Michael Innocenzo
EXELONAbout Michael Innocenzo
Michael A. Innocenzo, 59, is Executive Vice President and Chief Operating Officer (COO) of Exelon (since April 1, 2024), after serving as President and CEO of PECO from 2018–2024 . He joined the company in 1988 and holds a B.S. in Electrical Engineering (Widener University) and an MBA (Villanova University) . Under current leadership, Exelon delivered 2024 adjusted (non‑GAAP) operating EPS of $2.50, at the top of guidance, strong reliability (top quartile across utilities), and earned ROE around 9–10% with a 5–7% annualized EPS growth outlook through 2028 . Long‑term performance alignment is reflected in the 2022–2024 LTIP payout at 83.76% (after a TSR modifier), balancing financial goals and shareholder returns .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Exelon | EVP & COO | 2024–Present | Oversees all utility operations; utility CEOs report to COO; accountable for Cyber & Information Security, Physical Security, IT, Safety, Supply, Training, and Transmission Strategy & Compliance . |
| PECO (Exelon subsidiary) | President & CEO | 2018–2024 | Led Pennsylvania’s largest electric and gas delivery utility; continued top‑quartile reliability and customer satisfaction performance . |
| PECO / Exelon | COO (PECO) and progressive leadership roles | 1988–2018 | Held roles in Electric/Gas Distribution Operations, Energy Management, Smart Grid, Process Improvement, and Project Management; advanced operational excellence and grid modernization . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Greater Philadelphia Chamber of Commerce | Board Chair | Since 2022 |
| Philadelphia Police Athletic League (PAL) | Board Member | n/a |
| The Franklin Institute | Board Member | n/a |
| American Gas Association (AGA) | Board Member | n/a |
| Electric Power Research Institute (EPRI) | Board Member | n/a |
| Drexel University; Children’s Hospital of Philadelphia | Advisory roles | n/a |
Fixed Compensation
| Item | 2024 Detail |
|---|---|
| Base salary rate (effective) | $685,000 effective Apr 1, 2024 (promotion to COO) . |
| Salary paid (SEC SCT) | $653,820 (prorated across PECO CEO/Exelon COO service in 2024) . |
| Target annual incentive (AIP) | 90% of salary; target value $616,500 (full‑year COO target; actual prorated by time in roles) . |
| Actual AIP paid | $756,130 with a 133.22% performance factor (prorated PECO/Exelon results) . |
Perquisites, retirement, and deferred compensation (2024):
| Component | Amount |
|---|---|
| Perquisites (incl. car/driver, event tickets, financial planning) | $22,939 (car/driver: $1,219; event tickets: $4,184) . |
| Company contributions to savings plans | $26,913 . |
| Company‑paid long‑term disability premiums | $4,590 . |
| Total “All other compensation” | $54,442 . |
| Cash Balance Pension Plan (present value) | $1,606,882; credited service 36.55 years . |
| Supplemental Management Retirement Plan (present value) | $969,876; credited service 36.55 years . |
| Deferred Compensation Plan – executive contrib. (2024) | $48,521 . |
| Deferred Compensation Plan – registrant contrib. (2024) | $14,382 . |
| Deferred Compensation Plan – aggregate earnings (2024) | $128,333 . |
| Deferred Compensation Plan – year‑end balance | $1,756,358 . |
Performance Compensation
Annual Incentive Plan (AIP) design and 2024 outcomes:
| Metric | Weight | 2024 Target | 2024 Actual | Payout math |
|---|---|---|---|---|
| Adjusted (non‑GAAP) Operating EPS | 60% | $2.45 | $2.50 | 161.11% component; 96.67% weighted . |
| SAIDI (Outage Duration) | 15% | 43 | 44 | 98.39% component; 14.76% weighted . |
| SAIFI (Outage Frequency) | 15% | 0.54 | 0.51 | 118.75% component; 17.81% weighted . |
| Customer Satisfaction Index | 10% | 8.02 | 7.89 | 74.00% component; 7.40% weighted . |
| Responsible Business Modifier | ±10% | n/a | 100% (no adj.) | Final factor unchanged . |
| Final AIP performance factor (NEOs) | — | — | 136.64% | Company factor . |
| Final AIP factor (Innocenzo) | — | — | 133.22% | Pro‑rated PECO/Exelon goals . |
Long‑Term Incentive Plan (LTIP) – structure, performance, and awards:
- Structure: 67% Performance Share Units (PSUs) and 33% RSUs; PSUs measured on Utility Earned ROE, Exelon Net Income (adjusted), and CFO/Debt with a 3‑yr TSR modifier (2022–2024 cycle) . From 2025–2027, metrics shift to four equally weighted goals including adjusted operating EPS and a direct 3‑year TSR metric (modifer removed) .
- 2022–2024 PSU outcomes: Performance factor 91.79% × (100% + TSR modifier) = Overall payout 83.76% .
| PSU Metric | Threshold (50%) | Target (100%) | Distinguished (150%) | Actual | Perf. as % of Target | Weighted |
|---|---|---|---|---|---|---|
| Utility Earned ROE* | 8.3% | 9.2% | 10.1% | 9.3% | 103.96% | 34.62% |
| Utility Net Income* ($M) | $6,457 | $7,174 | $7,891 | $7,123 | 96.45% | 32.12% |
| Exelon CFO/Debt* (%) | >=12.0<12.5 | >=13.0<14.0 | >=15.0 | 12.9% | 75.00% | 25.05% |
| Composite factor | — | — | — | — | 91.79% | — |
| TSR modifier | — | — | — | — | (8.74%) | — |
| Overall payout | — | — | — | — | 83.76% | — |
2022–2024 PSU payout to Innocenzo:
| Target PSUs | Final Shares | Award Value ($) |
|---|---|---|
| 12,838 | 10,753 | $436,254 (at $40.57 on Feb 3, 2025) . |
2024 equity grants (grant dates, amounts, vesting, and fair value):
| Grant date | Type | Shares/Targets | Vesting | Grant date fair value |
|---|---|---|---|---|
| Jan 29, 2024 | RSUs | 7,721 | Time‑based; 1/3 in 2025/2026/2027 | $272,474 . |
| Jan 29, 2024 | PSUs | Target 15,676 (Thr 2,613 / Max 31,352) | 3‑yr cycle (2024–2026) | $524,439 . |
| Apr 1, 2024 | RSUs | 8,327 | Time‑based; 1/3 in 2025/2026/2027 | $310,014 . |
| Apr 1, 2024 | PSUs | Target 16,905 (Thr 2,818 / Max 33,810) | 3‑yr cycle (2024–2026) | $596,646 . |
Notes:
- RSUs vest ratably over three years; PSUs settle based on 3‑year performance; from 2024 grants, PSUs tied to updated plan goals through 2026 .
- Exelon has not issued stock options since 2012; no options outstanding .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (as of Feb 3, 2025) | 116,710 shares . |
| Ownership as % of shares outstanding | ~0.0116% (116,710 / 1,009,535,632) using record shares outstanding as of Mar 3, 2025 . |
| Unvested RSUs (12/31/2024) | 34,413 units; $1,295,305 at $37.64 . |
| Unvested PSUs at target (12/31/2024) | 45,809 target units; $1,724,251 at $37.64 . |
| 2024 vested stock (all NEO stock vested) | 28,786 shares vested and $1,015,870 value for Innocenzo in 2024 (mix of RSUs and PSU cycle) . |
| Stock ownership guidelines | 3x base salary requirement; Innocenzo at 5.0x as of Jun 30, 2024 (in compliance) . |
| Hedging/pledging | Hedging and pledging prohibited; none of the executive shares are pledged . |
Employment Terms
| Topic | Terms |
|---|---|
| Employment agreement | No individual employment agreement; executives covered by standard plans/policies . |
| Severance (no CIC) | 24 months continued base salary + target AIP; pro‑rated current‑year AIP; pro‑rated vesting of RSUs/PSUs (based on actual performance); health/welfare continuation; financial planning/outplacement; SMRP service/pay credit up to 24 months . |
| Change‑in‑control (double‑trigger) | If terminated without cause or resigns for good reason from 90 days before to 24 months after a CIC: 2.99x base salary + target AIP in installments; pro‑rated current‑year AIP; RSUs vest; PSUs vest based on actual/deemed performance; benefits continuation; SMRP enhancements; no excise tax gross‑ups (subject to best‑net cutback) . |
| Clawbacks | Discretionary recoupment for financial restatements, significant losses, or reputational harm; mandatory recoupment policy adopted in 2023 per SEC/Nasdaq rules . |
| Insider trading policy | Prohibits short sales, options, hedging, and pledging; robust preclearance/blackout regimen . |
| Retirement/disability/death | Acceleration/pro‑ration of awards consistent with plan terms; estimated dollar values disclosed for each scenario . |
Compensation Structure Analysis
- Cash vs. equity mix: Post‑promotion (Apr 1, 2024) target pay set at $685k salary, 90% AIP, and $1.765m LTIP (67% PSUs/33% RSUs), reinforcing at‑risk, performance‑weighted design; options are no longer used (phased out since 2012) .
- Rigor and alignment: 2024 AIP EPS target set at midpoint of guidance ($2.45) with operational targets at top‑quartile standards; final NEO factor 136.64% and Innocenzo’s prorated factor 133.22% .
- Long‑term discipline: 2022–2024 PSU payout at 83.76% reflects below‑target composite with TSR overlay; 2025–2027 plan increases direct TSR accountability and aligns to external EPS messaging .
- Shareholder feedback: 5‑year average say‑on‑pay support 93.5%; 2024 result 93.7%, indicating broad investor support of pay‑for‑performance .
- Benchmarking: Program assessed versus a blended peer group (energy services and general industry) with size adjustments via regression; Exelon stood at 52nd percentile for revenue and 38th percentile for market cap versus peers (Aug 2024 data) .
Investment Implications
- Pay alignment and retention: Strong pay‑for‑performance mechanics (AIP rigor; below‑target LTIP payout) and double‑trigger CIC terms limit windfalls while supporting retention; no excise tax gross‑ups reduce governance risk .
- Vesting/supply overhang: Substantial unvested RSUs (34,413) and target PSUs (45,809) create predictable vesting cadence through 2027; PSU outcomes remain sensitive to utility ROE, cash coverage, EPS, and TSR, aligning executive outcomes to shareholder value and balance sheet strength .
- Ownership alignment: Innocenzo exceeds ownership guidelines (5.0x vs 3x), with no pledging and hedging prohibited—reducing alignment risks and potential forced selling .
- Execution signals: 2024 operational outperformance (reliability, cost savings) and guidance‑consistent EPS delivery support incentive payouts; the shift to direct TSR weighting from 2025 further tightens linkage to shareholder returns during a capital‑intensive grid investment cycle .