Gerardo Norcia
DTE ENERGYAbout Gerardo Norcia
Gerardo Norcia is Chairman (2022–present) and Chief Executive Officer (2019–present) of DTE Energy; he is 62 and has served on the Board since 2019, and is not independent due to his executive role . In 2024, 81% of his compensation was variable/at-risk, with total reported compensation of $12,592,002 and a CEO pay ratio of 87:1 . DTE’s pay-for-performance design ties incentives to Adjusted Operating EPS, relative Total Shareholder Return (TSR) versus a regulated-utility peer group, and Cash from Operations; the 2021–2023 performance share cycle paid out at 169.2% for Mr. Norcia, indicating strong performance versus goals . The Board combines Chair/CEO roles but has a Lead Independent Director (Mark A. Murray) elected in 2023 to provide independent counterbalance and enhanced oversight .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| DTE Energy Company | President | 2016–2023 | Senior enterprise leadership over strategy and operations across the utility and non-utility portfolio . |
| DTE Energy Company | Chief Operating Officer | 2016–2019 | Enterprise COO leadership; operational effectiveness and productivity focus cited among credentials . |
| DTE Electric | President & COO | 2013–2016 | Led electric utility operations and performance . |
| DTE Gas | President & COO | 2007–2013 | Led gas utility operations and performance . |
| DTE Gas Storage & Pipelines | President & COO | 2002–2007 | Led midstream/storage and pipeline business development and operations . |
External Roles
- No other public company boards were listed for Mr. Norcia in his 2025 proxy biography (unlike other director bios that enumerate “Other Public Boards”) .
Fixed Compensation
- Base salary levels remained at $1,340,000 in 2023 and 2024 (vs. $1,330,769 in 2022) .
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,330,769 | 1,340,000 | 1,340,000 |
Additional fixed/benefit elements:
- Pension accruals (change in pension value) contributed $37,810 (2022), $1,176,501 (2023), and $939,773 (2024) to total compensation .
- “All Other Compensation” totaled $138,962 (2022), $136,011 (2023), and $157,075 (2024) .
Performance Compensation
Annual Incentive Plan (AIP)
2024 AIP design for DTE executives (CEO included):
| Metric | Weight |
|---|---|
| DTE Operating EPS | 20% |
| DTE Cash From Operations | 20% |
| Customer Satisfaction Score | 15% |
| Employee Engagement – Gallup | 5% |
| Safety Performance | 10% |
| Utility Operating Excellence Index | 30% |
2024 CEO AIP target and outcome:
| Item | 2024 |
|---|---|
| AIP Target Award ($) | 1,809,000 |
| AIP Actual Paid ($) | 2,467,295 |
| Payout vs. Target (%) | 136.39% (Business Unit Modifier cited in employment agreement illustration) |
Notes:
- For 2024, officer AIP target awards range from 70% to 135% of salary; Mr. Norcia’s target dollar award is disclosed at $1,809,000 (implies ~135% of $1.34m salary) .
Long-Term Incentive (LTI)
- Mix: ~70% Performance Shares; ~30% time-based Restricted Stock for 2024 grants .
- 2024 PSU performance measures and weights (three-year period 1/1/2024–12/31/2026; payout 0%–200%): TSR vs custom regulated-utility peer group (80%), 3-year cumulative Operating EPS (20%); PSU targets raised beginning with 2022 grants to 55th percentile target and 80th percentile max for TSR .
- 2024 RS vest on January 31, 2027 (3-year cliff); dividends paid on RS during vesting; no dividends on unvested PSUs .
2024 Grants to CEO (Grant Date: 1/31/2024):
| Award Type | Shares (#) | Grant-Date Fair Value ($) | Vest/Performance |
|---|---|---|---|
| Performance Shares (Target) | 54,694 | 5,765,841 | Performance period 2024–2026; payout after O&C certification in early 2027 . |
| Restricted Stock | 18,232 | 1,922,017 | Vests 1/31/2027 (3-year cliff) . |
Outstanding and vested equity (as of/for 2024):
| Category | Shares (#) | Value ($) |
|---|---|---|
| Unvested RS at 12/31/2024 | 53,467 | 6,456,140 |
| Unvested PSUs at 12/31/2024 (Target) | 144,996 | 17,508,267 |
| RS vested in 2024 | 19,071 | 1,975,565 |
| PSUs vested in 2024 | 82,873 | 8,736,502 |
Performance share payout history:
- 2021–2023 PSU cycle paid at 169.2% for the CEO, aligning to TSR vs peer group and operating EPS outcomes; other NEO payout ranges in 2022–2023 cycles were 158%–195% .
Equity Ownership & Alignment
- Beneficial ownership at 12/31/2024: 375,657 common shares; 1,622 phantom shares; 144,996 PSUs at target (other shares that may be acquired) .
- Company prohibits any hedging or pledging of DTE securities by officers and directors (including margin accounts) .
- Executive stock ownership guidelines: CEO required to hold 5x base salary; all NEOs with ≥5 years in role met guidelines as of 12/31/2024 .
- No executive/director owned ≥1% of outstanding shares as of 12/31/2024 .
| Ownership Detail | Amount |
|---|---|
| Common Stock | 375,657 |
| Phantom Stock | 1,622 |
| PSUs at Target (future-eligible) | 144,996 |
| CEO Ownership Guideline | 5x base salary |
| Hedging/Pledging Policy | Prohibited |
Vesting cadence and potential selling pressure indicators:
- RS grants vest 3 years from grant date: 2/2/2022 grant vests 2/2/2025; 2/1/2023 grant vests 2/1/2026; 1/31/2024 grant vests 1/31/2027; PSUs pay after O&C certification (e.g., early 2027 for 2024 grant) .
- Section 16 insiders are restricted to four trading windows per year; plan contributions and matching may be redirected from the DTE Stock Fund subject to insider trading restrictions .
Employment Terms
Severance/change-in-control (CIC) architecture:
- CIC Agreements (double-trigger): Cash severance of 200% of base+target bonus if terminated (actual or constructive) within two years post-CIC, plus a separate non-compete consideration equal to 100% of base+target bonus for a 1-year non-compete; pro-rata annual bonus; two years of health/welfare benefits; two years of ESRP compensation credits; outplacement up to 15% of base; no excise tax gross-ups .
- LTI treatment under CIC: Double-trigger if awards are assumed; if not assumed, awards vest on CIC; PSUs settle at greater of target or actual through CIC date .
CIC-value illustration (as of 12/31/2024):
| Component | Amount ($) |
|---|---|
| Severance (2x base+target bonus) | 6,298,001 |
| Pro‑rated Bonus | 1,809,000 |
| Pension Enhancement (ESRP) | 760,424 |
| Accelerated LTIP Awards | 23,964,528 |
| Outplacement (≤15% of base) | 201,000 |
| Health & Wellness Benefits (24 months) | 58,100 |
| Non‑Compete Consideration (100% of base+target bonus) | 3,149,000 |
| Total | 36,240,053 |
Standalone employment agreement (non‑CIC) for CEO:
- If terminated without cause or resigns for “good reason,” illustrative payment value at 12/31/2024 was ~$25,389,846, including 24 months of base salary, 2x 2024 annual incentive with Business Unit Modifier of 136.39%, 2024 annual incentive actually earned (136.39% factor), and pro‑rated vesting of unvested RS/PSUs at target; plus retiree medical as eligible .
Clawback:
- Incentive-based compensation (AIP and LTI) subject to clawback for three years preceding any required accounting restatement; 2025 LTIP explicitly subject to the Company’s Clawback Policy .
Retirement and Deferred Compensation
Pension present value and credited service (12/31/2024):
| Plan | Years Credited | PV of Accrued Benefit ($) |
|---|---|---|
| Cash Balance Plan | 22.2 | 433,562 |
| Supplemental Retirement Plan (SRP) | 22.2 | 2,099,107 |
| Executive Supplemental Retirement Plan (ESRP) | 22.2 | 5,290,503 |
Supplemental Savings Plan (nonqualified) — 2024 activity and balance:
| Item | Amount ($) |
|---|---|
| Executive Contribution | 111,000 |
| Company Match | 68,031 |
| Aggregate Earnings | 219,290 |
| Year‑End Balance | 2,542,496 |
Board Governance and Director Service
- Role: Chairman (since 2022) and CEO (since 2019); not independent; the Board has determined all other nominees are independent .
- Combined Chair/CEO structure is explicitly addressed in governance; a Lead Independent Director (Mark A. Murray) was elected effective May 4, 2023 with robust responsibilities including executive sessions, agenda/information approval, shareholder liaison, and participation in CEO evaluation .
- Employee directors receive no compensation for Board service; non-employee director compensation includes cash retainers and equity (phantom shares) subject to ownership guidelines .
- Director stock ownership guideline equals 2x (cash retainer + annual phantom stock value); directors with ≥5 years meet guideline .
- Committees are comprised of independents; the Organization & Compensation Committee (O&C) oversees executive pay and met four times in 2024; committee membership includes independent directors (e.g., Brandon (Chair), McGovern, Murray, Skaggs, Thomas) .
- Say‑on‑pay support: 96.2% approval at each of the 2023 and 2024 annual meetings .
Director Compensation (as it pertains to the CEO as a director)
- As an employee director, Mr. Norcia receives no separate director compensation .
Compensation Governance, Peer Group, and Pay Versus Performance
- Independent compensation consultant: Meridian Compensation Partners (independent; retained since June 2018); Aon provided 2024 market study; pay targeted near median with strong performance linkage .
- Executive peer group for benchmarking includes large regulated utilities (e.g., SO, DUK, D, EXC, SRE, PNW, WEC, XEL, CMS, EIX, PPL, ED, ETR, FE, CNP, ETR, PSEG, ETR, AEP, etc.) as approved June 2024; see proxy for full list .
- LTI TSR peer group is a custom regulated set (e.g., SO, DUK, D, ED, WEC, XEL, ETR, CMS, AEP, etc.) reviewed annually; see proxy for full list .
- Key “what we don’t do”: no single‑trigger CIC payouts; no excise tax gross‑ups; no guaranteed bonuses; no stock option grants since 2010; no repricing .
Multi‑Year CEO Summary Compensation (reported amounts)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 1,330,769 | 1,340,000 | 1,340,000 |
| Stock Awards ($) | 7,013,377 | 6,729,046 | 7,687,859 |
| Non‑Equity Incentive ($) | 1,937,300 | 896,540 | 2,467,295 |
| Change in Pension Value ($) | 37,810 | 1,176,501 | 939,773 |
| All Other Compensation ($) | 138,962 | 136,011 | 157,075 |
| Total ($) | 10,458,218 | 10,278,098 | 12,592,002 |
Risk Indicators and Alignment Checks
- Hedging/pledging: Explicitly prohibited for officers/directors (reduces misalignment and margin‑call risk) .
- Ownership guideline: CEO 5x salary; met as of 12/31/2024 (reinforces alignment) .
- CIC economics: Double‑trigger; sizable value concentration in accelerated LTIP ($23.96m in illustration), a potential event‑risk trading signal if M&A surfaces; no tax gross‑ups .
- Clawback: 3-year lookback for restatements; 2025 LTIP expressly under Clawback .
- Governance mitigants: Lead Independent Director with robust authorities; committee independence .
- Say‑on‑pay support: 96.2% in 2023 and 2024 suggests low shareholder dissent risk on pay .
Investment Implications
- Pay-for-performance is tightly linked to TSR and operating metrics; the 169.2% PSU payout on the 2021–2023 cycle and 136.39% AIP payout for 2024 signal above‑target execution, supporting confidence in forward incentive alignment if performance persists .
- Equity overhang and event risk: Large unvested PSU/RS balances and double‑trigger CIC acceleration (with a ~$36.2m illustrative value) mean M&A headlines could be a stock catalyst; conversely, vesting cliffs (2/2025, 2/2026, 1/2027) define potential periodic selling/withholding flows subject to insider windows .
- Alignment safeguards (ownership guidelines, hedging/pledging bans, clawback) and high say‑on‑pay support reduce governance discount risk, while combined Chair/CEO is mitigated by an empowered Lead Independent Director and independent committees .
- Retention risk appears contained by multi‑year LTI and pension/deferred balances; however, the CEO’s employment agreement and above‑median incentive opportunities create meaningful optionality tied to performance and potential corporate events .