Stan Connally
SOUTHERNAbout Stan Connally
Stanley W. Connally, Jr. is Executive Vice President and Chief Operating Officer of The Southern Company, effective January 1, 2025; he was 55 at appointment, an executive officer since 2012, and previously served as EVP for Operations and Chairman, President & CEO of Southern Company Services (SCS) (Apr 2021–Dec 2024) and EVP for Operations of SCS (Jun 2018–Apr 2021) . In 2024, before becoming COO, Connally’s annual incentive (PPP) paid 171% of target amid top-of-guidance adjusted EPS and strong operational execution, with a reduction applied due to two employee fatalities . Long-term PSUs for the 2022–2024 cycle paid 168% for CFO/COO cohorts on Relative TSR and ROE, plus a GHG metric for CFO/COO, reflecting above-target value creation; company TSR outperformed the UTY index across 1-, 3-, 5-, and 25-year periods .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Southern Company | EVP & COO | Effective Jan 1, 2025 | Enterprise operations leadership; role created/assumed following strong system performance and Vogtle Unit 4 COD . |
| Southern Company (Corporate) & SCS | EVP for Operations; Chairman, President & CEO of SCS | Apr 2021–Dec 2024 | Led operations and corporate services; advanced portfolio modernization and reliability initiatives . |
| Southern Company Services (SCS) | EVP for Operations | Jun 2018–Apr 2021 | Oversaw system operations and transformation; groundwork for subsequent leadership of SCS . |
| The Southern Company | Executive Officer | Elected 2012 | Senior leadership continuity and succession pipeline . |
External Roles
No external public-company directorships or outside roles are disclosed for Connally in the 2025 proxy or recent 8-K filings .
Fixed Compensation
| Metric | 2024 |
|---|---|
| Base Salary Rate ($) | $820,343 |
| Salary Paid ($) | $812,981 |
| Target PPP (% of Salary) | 85% |
| Target PPP ($) | $697,292 |
| Approved PPP Payout (% of Target) | 171% (reduction applied due to fatalities) |
| PPP Paid ($) | $1,192,369 |
| All Other Compensation ($) | $58,242 (perqs $18,291; 401(k) $16,084; supplemental retirement plan $23,867) |
Performance Compensation
Annual Performance Pay Program (PPP) – Design and 2024 Outcomes
| Metric | Target/Structure | Weight | 2024 Performance | Payout |
|---|---|---|---|---|
| EPS | One-year adjusted EPS vs guidance | Not separately disclosed for CFO/COO | Finished at top of guidance | 176% |
| Operational Goals (Company-level) | Safety, Culture, Generation Reliability, Carbon-Free Resource Availability, Gas Infrastructure | 100% total (Safety 20%; Culture 20%; Gen Reliability 15%; plus resource availability and gas infrastructure) | Broadly exceeded targets; two fatalities occurred | Calculated 177%; Approved 171% for CEO/COO cohorts due to fatalities |
Long-Term Incentive Program (LTI) – 2024 Grants and PSUs Results
| Grant Cycle | Instrument | Metric | Target Units | Grant Date Fair Value ($) | Performance Period | Notes |
|---|---|---|---|---|---|---|
| 2024–2026 | PSUs | Relative TSR | 11,800 | Included in $1,463,436 total for PSUs granted on 1/31/2024 | 3 years | Monte Carlo valuation; earns 0–200% |
| 2024–2026 | PSUs | Consolidated ROE | 7,375 | Included in $1,463,436 PSUs total | 3 years | Closing price-based valuation |
| 2024–2026 | PSUs | GHG Reduction (CFO/COO only) | 2,950 | $205,084 | 3 years | Earns 0–225%; CFO/COO cohort includes GHG metric |
| 2024–2026 | PRSUs | Cash From Operations test | 7,375 | $512,710 | 1-year performance condition; 3-year ratable vesting | 2024 cash from ops > 2023 dividends; certified Feb 5, 2025; first 1/3 vested then |
| 2022–2024 | PSUs (results) | Relative TSR, ROE, GHG | — | — | Ended Dec 31, 2024 | CFO/COO cohort overall PSU performance: 168%; GHG metric achieved 136%; units earned: Connally target 19,449; earned 36,541 |
Stock Vested in 2024
| Metric | 2024 |
|---|---|
| Shares Acquired on Vesting (#) | 44,476 |
| Value Realized on Vesting ($) | $3,554,687 |
Equity Ownership & Alignment
| Ownership Element | Amount/Status |
|---|---|
| Beneficial Ownership (Feb 14, 2025) | 176,846 shares |
| Ownership as % of Shares Outstanding | ~0.016% (176,846 ÷ 1,100,193,640; shares outstanding Mar 31, 2025) |
| Unearned Units Not Vested (as of Dec 31, 2024) | 2,422 ($199,379); 5,103 ($420,079); 7,644 ($629,254); 22,962 ($1,890,232); 22,932 ($1,887,762) |
| Stock Options Outstanding | None; options not granted since 2014 |
| Hedging/Pledging | Prohibited for executive officers and directors |
| Ownership Guidelines | Officers subject to 1–2.5x base salary multiples; all NEOs met requirements as of March 1, 2025 |
Notes: Ownership percentage computed from cited share counts. Unearned units include PRSUs and PSUs across 2022–2024, 2023–2025, and 2024–2026 cycles with stated valuation methodology .
Employment Terms
Severance and Change-in-Control (CIC) Economics
| Provision | Treatment |
|---|---|
| Severance Multiple (CIC Termination) | Two times the sum of base salary + PPP opportunity (greater of target or three-year average) for NEOs; CEO at 3x; no excise tax gross-up (payments reduced to avoid 280G excise) |
| Estimated Severance Amount (as of Dec 31, 2024) | $4,025,425 |
| PPP under CIC | Greater of actual or target if program continues; if terminated within two years of CIC, prorated at greater of target or 3-year average |
| Equity under CIC (Awards on/after Aug 15, 2022) | If no replacement award, all vest; PSUs at greater of target or projected actual; subsidiary CIC: awards vest for impacted subsidiary employees at target for PSUs; CIC Termination: replacement awards vest at greater of target or projected actual |
| Accelerated Units under CIC | PSUs: 73,847; PRSUs: 15,169 (Connally) |
| Outplacement | Up to six months; est. $6,000 per NEO |
| Clawbacks | Clawback provisions apply to all incentive awards; enhanced policy for key executives |
| Employment Agreements | None for executive officers |
Pension and Deferred Compensation
| Plan | Credited Service (Years) | Present Value ($) |
|---|---|---|
| Pension Plan | 33.17 | $1,141,536 |
| Supplemental Benefit Plan (Pension-Related; SBP-P) | 33.17 | $4,623,582 |
| Supplemental Executive Retirement Plan (SERP) | 33.17 | $1,809,617 |
| CIC Lump Sum Acceleration (No Additional Benefits) | Amount ($) |
|---|---|
| SBP-P | $5,957,360 |
| SERP | $2,400,222 |
Perquisites (2024)
| Category | Amount ($) |
|---|---|
| Perquisites (financial planning, aircraft-related incremental costs, etc.) | $18,291 |
| Company Contribution to 401(k) | $16,084 |
| Company Contribution to Supplemental Retirement Plan | $23,867 |
| Total | $58,242 |
Performance & Track Record
- 2024 outcomes included adjusted EPS at the top end of guidance and broad operational outperformance; PPP paid 171% of target for Connally after safety-related reduction .
- 2022–2024 PSU cycle earned 168% for CFO/COO cohorts, with Connally earning 36,541 PSUs vs 19,449 target; Relative TSR result 168% and ROE 180% with defined adjustments; GHG metric for CFO/COO achieved 136% .
- Company TSR outperformed UTY across all shown periods: 1-year 21.7%; 3-year 10.4%; 5-year 9.5%; 25-year 12.3% (SO vs UTY 20.9%, 3.4%, 6.1%, 9.1%) .
| TSR (Annualized) | 1-Year | 3-Year | 5-Year | 25-Year |
|---|---|---|---|---|
| Southern Company | 21.7% | 10.4% | 9.5% | 12.3% |
| UTY Index | 20.9% | 3.4% | 6.1% | 9.1% |
Compensation Governance and Peer Benchmarking
- Southern’s compensation program uses fixed salary, PPP, and equity (PSUs/PRSUs), with 100% of short- and long-term incentives performance-based; prohibitions on hedging/pledging; double-trigger CIC; no employment agreements; no excise tax gross-ups on CIC severance .
- Peer benchmarking: Committee sets target compensation referencing peer utilities; Southern ranks at the 96th percentile of peer net annual revenue and 100th percentile of market cap, informing competitive targets .
Equity Ownership & Alignment (Additional Detail)
- Stock ownership guidelines require 1–2.5x salary multiples for officers; all NEOs met requirements by March 1, 2025, supporting alignment and retention .
- No stock options outstanding since 2014; equity mix emphasizes PSUs (TSR, ROE, GHG) and PRSUs tied to cash from operations (dividend coverage) to reinforce shareholder value creation and dividend sustainability .
Risk Indicators & Red Flags
- Positive indicators: clawbacks; no hedging/pledging; double-trigger CIC; no employment agreements; no excise tax gross-ups; dividends on stock awards only if underlying awards are earned .
- Safety governance signal: PPP reductions for CEO/COO due to fatalities underscore accountability linkage and culture emphasis on “Safety First” .
- Ownership concentration: Directors and executive officers as a group beneficially own <1% of shares; Connally’s ownership ~0.016%, typical for large-cap utilities with pay largely in performance equity .
Investment Implications
- Strong pay-for-performance alignment: Above-target PSU outcomes, PPP tied to EPS and robust operational scorecard, and PRSUs linked to cash generation vs dividend outlays support continuity of dividend policy and disciplined capital deployment—constructive for yield and TSR frameworks .
- Retention risk appears moderate: Significant unvested PRSUs and multi-year PSU cycles, ownership guideline compliance, and defined CIC benefits (2x multiple) provide retention anchors; hedging/pledging bans limit misalignment .
- Trading signals: Scheduled vesting (e.g., PRSU tranches in 2025–2026 after certification) may create periodic settlement events; no options overhang; insider selling pressure is structurally limited by the policy environment and equity design, though normal liquidity around vest dates is possible .
- Execution risk: Safety outcomes (fatalities) triggered PPP reductions, highlighting operational risk oversight; GHG/transition metrics for CFO/COO embed decarbonization execution into compensation, with 2023–2025 forecasts indicating potential below-target quantitative GHG achievement due to load growth and supply chain constraints—watch PSU accrual trajectory and operational delivery vs evolving demand .