Jacob Tetlow - Executive Vice President and Chief Operating Officer | PINNACLE WEST CAPITAL (PNW) Executive Profile & Compensation

About Jacob Tetlow

Executive Vice President and Chief Operating Officer of APS since October 23, 2024; previously Executive Vice President (promoted May 2021), overseeing non‑nuclear generation and power delivery plus IT, resource management, safety, security, sustainability, supply chain, and customer‑to‑grid solutions . External leadership includes the Electric Power Research Institute (EPRI) Research Advisory Committee, Board of Directors for the Association of Edison Illuminating Companies, and serving as Board Chair for The Nature Conservancy Arizona Chapter . During his tenure, PNW delivered year‑end diluted EPS of $5.24 and a 2024 TSR of 23.25%, outperforming the EEI Index (19.10%) amid constructive rate outcomes and strong load growth .

Past Roles

Organization	Role	Years	Strategic Impact
APS	Executive Vice President, Operations	2021–2024	Led non-nuclear generation and power delivery operations; set enterprise operational metrics and contributed to earnings and reliability outcomes
APS	Executive Vice President & Chief Operating Officer	Oct 2024–present	Expanded remit across IT, resource management, safety, security, sustainability, supply chain, facilities, transportation, and environmental services; core role in execution of largest transmission/generation expansion in APS history

External Roles

Organization	Role	Years	Strategic Impact
EPRI	Research Advisory Committee Member	Ongoing	Guides industry R&D priorities and technology adoption to support grid reliability and decarbonization
Association of Edison Illuminating Companies	Board Director	Ongoing	Advances utility operating best practices and safety/risk management standards
The Nature Conservancy – Arizona Chapter	Board Chair	Ongoing	Oversees conservation initiatives relevant to APS’s water stewardship and environmental commitments

Fixed Compensation

Metric	2022	2023	2024
Base Salary ($)	485,000	525,000	586,776
Annual Cash Incentive ($)	540,242	566,799	878,981
Stock Awards – Grant Date FV ($)	633,827	1,261,291	2,337,019
Change in Pension & NQDC ($)	(99,050)	490,390	108,829
All Other Compensation ($)	27,308	26,240	27,415

2024 base salary rate increased from $560,000 to $700,000 effective October 23, 2024 upon promotion to EVP & COO .
2024 target annual incentive: 75% of base salary; threshold 18.75%; max 150%; actual payout 149.8% of salary ($878,981) .
2024 perquisites included car allowance, executive physical, and financial planning ($17,065) and 401(k) contribution ($10,350) .

Performance Compensation

Annual Incentive Structure and Results (2024)

Component	Weighting	Target	Actual	Payout
APS Earnings	50%	$570M APS incentive earnings	$641.9M APS incentive earnings	200%
Corporate Resources (avg)	15%	100%	145%	145%
Information Technology	10%	95% Mission/Business Critical SLAs	100% (200% payout)	200%
Resource Management	5%	Various shared metrics	Included in Corporate Resources	Included
Generation (non‑nuclear)	17.5%	100%	110%	110%
Transmission & Distribution	17.5%	100%	152%	152%
Total	100%	—	—	135% (business unit), earnings at 200%

Business unit metrics averaged 145% of target across APS; Tetlow’s mix included Corporate Resources, IT, Resource Management, Generation, and T&D .
PNW/APS earnings results were 200% of target driven by constructive rate case, favorable weather, and strong customer growth .

Long-Term Incentives (2024 Design)

Vehicle	% of Target Equity	Measurement Period	Performance Link
Performance Shares (PS)	70%	3 years	Relative TSR 40%; EPS Performance 40%; Clean MWs Installed 20%
RSUs	30%	4-year ratable vest	Stock price; retention emphasis

2024 Grants – Share Counts and Grant-Date Values (Tetlow)

Grant Type	Grant Date	Target (#)	Max (#)	Grant-Date FV ($)
PS – TSR	Feb 20, 2024	5,269	10,538	400,918
PS – EPS	Feb 20, 2024	5,269	10,538	364,088
PS – Clean MWs	Feb 20, 2024	2,634	5,268	182,009
RSUs (annual)	Feb 20, 2024	5,644 (granted)	—	390,000
RSUs (promotional, cliff)	Oct 23, 2024	11,197 (granted)	—	1,000,004

Allocation of 2024 equity value: RSUs $1,390,004; Performance Shares $947,015 .

Vesting schedules:

PS: 3‑year performance period; payout based on relative TSR, EPS, and Clean MWs metrics .
RSUs: annual grant vests ratably over 4 years; promotional RSUs cliff vest October 31, 2029 .

Equity Ownership & Alignment

Item	Detail
Beneficial Ownership	2,527 shares as of March 14, 2025; less than 1% of outstanding
Stock Ownership Guidelines	EVP/SVP requirement: 2× base salary; 5‑year phase‑in; +3 years if promotion or >20% salary increase; all NEOs in compliance
Hedging/Pledging	Prohibited for Directors and officers; anti‑pledging policy in effect
Clawback	NYSE‑compliant policy; recovers excess incentive pay over prior 3 fiscal years upon required restatement

Outstanding equity detail (Dec 31, 2024):

Category	Units (#)	Market Value ($)
RSUs (2024 annual)	5,644	478,442
RSUs (2024 promotional, cliff)	11,197	949,170
RSUs (2023 remnant)	3,720	315,344
RSUs (2022 remnant)	1,308	110,879
Performance Shares (2024 TSR at max)	10,538	893,306
Performance Shares (2024 EPS at max)	10,538	893,306
Performance Shares (2024 Clean MWs at threshold)	1,317	111,642
Performance Shares (2022 TSR at max)	9,254	784,462
Performance Shares (2022 EPS at max)	9,254	784,462
Performance Shares (2022 Clean MWs at threshold)	1,157	98,079
RSUs (older)	615	52,134
RSUs (older)	190	16,107

Note: Market values use $84.77 closing price at 12/31/2024 and include applicable dividend equivalents where noted .

Employment Terms

Change-of-Control Economics

Structure: Double‑trigger agreements (2.99× salary + average annual bonus over prior four years), continued medical/dental/life benefits, outplacement; “best net benefit” provision to avoid excise tax gross‑ups in updated agreements (no gross‑ups in new/materially amended NEO agreements since 2009, exception removed in 2018) .
Award treatment: PS/RSU accelerate at target upon change of control unless Board overrides by assuring equivalent awards without material impairment .

Termination scenario values (as of Dec 31, 2024):

Scenario	PS ($)	RSUs ($)	Severance ($)	Benefits & Outplacement ($)	Total ($)
Qualifying CoC termination	2,797,834	1,988,563	3,227,116	58,720	8,072,233
Death/Disability	2,383,817	1,919,193	0	58,720	4,303,010
All other termination	0	0	0	0	0

Other terms:

No formal employment agreement; company uses offer letters for executives .
Deferred Compensation Plan (DCP) discretionary credits: $100k (7/1/2019), $50k (1/1/2020), and $100k on 1/1/2021–2023 vested upon May 2021 promotion; payable after separation; additional credits of $500k on 11/1/2027 (vest 10/31/2028) and $500k on 11/1/2028 (vest 10/31/2029); accelerate upon APS termination without cause, death, or disability prior to 10/31/2029 .

Compliance/Trading:

Section 16: one Form 4 filed one day late on Feb 22, 2024 due to third‑party outage; company indicates overall compliance otherwise .

Investment Implications

High pay‑at‑risk mix with measurable operational/financial metrics (Earnings, TSR, EPS, Clean MWs) aligns incentives with shareholder returns and APS decarbonization goals; 2024 business unit metrics averaged 145% and earnings paid at 200%, driving strong cash incentive outcomes .
Retention signals are strong: promotional RSUs with 2029 cliff vest and sizable DCP credits vesting in 2028/2029 create meaningful deferral and reduce near‑term insider selling pressure .
Governance mitigants: anti‑hedging/pledging, clawback, ownership guidelines (EVP 2× salary, with phase‑in extensions on promotion/large raise) support alignment and reduce risk of leveraged sales or misreporting .
Change‑of‑control double‑trigger with potential equity acceleration could be a valuation consideration in strategic scenarios; lack of gross‑ups in updated agreements is shareholder‑friendly, but 2.99× cash severance remains material .