Christopher H. Franklin
Essential UtilitiesAbout Christopher H. Franklin
Christopher H. Franklin (age 59) is Chairman, President and Chief Executive Officer of Essential Utilities (WTRG), serving as CEO since July 2015 and a director since 2015. He holds a B.S. from West Chester University and an MBA from Villanova University. Under his tenure, Essential’s customer base nearly doubled via 70+ acquisitions, and market cap rose from ~$4.4B to ~$10B by year-end 2024; he also serves on the board of CenterPoint Energy and Independence Health Group . In 2024, the company achieved above-target performance on EPS and ROE in its STI plan (136.48% overall payout), while the 2022 PSU cycle paid out at 83.31% due to weak 3-year TSR offset by strong operating metrics . Financially, FY 2021–FY 2024 Revenues were ~$1.88B, ~$2.29B, ~$2.05B, and ~$2.09B, with EBITDA rising over the same period (see table below; EBITDA values marked with asterisks) [functions.GetFinancials]*.
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Essential Utilities | President & CEO | 2015–present | Led 70+ acquisitions; market cap from ~$4.4B to ~$10B by YE2024; integration execution and regulatory advocacy . |
| Essential Utilities | EVP; President & COO, Regulated Ops | 2012–2015 | Led regulated operations . |
| Essential Utilities | Regional President (Midwest/Southern); SVP Public Affairs | 2007–2012 | Regional leadership; regulatory/stakeholder interface . |
| Essential Utilities | VP roles (Public Affairs, Customer Ops) | 2005–2007 | Implemented single CIS and created three call centers . |
| Essential Utilities | VP Corporate & Public Affairs; Manager Corporate & Public Affairs | 1992–2005 | Public affairs leadership; legislative advocacy enabling improved systems and fair returns . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| CenterPoint Energy, Inc. | Director (public company) | 2022–present | Current public company directorship . |
| Independence Health Group | Director | N/A | Company uses IHG as medical plan administrator; fees were immaterial to IHG; Board maintained independence determinations . |
| University of Pennsylvania; The Franklin Institute | Trustee/Board roles (non-profit) | N/A | Community and education leadership . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 938,628 | 985,584 | 1,023,134 |
| Base Salary Rate effective April 1, 2024 ($) | — | — | 1,032,500 |
| Target Bonus (% of salary) | — | — | 100% |
| Actual STI Payout ($) | 1,226,070 | 1,437,300 | 1,460,781 |
| Grant Date Fair Value – Stock Awards ($) | 2,138,892 | 2,523,854 | 3,035,513 |
| Grant Date Fair Value – Stock Options ($) | 246,090 | 298,940 | 349,956 |
| All Other Compensation ($) | 19,367 | 20,555 | 23,632 |
Perquisites detail (2024): 401(k)/company match $7,740; car allowance $9,958; other $5,934 . CEO-to-median pay ratio: 64:1 (2024) .
Performance Compensation
2024 Short-Term Incentive (STI) scorecard and payout
| Component | Weight | Threshold | Target | Max | 2024 Actual | Attainment | Weighted Achievement |
|---|---|---|---|---|---|---|---|
| EPS (Adjusted) | 35% | $1.93 | $1.98 | $2.03 | $2.17 | 150.00% | 52.50% |
| ROE | 15% | 8.04% | 9.54% | 11.04% | 11.77% | 150.00% | 22.50% |
| Safety (3 metrics) | 20% | — | — | — | Mixed | 105–150% | 25.68% combined |
| Customer Service (2 metrics) | 10% | — | — | — | Mixed | 113.5–145.5% | 12.96% |
| Compliance (4 metrics) | 10% | — | — | — | Mixed | 103.5–150% | 12. -ish% |
| Individual Goals | 10% | 50% | 100% | 150% | 150% (CEO) | 100–150% | 10.00% (CEO) |
| Total | 100% | — | — | — | — | — | 136.48% |
2024 STI payout for Franklin: target 100% of salary; achievement 141.48% (reflecting 150% on individual goals), paying $1,460,781 .
Long-Term Incentive (LTI) design and 2024 grants
- Mix: PSUs 65%, Stock Options 10%, RSUs 25% (CEO’s RSUs vest subject to adjusted ROE) .
- CEO 2024 LTI target: 320% of salary .
- 2024 CEO awards (1/24/24): PSUs target 80,574; Options 43,098 at $35.78; total grant-date fair value of stock and options $3,385,469 .
Performance metrics:
- PSUs (2022–2024 cycle): metrics were Relative TSR vs peer group, Rate Base Growth, and O&M; payout 83.31% (TSR 0% due to rank 13th; strong rate base growth and O&M control) .
- Options: vest one-third per year based on adjusted ROE threshold (≥150 bps below most recent PUC water ROE); only have value if stock appreciates .
- CEO RSUs: cliff vest after 3 years, contingent on adjusted ROE achievement .
Vesting calendar (near-term):
- 2022 PSU/RSU tranche vested/paid Feb 16, 2025; CEO received 14,162 RSUs; PSUs earned per plan .
Pay-for-performance calibration (context)
| Year | Target EPS (for plan) | STI payout % | 3-yr TSR | PSU payout % |
|---|---|---|---|---|
| 2022 | $1.77 (Achieved) | 129.06% | 12.37% | 171.16% |
| 2023 | $1.88 (Achieved) | 143.73% | -15.49% | 77.94% |
| 2024 | $1.98 (Achieved) | 136.48% | -14.81% | 83.31% |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 258,192 shares as of Mar 10, 2025; “less than 1%” of outstanding . |
| Vested shares held (12/31/2024) | 233,150 shares . |
| Stock ownership guideline | CEO: 5× midpoint of average base salary; approximated as 143,200 shares based on 12/31/2024 price; directors 5× cash retainer; all directors compliant . |
| Compliance vs guideline | Exceeds guideline (233,150 vs requirement ~143,200) . |
| Outstanding awards (12/31/2024) | RSUs not yet vested: 53,193 (mkt value $2,042,606); PSUs target unearned: 132,816 (mkt value $5,100,281) . |
| Options outstanding | Multiple tranches, incl. 190,088 @ $35.94 exp. 2/28/2029; 17,815 @ $34.51 exp. 2/27/2028; 8,783 unexercisable/17,565 exercisable @ $45.19 exp. 2/16/2032; 17,528 unexercisable/8,764 exercisable @ $45.39 exp. 2/22/2033; 43,098 unexercisable @ $35.78 exp. 1/24/2034 . |
| Hedging/pledging | Prohibited; no hedging or pledging by directors/NEOs during 2024 . |
| Deferred compensation (2024) | Company contribution $19,668; aggregate balance $181,469; aggregate withdrawals $(22,877) . |
| Pension/SERP present value (12/31/2024) | Qualified plan: $1,017,695; Non-Qualified Pension Benefit Plan: $10,824,273 . |
Vesting supply watch: 2022 RSUs vested on Feb 16, 2025 (14,162 shares to CEO); options begin expiring 2028–2034 per schedule above .
Employment Terms
| Term | Provision |
|---|---|
| Agreement | Renewed Employment Agreement effective July 1, 2024; term through July 1, 2027; CEO may extend by 1 year at his option with 6 months’ notice . |
| Target pay floors | Target annual bonus ≥100% of salary; annual equity LTI ≥250% of salary, subject to Comp Committee . |
| Non-compete / non-solicit | Applies during employment and for 12 months post-termination; includes non-solicit of employees/customers and non-compete with “competing business” . |
| Severance (no CIC) | If terminated without cause or for good reason: 24 months base salary + 2× target bonus + 36 months COBRA; vesting of time-based equity and certain performance equity if retirement-eligible . |
| Change-in-Control (double trigger) | Within 6 months before to 2 years after a CIC, if terminated without cause or CIC good reason: 36 months base salary + 3× target bonus + 36 months COBRA + 36 months outplacement + full vesting of all equity; OTM options converted to RSUs if not assumed, using Black-Scholes equivalence . |
| Company severance policy (all NEOs) | 1 year salary + 1 year projected bonus + 1–6 months medical (outside CIC and CEO contract) . |
| Clawback | SEC/NYSE-compliant clawback adopted Feb 22, 2023; includes time-vesting equity; applies regardless of fault in restatement . |
| Hedging/pledging | Prohibited by policy . |
| 280G / tax gross-ups | Company determined no tax gross-ups in CIC agreements; subject to 280G limitations . |
Board Governance
- Role: Combined Chairman and CEO; Board intentionally uses a strong Lead Independent Director (LID) model to counterbalance combined role .
- Independence: All directors independent except Mr. Franklin; Board found certain related-person relationships immaterial (e.g., IHG administrative fees where Franklin is a director; EY consulting; PSEG purchases) .
- Committees and roles (current): Chair, Executive Committee; member, Risk Mitigation & Investment Policy Committee .
- Attendance: Board held 5 meetings in 2024; each director attended 100% of Board and assigned committee meetings; directors attended 2024 annual meeting .
- Director pay: As an officer, Franklin receives no additional compensation for Board service .
Board service history and external directorships: Director since 2015; also serves as a director of CenterPoint Energy (public) and Independence Health Group; multiple non-profit boards; committee roles include Executive Committee (Chair) and Risk Committee member .
Dual-role implications: Combined Chair/CEO can raise independence concerns, mitigated by robust LID authority (agenda approval, executive session leadership, shareholder engagement authority, advisor engagement) .
Director Compensation (context)
2024 program for non-employee directors: $105,000 cash retainer; $120,000 stock grant; chair/LID retainers ($15k–$30k) per committee; revised for 2025 to $110,000 cash and $135,000 equity. Franklin, as CEO, receives no director compensation .
Compensation Committee & Peer Benchmarking
- Committee: Independent directors; chaired by Lead Independent Director (Hilferty); meets with independent consultant Pay Governance; no management conflicts disclosed .
- Market positioning: Targets ~50th percentile (market median) for total direct compensation; uses a 16-company custom utility peer group .
- Say-on-pay: 93.7% approval in 2024 following extensive shareholder outreach .
Related Party Transactions (screen)
- IHG administrative services (Franklin is an IHG director): fees of $1.37M (2024), 0.0043% of IHG revenue; self-insured “pass-through” payments of $21.18M in 2024; Board deemed immaterial and maintained independence .
- EY and PSEG transactions similarly deemed immaterial; independence of directors affirmed .
Performance & Track Record
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| Revenues ($) | 1,878,144,000 [functions.GetFinancials] | 2,288,032,000 [functions.GetFinancials] | 2,053,824,000 [functions.GetFinancials] | 2,086,112,999 [functions.GetFinancials] |
| EBITDA ($) | 908,352,000* | 990,452,000* | 1,040,259,000* | 1,128,080,000* |
*Values retrieved from S&P Global.
Strategic/regulatory highlights in 2024: resolved PA water and gas rate cases; secured a weather normalization mechanism; invested >$1.3B in infrastructure; continued PFAS and lead line initiatives . 2025 announced all-stock merger with American Water; upon close, Franklin to serve as Executive Vice Chair of the combined company’s board and executive sponsor of integration (timing expected by end of Q1 2027, subject to approvals) .
Investment Implications
- Pay-for-performance alignment: High alignment signals—STI and PSU metrics rooted in EPS, ROE, TSR, rate base growth, and O&M; 2024 STI paid 136.48% on above-target financial/operational results; 2022 PSU paid 83.31% due to negative TSR, demonstrating downside capture on share price underperformance .
- Retention and transition risk: Strong severance/CIC protections and a renewed contract (through 2027) reduce near-term retention risk; CIC terms provide full vesting and 3× target bonus multiple, which could incent continuity through merger close and integration; non-compete/non-solicit for 12 months mitigates post-departure risk .
- Selling pressure watch: 2022 RSUs vested Feb 16, 2025 (14,162 shares to CEO); additional tranches scheduled through 2027; options expiring 2028–2034; monitor Form 4s around vest dates for liquidity events .
- Alignment and governance: Exceeds rigorous ownership guidelines (233k vested shares vs ~143k required), anti-hedge/pledge policy, and clawback broadened in 2023; dual Chair/CEO structure is mitigated by robust LID powers and committee independence .
- Merger lens: Franklin’s designated Executive Vice Chair role signals continuity and influence through integration—reducing execution risk; however, the long regulatory approval path to 2027 and any required dispositions are considerations to watch. Transaction is all-stock with no new debt issuance; equity incentives will likely re-strike post-close .
Notes:
- All compensation, governance, and ownership data are from Essential Utilities’ 2025 Proxy (DEF 14A) unless otherwise noted .
- Employment agreement and CIC amendments per 8‑K filed May 3, 2024 (effective July 1, 2024) .
- Merger with American Water announced Oct 27, 2025; role and timeline per press release .
*GetFinancials financials (Revenues, EBITDA) come from S&P Global; EBITDA values shown with asterisks are S&P Global values without document citations.