Michael Luhrs
Executive Vice President, Technology, Customer and Chief Commercial Officer at NI
Executive
About Michael Luhrs
Michael S. Luhrs (age 52) is Executive Vice President, Technology, Customer and Chief Commercial Officer at NiSource (NI), appointed March 27, 2023. He oversees customer growth, economic development, M&A, sustainability, CX, data & analytics, cyber/physical security, and business transformation. He holds a B.S. in Chemical Engineering and B.A.s in Business Management and Economics from North Carolina State University. Company performance under the current leadership includes 2024 Adjusted EPS of $1.75 (9.4% YoY growth), FFO/Debt of 14.6%, and 2024 TSR of 43.5% (second in the industry), which directly drive incentive outcomes.
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Alliant Energy | Senior Vice President, Customer Experience & Strategy | 2022–Mar 2023 | Led customer strategy and experience; joined NiSource from this role. |
| Duke Energy | VP, Integrated Grid Strategy & Solutions; VP, Market Strategy & Solutions; VP, Retail Programs; GM roles in Business Excellence and Energy Supply & Finance | Pre‑2022 | Drove grid strategy, market solutions, and retail programs; operational excellence and finance roles. |
| Progress Energy | Multiple roles (including Resource Planning, Energy Supply Finance, Audit) | ~14 years (pre‑2012) | Broad finance/operations grounding prior to Duke acquisition. |
External Roles
No public company directorships or external board roles disclosed. (No disclosure found in 2023–2025 proxies.)
Fixed Compensation
| Item | 2023 | 2024 | Notes |
|---|---|---|---|
| Base salary (year-end) | $550,000 | $600,000 (+9.1% from 3/1/2024) | EVP annual base set by C&HC Committee. |
| Target annual bonus (% of base) | 75% | 75% | Applies to EVPs. |
Performance Compensation
Annual Cash Incentive (STI) Design and Outcomes
- 2023 STI scorecard metrics: NOEPS (70%), Operational Excellence (10%), Safety DART (5%), Safety PVC (5%), Customer Satisfaction (10%); formulaic result 170% of target. Luhrs final STI payout: $538,641.
- 2024 STI scorecard metrics: Adjusted EPS (70%), Operational Excellence (10%), Safety DART (5%), Safety PVC (5%), Customer Satisfaction (10%); formulaic result 189% of target. Luhrs’ individual performance modifier: 116%. Final STI payout: $975,000.
| Year | Metric | Weight | Target/Goal | Actual | Payout as % Target | Luhrs Final STI ($) |
|---|---|---|---|---|---|---|
| 2023 | NOEPS | 70% | $1.56 | $1.60 | 180% | |
| 2023 | OpEx | 10% | 0 | 0 | 100% | |
| 2023 | Safety – DART | 5% | 0.70 | 0.65 | 171% | |
| 2023 | Safety – PVC | 5% | 1.65 | 1.49 | 200% | |
| 2023 | Customer Sat | 10% | 70% | 71.5% | 150% | |
| 2023 | Formulaic total | 170% | $538,641 | |||
| 2024 | Adjusted EPS | 70% | $1.72 | $1.75 | 200% | |
| 2024 | OpEx (SIF/PHMSA) | 10% | 1 → 0 | 0 | 200% | |
| 2024 | Safety – DART | 5% | 0.57 | 0.59 | 67% | |
| 2024 | Safety – PVC | 5% | 1.46 | 1.35 | 173% | |
| 2024 | Customer Sat | 10% | 71.5% | 72.8% | 165% | |
| 2024 | Formulaic total | 189% | ||||
| 2024 | Individual modifier | 116% | $975,000 |
Long-Term Incentives (LTI): PSU/RSU Mix, Metrics, and Grants
- PSUs: three-year performance with up to 200% payout; 2024 PSU measures and weights: Cumulative Adjusted EPS 55% (threshold/target/stretch $5.42/$5.53/$5.64), RTSR 25% (30th/50th/80th percentile), OpEx & Safety Index 10%, Engagement 5%, GHG reduction 5%. 2022–2024 PSU cycle vested at 190% overall.
- RSUs: service-based; 2024 RSUs vest after three years (end of Feb 2027). 2023 RSUs vest Feb 27, 2026; Luhrs’ 2023 new hire RSUs vest Mar 27, 2025.
| Grant Year | Award Type | Grant Date | Target/Granted (#) | Grant Date Fair Value ($) | Vesting | Notes |
|---|---|---|---|---|---|---|
| 2023 | PSUs | 3/27/2023 | 32,532 | Included in $1,443,585 stock awards | 3-year perf. to 12/31/2025 | Measures: 3-yr NOEPS, RTSR, OpEx/Safety, Engagement, Supplier Diversity, GHG. |
| 2023 | RSUs (annual) | 3/27/2023 | 8,133 | Included above | Vests 2/27/2026 | Service-based. |
| 2023 | RSUs (new hire) | 3/27/2023 | 11,091 | Included above | Vests 3/27/2025 | Inducement award. |
| 2024 | PSUs | 1/24/2024 | 42,891 | $1,144,333 | 3-year perf. to 12/31/2026 | 55% EPS / 25% RTSR / 10% OpEx-Safety / 5% Engagement / 5% GHG. |
| 2024 | RSUs | 1/24/2024 | 10,723 | $273,544 | Vests end of Feb 2027 | Service-based. |
| 2025 | RSUs (one-time) | 1/22/2025 | 52,938 | $2,000,000 value | 33% on 1/22/2026; 33% on 1/22/2027; 34% on 1/22/2028; certain separations accelerate | Retention award documented in 8‑K; form agreement as Ex.10.1. |
Summary Compensation (Reported)
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2023 | 422,464 | 350,000 (sign-on) | 1,443,585 | 538,641 | 171,754 | 2,926,443 |
| 2024 | 591,667 | — | 1,417,877 | 975,000 | 55,558 | 3,040,101 |
Perquisites/Other: 2023 perqs include $100,000 relocation; 2024 perqs none disclosed for Luhrs.
Equity Ownership & Alignment
- Beneficial Ownership: 877 shares as of Mar 18, 2024; 12,770 shares as of Mar 17, 2025 (<1% outstanding in both years).
- Outstanding equity at FY-end 2024 (unvested): RSUs 8,133; 10,723; 11,091; PSUs (unearned) 69,263 and 88,791; no stock options outstanding.
- Ownership Guidelines: CEO 6x salary; EVPs 3x salary; five-year compliance window; must retain 50% of net shares until compliant; NEOs on path to achieve.
- Hedging/Pledging: Prohibited for executive officers and directors.
| Date | Beneficially Owned Shares | % Outstanding |
|---|---|---|
| 3/18/2024 | 877 | <1% |
| 3/17/2025 | 12,770 | <1% |
| Equity Holdings at 12/31/2024 | Count (#) | Market Value ($) |
|---|---|---|
| RSUs unvested (8,133) | 8,133 | 298,969 |
| RSUs unvested (10,723) | 10,723 | 394,177 |
| RSUs unvested (11,091) | 11,091 | 407,705 |
| PSUs unearned (69,263) | 69,263 | 2,546,096 |
| PSUs unearned (88,791) | 88,791 | 3,263,971 |
| Options | 0 | 0 |
Insider transactions (recent): Form 4 filings show RSU grants on Jan 24, 2025 and holdings updates; one-time 52,938 RSU award aligned with 8‑K; subsequent Form 4 filed Mar 31, 2025.
Employment Terms
- Appointment/start: EVP Strategy & Risk and Chief Commercial Officer effective March 27, 2023.
- Severance (non‑CIC): Executive Severance Policy provides 52 weeks base salary, 130% of 52 weeks COBRA premiums (lump sum), and outplacement services for eligible terminations (no severance if termination occurs in connection with a CIC).
- Change‑in‑Control (double trigger): CIC & Termination Agreements pay a lump sum of 2x (3x for CEO) current annual base salary plus target annual bonus; pro rata target bonus for year of termination; “best net benefit” cutback/no gross-up; equity awards double-trigger accelerate unless assumed/replaced.
- Clawback: Executive recoupment policy consistent with SEC Rule 10D‑1 and NYSE standards, and clawback under Omnibus Plan for restatements due to misconduct.
- Non-compete/non-solicit: Not specifically disclosed in proxy (no details found).
Potential payments (as of 12/31/2024)
| Scenario | Severance ($) | Pro Rata Bonus ($) | Equity ($) | Welfare ($) | Outplacement ($) | Total ($) |
|---|---|---|---|---|---|---|
| Disability | — | 838,688 | 2,015,808 | — | — | 2,854,496 |
| Death | — | 838,688 | 2,015,808 | — | — | 2,854,496 |
| Involuntary (non‑CIC) | 600,000 | — | — | 36,725 | 25,000 | 661,725 |
| CIC + Qual. Termination | 2,877,375 | 838,688 | 4,005,885 | 77,943 | 25,000 | 7,824,891 |
Deferred compensation (2024)
| Plan | Exec Contributions ($) | Company Contributions ($) | Aggregate Balance ($) |
|---|---|---|---|
| Deferred Compensation Plan | — | — | — |
| Savings Restoration Plan | — | 23,162 | 32,297 |
Compensation Structure Analysis
- Cash vs equity mix: Majority at-risk and equity-based for NEOs; Luhrs’ 2024 target TDC: salary $600k, STI target $450k (75%), PSUs $1.08m, RSUs $270k (significant equity tilt).
- Metrics rigor: STI emphasizes Adjusted EPS (70%) plus safety/customer metrics; 2024 formulaic result was 189% with a modest positive individual modifier for Luhrs (116%).
- PSU breadth: 2024 PSUs include financial (EPS, RTSR), operational safety, engagement, and GHG reduction with explicit threshold/target/stretch goals.
- No option repricing or excise tax gross-ups; hedging/pledging prohibited; one-year minimum vesting.
Say‑on‑Pay & Peer Benchmarking
- Say‑on‑Pay approval: ~94% in 2023; >96% in 2024.
- Peer group (2024/2025): Utilities of comparable size (e.g., AEP, CMS, DTE, ETR, EIX, Eversource, FirstEnergy, PPL, PSEG, Sempra, Southern, WEC, Xcel, etc.); Meridian as independent consultant; Committee does not target a fixed percentile but references market data.
Performance & Track Record
- 2024 delivery: Adjusted EPS $1.75 (+9.4% YoY), 14.6% FFO/Debt; zero SIF/PHMSA incidents; exceeded customer satisfaction goals; TSR 43.5% (second in industry).
- 2022–2024 PSUs settled at 190% (EPS 129%, RTSR at 91st percentile, +15% modifiers).
Investment Implications
- Alignment: Strong pay‑for‑performance linkage (EPS, RTSR, safety) and 3x salary ownership guideline with mandatory holding until compliance; hedging/pledging prohibited—favorable alignment profile.
- Vesting and potential selling pressure: 11,091 new‑hire RSUs vest 3/27/2025; special 52,938 RSUs vest 33/33/34% on 1/22/2026–2028; 2023 PSUs (performance period ends 12/31/2025) and 2024 RSUs settle by early 2027—creates staggered liquidity windows that may drive periodic insider sales.
- Retention and CIC: Non‑CIC severance limited to 1x salary; CIC double-trigger at 2x salary+bonus with equity acceleration if not assumed—standard utility practice with limited shareholder-unfriendly terms (no tax gross‑ups).
- Execution risk: Broad remit (technology, customer, commercial) ties incentives to financial and operational outcomes; sustained performance is required to realize PSU value (up to 200% cap).