Lynn Hobbie
About Lynn Hobbie
Executive Vice President, Marketing Communications at MGE Energy (MGEE). Lynn plans to retire by the end of 2025, is retirement-eligible under plan terms, and continues to vest in outstanding awards upon bona fide retirement . Beneficial ownership totals 10,315 shares (<1% of outstanding), plus 3,743 restricted stock units counted toward stock ownership guidelines and 134 shares held in the 401(k), for 14,058 “considered owned” under guidelines . Company performance context during her recent tenure: EPS rose from $3.07 (2022) to $3.25 (2023) to $3.33 (2024) and net income increased to $120.6M (2024); MGEE TSR index value was 95 (2022), 100 (2023), 133 (2024), while EEI peer TSR was 117 (2022), 107 (2023), 127 (2024) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | — |
No prior roles disclosed for Lynn in the proxy statements.
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | — |
No external directorships or roles disclosed for Lynn in the proxy statements.
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 346,078 | 358,790 | 373,142 |
| Annual STI Paid ($) | 189,501 | 197,270 | 200,711 |
| Stock Awards – Grant Date Fair Value ($) | 187,969 | 199,890 | 195,899 |
| Option Awards ($) | — (none granted) | — (none granted) | — (none granted) |
| All Other Compensation ($) | 9,150 | 9,900 | 11,484 |
Performance Compensation
Short-Term Incentive (STI) Design and 2024 Results
| Component / Metric | Threshold | Target | Maximum | Actual | 2024 Pool Contribution |
|---|---|---|---|---|---|
| EPS ($) | 2.87 | 3.19 | 3.51 | 3.33 | 24.4% |
| Residential Customer Satisfaction (1–5) | 4.10 | 4.40 | 4.70 | 4.63 | 6.9% |
| Commercial Customer Satisfaction (1–5) | 4.10 | 4.40 | 4.70 | 4.60 | 6.7% |
| Electric Reliability (SAIFI/SAIDI rank) | Top-half | Top-quartile | Top-decile | Top-decile | 7.5% |
| Gas Safety (response/damages rank) | Top-half | Top-quartile | Top-decile | Top-decile | 7.5% |
| Other Corporate Goals (% of target) | — | 30% | — | 35% | — |
| Individual Performance (% of target) | — | 30% | — | 30%–38% (NEOs) | — |
STI target bonus opportunity in 2024 for Lynn was 45% of base salary (NEO-specific rates set by role) . Aggregate metric-specific pool contribution also exceeded target in 2023 (53.6%) and 2022 (50.5%); Other Corporate Goals paid 35% (2023) and 38% (2022); NEO individual performance ranged 32%–40% (2023) and 32%–37% (2022) of target .
Long-Term Incentives (LTI) – Award Structure
- RSUs: 50% of LTI; cliff vest 12/31/2026; stock-settled .
- PSUs: 50% of LTI; 2024–2026 performance; measures: 50% average ROE, 50% cumulative EPS; plus market modifier 0–50% based on relative TSR vs EEI; payout 0–200%; settlement in cash, stock, or combo per election .
- Change-in-control: awards vest 100% .
- Retirement: bona fide retirement confers continued vesting; Lynn qualifies .
LTI Grants to Lynn (units and fair value)
| Year | PSUs – Target Units | PSUs – Grant Date Fair Value ($) | RSUs – Units | RSUs – Grant Date Fair Value ($) |
|---|---|---|---|---|
| 2022 | 1,171 | 103,118 | 1,171 | 84,851 |
| 2023 | 1,249 | 112,522 | 1,249 | 87,368 |
| 2024 | 1,438 | 105,032 | 1,438 | 90,867 |
Outstanding Equity Awards (as of 12/31/2024)
| Award Type | Units Outstanding | Market/Payout Value ($) |
|---|---|---|
| RSUs (2023 grant) | 1,249 | 117,356 |
| RSUs (2024 grant) | 1,438 | 135,114 |
| PSUs (2023 grant, max assumption) | 2,498 | 234,712 |
| PSUs (2024 grant, max assumption) | 2,876 | 270,229 |
2022 LTI cycle paid at 175% of target PSUs for NEOs (150% performance, +25% TSR modifier), with Lynn vesting 2,049 PSUs valued at $202,800 and 1,171 RSUs valued at $115,900 in 2024 settlements .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial Ownership (direct/indirect shares) | 10,315 (<1% of class) |
| RSUs counted for guideline compliance | 3,743 |
| 401(k) shares | 134 |
| Total “considered owned” under guidelines | 14,058 |
| Stock Ownership Guidelines | Executives at EVP/SVP/CFO: 1.5× base salary; CEO: 3×; VPs: 1× |
| Compliance Status | All NEOs achieved or are on track to meet guidelines within specified period |
| Anti-Pledging/Hedging | Prohibits pledging and hedging by directors/executives |
| Stock Options | Company does not grant stock options under 2021 LTI Plan |
Employment Terms
| Provision | Detail |
|---|---|
| Severance (CIC) | Lynn’s agreement (1994): 3× annual base salary + 3× highest STI in past five years, plus unpaid salary, pro-rata STI, accrued vacation; reduced to avoid 280G excise tax; payable 6 months after separation |
| Triggers | Termination by company (other than for cause) or for “good reason,” or by employee for any reason during 30-day window starting one year post-CIC; good-faith determination of “good reason” is conclusive |
| CIC Definition | 20%+ beneficial ownership; board majority change; certain mergers/asset transactions; liquidation/dissolution |
| LTI Treatment | 100% vesting on change in control |
| Clawback | SEC/NYSE-compliant recoupment policy for erroneously awarded incentive compensation (cash/stock/TSR/stock price), covering past 3 fiscal years |
| Tax Gross-Ups | Gross-ups eliminated; payments reduced to avoid 280G excise tax |
| Legal Fees | Company pays legal expenses for disputes where employee prevails (subject to 280G limits) |
Quantified as-of 12/31/2024 (illustrative): Salary $1,130,621; STI $600,358; accrued vacation $43,485; pro-rata STI $196,688; unvested LTI $757,412; total $2,728,564 .
Retirement and Deferred Compensation
| Item | 2022 | 2023 | 2024 |
|---|---|---|---|
| Pension – Present Value ($) | 1,797,322 | 1,646,974 | 1,614,569 |
| Income Continuation Agreement – Present Value ($) | 2,811,485 | 3,202,920 | 3,089,174 |
| DCSERP Participation | — (not eligible due to income continuation agreement) | — | — |
| Supplemental Disability Premium ($) | — | — | 1,134 |
Compensation Peer Group and Say-on-Pay
- Peer group used for benchmarking (latest): ALLETE, Avista, Chesapeake Utilities, Genie Energy, IDACORP, NorthWestern Energy Group, Northwest Natural Holding, Ormat Technologies, Otter Tail, Suburban Propane Partners, Sunnova Energy International, Unitil; no fixed percentile target; positioning considers experience/performance .
- Say-on-Pay support: ~94% approval at 2024 meeting and ~94% average over five years; 2023 approval was 95% .
Related Party, Risk Indicators, and Policies
- No related person transactions requiring disclosure since the beginning of fiscal 2024 .
- Anti-pledging and anti-hedging policies in force for directors/executives .
- Lynn is planning to retire by end of 2025 (retirement-eligible), implying continued vesting and eventual RSU settlement in 2026; PSUs may be cash- or stock-settled per election .
Investment Implications
- Alignment: High equity-linked pay via RSUs/PSUs with explicit ROE/EPS/TSR metrics and strict anti-pledging/hedging enhance alignment; Lynn meets/targets stock ownership guidelines .
- Retention/Selling Pressure: Retirement eligibility and 2026 cliff-vesting RSUs could lead to stock issuance in 2026; PSUs can be cash-settled, mitigating forced selling; no stock options outstanding reduces pressure from option exercises .
- Change-in-Control Economics: Lynn’s 3× CIC multiple is above peers granted 2× (CEO/CFO/others), and includes a one-year post-CIC window—elevated payout risk in a transaction; 100% LTI vesting at CIC increases deal-triggered compensation .
- Pay-for-Performance: Consistent over-target STI payouts from operational excellence (reliability, satisfaction, EPS beats) and PSU vesting above target indicate strong execution; company EPS and TSR trajectory supportive of incentive realizations .