Charles Walworth
OGE ENERGYAbout Charles Walworth
Charles B. Walworth is Chief Financial Officer and Treasurer of OGE Energy Corp. and OG&E, appointed interim CFO on August 23, 2024 and permanent CFO in December 2024; he has served as Treasurer since 2014 and was age 49 at appointment . His 2024 compensation reflects pay-for-performance structures used across OGE: annual incentives tied to OG&E earnings, cost control (O&M), reliability, safety, and environmental compliance, and long-term incentives driven by relative TSR versus the EEI peer group; 2024 annual incentive paid ~129% of target and 2022–2024 TSR performance units paid ~157% of target based on ~73rd percentile TSR .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| OGE Energy Corp. / OG&E | Interim CFO (then CFO) | Aug 2024–Dec 2024 (interim); CFO from Dec 2024 | Transitioned CFO role; continued Treasurer responsibilities |
| OGE Energy Corp. / OG&E | Treasurer | 2014–present | Corporate finance, liquidity and risk oversight |
External Roles
- Not disclosed in the proxy or 8‑K; skip if not available.
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Target Bonus ($) | Actual Annual Incentive Paid ($) | Notes |
|---|---|---|---|---|---|
| 2024 | 348,691 | 45% | 156,911 | 203,184 | Target set Dec 2023 while serving as Treasurer; CFO salary updated Jan 2025 |
Performance Compensation
| Metric | Weighting | Target | Actual | Payout |
|---|---|---|---|---|
| OG&E Earnings per diluted share | 40% for NEOs | $2.22/share | $2.33/share | 200% |
| O&M (company/business unit O&M) | Not disclosed | $412mm target | $423mm | 58% |
| Safety (OSHA/DART avg, quarterly) | Not disclosed | OSHA target 0.43; DART target 0.27 | Quarterly OSHA: 0.52/0.34/0.35/0.57; DART: 0.52/0.17/0.35/0.38 | 80% (total) |
| Customer/Operations – SAIDI | 33% of Customer/Ops | Quarterly targets: 24/40/40/24 min–max 21/35/35/21 | 14/43/27/13 minutes | 166% (sub-metric); 55% contribution after weighting |
| Customer/Operations – Escalent Residential | 17% of Customer/Ops | 66.67th percentile | Did not meet | 0% |
| Customer/Operations – Escalent Business | 17% of Customer/Ops | 66.67th percentile | Did not meet | 0% |
| Customer/Operations – Equivalent Forced Outage Rate | 33% of Customer/Ops | Unit-level targets by fuel; weighted 32.5% coal, 37.5% combined cycle, 15% gas legacy, 10% simple cycle, 5% wind | Performance exceeded targets in most categories | 124% (sub-metric); 41% contribution after weighting |
| Environmental (penalties/enforcement actions) | Not disclosed | ≤$75k penalties; ≤2 actions | No penalties; 1 enforcement action | 175% |
- Program design: NEO annual incentive weighting 30–43% of at‑risk pay; OG&E EPS is the most significant component; overall 2024 annual incentive payout averaged ~129% of target across NEOs .
- LTI design: 65% performance units tied to 3‑yr relative TSR vs ~40 EEI peer companies; 35% time‑based RSUs vest after 3 years .
Equity Awards & Vesting
| Grant Year | Grant Date | Instrument | Units (Target) | Units (Max) | Vest/Perf Period | Grant Date Fair Value ($) |
|---|---|---|---|---|---|---|
| 2024 | 2/19/2024 | Performance Units (TSR) | 6,210 | 12,420 | 1/1/2024–12/31/2026 | Included in $332,173 total stock awards |
| 2024 | 2/19/2024 | RSUs | 3,344 | n/a | Vests 12/31/2026 | Included in $332,173 total stock awards |
| 2023 | 2/21/2023 | Performance Units (TSR) | 9,120 | 18,240 (max) | 1/1/2023–12/31/2025 | See 2023 grant methodology |
| 2023 | 2/21/2023 | RSUs | 2,456 | n/a | Vests 12/31/2025 | See 2023 grant methodology |
- Valuation notes: 2024 LTI valued using $32.85 stock price (avg of high/low prior day) with 65% PUs, 35% RSUs allocation . Max payout fair values for 2024 awards would be $554,864 for Walworth (PUs at 200% and RSUs at 100%) .
- 2022 awards payout: EEI peer-relative TSR at ~73rd percentile yielded ~157.43% payout; Walworth realized 9,778 shares and $403,343 value plus $47,759 dividend equivalents (total $451,102) upon vesting (priced at $41.25 on 12/31/2024) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/17/2025) | 37,116 OGE shares; each executive officer owns <0.3% of the class . |
| Ownership as % of shares outstanding | ~0.018% (37,116 / 201,328,782 shares outstanding on 3/17/2025) . |
| Unvested RSUs | 3,344 (2024 grant, vests 12/31/2026) and 2,456 (2023 grant, vests 12/31/2025); market values $137,940 and $101,310 at $41.25, respectively . |
| Performance Units outstanding | 12,420 (2024–2026) and 9,120 (2023–2025); payout 0–200% based on relative TSR . |
| Options | None outstanding; Company has not granted options since 2004 . |
| Ownership guidelines | Officers: 2.0–3.0x base salary; CEO 6.0x; expected within 5 years of promotion . |
| Hedging/Pledging | Hedging prohibited; pledging policy not explicitly disclosed in the proxy . |
| Deferred compensation | 2024 executive contributions $30,843; registrant contributions $13,985; YE balance $347,108 . |
| Retirement plan accruals | Pension credited service 24.08 years; present value of benefits: $234,186 (Qualified) + $46,172 (Restoration) . |
Employment Terms
- Role and tenure: Interim CFO from August 23, 2024; CFO and Treasurer from December 2024; Treasurer since 2014; age 49 at appointment .
- Agreements: No employment agreement; standard double‑trigger change‑of‑control agreements for executives .
- Change‑of‑control economics (illustrative, assuming 12/31/2024 CoC and termination): Cash severance $1,650,091; outplacement $50,000; welfare benefits $35,280; plus immediate vesting of PUs at target and RSUs in cash; equity value at $41.25 would be $444,263 (stock payout) .
- Severance formula: 2.99× (base salary + highest recent annual incentive); no excise tax gross‑ups; payments reduced to avoid 280G excise tax if economically beneficial .
- Clawback: NYSE Rule 10D‑1 compliant incentive compensation clawback for restatements .
- Insider trading: Hedging prohibited; Board reviews policy annually .
Compensation Structure Analysis
- Mix: For 2024, salary was ~16–43% of targeted total direct compensation across NEOs; Walworth’s targeted LTI was 90% of salary (aligned with peer median) and annual incentive target was 45% of salary .
- Shift to RSUs vs options: Company has not granted options since 2004, favoring RSUs and performance units—reduces risk of underwater options, enhances retention and TSR alignment .
- Performance rigor: OG&E EPS hit maximum (200%); O&M underperformed (58%); customer reliability strong (SAIDI 166% and EFOR 124%); safety at 80%; environmental at 175%, producing an overall ~129% annual incentive payout—demonstrating balanced, multi‑factor performance gating .
- LTI outcomes: 2022 cycle paid ~157% (TSR ~73rd percentile), confirming payout sensitivity to multi‑year stock performance versus peers .
Risk Indicators & Red Flags
- Hedging/pledging: Hedging prohibited; pledging not explicitly addressed—monitor for any future disclosure .
- Tax gross‑ups: None on CoC; uses cut‑back—shareholder‑friendly .
- Related party transactions: Company policy prohibits conflicts and loans; Audit and Governance committees oversee compliance; no Walworth-specific related party transactions disclosed .
- Say‑on‑pay: >90% approval at the prior annual meeting, indicating broad support of pay design .
- Insider selling pressure: Form 4 feed could not be retrieved due to API authorization error; recommend monitoring upcoming vesting events (12/31/2025 RSUs; 12/31/2026 RSUs and PUs) for potential selling windows. Attempted insider-trades fetch failed (401 Unauthorized) — will re‑run once access is available.
Compensation Peer Group (Benchmarking)
| Peer companies (used for 2024 comp) |
|---|
| ALLETE, Alliant Energy, Ameren, AVANGRID, Black Hills, CenterPoint, CMS Energy, Entergy, Evergy, IDACORP, NiSource, ONE Gas, Pinnacle West, PNM Resources, Portland General Electric, PPL |
- Targets set around peer median; Mercer advises Compensation Committee; no conflicts identified .
Investment Implications
- Alignment: High proportion of at‑risk pay tied to EPS, reliability, safety, environmental compliance, and multi‑year relative TSR aligns Walworth’s incentives with both operational excellence and shareholder returns; no stock options and robust clawback reduce risk of misaligned incentives .
- Retention: Material unvested equity (RSUs vesting 12/31/2025 and 12/31/2026; PUs through 12/31/2026) plus ownership guidelines support retention; double‑trigger CoC terms provide protection without gross‑ups .
- Trading signals: The 2022 cycle’s 157% payout underscores TSR momentum; watch for 2023 cycle outcomes in early 2026 and 2024 cycle outcomes in early 2027. Upcoming vesting dates may create liquidity events—monitor Form 4 filings around vesting/payout dates (we attempted to fetch, but API access failed) .
- Governance: >90% say‑on‑pay support, hedging ban, and formal ownership guidelines reflect strong governance; absence of pledging disclosure warrants periodic review .