Adam Heflin
PINNACLE WEST CAPITALAbout Adam Heflin
Adam C. Heflin is Executive Vice President and Chief Nuclear Officer of APS, responsible for all nuclear-related activities at Palo Verde Generating Station (PVGS), the nation’s largest power producer and the country’s largest producer of carbon‑free energy; he joined PVGS/APS in June 2022 after a nuclear career that began in the U.S. Navy and prior roles as CEO & CNO of Wolf Creek Nuclear Operating Corporation and CNO of Ameren’s Callaway Energy Center . His 2024 annual incentive paid out at 139.7% of salary, driven by 200% achievement on the APS earnings metric (50% weight) and 173% achievement on the Palo Verde business unit metric (50% weight), indicating strong operational and financial goal attainment in the year . Long‑term incentives emphasize pay‑for‑performance via a 70% performance share / 30% RSU mix with three‑year PSUs tied to Relative TSR (40%), EPS performance (40%), and Clean Megawatts Installed (20%), and RSUs vesting ratably over four years . Heflin beneficially owned 10,058 PNW shares as of March 14, 2025 (less than 1% of shares outstanding) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Wolf Creek Nuclear Operating Corporation | Chief Executive Officer & Chief Nuclear Officer | — | Led overall nuclear operations and corporate leadership at Wolf Creek (prior to joining APS) . |
| Ameren – Callaway Energy Center | Chief Nuclear Officer | — | Oversaw nuclear plant operations at Callaway Energy Center (prior to joining APS) . |
| U.S. Navy | Nuclear career (early career) | — | Foundational nuclear training/experience forming basis for subsequent utility leadership . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Nuclear Energy Institute (NEI) | Board Member | — | Industry policy/advocacy and best practices in nuclear generation . |
| Institute for Nuclear Power Operations (INPO) | Board Member | — | Nuclear safety and operational excellence standards across the fleet . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 400,822 | 715,000 | 735,000 |
| Bonus ($) | 500,000 (sign‑on) | 0 | 0 |
| Non‑Equity Incentive Plan Compensation ($) | 527,008 | 757,721 | 1,026,703 |
| Target Bonus (% of Salary) | — | — | 75% |
| Actual Annual Incentive (% of Salary) | — | — | 139.7% |
Performance Compensation
Annual Incentive (2024) – Structure and Results
| Metric | Weighting | Target | Actual Result | Payout Impact |
|---|---|---|---|---|
| APS Earnings (threshold required) | 50% | APS 2024 earnings target set at $570M (context) | 200% | Contributed to 139.7% of salary total payout |
| Palo Verde Business Unit (safety, CX, reliability, affordability) | 50% | Palo Verde Plan targets set; threshold/target rules defined (no numeric detail) | 173% | Contributed to 139.7% of salary total payout |
Notes: Payouts only occur if earnings thresholds are met; Palo Verde rules allow business unit payout even if APS earnings threshold not met, subject to plan design .
Long‑Term Incentives – Design (2024 awards)
| Vehicle | % of Target LTI | Measurement Period | Performance Link |
|---|---|---|---|
| Performance Shares (PSUs) | 70% | 3 years | Relative TSR (40%), EPS Performance (40%), Clean MW Installed (20%) |
| RSUs | 30% | 4 years (ratable vesting) | Stock price/retention |
Long‑Term Incentives – 2024 Grants (Adam C. Heflin)
| Grant Type | Grant Date | Threshold (#) | Target (#) | Maximum (#) | Grant Date Fair Value ($) |
|---|---|---|---|---|---|
| PSUs – TSR | 02/20/2024 | — | 5,269 | 10,538 | 400,918 |
| PSUs – EPS | 02/20/2024 | — | 5,269 | 10,538 | 364,088 |
| PSUs – Clean MW | 02/20/2024 | — | 2,634 | 5,268 | 182,009 |
| RSUs | 02/20/2024 | — | 5,644 (time‑based) | — | 390,000 |
Additional reference: 2024 stock award mix for Heflin allocated $390,000 RSUs and $947,015 PSUs in the Summary Compensation Table .
Equity Ownership & Alignment
Beneficial Ownership
- Shares beneficially owned: 10,058 (as of March 14, 2025); percent of class: * (less than 1%) .
Outstanding Equity Awards at FY‑End 2024 (select Heflin lines)
| Award Type | Quantity (#) | Market Value ($) | Notes |
|---|---|---|---|
| RSUs (2024 grant) | 5,644 | 478,442 | Feb‑2024 RSUs; ratable vesting |
| RSUs (2023 grant) | 3,948 | 334,672 | Vests/release in 25% increments starting 2/20/2024 |
| RSUs (2022 grant) | 6,404 | 542,867 | Vests/release in 25% increments (schedule as described) |
| RSUs (2022 add’l/offer) | 2,306 | 195,480 | Additional 2022 RSUs per offer letter |
| PSUs (various 2022–2024 cycles) | 10,538 (max) | 893,306 | Performance awards; multiple lines shown at max/threshold |
| PSUs (various) | 1,317 (threshold) | 111,642 | Performance awards |
| PSUs (various) | 9,820 (max) | 832,441 | Performance awards |
| PSUs (various) | 7,829 | 663,664 | Performance awards |
| PSUs (various) | 7,928 | 672,057 | Performance awards |
| PSUs (various) | 1,228 (threshold) | 104,098 | Performance awards |
| PSUs (various) | 4,304 | 364,850 | Performance awards |
Notes: Market values use $84.77 (12/31/2024 close) as disclosed; entries reflect multiple cycles with status at threshold/target/max as presented in the company’s table .
Stock Vested (2024)
| Metric | 2024 |
|---|---|
| Shares acquired on vesting (#) | 5,671 |
| Value realized on vesting ($) | 391,866 |
Alignment Policies and Guidelines
- Anti‑hedging and anti‑pledging policies apply to Directors and officers .
- Stock ownership guidelines apply to NEOs; all NEOs are in compliance .
Employment Terms
Change‑of‑Control (CoC) Agreement
- Structure: Double‑trigger; payments if terminated without cause or for good reason within two years after a CoC .
- Cash severance: 2.99× (salary at CoC + average annual bonus over prior four years) .
- Benefits: Continued medical/dental/life insurance through end of the second year following termination year; outplacement services .
- Excise tax: “Best net benefit” provision for all NEOs except former CEO; no excise tax gross‑ups in new/materially amended agreements since 2021 .
- Auto‑renewal: Agreements run to Dec 31 each year and auto‑renew for one‑year periods absent six‑month advance notice .
Estimated Payments if Terminated on 12/31/2024 (Heflin)
| Component | CoC Termination ($) | Death/Disability ($) | All Other Terms ($) |
|---|---|---|---|
| Performance Shares | 3,298,146 | 2,452,057 | 0 |
| RSUs | 1,681,922 | 1,681,922 | 0 |
| Severance Benefits | 4,118,320 | 0 | 0 |
| Medical/Dental/Life PV | 37,278 | 0 | 0 |
| Outplacement | 10,000 | 0 | 0 |
| Total | 9,145,666 | 4,133,979 | 0 |
Notes: Equity acceleration upon CoC is subject to Board override; if protected/assumed awards remain outstanding, automatic acceleration may not occur per plan language .
Severance (non‑CoC)
- Company does not maintain a general severance plan for NEOs; no traditional severance agreements—only CoC agreements apply .
Restrictive Covenants and Clawback
- RSU awards include confidentiality and one‑year post‑termination non‑compete and non‑solicit provisions; treatment varies by award year and termination scenario as described .
- Clawback policy covers current/former executive officers for both short‑ and long‑term incentives .
Retirement and Deferred Compensation
- Pension (Present Value of Accumulated Benefits at 12/31/2024): Retirement Plan $68,014; Supplemental Plan $535,932; credited service 3 years .
- Deferred Compensation (DCP) 2024: Executive contributions $134,541; aggregate earnings $13,886 (above‑market portion $1,650 also reported as compensation); ending balance $238,394 .
Investment Implications
- Pay‑for‑performance alignment: 2024 annual incentive paid at 139.7% of salary with strong results on earnings (200%) and Palo Verde metrics (173%); LTI focuses 70% on PSUs tied to TSR/EPS/Clean MW and 30% on time‑based RSUs, aligning realized pay with shareholder value creation and decarbonization execution .
- Retention vs. dilution trade‑off: Significant unvested RSUs/PSUs outstanding (multiple cycles) support retention but create scheduled equity releases; RSUs vest ratably over four years and prior RSU tranches vested on February 20, 2024, indicating potential seasonal share delivery windows .
- Change‑of‑control protection: Double‑trigger CoC with 2.99× cash multiple and estimated $9.15M CoC package for Heflin (as of 12/31/2024) reduces near‑term departure risk but represents material transaction‑related cost for shareholders .
- Governance risk mitigants: Anti‑hedging/anti‑pledging policies and clawback provision, plus NEO ownership guideline compliance, reduce alignment and reputational risks tied to hedging/pledging or incentive recoupment gaps .
- Skin‑in‑the‑game: Direct ownership of 10,058 shares (<1% of class) provides some alignment but remains modest relative to market‑cap scale; ongoing RSU/PSU holdings are the primary alignment lever .