Toby Thomas
Chief Operating Officer at FE
Executive
About Toby Thomas
Toby L. Thomas is Chief Operating Officer of FirstEnergy (FE), appointed effective November 30, 2023, after more than two decades at American Electric Power (AEP) spanning generation, distribution and transmission leadership roles; he holds a B.S. in Mechanical Engineering from Rose‑Hulman Institute of Technology . FE’s 2024 short‑term incentive (STIP) pool was not funded after Operating Earnings of $1,514mm fell below the $1,518mm threshold, resulting in a 0% STIP payout for all NEOs, including Thomas . Over the 2022–2024 LTIP period, FE delivered a 37th percentile Relative TSR and $7.60 cumulative Operating EPS (vs. $7.72 target), producing a 77% LTIP payout, with Thomas receiving 12,621 shares from that cycle in March 2025 . FE increased 2024 dividends to $1.70 per share (up just over 6% YoY), and outlines 9% compounded annual rate base growth through 2029 under its Energize365 plan—key performance context for incentive design and payout potential .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| American Electric Power (AEP) | Senior Vice President – Energy Delivery | 2021–2023 | Led transmission engineering, construction, operations and maintenance; drove T&D efficiency by aligning transmission and distribution engineering/standards |
| AEP – Indiana Michigan Power | President & Chief Operating Officer | 2017–2021 | Oversaw business performance, distribution operations, customer, policy and regulatory relationships |
| AEP | Vice President, Competitive Generation | 2013–2016 | Managed competitive generation fleet |
| AEP | Managing Director, Kentucky Power Gas Turbine & Wind Generation | 2008–2012 | Managed generation fleet (gas turbine & wind) |
| AEP (earlier); Cummins Engine Company (early career) | Multiple engineering/marketing roles | 2001–2007 (AEP); prior (Cummins) | Project engineering, industrial marketing/origination; prior engineering roles at Cummins |
External Roles
- Not disclosed in FE filings for Thomas.
Fixed Compensation
| Component | 2024 terms | 2024 actual |
|---|---|---|
| Base salary | $600,000 annual rate | $604,615 earned in 2024 |
| Target STIP (% of salary) | 70% (target $420,000) | $0 paid (STIP pool not funded) |
| Target LTIP (% of salary) | 215% (target $1,290,000) | 2022–2024 LTIP paid at 77% (12,621 shares delivered Mar‑2025) |
Performance Compensation
2024 STIP design and results (companywide)
| Metric | Weight | Threshold | Target | Stretch | 2024 actual | Payout result |
|---|---|---|---|---|---|---|
| Operating Earnings (non‑GAAP), $mm | 35% | $1,518 | $1,558 | $1,615 | $1,514 | Below threshold (gate not met) |
| Baseline O&M, $mm (lower is better) | 25% | $1,410 | $1,350 | $1,290 | $1,287 | Meets stretch |
| Operations Index (SAIDI, TOF, ECR, Env. Excursions/NOVs, Reg Gen EFOR) | 15% | 2.50 | 5.00 | 7.50 | 3.43 | Between threshold & target |
| Safety – Systemwide LCEs | 7.5% | n/a | n/a | 0 | 1 | Below threshold |
| Safety – Systemwide DART | 7.5% | 0.67 | 0.35 | 0.22 | 0.78 | Below threshold |
| Human Capital & Inclusion Index | 10% | 1.00 | 2.00 | 3.00 | 2.78 | Between target & stretch |
| STIP funding gate | — | — | — | — | Operating Earnings below threshold | 0% payout for all NEOs |
Notes:
- 2024 STIP included an earnings-based funding pool; because the Operating Earnings gate was not met, no STIP funded (Thomas payout = $0) .
- For 2025, FE simplified STIP: removed the O&M KPI and the separate funding gate; Core Earnings becomes the sole financial KPI, and each KPI pays as earned .
LTIP structure and outcomes
| Cycle / Design | Metrics & weights | Targets (EPS/TSR) | Key features | Outcome for Thomas |
|---|---|---|---|---|
| 2024–2026 LTIP (granted Mar‑1‑2024) | Cumulative Operating EPS 65%; Relative TSR vs S&P 500 Utility 35% | EPS threshold/target/stretch $8.16/$8.73/$9.03; TSR 25th/50th/85th percentiles | Entirely performance‑adjusted RSUs, 2/3 stock & 1/3 cash; payout 0–200%; capped at 100% if absolute TSR is negative | Grant sizes for Thomas: stock‑settled target 23,634 units (threshold 5,909; max 47,268); cash‑settled target 11,899 units (threshold 2,975; max 23,798) |
| 2022–2024 LTIP (paid Mar‑2025) | Cumulative Operating EPS 65%; Relative TSR 35% | Actual EPS $7.60 (vs $7.72 target); TSR 37th percentile | Absolute TSR cap did not apply (stock price avg Dec‑2024 > Dec‑2021) | Payout 77% of target; Thomas received 12,621 shares (stock portion) |
| Program changes (effective 2025) | 60% performance‑adjusted stock RSUs; 40% time‑based stock RSUs (no cash‑settled piece) | Maintain 65% Core EPS and 35% Relative TSR for performance portion | Adds time‑based component to aid retention; absolute TSR cap retained; individual grant‑value modifier up to ±15% may be used; none applied for 2025–2027 | Applies to Thomas beginning with 2025–2027 cycle |
| Mid‑cycle KPI change (Core EPS) | For 2023–2025 and 2024–2026 awards, the EPS KPI switches from Operating EPS to Core EPS for the remaining periods starting 2025; EPS KPI payout capped at 100% | 2023–2025 mixed EPS target $7.76; 2024–2026 mixed EPS target $7.88 | Aligns incentives with FE’s external reporting/guidance shift to Core EPS | Applies to Thomas’ outstanding awards |
Equity Ownership & Alignment
- Beneficial ownership: 12,782 FE common shares as of March 17, 2025 .
- Stock ownership guideline: 3x base salary; Thomas has until November 30, 2028 to comply (not yet met as of Dec 31, 2024) .
- Outstanding unvested awards (Dec 31, 2024):
- Time‑based restricted stock from new‑hire award: 2,828 shares (vests 2/3 on Nov 30, 2024 and 1/3 on Nov 30, 2025) .
- Performance‑adjusted RSUs (target amounts, stock‑settled): 12,483 (2022 cycle), 18,870 (2023 cycle), 24,360 (2024 cycle); corresponding cash‑settled targets: 9,501 (2023), 12,265 (2024) .
- Anti‑hedging/pledging: Hedging and pledging are prohibited for covered persons; designated insiders may not hold company securities in margin accounts .
- Deferred compensation: In 2024, Thomas deferred $12,012 of salary and $411,472 of stock‑based RSUs; EDCP aggregate year‑end balance $12,397 .
Ownership detail table (Dec 31, 2024)
| Holding type | Units/Shares | Notes |
|---|---|---|
| Beneficially owned common stock | 12,782 | As of Mar 17, 2025 |
| Restricted stock (time‑based) | 2,828 | Nov 30, 2023 grant; vesting 2/3 on 11/30/2024, 1/3 on 11/30/2025 |
| 2022 perf‑adjusted RSUs (stock) | 12,483 | Earned/achieved, pending vest at 3/1/2025 as of 12/31/2024 |
| 2023 perf‑adjusted RSUs (stock) | 18,870 | Target amount unearned as of 12/31/2024 |
| 2024 perf‑adjusted RSUs (stock) | 24,360 | Target amount unearned as of 12/31/2024 |
| 2023 perf‑adjusted RSUs (cash) | 9,501 | Target amount unearned as of 12/31/2024 |
| 2024 perf‑adjusted RSUs (cash) | 12,265 | Target amount unearned as of 12/31/2024 |
Employment Terms
- Appointment and start: Appointed COO on November 10, 2023, effective November 30, 2023 .
- New‑hire compensation package (approved Nov 10, 2023): Base salary $600,000; target STIP 70% of salary; target LTIP 215% of salary; prorated performance RSUs for overlapping cycles; $250,000 hiring bonus (subject to 24‑month clawback); $300,000 time‑based restricted stock (2/3 vests at 1 year; 1/3 at 2 years); eligibility for relocation benefits; participation in CIC plan, Cash Balance Pension Plan, and Cash Balance Restoration Plan .
- Severance (non‑CIC): Covered by Executive Severance Plan—3 weeks of base salary per full year of service (minimum 52 weeks; maximum 104 weeks), with active‑rate healthcare for up to 18 months; cash severance capped by policy at ≤2.99x salary+target STIP without shareholder approval .
- Change‑in‑Control (double trigger): Cash severance = 2x (base salary + target STIP); prorated STIP at target; prorated LTIP at target if not replaced; 2 years health benefits; outplacement (≤$30,000); non‑competition and non‑disparagement obligations; no excise tax gross‑ups (cut‑back to safe harbor if applicable) .
- Equity vesting on separation (high level): Involuntary without cause—prorated performance RSUs (based on full months served) with performance adjustment at cycle end; death/disability—prorated at target; CIC termination—double‑trigger acceleration/proration at target; time‑based restricted stock fully vests on death/disability/CIC termination; forfeited on voluntary resignation before retirement eligibility .
- Clawbacks/ethics: Two clawback policies—an SEC‑compliant mandatory recovery for restatements and a discretionary policy for detrimental activity causing significant harm; robust anti‑hedging/anti‑pledging and insider trading controls .
Performance Compensation – Metric Details (Thomas eligibility)
| Plan | Metric | Weight | Target setting and guardrails |
|---|---|---|---|
| 2024 STIP | Operating Earnings, Baseline O&M, Operations Index, Safety (DART, LCE), Human Capital & Inclusion | 60% financial; 40% non‑financial | Non‑overlapping with LTIP; STIP pool funded only if Operating Earnings meets gate (not met in 2024) |
| 2024–2026 LTIP | Cumulative Operating EPS (switching to Core EPS for 2025–2026) and Relative TSR | 65% EPS; 35% TSR | EPS KPI payout capped at 100% post‑switch; absolute TSR cap at 100% if TSR is negative; 0–200% payout range |
| 2025–2027 LTIP | 60% performance stock RSUs (Core EPS/TSR); 40% time‑based stock RSUs | — | Removes cash‑settled component; introduces retention element; individual grant‑value modifier (±15%) available but not used for 2025 |
Say‑on‑Pay & Governance Highlights
- 2024 say‑on‑pay approval exceeded 95%, reflecting shareholder support for pay‑for‑performance structure .
- Compensation Committee practices: no employment agreements, no option repricing, double‑trigger CIC, robust clawbacks, anti‑hedging/pledging, stock ownership guidelines .
Investment Implications
- Pay alignment and discipline: Thomas received $0 STIP for 2024 due to the earnings gate not being met, underscoring discipline in the program and alignment with shareholders when financial thresholds are missed .
- LTIP visibility and retention: The 77% payout for 2022–2024 reflects below‑target financial/TSR performance through 2024; beginning 2025, the mix adds 40% time‑based RSUs (60% performance), improving retention while keeping performance focus via Core EPS and TSR with an absolute TSR cap .
- Ownership build and alignment: Thomas holds 12,782 shares and must reach 3x salary by November 30, 2028; anti‑hedging/pledging and strong clawbacks mitigate governance risk while he builds holdings .
- Upcoming equity vesting: The remainder of his new‑hire restricted stock vests on November 30, 2025; performance RSUs vest on March 1 following cycle end, creating scheduled equity events to monitor for insider Form 4 activity and potential liquidity .
- Incentive metric evolution: Mid‑cycle shift from Operating EPS to Core EPS for the EPS KPI (with a 100% cap) aligns incentives to FE’s reported metric transition and may reduce payout volatility tied to non‑core items—enhancing transparency for investors tracking beat/miss risk vs guidance .