/2023): TSR vested at 71.1% of target; LTI EPS vested at 180.4% of target .
- 2022 grant (performance period 1/1/2022–12/31/2024): TSR vested at 105.3% of target; EPS growth portion pending determination after March 21, 2025; service vest dates Jan 29, 2025 (TSR) and Mar 21, 2025 (EPS) .
Equity Ownership & Alignment
| Ownership Item | Detail |
|---|---|
| Beneficial ownership | 84,478 CMS shares as of March 4, 2025; includes restricted stock; no shares pledged |
| Restricted stock held (included above) | 55,676 shares |
| Options | None outstanding; no options granted since 2003 |
| Stock ownership guideline | 2x base salary for Wells; all NEOs were in compliance as of Dec 31, 2024 |
| Hedging/pledging policy | Officers prohibited from pledging, hedging, shorting, or derivative trading in CMS securities |
| Sale to cover taxes | Shares are sold at vest to cover tax withholdings |
| Ownership as % of outstanding | Each officer individually owns <0.5% of CMS common; all officers/directors combined <0.5% |
Selected outstanding unvested equity (as of Dec 31, 2024):
- 2022 performance-based awards (TSR): 4,974 shares; vesting date Jan 29, 2025; market value $331,517 .
- 2022 performance-based awards (EPS): 9,448 shares; vesting date Mar 21, 2025; market value $629,709 (pending performance determination) .
- 2023 tenure-based awards: 3,704 shares; vest Jan 26, 2026; market value $246,872 .
- 2024 tenure-based awards: 4,539 shares; vest Jan 25, 2027; market value $302,524 .
Note: Column (h) unearned performance-based shares in the Outstanding Equity Awards tables are disclosed at the next-higher performance level per SEC regulations and do not represent target; 2024 target share figures are provided in the Grants table above .
Employment Terms
| Provision | Terms |
|---|---|
| Employment agreement | No traditional employment agreement; officer separation (OS) and change-in-control (CIC) agreements in place |
| Severance (OS Agreement) | Senior Vice President: 1.5x base salary; unvested equity pro-rata vesting; DC SERP vest of unvested balance; requires release; non-disparagement/confidentiality |
| Change-in-control (CIC) | Double trigger required (CIC + qualifying termination within 2 years); 2x salary, 2x incentive at target, pro-rata incentive, DC SERP enhancements, medical coverage payment; equity vests pro-rata at target for performance awards |
| Non-compete | Included as consideration within CIC provisions |
| Clawback | Dodd-Frank compliant clawback policy; broader plan-level clawbacks at Committee discretion for restatements/errors |
| Tax gross-ups | None in separation or CIC agreements; “best net benefit” applies for potential excise tax reductions |
Potential payments for Wells Jr. (as of 12/31/2024):
| Scenario | Salary/Incentive ($) | Equity ($) | DC SERP ($) | Medical ($) | Total ($) |
|---|---|---|---|---|---|
| Termination without Cause (OS) | 1.5x salary = $862,500 | $1,925,963 | $402,568 (unvested balance vests) | — | $3,191,031 |
| Change-in-control (double trigger) | 2x salary = $1,150,000; 2x target incentive = $862,500; pro-rata incentive = $431,250 | $2,209,936 | $646,943 (+ CIC contribution mechanics) | $43,167 | $5,343,796 |
| Disability | Pro-rata incentive = $431,250 | $1,925,963 | — | — | $2,357,213 |
| Death | Pro-rata incentive = $431,250 | $3,098,292 (performance-based at target; tenure 100%) | — | — | $3,529,542 |
Investment Implications
- Alignment and retention: High variable pay mix (72% of total direct comp for Wells; 70% of variable is LTI) coupled with strict ownership guidelines and hedging/pledging prohibitions support long-term alignment and reduce voluntary selling/hedging risk . Shares are sold at vest to cover taxes, which can create predictable insider “sell-to-cover” flows around vest dates (not discretionary selling) .
- Upcoming vesting/supply signals: EPS portion of 2022 performance awards vests March 21, 2025; tenure/TSR portions already vested Jan 29, 2025. Additional tenure-based tranches vest in 2026 and 2027, with performance tranches resolving in 2025–2027, indicating periodic sell-to-cover events rather than opportunistic selling .
- Pay-for-performance and risk: Annual incentive tied to EPS and operational metrics paid 133% in 2024, and LTI outcomes reflect mixed TSR/EPS relative performance across grant cycles; clawback policy and no tax gross-ups are shareholder-friendly, while CIC is double-trigger with target-level vesting, limiting windfalls absent termination .
- Severance economics: OS multiple of 1.5x salary and CIC multiples (2x salary and target incentive plus pro-rata incentive) are moderate for a regulated utility peer set; DC SERP vesting and equity acceleration under CIC add to exit value, relevant for retention and potential event-driven scenarios .
Say-on-Pay context: Shareholders supported CMS executive compensation with ~95% approval in 2024, indicating broad investor acceptance of the program design .