Gale Klappa

About Gale E. Klappa

Gale E. Klappa, age 74, is Non-Executive Chairman of WEC Energy Group (since May 2024) and has served on the Board since 2003. He previously served as CEO (2004–2016; 2017–2019) and Executive Chairman (2019–May 2024), bringing 45+ years in public utilities, including senior leadership roles at The Southern Company; he led WEC’s 2015 acquisition of Integrys Energy Group that expanded the footprint to four states . He is not an independent director (non-independent due to prior employment) .

Past Roles

External Roles

Board Governance

• Independence: Not independent due to prior WEC employment .
• Current Board role: Non-Executive Chairman (since May 2024); Executive Committee Chair .
• Attendance and engagement: In 2024, the Board met 7 times; all directors attended >75% of meetings; average attendance >98.7%; executive sessions held at every regular Board and most committee meetings .
• Board leadership balance: Separate CEO and Chair with Independent Lead Director (Tom Lane) and defined duties .

Fixed Compensation

Pension/SERP/ILA details (benefit status and 2024 payments):

• Present value of accumulated benefits at 12/31/2024: WEC Plan $555,112; SERP $2,410,753; Individual Letter Agreement (ILA) $16,907,467; 2024 payments: WEC Plan $35,425; SERP $263,731; ILA $1,849,639. ILA service credit totaled 38.67 years; WEC may be obligated if a prior employer cannot pay its portion .

Performance Compensation

Compensation structure practices and controls:

• Clawback: NYSE/Rule 10D-1 compliant recoupment policy for restatements; additional recovery for “for cause” or restrictive covenant violations .
• Hedging/pledging: Prohibited for directors and employees; limited trading windows with pre-clearance .
• Change-in-control: Equity vests upon qualifying termination within 24 months post-CIC; performance units vest at target upon such termination; SERP lump sum if terminated within 18 months of CIC; no individual executive employment severance agreements .
• Say-on-pay: 94.3% approval in 2024; broad investor engagement with ~50% of outstanding stock .

Other Directorships & Interlocks

Expertise & Qualifications

• 45+ years in public utility industry; senior executive experience at WEC and The Southern Company .
• Led WEC’s strategic combination with Integrys (2015), expanding scale and geographic footprint .
• Governance and public company board experience (Associated Banc-Corp; past Badger Meter) .

Equity Ownership

Board Governance

Governance Assessment

• Positives

  • Substantial utility leadership depth; successful major M&A execution; long board tenure supports continuity .
  • Strong board processes: separate Chair/CEO, independent Lead Director, regular executive sessions, robust evaluation and education .
  • Director ownership guideline and prohibition on hedging/pledging support alignment; no shares pledged; no related-party transactions since Jan 1, 2024 .
  • Compensation controls: clawback policy, defined CIC treatment, no executive employment severance agreements; high say-on-pay support (94.3%) .

• Risk indicators and potential red flags

  • Independence: As Non-Executive Chair, Klappa is not independent; Board mitigates with an Independent Lead Director but investors may scrutinize independence of the Chair .
  • Discretion/award modifications: 2022 Performance Unit Plan peer TSR calculations were adjusted for certain peers (Duke, Xcel) to address plan design effects, increasing vesting to 112.9% with ROE adjustments; use of discretion in long-term plan calculations warrants monitoring .
  • Accelerated vesting: Restricted stock for Klappa (30,539 shares) accelerated upon retirement in May 2024; while standard for retirement transitions, acceleration increases realized pay and should be monitored for precedent .
  • Additional Chair retainer: Non-Executive Chair receives an incremental $187,500 retainer; typical in market but adds cash component to director pay; equity alignment for Chair role in 2024 was not granted due to mid-year transition .

No related-party transactions requiring disclosure were reported since January 1, 2024, and Compensation Committee interlocks were “none” for 2024 .

Fixed Compensation (detail table)

Performance Compensation (detail table)

2024 STPP Metric Weights and Thresholds (Company-wide)

2024 PUP (LTI) Metric Design

Note: For 2022 PUP payouts (vested in 2024), the Committee adjusted peer TSR calculations for Duke Energy and Xcel Energy due to plan design effects; combined with ROE adjustments, vesting was 112.9% .

Equity Ownership

Governance Assessment Summary

• Overall, Klappa brings deep sector expertise and continuity as Non-Executive Chair, but his non-independent status, equity acceleration, and the Committee’s prior adjustments in TSR calculations warrant continued monitoring for potential misalignment or precedent-setting discretion. Positive indicators include strong board processes, robust compensation governance (clawback, anti-hedging), no related-party transactions, and sustained shareholder support for pay programs .