Kim Hanemann
PUBLIC SERVICE ENTERPRISE GROUPAbout Kim Hanemann
President & Chief Operating Officer of Public Service Electric & Gas Company (PSE&G) since June 30, 2021; previously Senior Vice President & Chief Operating Officer and held numerous leadership roles across electric, gas, and utility support operations. Education: BS Mechanical Engineering, Lehigh University; MBA, Rutgers Graduate School of Management. Age 61; also serves as an independent director of Middlesex Water Company (MSEX) since 2016 . Company performance levers tied to her incentive plans include non-GAAP Operating EPS, operational scorecards, and LTIP metrics where PSEG’s 2022–2024 PSU cycle paid out 163% driven by top-quartile relative TSR and ROIC, with ESG metrics above target ; PSEG reported Operating Revenues of $10,290mm and Operating Earnings (non-GAAP) of $1,839mm in 2024, with year-end share price $84.49 and DPS $2.40 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| PSE&G | President & COO | Effective June 30, 2021 | Responsible for electric, gas, customer operations, asset management and centralized services; oversight of large construction projects . |
| PSE&G | Senior Vice President & Chief Operating Officer | Prior to 2021 | Led utility operations across electric, gas, and customer operations; major capital execution oversight . |
| PSE&G | Vice President | Appointed 2010 | Progression into senior leadership; expanded operational scope . |
| PSE&G | Senior Vice President – Electric Transmission & Distribution | As of 2019 | Led execution of large transmission construction programs and resiliency initiatives . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Middlesex Water Company (NASDAQ:MSEX) | Independent Director; Compensation and Corporate Governance & Nominating Committees | Since 2016 | Utility governance and oversight; leverages operational expertise to support capital planning and risk management . |
| New Jersey Chamber of Commerce | Board of Directors | Current | Business advocacy and policy engagement in NJ . |
| New Jersey Utilities Association | Board of Directors | Current | Industry coordination on regulatory and operational issues . |
| Children’s Specialized Hospital | Prior Board of Trustees | Prior | Community and healthcare governance . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $648,900 | $671,600 | $775,000 |
| Stock Awards ($) | $1,300,102 | $1,400,115 | $1,800,019 |
| Non-Equity Incentive Plan Compensation ($) | $588,900 | $569,200 | $869,600 |
| Change in Pension Value ($) | — | $405,000 | $146,000 |
| All Other Compensation ($) | $82,965 | $76,356 | $30,526 |
| Total Compensation ($) | $2,620,867 | $3,122,271 | $3,621,145 |
| 2024 Target Compensation Summary | Value |
|---|---|
| Base Salary ($) | $775,000 |
| Target Bonus (%) | 85% |
| Target Total Cash ($) | $1,433,750 |
| LTIP – PSUs (grant date fair value $) | $1,260,012 |
| LTIP – RSUs (grant date fair value $) | $540,007 |
| Target Total Compensation ($) | $3,233,769 |
Perquisites include automobile/parking, physical exams, home security, limited travel and club memberships; the company does not provide tax gross-ups except certain relocation expenses for new hires .
Performance Compensation
| 2024 Annual Incentive (MICP) | Target | Threshold | Maximum | Actual Paid |
|---|---|---|---|---|
| Cash bonus opportunity | $658,750 | $329,375 | $1,317,500 | $869,600 |
MICP metrics emphasize non-GAAP Operating EPS, business unit scorecards (People & Safety, Reliability, Customer, Sustainability), and strategic initiatives; scorecard targets are set at top quartile for industry benchmarks, with payout factors from 0–200% .
| 2024 LTIP Grant (Feb 13, 2024) | Metric Details | Units / Value | Vesting |
|---|---|---|---|
| RSUs | Grant date fair value | 9,223 units; $540,007 | Graded over 3 years; if retirement eligible, RSUs vest 1/12 per month over 1 year starting grant date . |
| PSUs (2024–2026 cycle) | Target units; Max units | 19,358 target; 38,716 max | Cliff at end of 3-year period; if retirement eligible, vest 1/36 per month with payout based on performance . |
| PSU Performance Mix | 50% Relative TSR; 25% EPS Growth; 25% ESG Index (methane reduction, carbon-free generation, EE electric, EE gas) with defined threshold/target/maximum ranges | Targets disclosed in proxy; payouts interpolate 20–200% . |
| 2022 PSU Cycle (2022–2024) Payout | Weighting | Target/Payout Range | Result | Payout Factor |
|---|---|---|---|---|
| Relative TSR | 40% | 25th=20%; 50th=100%; 75th=200% | Top quartile | 200% |
| ROIC | 20% | 25th=20%; 50th=100%; 75th=200% | Top quartile | 200% |
| EPS Growth | 20% | Linked to 2024 op EPS and 2025 guidance (5–7% CAGR range) | Low end of 5–7% | 69% |
| ESG Index | 20% | Targets across methane, EE electric/gas, carbon-free generation, Sustainalytics rating | Above targets/high end | 148% |
| Aggregate Payout | — | — | — | 163% (PSU payout) |
| Shares/Value to Hanemann | Granted/Earned/Payout | 12,881 granted; 23,272 earned; $1,885,956 @ $81.04 avg price | Paid in shares in 2025 |
No stock options have been granted since 2009; no repricings or discounted options permitted without shareholder approval .
Equity Ownership & Alignment
| Beneficial Ownership (Feb 21, 2025) | Owned Shares (#) | Stock Units/RSUs (#) | Total Beneficial (#) | % of Class |
|---|---|---|---|---|
| Kim C. Hanemann | 53,446 | 20,860 | 74,305 | <1% |
| Outstanding Awards (12/31/2024) | Unvested RSUs (#) | Market Value ($) | Unearned PSUs at Target (#) | Payout Value ($) |
|---|---|---|---|---|
| Kim C. Hanemann | 1,585 | $133,955 | 18,457 | $1,559,420 |
- Stock Ownership Guidelines: President & COO required to hold 4x base salary; all NEOs (including Hanemann) are in compliance .
- No hedging or pledging of company stock is permitted; Form 10b5-1 plans and pre-clearance required for officers and directors .
- RSU vesting calendar shows 2024 grant 1,585 units vesting in 2025 for Hanemann (retirement-eligible graded schedule) .
Employment Terms
| Provision | Term | Economics / Mechanics |
|---|---|---|
| Severance (without cause; non-CIC) | Key Executive Severance Plan; restrictive covenants (confidentiality, non-compete, non-solicit) | Cash: 1.0x salary + target bonus; prorated MICP; benefits and outplacement; equity handled per grant terms . December 31, 2024 illustrative: Severance $1,433,750; Pro rata bonus $658,750; RSUs $133,955; Benefits $32,558; Outplacement $25,000; Education $3,000; Aggregate $2,287,013 . |
| Change-in-Control (double trigger) | Termination w/in 2 years post-CIC; no excise tax gross-up; payments capped to avoid 280G excise | Cash: 2.0x salary + target bonus; prorated MICP; RSUs accelerate; PSUs prorate based on actual performance; enhanced retirement credit; welfare benefits; outplacement . December 31, 2024 illustrative: Severance $2,867,500; Pro rata bonus $658,750; RSUs $133,955; Enhanced retirement $298,000; Benefits $77,622; Outplacement $25,000; Education $3,000; Parachute forfeiture $(881,646); Aggregate $3,182,181 . |
| Retirement eligibility & vesting | 6‑month notice program implemented April 1, 2024 | Retirement‑eligible employees who provide ≥6 months’ notice become fully vested in outstanding 2024+ RSUs/PSUs at retirement; shares release on normal distribution dates . |
| Clawbacks | Two practices; 3-year lookback for misconduct or Standards of Conduct violations; Dodd-Frank compliant recovery for accounting restatements | Applies to all incentive comp (MICP, RSUs, PSUs); administered by O&CC . |
| Trading controls | Pre-clearance and window trading rules for officers/directors | No hedging/pledging, short-selling or margin purchases permitted . |
Performance & Track Record (Company Context)
| Metric | 2023 | 2024 |
|---|---|---|
| Operating Revenues ($mm) | $11,237 | $10,290 |
| Net Income ($mm) | $2,563 | $1,772 |
| Operating Earnings (non-GAAP) ($mm) | $1,742 | $1,839 |
| EPS – Diluted (Net Income) ($) | 5.13 | 3.54 |
| EPS – Diluted (Operating Earnings) ($) | 3.48 | 3.68 |
| Dividends per share ($) | 2.28 | 2.40 |
| Year-end Share Price ($) | 61.15 | 84.49 |
Say-on-Pay approval was 94.1% in 2024, reflecting strong shareholder support for pay design and disclosures . Peer group benchmarking targets pay around the peer median with upside for top-quartile performance; peers include AEP, Exelon, Southern Company, Xcel, etc. .
Compensation Structure Analysis
- Equity-heavy pay mix with 70% PSUs and 30% RSUs in LTIP; RSUs shifted to graded vesting starting 2024, increasing retention while smoothing vesting cadence for retirement-eligible executives .
- LTIP targets explicitly disclosed (TSR vs peers, EPS growth aligned to 5–7% CAGR, ESG quant goals), enhancing pay-for-performance transparency .
- No options, no repricing, no hedging/pledging, and double-trigger CIC — governance features reduce misalignment and risk .
Equity Ownership & Alignment
- Beneficial ownership: 74,305 shares/units (<1% of class); compliance with 4x salary ownership guideline for President & COO role .
- Upcoming supply: 1,585 RSUs scheduled to complete vest in 2025; PSUs vest monthly for retirement-eligible participants, with 2024–2026 cycle performance‑contingent .
- Pledging/hedging prohibited; trading requires pre‑clearance and windows, mitigating opportunistic selling pressure .
Investment Implications
- Alignment: Clear linkage of incentives to TSR, ROIC, EPS growth, and quant ESG priorities; strong 163% PSU payout for 2022–2024 validates relative value creation and execution on ESG targets .
- Retention risk: Retirement eligibility combined with graded/monthly vesting and a retirement notice program reduces cliff risk; however, CIC double-trigger terms (2x salary+bonus) could be catalytic in event-driven scenarios .
- Selling pressure: Near-term RSU vesting (1,585 in 2025) and ongoing PSU monthly vesting are modest relative to overall float and governed by pre-clearance, limiting abrupt insider supply .
- Governance quality: Strong shareholder support (94.1% say-on-pay), robust clawbacks, and no hedging/pledging policies support confidence in compensation oversight .