UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

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Securities Exchange Act of 1934

 

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Definitive Proxy Statement

 

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FirstEnergy Corp.

(Name of Registrant as Specified In Its Charter)

         

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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LOGO


On the Cover: FirstEnergy continues its sponsorship in 2022 of the Akron Marathon, a world-class race known for its 26.2-mile blue line threading through Akron, Ohio – our corporate headquarters city. The marathon attracts more than 10,000 runners annually and has an $8 million economic impact to the City of Akron. Since its inception in 2003, more than $6 million has been raised for local charities.


(1)Letter from
Our Chair

 

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.

(3)

Filing Party:

(4)

Date Filed:

 

March 23, 2022

 


LOGO


LOGO


LOGO

 

 

Message to

Letter from Our

Shareholders

LOGO Chair

 

  April 1, 2020

LOGO

  

LOGO

Donald T. Misheff

Chair of the Board

 

Dear FellowFirstEnergy Shareholders:

Thank you for your continued confidence in FirstEnergy. On behalf of your Board of Directors, and management, weI cordially invite you to attend our 20202022 Annual Meeting of Shareholders on May 19, 2020.17, 2022. The attached Notice of the 20202022 Annual Meeting of Shareholders (the “Meeting”) and Proxy Statement containscontain information about the business to be conducted at the Meeting. To make key information easierWe also encourage you to find,read about your Board, our environmental, social and governance practices, and our executive compensation programs in the accompanying Proxy Statement.

We will conduct the Meeting online for the health and safety of our shareholders, employees and the broader community. See the “Attending the Virtual Annual Meeting” section of “Questions and Answers about the Annual Meeting” in the accompanying Proxy Statement for instructions on how to register to participate in the virtual annual meeting.

A Culture of Doing the Right Thing

The events since mid-2020 have been deeply humbling for FirstEnergy’s Board and leadership. We are working tirelessly to move forward as a stronger, integrity-bound organization that puts doing the right thing at the heart of our business as we serve our customers and their evolving energy needs. We have taken decisive actions over the past two years and are focused on building a culture of uncompromising compliance, ethics, integrity and accountability. At the same time, we are strengthening our business and putting customers at the heart of all we do. We remain committed to working cooperatively with stakeholders and demonstrating FirstEnergy’s core values to rebuild trust and confidence in the Company while delivering safe, reliable and affordable electric service.

Executing Our Strategy

FirstEnergy’s strategy is to become a premier electric utility built on a strong foundation, with an unrelenting customer focus, that leads and enables the energy transition. Highlights of our progress include:

We are building a stronger, diverse and inclusive culture to better serve customers, improve operational performance, spark innovation, and provide a more rewarding and equitable work experience for all employees. Diversity, Equity and Inclusion, much like Safety, is a core value that is foundational to everything we do. Recognizing, developing and leveraging the unique strengths of our employees helps make FirstEnergy a more innovative and resilient company, and motivates employees to build their careers with us.

We are unlocking opportunities to enhance our business, including through FE Forward, our customer-focused effort to modernize our Company, unlock our potential and deliver sustainable value to all stakeholders.

We announced $3.4 billion of equity financings with two premier global infrastructure funds. These transformative financings are expected to strengthen FirstEnergy’s financial position, capitalize on incremental investment opportunities and address all non-SIP/DRIP equity plans. Blackstone Infrastructure Partners invested $1 billion in FirstEnergy common equity and Brookfield Super-Core Infrastructure Partners is acquiring a 19.9% minority interest in FirstEnergy Transmission, LLC for $2.4 billion. These transactions allow us to strengthen our business and fund strategic capital expenditures that will help us support our climate strategy and enable a sustainable energy transition.

FIRSTENERGY CORP.


Letter from
Our Chair

We remain committed to working cooperatively with stakeholders and demonstrating FirstEnergy’s core values to rebuild trust and confidence in the Company while delivering safe, reliable and affordable electric service.

An Engaged Board Dedicated to Strong Corporate Governance

Your Company is dedicated to strong corporate governance, which we view as foundational to our business and important to advancing the interests of our shareholders. Your Board oversees and guides FirstEnergy’s business strategy, including your Company’s efforts to drive integrity and accountability and make progress on environmental, social and governance matters.

Our stakeholder engagement efforts are also offeringvital to FirstEnergy’s success. In 2021 and early 2022, consistent with prior years’ practices, we held numerous conversations with shareholders. With support from your Board, the Company’s Chief Executive Officer and the management team, our integrated shareholder outreach team, consisting of members of Corporate Responsibility, Corporate Secretary department, Legal, Finance, Human Resources and Investor Relations, engages with a broad base of investors throughout the year. Feedback and suggestions gathered from these engagements have helped the Board shape our policies, practices and disclosures.

Since the beginning of 2021, your Board has expanded with seven new interactive proxy statementdirectors, five of whom are independent. Your new directors bring strong backgrounds and experience with enhanced navigation, availablepublicly traded companies and add unique insights to our Board, which have been particularly valuable during this period of change and renewal atwww.FirstEnergyCorp.com/AnnualMeeting.

In 2019, FirstEnergy successfully executed your Company. To further refresh the Board, Jana T. Croom and Sean T. Klimczak have been nominated for election at the 2022 Annual Meeting of Shareholders, and six long-term Board members will not stand for reelection: Michael J. Anderson, Thomas N. Mitchell, Christopher D. Pappas, Luis A. Reyes, Julia L. Johnson and myself. On behalf of this group, it has been our customer-focused growth strategiesprivilege to serve on your Board, and metI am confident your Company will continue to grow stronger under the leadership and guidance of our commitments as we continued our transformation into a high-performance, pure-play regulated utility. 2022 director nominees.

We also took important stepsrecognize the importance of diversity in our business and leadership, including on proactive initiatives designedour Board. Our Board nominees demonstrate diversity in the form of gender, ethnicity, age, tenure, thought, background and experiences. Of note, women and ethnic minorities currently represent 33% of our Board nominees.

Our Bright Future

On behalf of your board, I want to meetexpress my appreciation for the future energy needsdedicated efforts of customers, drive shareholder value and engagement, improve safety, and build a more innovative, diverse andFirstEnergy employees. Their performance is helping our Company achieve positive, sustainable corporate culture. These efforts are guided by our mission to be a forward-thinking electric utility powered by a diverse team of employees committed tomomentum, while making customers’ lives brighter, the environment better and our communities stronger. Our accompanying proxy statement demonstrates our ongoing commitment

Your Board and management team are deeply committed to our values, including:

1

Executing on Strategy

In 2019, we continued executing our strategy for long-term, sustainable growth that benefits our customers, shareholders, communities and employees. Through our multi-billion-dollar, long-term capital investment program, we are focused on strengthening and modernizing our distribution and transmission systems and enhancing service reliability for our 6 million customers. In 2019, our utilities received approval for infrastructure investment initiatives in Ohio, Pennsylvania, New Jersey and Maryland that will help ensure continued reliability while preparing for the distribution grid of the future.

As we transformed our Company, we continued to focus on execution, financial discipline and operational excellence. We’ve built a strong record of consistently meeting our commitments to investors, including five consecutive years of achieving the guidance we provided to the financial community. Our Board also declared a 3% increase for our most recent quarterly dividend payment, marking the second increase in a year. We’re proud of our progress and remain committed to meeting customers’ needs for years to come as we drive stable and predictable financial performance and create value for investors.

2

Focus on Environmental, Social & Governance (“ESG”) and Corporate Responsibility

We are committed to carrying out our vision of providing energy and improving lives safely and responsibly. Our Board believes that our focus on ESG and corporate responsibility demonstrates our Company’s Core Values, Behaviors, and mission statement, and drives value for the Company and our stakeholders. In 2019, the Company informed and engaged stakeholders onESG-related topics through the publication of our Climate Report and Corporate Responsibility Report, along with increased engagement with rating and ranking entities. In 2020, we’re driving continued accountability and transparency, particularly related to ESG risks, opportunities, goal setting and strategies. To reinforce and align our executives with these objectives, a portion of our annual incentive cash program is tied to ESG related goals, including Diversity & Inclusion, environmental and safety.

3

Engaging with Shareholders

We continued our investor outreach in 2019 to discuss our strategy, governance practices, executive compensation and corporate responsibility. The input we received continues to be incorporated into your Board’s deliberations and decision making. We highly value this dialogue and as a Board, we discuss and consider the feedback shared. We look forward to continuing this engagement with our shareholders in 2020.

creating value for you. We encourageare continuing to work quickly, decisively and with a strong sense of urgency to address challenges, while executing key initiatives to enhance shareholder value and reshape FirstEnergy into a more resilient, industry-leading organization of the future. As always, your Board and management team will continue to regularly engage with you toand keep you updated on your Company’s progress. Please read more about your Board, our corporateits environmental, social and governance practices, and our executive compensation programs in the accompanying proxy statement.Proxy Statement. We’re grateful for your support and thank you in advance for voting promptly.promptly.

 

Sincerely, 
 

LOGO

Charles E. Jones

President and Chief Executive Officer

LOGO
 

LOGO

Donald T. Misheff

Chair of your Board Chairman

2022 PROXY STATEMENT


Notice of Annual Meeting of Shareholders

Notice of Annual Meeting of Shareholders

Please carefully review this Notice, the Company’s Annual Report to Shareholders for the year ended December 31, 20192021 (the “2019“2021 Annual Report”), and the accompanying proxy statementProxy Statement and vote your shares by following the instructions on your proxy card/voting instruction form or Notice of Internet Availability of Proxy Materials to ensure your representationvote is cast at the 2022 Annual Meeting.Meeting of Shareholders (the “Annual Meeting”).

 

  

Date and Time    DATE AND TIME

Tuesday, May 19, 2020 17, 2022

8:00 a.m. EST

EDT

Location    

RECORD DATE

March 18, 2022

 

John S. Knight CenterLOCATION

77 E. Mill Street

Akron, OH 44308To protect the health and safety of shareholders, employees, and the broader community during the COVID-19 pandemic, your Board has decided that the Annual Meeting will be a virtual meeting of shareholders, conducted via live webcast, and will take place at: www.cesonlineservices.com/fe22_vm. Online access will begin at 7:30 a.m. EDT on May 17, 2022. There will be no physical location for in-person attendance at the Annual Meeting.

 

If you plan to attend the virtual Annual Meeting, you must register in advance. See the “Attending the Virtual Annual Meeting” section of the “Questions and Answers about the Annual Meeting” in the accompanying proxy statementProxy Statement for instructions on how to register.

We are monitoring novel coronavirus (COVID-19) developments Shareholders may only participate online and we believe that alternative Annual Meeting arrangements may be advisable or required, such as utilizing a virtual meeting or a change to the date, time or location. If we take these steps, we will announce our decision in advance via a press release, post additional information atmust www.FirstEnergyCorp.com/AnnualMeetingpre-register, and will also make a public filing with the Securities and Exchange Commission. As always, we encourage you to vote your shares prior to ourand ask questions at the virtual Annual Meeting.

Agenda    

   Elect the 11 nominees named in the accompanying proxy statement to the Board of Directors to hold office until the 2021 Annual Meeting of Shareholders and until their successors shall have been elected;

   Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2020;

   Approve, on an advisory basis, named executive officer compensation;

   Approve the FirstEnergy Corp. 2020 Incentive Compensation Plan;

   Approve a management proposal to amend the Company’s Amended and Restated Code of Regulations to authorize the Board of Directors to make certain future amendments to the Company’s Amended and Restated Code of Regulations;

   Vote on one shareholder proposal, if properly presented at the Annual Meeting; and

   Take action on other business that may come properly before the Annual Meeting and any adjournment or postponement thereof

Record Date    

March 20, 2020

Only shareholders of record as of the close of business on March 20, 2020,18, 2022, or their proxy holders, may vote at the Annual Meeting.

AGENDA

LOGO

LOGO

On behalf of the Board of Directors,

 

LOGO

LOGOMary M. Swann

Ebony L. Yeboah-Amankwah

Vice President, DeputyCorporate Secretary and Associate General Counsel

Corporate Secretary & Chief Ethics Officer

Akron, Ohio

This Notice and accompanying Proxy Statement are being mailed or made available to shareholders on or about April 1, 2020.March 23, 2022.

 

 

Important Notice Regarding Availability of Proxy Materials

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 19, 2020.17, 2022. The accompanying proxy statementProxy Statement and the 20192021 Annual Report are available atwww.FirstEnergyCorp.com/AnnualMeeting.

AnnualMeeting.

 


Table of Contents

 

FIRSTENERGY CORP.


Proxy Statement Summaryi
Environmental, Social & Governance (“ESG”) Overview

Table of
Contents

 v

      Table of Contents

Human Capital Management Overviewvi
 

PROXY STATEMENT SUMMARY

     6

1

Corporate GovernanceCORPORATE GOVERNANCE & Board of DirectorsBOARD OF DIRECTORS 

  Corporate Governance and Board of Directors Information  1
Audit Committee Report13 10
Matters Relating to the Independent Registered Public Accounting Firm11

Director Compensation in Fiscal Year 2019

12
Director Qualifications15
  Biographical Information and Qualifications of Nominees for Election as Directors  18

224

Items to Be

Voted On

 
  Board Committees31 

ITEMS TO BE VOTED ON

  Items to Be Voted On  2435

COMMITMENTS TO EMPLOYEES & ESG

Our Commitment to Employees43 
  Our Commitment to ESG51 
 

3EXECUTIVE
& DIRECTOR
COMPENSATION

Executive

Compensation

  Executive Compensation  4354
  

Compensation Committee Report

  4354
  

Compensation Discussion and Analysis

  4354
  

Executive Summary

  4556
  

Compensation Tables

  75

81
Director Compensation in Fiscal Year 202197
 

4OTHER
IMPORTANT
MATTERS  &

Security

Ownership &

Other Important

MattersQ&A ABOUT THE
ANNUAL MEETING

  Security Ownership of Management  96100
  

Security Ownership of Certain Beneficial Owners

  97102
  Compensation Committee Interlocks and Insider Participation  98102
  

Certain Relationships and Related Person Transactions

  98
103 
  Audit Committee Report  107

5

Questions and

Answers

About

Matters Relating to the Annual

Meeting

Independent Registered Public Accounting Firm
108
  Questions and Answers about the Annual Meeting  100109
  

Proxy Materials

  100109
  

Voting Matters

  102111
  

How You Can Vote

  104113
  

Attending the Virtual Annual Meeting

  106114
  

Proposals and Business by Shareholders

  107115
  

Obtaining Additional Information

117

 

2022 PROXY STATEMENT

 109


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 Appendices

MISSION STATEMENT

We are a forward-thinking electric utility centered on integrity, powered by a diverse team of employees committed to making customers’ lives brighter, the environment better and our communities stronger.

OUR CORE VALUES

FirstEnergy’s core values encompass what matters most to us. They guide the decisions we make and the actions we take. Our core values should inspire our actions today and shine a light on who we aspire to be in the future.

LOGO

Integrity

We always act ethically with honesty, humility and accountability.

LOGO

Safety

We keep ourselves and others safe.

LOGO

Diversity, Equity & Inclusion

We embrace differences, ensure every employee is treated fairly and create a culture where everyone feels they belong.

LOGO

Performance Excellence

We pursue excellence and seek opportunities for growth, innovation and continuous improvement.

LOGO

Stewardship

We positively impact our customers, communities and other stakeholders, and strive to protect the environment.

FIRSTENERGY CORP.

1


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

CODE OF CONDUCT

FirstEnergy’s Code of Conduct, The Power of Integrity, lays the foundation for what we expect from all employees. It reflects our collective commitment to keep integrity at the forefront of everything we do — a pledge underscored by the inclusion of integrity in our mission, core values and company strategy.

COMPANY STRATEGY

Our refined company strategy is built on three pillars: A Strong Foundation, An Unrelenting Customer Focus and Leading and Enabling the Energy Transition. We have defined what each of these pillars means to FirstEnergy in terms of where we will focus our efforts and investments. We believe that focusing on these core pillars will enable FirstEnergy to become a premier electric utility.

 

 

LOGO

22022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

ESG FOCUS

The pillars of our company strategy are supported by our environmental, social and governance (ESG) priorities and aligned with our commitment to corporate responsibility. Because of this strategic integration, improving our ESG performance advances our strategy and helps us become a more innovative, diverse, sustainable and industry-leading company.

 

FirstEnergy Corp. 2020 Incentive Compensation Plan

ESG Priorities:

  
A-1 
LOGO

Proposed AmendmentENVIRONMENTAL:

Protect the environment by minimizing our impact, improving the sustainability of our operations, executing our Climate Strategy and finding opportunities to Amended and Restated Code of Regulations to Authorizeenhance the Board of Directors to make certain future amendments to the Amended and Restated Code of Regulations.ecosystems we interact with

     
B-1 
LOGO

SOCIAL:

Support the development of an inclusive, equitable, rewarding and safe work atmosphere, while empowering our diverse and innovative team to make our customers’ lives brighter and our communities stronger

LOGO

GOVERNANCE:

Maintain oversight of significant company issues and strengthen risk management; build a strong, centralized corporate compliance program and culture of ethics and integrity; continue stakeholder engagement efforts and provide consistent, transparent disclosures on ESG topics

FE FORWARD

Our FE Forward improvement initiatives are designed to enhance the organization, focus on performance excellence, and refocus the investment strategy through a range of opportunities. The organizational changes, simplification and centralization of our processes and practices, and the implementation of more modern tools through FE Forward are helping to create a more efficient FirstEnergy.

For example, our transition from 10 separately managed distribution companies to our new five-state operating model and the corresponding changes to our organizational structure are designed to centralize decision-making and the development and implementation of business solutions, leading to greater consistency across the company. In addition, our new centralized and strategic Customer Experience function is helping drive improvements essential to our customer-focused strategic objectives: deliver a modern digital customer experience, accelerate widespread electrification, provide sustainable products and solutions, and focus on customer affordability.

CLIMATE STRATEGY

Enabling the energy transition

Our commitment to climate is a significant component of our company’s overarching strategy, especially our desire to enable the transition to a clean energy future. Executing our climate strategy and advancing the transition to clean energy requires addressing, among other things: emerging federal and state decarbonization goals; physical risks of climate change; industry trends and technology advancements; and customer expectations for cleaner energy, increased usage control, and more sustainable alternatives in transportation, manufacturing and industrial processes. Through our investment plan, we aim to enhance the resiliency, reliability and security of the electric system and support the integration of renewables, electric vehicles, grid modernization improvements and other emerging technologies.

Reducing GHG Emissions

As part of our climate strategy, we are also committed to reducing greenhouse gas (GHG) emissions. We’ve pledged to achieve carbon neutrality by 2050, with an interim 30% reduction in greenhouse gases within our direct operational control by 2030, based on 2019 levels.

Our GHG goal encompasses companywide emissions across our transmission, distribution and regulated generation operations.

FIRSTENERGY CORP.

3


Proxy Statement 
Summary

 

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

LOGOLOGO

2020 Annual MeetingKey steps in further reducing our emissions and improving the sustainability of Shareholders(the “Annual Meeting” or the “Meeting”)

our operations include:

 

 Time and Date: 8:00 a.m. EST on Tuesday, May 19, 2020

Location: John S. Knight Center, 77 E. Mill Street, Akron, Ohio

 

We are monitoring novel coronavirus (COVID-19) developments and we believeReplacing Aging Equipment: We’re responsibly replacing aging equipment on our transmission system that alternative Annual Meeting arrangements may be advisable or required, such as utilizingcontains sulfur hexafluoride (SF6), a virtual meeting or a change to the date, time or location. If we take these steps, we will announce our decisiongreenhouse gas commonly used in advance via a press release, post additional information atwww.FirstEnergyCorp.com/AnnualMeeting, and will also make a public filing with the Securities and Exchange Commission. As always, we encourage you to vote your shares prior to our Annual Meeting.electric utility equipment.

 

  Record Date

Electrifying our Vehicle Fleet: March 20, 2020We’re targeting 30% electrification of our light-duty and aerial truck fleet by 2030 and 100% electrification by 2050. To reach our electrification goal, we’ve committed to 100% electric or hybrid vehicle purchases for our light-duty and aerial truck fleet moving forward, beginning with the first hybrid electric vehicle additions to the fleet in 2021.

 

  

Using Generation Efficiencies and Flexibility: We’re utilizing operational flexibilities, such as heat rate improvements through equipment upgrades, operational monitoring systems, and auxiliary power reductions at our generation facilities that will enable us to reach our interim 2030 goal of a 30% GHG reduction from 2019 levels, while continuing to provide customers with safe and reliable electricity.

Transitioning Away from Coal Generation: We expect to thoughtfully transition away from our regulated coal generation fleet no later than 2050 and in 2021, FirstEnergy sought approval to construct a solar generation source of at least 50 MW in West Virginia. Also in 2021, FirstEnergy filed plans with the Public Service Commission of West Virginia to comply with EPA Effluent Limitation Guideline rules that would keep Monongahela Power’s generation plants responsibly operating beyond 2028; however, FirstEnergy intends to begin a broad stakeholder dialogue regarding planned operational end dates of 2035 and 2040 for Ft. Martin and Harrison, respectively, which further supports our Climate Strategy.

COMPANY CULTURE

Transforming our company culture is foundational to achieving our company’s strategy. Our core values are the foundation of our transformation, our strategy and ultimately FirstEnergy’s long-term success. Integrity, Safety, Performance Excellence, Diversity, Equity and Inclusion (“DEI”), and Stewardship are the bedrock from which we operate, behave and interact every day. It is critical to our long-term growth and endurance to have a strong cultural foundation of ethics and integrity where employees feel psychologically safe to be themselves, speak up and bring their best to work every day. Creating a work environment that allows for greater diversity, equity and inclusion and prioritizes employees’ safety, health and well-being is also key to that cultural transformation. As part of our transformation we strive to prioritize, operationalize and live these values in everything we do, internally and externally. They guide our behavior, our decisions and ultimately the actions that create our performance and success.

4Voting2022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

HUMAN CAPITAL MANAGEMENT

FirstEnergy’s workforce is essential in our ability to continue moving our company forward by keeping each other safe, delivering value to our stakeholders, and transforming our culture in alignment with our core values. While 2021 continued to present unprecedented challenges, our commitment to our employees and their health and safety has not wavered. Integrity is critical to our path to a stronger, more sustainable FirstEnergy, and reflects our collective commitment to ensuring that we conduct business ethically, help all employees do the right thing and treat our coworkers and communities with the respect we all deserve. Further details on FirstEnergy’s COVID-19 response, our focus on keeping our core values and behaviors at the center of everything we do, and our desire to help our employees to do their best each day is included in the “Our Commitment to Employees” section of this Proxy Statement.

FIRSTENERGY CORP.

5


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Proxy Statement Summary

2022 Annual Meeting of Shareholders (the “Annual Meeting” or the “Meeting”)

Time and Date: 8:00 a.m. EDT on Tuesday, May 17, 2022

Location: ShareholdersTo protect the health and safety of recordshareholders, employees, and the broader community during the COVID-19 pandemic, your Board of Directors (“Board”) has decided that the Annual Meeting will be a virtual meeting of shareholders, conducted via live webcast, and will take place at: www.cesonlineservices.com/fe22_vm. Online access will begin at 7:30 a.m. EDT on May 17, 2022.

Record Date: March 18, 2022

Voting: Shareholders of FirstEnergy Corp. (“FirstEnergy”, the “Company”, “we”, “us” or “our”) common stock as of the Record Date are entitled to receive the Notice of Annual Meeting of Shareholders and they or their proxy holders may vote their shares at the Annual Meeting.

 

 

AdmissionAdmission:: If you plan to attend the Annual Meeting, you must register in advance. For instructions on how to register, seeSee the “Attending the Virtual Annual Meeting” section of the “Questions and Answers about the Annual Meeting” below.in the accompanying Proxy Statement for instructions on how to register. Shareholders may only participate online and must pre-register to vote and ask questions at the virtual Annual Meeting.

Voting MattersVOTING MATTERS

 

 

Item

1

  

 

Elect the 1112 nominees named in this proxy statementProxy Statement to the Board of Directors. Refer to page 2435 for more detail.

Your Board recommends you voteFOR this item.

  

Item

2

  

 

Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2020.2022. Refer to page 2536 for more detail.

 

Your Board recommends you voteFOR the election of all the nominees listed in this Proxy Statement.Your Board recommends you vote FOR this item.

Item

3

  

 

Approve on an advisory basis named executive officer compensation. Refer to page 2637 for more detail.

Your Board recommends you voteFOR this item.

  

ItemItems

44-5

  

 

Approve the FirstEnergy Corp. 2020 Incentive Compensation Plan. Refer to page 27 for more detail.

Your Board recommends you voteFOR this item.

Item

5

Approve a management proposal to authorize the Board to make certain future amendments to the Amended and Restated Code of Regulations.Shareholder proposals. Refer to page 38 for more detail.

Your Board recommends you voteFOR this proposal.

  

Item

6

Shareholder Proposal Requesting Removal of Aggregation Limit for Proxy Access Groups. Refer to page 40 for more detail.

XYour Board recommends you vote AGAINSTFOR this shareholder proposal.

item.
XYour Board recommends you vote AGAINST these items.

 

62022 PROXY STATEMENT

i


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

LOGO

HOW TO CAST YOUR VOTE

 

How to Cast Your Vote

Your vote is important! Even if you plan to attend our Annual Meeting in person,virtually, please cast your vote as soon as possible by:

 

LOGO

 

LOGO

LOGO

 

Do you hold shares directly with FirstEnergy or in the FirstEnergy Corp. Savings Plan?

Use theinternet at
www.cesvote.com

 

 Call toll-free at
1-888-693-8683
 LOGO

INTERNET

LOGO

MAIL

Use the internet at www.cesvote.comMail by returning your proxy
card/voting instruction form(1)
LOGO

TELEPHONE

LOGO

DURING THE MEETING

Call toll-free at 1-888-693-8683This year’s meeting will be virtual. For details on voting your shares during the meeting, see “Questions and Answers about the Annual Meeting.”

 

Do you hold shares through a bank, broker or other institution (beneficial ownership)? (2)

Use theinternet at
www.proxyvote.com
Call toll-free at
1-800-454-8683
Mail by returning(1) If your proxy
card/voting instruction form

(1)If yourpre-addressed envelope is misplaced, send your proxy card to Corporate Election Services, Inc., the Company’s independent proxy tabulator and Inspector of Election. The address is FirstEnergy Corp., c/o Corporate Election Services, P.O. Box 1150, Pittsburgh, PA 15230.

Do you hold shares through a bank, broker or other institution (beneficial ownership)?(2)
Use the internet at
www.proxyvote.com
Call toll-free at
1-800-454-8683
Mail by returning your proxy
card/voting instruction form

(2) Not all beneficial owners may be able vote at the web address and phone number provided above. If your control number is not recognized, please refer to your voting instruction form for specific voting instructions.

Please follow the instructions provided on your proxy card/voting instruction form (the “proxy card”), Notice of Internet Availability of Proxy Materials, or electronic or other communications included with your proxy materials. Also referShareholders as of the March 18, 2022, Record Date may attend the virtual Annual Meeting and vote if registered in advance by following the Advance Registration Instructions below. Refer to the “How You Can Vote” section of the “Questions and Answers about the Annual Meeting” section below for more details. All shareholders of record may vote in person atdetails, including the annual meeting. Beneficial owners may vote in person at the meeting as described in response toAdvance Registration Instructions and questions 2, 13 and 13 of the “Questions and Answers about the Annual Meeting” below.15.

You may have multiple accounts and therefore receive more than one proxy card or voting instruction form and related materials. Please vote each proxy card and voting instruction form that you receive.

FIRSTENERGY CORP.

7


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Your Board Nominees

The following table provides summary information about each member of your Board of Directors (your “Board”)nominee standing for election to your Board. Each member stands for election annually.

Your Board nominees are highly qualified individuals that represent a diversity of gender, ethnicity, age, tenure, thought, background and experiences. Your Board is periodically refreshed with the addition of candidates whom we believe bring new ideas and fresh perspectives into the boardroom.

           Committee Memberships  

Number

of Other

Public

Company

Boards(1)

 

  Name

 

  

Age

 

   

Director

Since

 

 

Independent

 

 

Audit

 

 

Compensation

 

 

Corporate

Governance

and Corporate

Responsibility

 

 

Finance

 

 

Operations,
Safety and
Nuclear
Oversight

 

  Michael J. Anderson

   68   2007 Yes Chair      1

  Steven J. Demetriou

   61   2017 Yes       1

  Julia L. Johnson

   57   2011 Yes   Chair    3

  Charles E. Jones

   64   2015 No       0

  Donald T. Misheff

   63   2012 Yes       2

  Thomas N. Mitchell

   64   2016 Yes     Chair  0

  James F. O’Neil III

   61   2017 Yes  Chair     2

  Christopher D. Pappas

   64   2011 Yes    Chair   2

  Sandra Pianalto

   65   2018 Yes       3

  Luis A. Reyes

   68   2013 Yes       0

  Leslie M. Turner

   62   2018 Yes          0

Your Board has nominated Ms. Jana T. Croom and Mr. Sean T. Klimczak for election to your Board at the Annual Meeting. In addition, Messrs. Michael Anderson, Chris Pappas, Don Misheff, Tom Mitchell, Luis Reyes and Ms. Julia Johnson are not standing for re-election at the Annual Meeting.

LOGO

LOGO

LOGO

Jana T. Croom, 45

Independent Director Nominee

Chief financial officer of

Kimball Electronics, Inc.

LOGO

Steven J. Demetriou, 63

Independent Director

Chairman, Chief executive officer and

Director of Jacobs Engineering Group Inc.

| Other public boards 2

LOGO

Sean T. Klimczak, 45

Independent Director Nominee

Senior managing director and

global head of infrastructure of

The Blackstone Group L.P.

| Other public boards 1

LOGO

Jesse A Lynn, 51

Independent Director

General counsel of

Icahn Enterprises LP

| Other public boards 2

LOGO

Steven E. Strah, 58

Director

President and Chief Executive

Officer of FirstEnergy Corp.

LOGO

Andrew Teno, 37

Independent Director

Portfolio manager of Icahn Capital LP
| Other public boards 2

 

(1)
82022 PROXY STATEMENT


Proxy
Summary

 

As defined under New York Stock Exchange ListedCorporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A


LOGO

Lisa Winston Hicks, 55

Independent Director

Chair of the board for

MV Transportation, Inc.

LOGO

Paul Kaleta, 66

Independent Director

Retired executive vice president and
general counsel at First Solar, Inc.

LOGO

James F. O’Neil III, 63

Independent Director

Chief executive officer and vice chairman

of Orbital Energy Group
| Other public boards 1

LOGO

John W. Somerhalder II, 66

Vice Chair and Executive Director of
FirstEnergy Corp.

LOGO

Leslie M. Turner, 64

Independent Director

Retired senior vice president,

general counsel and corporate secretary of

The Hershey Company Manual Section 303A

LOGO

Melvin D. Williams, 58

Independent Director

Retired president of Nicor Gas and

senior vice president of

Southern Company Gas

OUR COLLECTIVE DIRECTOR NOMINEE SKILLS

LOGO

FIRSTENERGY CORP.

9


Proxy
Summary

Corporate
Governance Standards Frequently Asked Questions.& Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

ii


LOGO

Key Facts About Your Board

We seek to maintain a well-rounded and diverse Board representing a wide breadth of experience and perspectives that balances the institutional knowledge of longer-tenured directors with the fresh perspectives brought by newer directors. Below are highlights regarding our 11 director nominees standing for election to your Board.

LOGO

Corporate Governance HighlightsFeatures

The CompanyYour Board is committed to strong corporate governance, which we believe is important to the success of our business and in advancing shareholder interests. Highlights include:

 

  
Independent Oversight  

  Board & Committee Oversight

  Separate Board Chairman androles for Chief Executive Officer (our “CEO”(“CEO”)

and Independent Board ChairmanChair

  All directors are independent, other than (i) our Vice Chair of the Board and Executive Director and (ii) our CEO

  Board  Board’s standing committees are comprised entirely of independent directors

  Independent directors regularly hold executive sessions without management at Board and committee meetings

 
 Board & Committee Oversight

  Enterprise risk oversight is provided by the full Board and its committees

  Corporate Governance and Corporate Responsibility Committee oversees corporate citizenship practices including the political spending policy and ESG and sustainability initiatives

  Audit Committee oversees risks related to cybersecurity, in addition to matters related to financial statements and compliance

  Compensation Committee ensureshelps ensure alignment between pay and performance and oversees the Company’s compensation philosophy and practices and human capital initiatives

 

  Compliance Oversight Sub-Committee of the Audit Committee, comprised of all independent directors and supported by independent counsel, oversees implementation of compliance program enhancement

 

Shareholder Rights

& Accountability

  

  Shareholder Rights & Accountability

  Board Practices

  Annual election of all directors

  Shareholders of 25 percent or more shares outstanding and entitled to vote may call a special meeting

  Clear, effective process for shareholders to raise concerns to your Board

  Majority voting standard for uncontested director elections, (approved by shareholders in 2019), with an accompanying Director Resignation Policy

  General majority voting power threshold (approved by shareholders in 2019)

  Direct investor relations and governance engagement and outreach to shareholders

  Advisory vote onto approve named executive officer compensation is held on an annual basis, consistent with the shareholder advisory vote on frequency

  Shareholders may nominate directors through proxy access (approved by shareholders

  Shareholders of 25 percent or more shares outstanding and entitled to vote may call a special meeting. Based on your Board’s ongoing review we anticipate seeking shareholder approval in 2019)2023 to further reduce this threshold to 20 percent or more.

  No poison pill

 
 

  Consideration of your Board’s ethnic and gender diversity, age, experience and skills and other attributes when evaluating nominees for your Board

  A robust annual evaluation process: full Board evaluation including third-party interviews, Board committee evaluations and individual director evaluations

Practices

  Mandatory director retirement age of 72 pursuant to our Corporate Governance Policies

  Policy to consider diversity for director candidates

  Goal to maintain at least 30% diverse members (by race, ethnicity and gender combined) for the foreseeable future

  Actively seek to include in the director nominee pool candidates with diverse backgrounds, skills and experience, including highly qualified women and people of color

  A robust annual evaluation process, including full Board evaluation, Board committee evaluations and individual director evaluations

  Policy requiring directors who reach the age of 72to tender their resignations to your Board to be effective upon acceptance by the Board.

  Corporate Governance and Corporate Responsibility Committee and full Board engage in rigorous director succession planning

  Comprehensive  Extensive director orientation and continuing education

  Robust stock ownership guidelines

  Anti-Hedging and Anti-Pledging Policies

  No poison pill

Our corporate governance practices are described in greater detail in the “Corporate Governance and Board of Directors Information” section beginning on page 1.13.

 

iii

102022 PROXY STATEMENT


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Executive Compensation Highlights

Under our compensation design, the percentage of pay that is based on performance increases as the responsibilities of a Named Executive Officer’sOfficer (“NEO”) responsibilities increase. As shown in theThe charts below illustrate the mix of annual base salary 2019 FE Short-term Incentive Programrate and 2021 short-term incentive program (“FE STIP”) and Long-term Incentive Programlong-term incentive program (“FE LTIP”) awards approximately 87%for our NEOs. Approximately 85% of the CEO’s total target pay and 74%76% of our other NEOs’ average target pay is variable and could be reduced to zero if performance metrics are not met at a minimum of threshold level. For the CEO and other NEOs, the values shown are effective as of December 31, 2021. Mr. Somerhalder’s pay mix for 2021 is made up of approximately 19% for his base salary, 19% for his target STIP award, 31% for his performance-based restricted stock units (“RSUs”) and 31% for his time-based restricted stock. The charts below do not include Mr. Somerhalder due to the transitional nature of his role.

 

CEO 2019 Pay Mix at Target

LOGO

Other NEOs 2019 Pay Mix at Target

LOGOLOGO

We believe what we do and don’t do with respect tothat our executive compensation alignsphilosophy and practices align with the long-term interests of our shareholders and with commonly viewed best practices in the market.

 

What We DoWHAT WE
DO

 

LOGO

  

LOGO What We Don’t Do  Pay-for-performance

Pay-for-performance

•  FE  LTIP is 100% at risk, with no solely time-based vesting requirements

•  FE  STIP is 100% at risk

 

LOGO   Threshold andcaps on incentive awards:

  Threshold financial performance hurdle for Operating Earnings must be achieved before any FE STIP award is paid

  Individual FE STIP awards capped at 150% (vs. industry caps at 200%) (consistent with our peer companies)

  Individual FE LTIP awards capped at 200% (consistent with the industry)our peer companies) and capped at 100% if absolute Total Shareholder Return (“TSR”) over the performance period is negative

 

LOGO Non-overlapping financial performance measures in our short-STIP and long-term incentive plansLTIP

LOGO   Combination of absolute and relative performance goals

 

LOGO   Robust stock ownership guidelines

 

EnhancedLOGO   Clawback policy applicable to financial and reputational harm, and other Detrimental Activitydetrimental activity

 

LOGO   Mitigate undue risk through compensation design, corporate policies, and effective governance

 

LOGO   AnnualSay-on-Pay vote

 

LOGO   Double-trigger change in control (“CIC”) provisions

 

Independent compensation consultant for theLOGO   Compensation Committee withcomprised of only independent directors supported by an independent compensation consultant

WHAT WE
DON’T DO

 

LOGO

  

LOGOLOGO    No executive hedging or pledging is permitted

 

LOGOLOGO    No employment agreements

 

LOGOLOGO    No excise taxgross-upsgross-up provisions for our NEOs

 

LOGOLOGO    No excessive perquisites

LOGO    No repricing of underwater stock options without shareholder approval – stock options are not currently used in plan design

 

LOGO    No excessive perquisites

LOGOLOGO    No payment of dividend equivalents on unearned awards

LOGO    No new entrants in the Supplemental Executive Retirement Plan (“SERP”) – SERP closed since 2014

Our executive compensation practices are described in greater detail in the “Executive Compensation” section beginning on page 43.54.

 

iv

FIRSTENERGY CORP.

11


    ESG Overview    

LOGO

LOGO

FirstEnergy’s Corporate Responsibility efforts are guided by Environmental, Social, and Governance, or ESG principles. These ESG principles reinforce our commitment to our Mission Statement. The Company is dedicated to accountability and transparency of ESG related issues, as well as demonstrating the value that these initiatives present to the Company and our stakeholders.

Accountability

Accountability for Corporate Responsibility at the Company spans the entire organization and starts at the top with the Board’s Corporate Governance and Corporate Responsibility committee. In addition, we have a dedicated team of full-time Corporate Responsibility employees within our Strategy organization and is guided by our Senior Vice President, Strategy, and an executive, cross-functional Steering Committee. Together, these teams guide the development of internal and external initiatives to improve long-term sustainability of the Company. To drive accountability in this critical area, our annual cash incentive program includes metrics related to ESG, such as Diversity & Inclusion, environmental matters and safety goals.

Transparency

The Company recognizes that transparency on ESG related issues is a critical component of Corporate Responsibility. In 2019, we focused on increasing our ESG disclosures and transparency. Key examples include:

Climate Report

Corporate Responsibility Report and dedicated website at http://www.fecorporateresponsibility.com/

Increased engagement with rating and ranking entities, resulting in increased scores from entities such as RobecoSAM and ISS

Demonstrating Value

In 2020, the Company is focusing on demonstrating the value Corporate Responsibility and ESG initiatives deliver to all our stakeholders. These efforts include:

Goal setting and policy development driven by the results of a materiality assessment

Increased alignment with reporting frameworks such as the Task Force for Climate Related Disclosures (TCFD), Global Reporting Initiative (GRI), and the Sustainable Accounting Standards Board (SASB)

Cross-department projects that demonstrate our commitment to our Mission Statement

Promoting Strong ESG Policies through Board-level oversight

A key driver and component of our success is a strong foundation of Corporate Governance practices and policies that promote transparency, accountability and engagement exemplified by your Board. As further discussed earlier in the Proxy Statement Summary and in the Corporate Governance and Board of Directors Information section below, your Board has:

Since 2015, elected six new directors and continued to increase your Board’s ethnic and gender diversity.

Added responsibilities to the Corporate Governance and Corporate Responsibility Committee to reflect efforts on sustainability and corporate responsibility, specifically including ESG topics.

LOGO

v


    Human Capital Management Overview    

Proxy
Summary

 

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

LOGO

FirstEnergy strives to be the employer of choice in our operating areas, known for our diverse team, our culture of inclusion and our dedication to assisting our employees in reaching their full potential. We believe our culture empowers employees to support our mission, build satisfying careers at FirstEnergy and drive our success.

Built upon our Core Values and Behaviors, our talent management and total rewards processes are designed to attract, retain, reward and develop a diverse and qualified workforce of high-performing employees and teams. All employees are responsible for demonstrating our Core Values & Behaviors and adhering to the FirstEnergy Code of Conduct.

Safety

Safety is a Core Value of the Company. Together, FirstEnergy employees have the power and responsibility to keep each other safe and eliminate life-changing events. Safety metrics are also a key part of the Key Performance Indicators (“KPI”) that drive our short-term incentive program. For more information, refer to the Compensation Discussion and Analysis (“CD&A”).

To achieve a world-class safety culture, we are working with a leading safety consultant to shift our focus from incident prevention to exposure reduction with the goal of eliminating life-changing events, injuries that have life changing impacts or fatal results. This comprehensive initiative along with our multifaceted public safety outreach – which extends to contractors, first responders and members of the communities – highlights our steadfast commitment to striving for a safe environment.

Diversity and Inclusion

We believe a diverse and inclusive work environment drives better service for customers, strong operational performance, innovation and a rewarding work experience for employees. This is why Diversity and Inclusion (“D&I”) is a Core Value, as well as a corporate objective. We are focused on expanding the diversity of our workforce and creating an inclusive workplace where employees feel valued, motivated and empowered to drive FirstEnergy’s success.

Under our CEO’s leadership over the last several years, we moved our D&I efforts forward by building within our culture:

A12-member Executive Diversity & Inclusion Council – sponsored by our CEO – that aims to enhance workforce diversity, create an inclusive work environment and provide oversight and guidance for FirstEnergy’s integrated D&I strategy;

A D&I Working Group to develop action plans and oversee D&I activities across the organization;

D&I Implementation Teams in each business unit to effectively implement actions;

Employee Business Resources Groups (“EBRG”) consisting of more than 1,500 members to help celebrate our differences and support our common goals;

Regularly surveying employees about inclusion at FirstEnergy, soliciting their ideas and engaging them in actions to improve it;

Ongoing training and education on a variety of D&I topics for employees and leaders;

An independent third-party pay equity analysis to support FirstEnergy’s long-standing internal processes that drive equitable pay decisions;

Job recruiting processes to increase the number of diverse candidates considered for open positions and expand the diversity of teams interviewing those candidates; and

Partnerships to open new doors for candidates from local organizations and schools.

To track our progress and drive leadership accountability for efforts to enhance our culture and expand the diversity of our team, we introduced a D&I Index KPI in our 2018 short-term incentive compensation program for managers and above. In 2019, we increased the weight of this KPI to further advance this business imperative. For more information, refer to the CD&A.

Our D&I initiatives begin with our Board of Directors. We believe it is in our shareholders’ best interest to have a diverse Board representing a wide breadth of experiences and perspectives. Accordingly, our Board has set a goal that it will maintain at least 30% diverse members (by race, ethnicity and gender combined) for the foreseeable future.

vi


LOGO

We are also focused on building our diverse supplier pipeline through our Supplier Diversity Program. Supplier diversity is intended to provide value to our customers and strengthen the economic health of communities across our service area. Having an inclusive supplier diversity strategy is important when sourcing products and services, selecting suppliers, and managing supplier and contractor relationships. Maintaining a proactive Supplier Diversity Program is an extension of our commitment to promote diversity at every level of our company.

For more than a century, FirstEnergy and its predecessor companies have worked to improve the quality of life in the places where our customers and employees live and work. As part of our D&I initiatives, our goal is to increase the FirstEnergy Foundation’s support of community organizations that have a D&I focus.

Employee Growth and Development

We are committed to preparing our high-performing workforce for the future and helping employees reach their full potential. We are working with employees to develop their skills and competencies and preparing our emerging leaders for future management responsibilities. We believe understanding our rapidly changing industry and our company strategy is key to our employees’ abilities to support our mission and meet our customers’ evolving needs. Toward that end, we are actively engaged in the following initiatives:

Talent Management –We have robust processes to support recruiting, career management, succession planning, and employee and leadership development. In 2019, we launched an effort to provide greater transparency into these talent management processes. This transparency fosters a more robust exchange of information and feedback between employees and leaders and promotes a clearer understanding of career management and development opportunities. Employees continue to learn about available tools throughout the talent management process and are empowered to take ownership of their careers. Meaningful conversations between leaders and their employees builds trust and leads to a more inclusive workplace.

Mentoring Program –Implemented as a pilot program in 2019, our mentoring program enhances learning, teamwork and collaboration throughout FirstEnergy. It cultivates an environment for professional growth and encourages leaders to guide and prepare colleagues. We believe our mentoring program will support the development of our employees, retain our top talent, increase job satisfaction for mentees and mentors, and facilitate skills and knowledge-sharing across the company. We are expanding the program to reach broader audiences in 2020.

Experienced Leader Program –Piloted during the first quarter of 2020, this new program bridges the development gap between new supervisors and managers and senior executives. By providing a development path for experienced directors and managers, we equip our leadership with the right tools to coach and support their teams and ultimately drive FirstEnergy’s long-term success.

Power Systems Institute –We are focused on increasing the number of candidates in our Power Systems Institute (“PSI”), an award-winning program for recruiting and developing the next generation of highly trained, dedicated and motivated line and substation workers. Upon completion of the21-month program, students receive an associate degree and are eligible to be hired by FirstEnergy. Since the PSI program’s inception, we have hired more than 2,000 graduates across our service territory. Over the next five years, we plan to enhance our PSI recruitment efforts by building and expanding partnerships with community organizations in each of our service areas.

vii


 

Note About Forward-Looking Statements

Forward-Looking Statements:This proxy statementProxy Statement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 based on information currently available to management. Such statements are subject to certain risks and uncertainties.uncertainties and readers are cautioned not to place undue reliance on these forward-looking statements. These statements include declarations regarding management’s intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” “forecast,” “target,” “will,” “intend,” “believe,” “project,” “estimate,” “plan” and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, which may include the following: the ability to successfully execute an exitpotential liabilities, increased costs and unanticipated developments resulting from commodity-based generation,government investigations and agreements, including without limitation, mitigating exposure for remedial activitiesthose associated with formerly owned generation assets;compliance with or failure to comply with the ability to accomplishDeferred Prosecution Agreement entered into on July 21, 2021 with the U.S. Attorney’s Office for the Southern District of Ohio; the risks and uncertainties associated with government investigations and audits regarding Ohio House Bill 6 (“HB 6”), as passed by Ohio’s 133rd General Assembly, and related matters including potential adverse impacts on federal or realize anticipated benefits from strategic and financial goals,state regulatory matters including, but not limited to, our strategymatters relating to operaterates; the risks and growuncertainties associated with litigation, arbitration, mediation and similar proceedings, particularly regarding HB 6 related matters, including risks associated with obtaining court approval of the definitive settlement agreement in the derivative shareholder lawsuits; weather conditions, such as a fully regulated business,temperature variations and severe weather conditions, or other natural disasters affecting future operating results and associated regulatory actions or outcomes in response to execute our transmission and distribution investment plans, to continue to reduce costs, and to improve our credit metrics, strengthen our balance sheet and grow earnings;such conditions; legislative and regulatory developments, including, but not limited to, matters related to rates, compliance and enforcement activity; economicthe ability to accomplish or realize anticipated benefits from our FE Forward initiative and weatherour other strategic and financial goals, including, but not limited to, overcoming current uncertainties and challenges associated with the ongoing government investigations, executing our transmission and distribution investment plans, greenhouse gas reduction goals, controlling costs, improving our credit metrics, growing earnings, strengthening our balance sheet, and satisfying the conditions necessary to close the sale of the minority interest in FirstEnergy Transmission, LLC; the risks associated with cyber-attacks and other disruptions to our, or our vendors’, information technology system, which may compromise our operations, and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information; mitigating exposure for remedial activities associated with retired and formerly owned electric generation assets; the ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets affecting future operating results,us, including the increasing number of financial institutions evaluating the impact of climate change on their investment decisions; the extent and duration of the COVID-19 pandemic and the related impacts to our business, operations and financial condition resulting from the outbreak of COVID-19 including, but not limited to, disruption of businesses in our territories, additional costs, workforce impacts and governmental and regulatory responses to the pandemic, such as significant weather eventsmoratoriums on utility disconnections and other natural disasters,workforce vaccination mandates; the effectiveness of our pandemic and associated regulatory eventsbusiness continuity plans, the precautionary measures we are taking on behalf of our customers, contractors and employees, our customers’ ability to make their utility payment and the potential for supply-chain disruptions; actions that may be taken by credit rating agencies that could negatively affect either our access to or actions;terms of financing or our financial condition and liquidity; changes in assumptions regarding factors such as economic conditions within our territories, the reliability of our transmission and distribution system, or the availability of capital or other resources supporting identified transmission and distribution investment opportunities; changes in customers’ demand for power, including, but not limited to, the impact of climate change or energy efficiency and peak demand reduction mandates; changes in national and regional economic conditions, including recession and inflationary pressure, affecting us and/or our major industrialcustomers and commercial customers or othersthose vendors with which we do business; the risks associatedpotential of non-compliance with cyber-attacks and other disruptions todebt covenants in our information technology system, which may compromise our operations, and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information;credit facilities; the ability to comply with applicable reliability standards and energy efficiency and peak demand reduction mandates; changes to environmental laws and regulations, including, but not limited to, those related to climate change; changing market conditions affecting the measurement of certain liabilities and the value of assets held in our pension trusts, and other trust funds, or causing us to make contributions sooner, or in amounts that are larger, than currently anticipated; the risks associated with the decommissioning of our retired and former nuclear facilities; the risks and uncertainties associated with litigation, arbitration, mediation and like proceedings; labor disruptions by our unionized workforce; changes to significant accounting policies; any changes in tax laws or regulations, or adverse tax audit results or rulings; the ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets affecting us, including the increasing number of financial institutions evaluating the impact of climate change on their investment decisions; actions that may be taken by credit rating agencies that could negatively affect either our access to or terms of financing or our financial condition and liquidity; the risks and other factors discussed from time to time in our Securities and Exchange Commission or SEC, filings and other similar factors.(“SEC”) filings. Dividends declared from time to time on FirstEnergy Corp.’s common stock during any period may in the aggregate vary from prior periods due to circumstances considered by FirstEnergy Corp.’s Board of Directors at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. The foregoing factors should not be construed as exhaustiveThese forward-looking statements are also qualified by, and should be read in conjunctiontogether with, the other cautionary statements and risks that arerisk factors included in ourFirstEnergy Corp.’s filings with the SEC, including, but not limited to, the most recent Annual Report on Form10-K and any subsequent Quarterly Reports on Form10-Q.10-Q and Current Reports on Form 8-K. The foregoing review of factors also should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy Corp.’s business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy Corp. expressly disclaims any current intentionobligation to update or revise, except as required by law, any forward-looking statements contained herein or in the information incorporated by reference as a result of new information, future events or otherwise.

 

122022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

viii


LOGO

Corporate Governance and Board of DirectorsInformation

Board Leadership Structure

The three positions of CEO, and ChairmanChair of the Board, and Vice Chair and Executive Director are separated.held by separate individuals. Our Amended and Restated Code of Regulations and Corporate Governance Policies do not require that your Chairman of the Board and CEOthese positions be separate, and your Board has not adopted a specific policy or philosophy on whether the role of the CEO and Chairman of the Boardsuch roles should remain separate. However, having aHaving separate Chairman of the Board and CEOroles has allowed your CEO to focus more time on ourday-to-day operations and, in your Board’s judgement, is appropriate at this time.

Your Board, however, will continue to consider whether an alternate Board leadership structure is appropriate if changing circumstances dictate. Your Board schedules regular executive sessions for your independent directors to meet without management participation. Because an independent director is required to preside over each such executive session of independent directors, we believe it is efficient and appropriate to have your independent ChairmanChair of the Board preside over such meetings.

Board Composition and Refreshment

Your Board is comprised of individuals who are highly-qualified,highly qualified, diverse, and independent (other than Mr. Jones,Messrs. Somerhalder and Strah, who isare not considered independent because of their employment with the Company). Your Board’s succession planning takes into account the importance of Board refreshment and having an appropriate balance of experience and perspectives on your Board. As further discussed in the “Director“Board Qualifications” section of this proxy statement,Proxy Statement, your Board and the Corporate Governance and Corporate Responsibility Committee recognizes that the racial, ethnic and gender diversity of your Board, as well as diversity of thought, background and experiences, are an important part of its analysis as to whether your Board possesses a variety of complementary skills and experiences. Accordingly, your Board has set a goal that, it will maintainfor the foreseeable future, at least 30% of your Board will be composed of diverse members (by race, ethnicity and gender combined) individuals.

The Corporate Governance and Corporate Responsibility Committee reviews Board succession planning on an ongoing basis. In performing this function, the Committee recruits and recommends nominees for the foreseeable future.

Weelection as directors to your Board. Accordingly, we have regularly added directors who we believe infuse diversity, new ideas and fresh perspectives into the boardroom. SinceIf elected, all of the 12 nominees will be Board members who have joined the Board since the beginning of 2015, your Board has added six new Board members.2017. The result is more than half of your Board’severy director nominees havenominee has tenure of fivesix years or less. During this time, your Board also added threefour directors that increased its diversity profile, twoprofile. In addition, and as described in greater detail in the “Board Oversight – Board Response to Government Investigations” section below, six current members of whomyour Board will not stand for re-election at the Annual Meeting and your Board plans to review and update its committee memberships in the near future.

The Corporate Governance and Corporate Responsibility Committee has sole authority to retain and engage a third-party search firm to identify a candidate or candidates. In 2022, Ms. Croom was identified by a third-party search firm and, in 2021, Ms. Hicks and Messrs. Williams and Kaleta were each identified by a third-party search firm.

Board Oversight

Board Response to Government Investigations

Your Company has been cooperating fully with requests related to recent government investigations. We’ve pledged full and continuing cooperation with the government investigations.

Your Board has formed various special Board oversight committees since July 2020. Effective July 1, 2021, a Special Litigation Committee was created, and the Independent Review Committee and the Demand Review Committee, both special Board

FIRSTENERGY CORP.

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Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

oversight committees, were dissolved. Our current special Board oversight committees (Special Litigation Committee and the Compliance Oversight Sub-committee of the Audit) are currentlydescribed in greater detail in the “Board Committees – Special Board Oversight Committees” section below.

Legal Proceedings

Beginning in July 2020, stockholders of the Company filed shareholder derivative lawsuits in the federal courts for the Northern and Southern Districts of Ohio and in the Court of Common Pleas of Summit County, Ohio, asserting claims on behalf of the Company against various former and current officers and directors of the Company arising out of the circumstances at issue in the investigations and proceedings relating to HB 6. The lawsuits, Gendrich v. Anderson, et al. and Sloan v. Anderson, et al. (Common Pleas Court, Summit County, OH, all actions have been consolidated) and Miller v. Anderson, et al. (Federal District Court, N.D. Ohio); Bloom, et al. v. Anderson, et al.; Employees Retirement System of the City of St. Louis v. Jones, et al.;Electrical Workers Pension Fund, Local 103, I.B.E.W. v. Anderson et al.;Massachusetts Laborers Pension Fund v. Anderson et al.;The City of Philadelphia Board of Pensions and standingRetirement v. Anderson et al.;Atherton v. Dowling et al.; Behar v. Anderson, et al. (Federal District Court, S.D. Ohio, all actions have been consolidated), assert claims for election.breach of fiduciary duty and for violation of Section 14(a) of the Securities Exchange Act of 1934, among other claims.

On March 11, 2022, the plaintiffs and defendants in the lawsuits, and the Special Litigation Committee acting on behalf of the Company, entered into a settlement agreement to resolve all of the shareholder derivative lawsuits. The settlement is subject to court approval.The settlement includes a series of corporate governance enhancements, that will result in the following:

Six members of the Board, Messrs. Michael J. Anderson, Donald T. Misheff, Thomas N. Mitchell, Christopher D. Pappas and Luis A. Reyes, and Ms. Julia L. Johnson, will not stand for re-election at the Company’s 2022 annual shareholder meeting;

A special Board committee of at least three recently appointed independent directors will be formed to initiate a review process of the current senior executive team, to begin within 30 days of the 2022 annual shareholder meeting and will make a recommendation to the full Board;

The Board will oversee the Company’s lobbying and political activities, including periodically reviewing and approving political and lobbying action plans prepared by management;

The Corporate Governance and Corporate Responsibility Committee will be reconstituted, made up of recently appointed independent directors to oversee the implementation and third-party audits of Board-approved action plans with respect to political and lobbying activities;

The Company will implement enhanced disclosure to shareholders of political and lobbying activities, including enhanced disclosure in its annual proxy statement; and

The Company will further align financial incentives of senior executives to proactive compliance with legal and ethical obligations.

The settlement also includes a payment to FirstEnergy of $180 million, to be paid by insurance after court approval, less any court-ordered attorney’s fees awarded to plaintiffs.

While your Board Oversightcannot predict the outcome of the continuing government investigations and related matters, as your stewards, we are fully committed to providing thorough and complete oversight and will, as a Board, take any necessary actions to address these matters. Your Board will not tolerate any actions or behaviors demonstrating anything less than a commitment to high standards of ethics and compliance for your Company and is committed to improving the compliance policy and culture at FirstEnergy

Risk Management

The Company faces a variety of risks and recognizes that it must take certain risks in the effective managementordinary course of those risks contributesbusiness to theensure overall success of the Company.Company as it pursues its strategic objectives. The Company has implemented aan Enterprise Risk Management process to identify, prioritize, report, monitor, manage, and mitigate its significant risks. A managementAn Enterprise Risk PolicyManagement Committee, consisting ofchaired by the Vice President, Risk & Internal Audit (who serves as our Chief Risk Officer) andOfficer consisting of senior executive officers, provides oversight and monitoring to ensure that appropriate risk policies are established and carried out and processes are executed in accordance with selected limits and approval levels. OtherIn addition, other management committees exist to addressare focused on addressing topical risk issues. Timely reports on significant risk issues are

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Executive

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Important

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provided as appropriate to employees, management, senior executive officers, respective Board committees, and the full Board. The Chief Risk Officer also prepares enterprise-wide risk management reports that are presented to the Audit Committee the Finance Committee and your Board.

Your Board administers its risk oversight function through the full Board, as well as through the various Board committees.committees, and views risk management as an integral part of the Company’s strategic planning process. Specifically, your Board considers risks applicable to the Company at each meeting in connection with its consideration of significant business and financial developments of the Company. Also, the Audit Committee Chartercharter requires the Audit Committee to oversee, assess, discuss, and generally review the Company’s policies with respect to the assessment and management of risks, including risks related to the financial statements and financial reporting process of the Company credit risk, liquidity and commodity market risks, and risks related to cybersecurity. The Audit Committee also reviews and discusses with management the steps taken to monitor, control, and mitigate such exposures. Through this oversight process, your Board obtains an understanding of significant risk issues on a timely basis, including the risks inherent in the Company’s strategy. In addition, while the Company’s Chief Risk Officer

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administratively reports to your Senior Vice President, Chief Financial Officer (your “CFO”),& Strategy, he also has full access to the Audit Committee and Finance Committee and is scheduled to attend each of theirand report to other Board committee meetings.meetings as appropriate.

In addition to the Audit Committee’s role in risk oversight, our other Board committees also play a role in risk oversight within each of their areas of responsibility. Specifically, the Compensation Committee reviews, discusses, and assesses risks related to executive compensation programs, including incentive compensation and equity-based plans, as well as human capital and the relationship between our risk management policies and practices and compensation. See also, “Risk Assessment of Compensation Programs” found in the CD&A section in this proxy statement.Proxy Statement. The Corporate Governance and Corporate Responsibility Committee considers risks related to corporate governance, including Board and committee membership, Board effectiveness, related person transactions, and the Company’s corporate citizenship practices.practices, political activities and practices and ESG strategy. The Finance Committee evaluates risks relating to financial resources and strategies, including capital structure policies, financial forecasts, budgets and financial transactions, commitments, expenditures, long and short-term debt levels, dividend policy, acquisition and divestitures, issuance of securities, exposure to fluctuation in interest rates, share repurchase programs and other financial matters deemed appropriate by your Board. The Operations Safety and NuclearSafety Oversight Committee considers risks associated with the safety, reliability, environmental strategy, climate change, environmental protection and sustainability, and quality relating to the Company’s electric powerdistribution, transmission, and generation and distribution and transmission facilities and a retired nuclear unit ..facilities. Further,day-to-day risk oversight is conducted by our Corporate Risk department and our senior management and is shared with your Board or Board committees, as appropriate. We believe that your Board’s role in risk oversightEnterprise Risk Management is consistent with and complemented by your Board’s leadership structure. In addition, the section in this proxy statement entitled “Board Leadership Structure” provides information relating to our separation of the Chairman of the Board and CEO positions.

Cybersecurity

FirstEnergy is committed to protecting its employees, customers, facilities, and the ongoing reliability of its electric system. We work closely with state and federal agencies and our peersa central consideration in the electric utility industry to identify physical and cyber security risks, exchange information, and put safeguards in place to comply with strict reliability and security standards. From a security standpoint, no other industry – including gas pipelines – is as heavily regulated as the electric utility sector. We have comprehensive cyber and physical security plans in place, but we don’t publicly disclose details about these measures that could aid those who want to harm our customers and our employees.

Your Board has identified cybersecurity as a key enterprise risk. Your Board receives cybersecurity updates from the Chief Information Officer at regularly scheduled meetings. The Audit Committee reviews our cybersecurity risk management practices and performance, primarily through reports provided by management. The Audit Committee also reviews and discusses with management the steps taken to monitor, control, and mitigate such exposure. Among other things, these reports have focused on incident response management and recent cyber risk and cybersecurity developments.

Security enhancements are also a key component of FirstEnergy’s Energizing the Future transmission investment program. The Company invests heavily in layered security measures that use both technology and hard defenses to protect critical transmission facilities and our digital communications networks.

Corporate Responsibility

Social responsibility is a core value of your Company. In 2018, responsibilities related to the review of corporate citizenship practices were added to the Corporate Governance and Corporate Responsibility committee’s charter to continue to ensure transparency and accountability of these important topics.

The Company remains focused on delivering strong financial results and providingtop-tier reliability to our customers, and we are committed to doing so in a way that respects our employees, customers, communities and the environment. In 2019 we demonstrated that through the issuance of a Climate Report, a Corporate Responsibility Report and dedicated website, increased scores from rating and ranking agencies, and instituted various internal initiatives aimed at informing and engaging our employees onESG-related responsibilities.

Public Policy and Engagement

We have decision-making and oversight processes in place for political contributions and expenditures. Our Corporate Political Activity Policy available on our website describes the criteria for certain politicalCompany’s strategic initiatives.

 

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Commitments to

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Executive

& Director Compensation

Other

Important

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contributions and ballot initiative expenditures and the process for approving such contributions and expenditures. Also, your Board’s Corporate Governance and Corporate Responsibility Committee periodically reviews this policy and related practices as well as dues and/or contributions to industry groups and trade associations.

Based on feedback from our shareholder engagement and outreach, we expanded our website disclosure to include reports on federal and state level lobbying, as well as, the lobbying portion of certain trade association dues.

Evaluating Board Effectiveness

Your Board is committed to a rigorous evaluation process. For 2019 your Board conducted an annual evaluation process as further described below, that wasbelow. Annually, Board, committee and individual director evaluations are performed and coordinated by the Corporate Governance and Corporate Responsibility Committee: a full Board evaluation that included third-party director interviews; committee evaluations; and individual director evaluations.Committee.

2021 Board Evaluations: A Multi-Step Process

 

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Annual Process
is Initiated

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Your Board’s Corporate Governance and Corporate Responsibility Committee initiatesinitiated the annual Board, committee and individual director evaluation process and presentspresented the proposed approach to your Board for comment.

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Third-Party
Board & Committee
Assessment, Surveys
Individual Director Evaluations

LOGOYour Board engaged a third-party to conduct assessment surveys to solicit each

Each independent director’s opinion was solicited regarding your Board’s and its committees’ effectiveness relating to topics such as ethics and accountability, Board composition and culture, succession planning, and shareholder and stakeholder involvement.

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Third-Party
Director
Interviews
Self-Assessments

LOGOYour Board engaged a third-party to conduct interviews with your directors. Interviews includefollow-up conversations regarding answers to Board and Committee assessment surveys.

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Individual Director
Evaluations
& Director
Self-Assessments
LOGOYour Board Chairman, in consultation with the Chair of the Corporate Governance and Corporate Responsibility Committee, reviews individual performance and qualifications of each director. In addition, prior

Prior to accepting a nomination,re-nomination, each director is to conduct a self-assessment as to whether he or she satisfies the criteria set forth in the Company’s Corporate Governance Policies and the Corporate Governance and Corporate Responsibility Committee Charter.

Presentation of Findings

The results of the assessments were presented to your Board. Future topics for discussion include succession planning and diversity, social responsibility, regular assessments of board composition and size, and emergent trends in the utility sector.

Shareholder Outreach and Engagement Program

Commitment to Shareholder Outreach and Engagement

FirstEnergy has a long history of meaningful, robust engagement with our shareholders. We believe consistent, transparent dialogue is essential in order to understand investor feedback on a broad range of issues and provides valuable insights for our Board, its committees, and our management team into investor perspectives and priorities.

In connection with our shareholder outreach that focused on ESG and executive compensation matters, we recently reached out to 20 of our top shareholders representing nearly 50% of shares outstanding.In addition to our proactive shareholder engagement throughout the year focused on ESG and executive compensation matters, our management team participates in numerous investor conferences, and in both one-on-one and group meetings.

LOGO16 Presentation
of Findings2022
PROXY STATEMENT
LOGOYour Corporate Governance and Corporate Responsibility Committee presents its findings to your Board, assessing the contributions of your Board and its committees and discussing any areas in which your Board believes improvement is recommended. Input about the findings is sought from your Board.
LOGOFeedback
Incorporated
LOGOResults requiring consideration are addressed at subsequent Board and committee meetings and reported back to the full Board, where appropriate. For example, in 2019, feedback included indications that your Board should stay focused on diversity and inclusion, Board and employee engagement and the Company’s strategic initiatives.

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Shareholder Outreach and Engagement Program

We Have a Robust Shareholder Outreach and Engagement Program

We believe it is important for us to engage regularly with our shareholders. We maintain an active shareholder outreach and engagement program to understand our investors’ perspective on certain topics, including, among others, ESG policies and executive compensation. With support from your Board, the Company’s CEO and the management team, including members of the Corporate Secretary’s office and departments of Corporate Responsibility, Investor Relations and Human Resources, focus significant efforts on engaging with our major shareholders and the broader investment community. Shareholder feedback and suggestions we receive are reported to the Compensation Committee, Corporate Governance and Corporate Responsibility Committee and, as needed, your Board or various committees of your Board for consideration. We also conduct ongoing governance reviews (for example, assessing governance trends). This process enables your Board and management to understand and consider the topics that matter most to our shareholders so we can plan to address them effectively.

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Outreach and Engagement Program Shareholder Feedback

As part of our commitment to continue to understand our investors’ perspectives through and as part of our corporate governance shareholder engagement program, we appreciate the opportunity to engage with our shareholders, and we continue to find our meetings to be enlightening and productive. Shareholders we meet with often express appreciation for our proactive interest in their views, and we certainly appreciate the time they took to share their thoughts with us. During these meetings, participants included members from management and your Board, where appropriate. Collectively, our discussions during 2019 primarily centered around the following topics:

ESG and Executive Compensation

Highly Skilled &Proxy
Diverse Board

Summary

 

Corporate
Governance & Board of Directors

 

Corporate Responsibility

CorporateItems to Be
Governance Best
Practices

Voted On

 

Commitments to

Employees & ESG

 

Executive

Strategic Plan

& Director Compensation

 

Other

Diversity andImportant

Inclusion

Matters / Q&A

 

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Based on the resultsIn 2021 and early 2022, members of our outreachBoard and engagement efforts, your Board has takenmanagement met with institutional shareholders, including our CEO and members of the following steps:management team from Corporate Responsibility, Corporate Secretary department, Finance, Legal, Human Resources and Investor Relations. These conversations covered a variety of topics, including:

 

 

Maintained Design of Executive Compensation Program:Applying the feedback we received from shareholders, your Compensation Committee maintained, in 2019, the design changes to the executive compensation program implemented in 2018. For further insight on our outreach related to executive compensation, see the “Shareholder Engagement andSay-on-Pay Results” section below in the CD&A.Our strategic vision

 

Enhanced our Environmental & Corporate Responsibility Related Disclosures:We regularly evaluate our risk and related disclosures, and recently we published a climate reportBoard oversight of corporate governance, and our Corporate Responsibility Report.ethics and compliance program

 

EnhancedFederal and state regulatory matters spanning our Proxy Statement Disclosures:We continue to enhance our disclosures throughout this proxy statement regarding Board composition, director skills and executive compensation. We also expanded the use of charts and illustrations in this proxy statement to help better explain our corporate governance and executive compensation programs and objectives.five-state service territory

 

Governance-Related Management Proposals: Your Board is pleased to report that the following management proposals discussed during prior outreachFinancial and engagement efforts and approved atoperational performance, including our 2019 Annual Meeting of Shareholders have all been implemented: general majority voting, majority voting for uncontested director elections and proxy access. The Company’s implementation of general majority voting also addressed the simple majority vote shareholder proposal presented at our 2019 Annual Meeting of Shareholders. On a related matter, your Board is seeking shareholder approval of a management proposal at the Meeting to authorize your Board to make certain future amendments to the Company’s Amended and Restated Code of Regulations (Item 5).FE Forward initiative

Communications

Executive compensation

Our lobbying practices, and their alignment with our climate goals

Our climate goals, clean energy transition and sustainable investments

As part of our commitment to shareholder engagement and understanding our investors’ perspectives, we welcome the opportunity for future dialogue on matters of mutual interest and to obtain your Board of Directorsinsights and feedback.

Your Board provides a process for shareholders and interested parties to send communications to your Board andnon-management directors, including our Chairman of the Board. As set forth in the Company’s Corporate Governance Policies, shareholders and interested parties may send written communications to your Board or a specified individual director, including our Chairman of the Board, by mailing any such communications to the FirstEnergy Board of Directors at the Company’s principal executive office, c/o Corporate Secretary, FirstEnergy Corp., 76 South Main Street, Akron, OH 44308-1890. Our Corporate Governance Policies can be viewed by visiting our website atwww.firstenergycorp.com/charters.

The Corporate Secretary or a member of her staff reviews all such communications promptly and relays them directly to a Board member, provided that such communications: (i) bear relevance to the Company and the interests of the shareholder, (ii) are capable of being implemented by your Board, (iii) do not contain any obscene or offensive remarks, (iv) are of a reasonable length, and (v) are not from a shareholder who already has sent two such communications to your Board in the last year. Your Board may modify procedures for sorting shareholders’ and interested parties’ communications or adopt any additional procedures, provided they are approved by a majority of the independent directors.

Other Governance Practices and Policies

Code of Conduct

FirstEnergy’s Code of Conduct, Attendance at Board Meetings, Committee MeetingsThe Power of Integrity, lays the foundation for what we expect from all FirstEnergy employees, officers and the Annual Meeting of Shareholders

Our Corporate Governance Policies provide that directors, are expectedincluding our CEO, Vice Chair and Executive Director, CFO, Chief Accounting Officer and other executives. It reflects our collective commitment to attend all scheduled Board and applicable committee meetings and the Company’s annual meetings of shareholders. Your Board held 12 meetings during 2019. All directors attended at least 75 percent of the meetings of your Board and of the committees on which they served. Also, all of our directors who were directorskeep integrity at the timeforefront of everything we do — a pledge underscored by the 2019 year’s Annual Meeting attended the 2019 annual meeting. During 2019, Board members also participatedinclusion of integrity in site visitsour mission and core values. By adhering to the Company’s operating locations.expectations of compliance and ethics in this Code, always acting with uncompromising integrity, and speaking up when something doesn’t seem right, we are paving the way for a strong future for FirstEnergy.

Non-management directors, who are all independent directors, are required to meet as a group in executive sessions without the CEO or any othernon-independent director or management at least six times in each calendar year, and our independent Chairman of the Board presided over all executive sessions. During 2019, thenon-management directors met 9 times in executive sessions.

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Codes of Business Conduct

The Company’s Code of Business Conduct applies to all Company personnel, including the CEO, CFO and Chief Accounting Officer. In addition, your Board has implemented a separate Board of Directors Code of Ethics and Business Conduct. Any substantive amendments to, or waivers of, the provisions of these documentsthis document will be disclosed and made available on our website, as permitted by the SEC and as disclosed in our most recent Annual Report. Both codes areThe Code is available, without charge, upon written request to the Corporate Secretary, FirstEnergy Corp., 76 South Main Street, Akron, Ohio 44308-1890 or may be viewedis accessible on our website athttps://www.firstenergycorp.com/investor/corporate_governance/responsibility.htmlresponsibility.

Corporate Governance DocumentsPolicies and Standing Committee Charters

Your Board believes that the Company’s policies and practices should enhance your Board’s ability to represent your interests as shareholders. Your Board established Corporate Governance Policies which, together with Board committee charters, serve as a framework for meeting your Board’s duties and responsibilities with respect to the governance of the Company. Our Corporate Governance Policies and Board committee charters can be viewed by visiting our website atwww.firstenergycorp.com/charters. Any amendments to these documents will promptly be made available on our website.

Director Orientation and Continuing Education

Your Board recognizes the importance of its members to keep current on Company, industry and governance issues and their responsibilities as directors. All new directors participate in orientation soon after being elected to your Board. Also, your Board makes available and encourages continuing education programs for Board members, which include internal strategy meetings internally developed materials such ason-lineand presentations and engagement with relevant third-party experts, third-party presentations and external programs.

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Commitments to

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Executive

& Director Compensation

Other

Important

Matters / Q&A

Attendance at Board Meetings, Committee Meetings and the Annual Meeting of Shareholders

Our Corporate Governance Policies provide that directors are expected to attend all scheduled Board and applicable committee meetings and the Company’s annual meetings of shareholders. Your Board held 20 meetings during 2021. During their tenure in 2021, all directors attended at least 75% of the meetings of your Board and of the committees on which they served during 2021. Also, all of our directors who were members of the Board at the time of the 2021 annual meeting attended the 2021 annual meeting.

Non-management directors, who are all independent directors, met, as annually required, as a group in executive session without the CEO or any other non-independent director or member of management at each of the seven regularly scheduled 2021 Board meetings. Our independent Chair of the Board presided over all executive sessions.

Other Public Company Board Membership and Related Time Commitments

Our Corporate Governance Policies provide that directors will not, without your Board’s approval, serve on a total of more than four public company board of directors.directors (including our own). Further, without your Board’s approval, no director who serves as an executive officer of any public company may serve on a total of more than two public company boards of directors.

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Committees of your Board

Your Board established the standing committees listed below. All committees are comprised solely of independent directors, as determined by your Boardincluding our own. Furthermore, when a director has a major change in accordance with our Corporate Governance Policies, which incorporate the New York Stock Exchange (“NYSE”) listing standards and applicable Securities and Exchange Commission (“SEC”) rules,their responsibilities, including the members of the Audit Committee, Compensation Committee andprincipal employment or directorships, the Corporate Governance and Corporate Responsibility Committee. Mr. Jones,Committee is to consider such change and make a recommendation to your onlyBoard.

In addition to being a director who is not considered independent because of his employment with the Company, doesMr. Demetriou, chief executive officer and director of Jacobs Engineering Group Inc., also serves as a director and non-executive board chair of C5 Acquisition Corp, a special acquisition company. The Board has evaluated Mr. Demetriou’s current responsibilities and future commitment expectations and has approved Mr. Demetriou’s various directorships.

Communications with your Board of Directors

Your Board provides a process for shareholders and interested parties to send communications to your Board and non-management directors, including our Chair of the Board. As set forth in the Company’s Corporate Governance Policies, shareholders and interested parties may send written communications to your Board or a specified individual director, including our Chair of the Board, by mailing any such communications to the FirstEnergy Board of Directors at the Company’s principal executive office, c/o Corporate Secretary, FirstEnergy Corp., 76 South Main Street, Akron, OH 44308-1890. Our Corporate Governance Policies can be viewed by visiting our website at www.firstenergycorp.com/charters.

The Corporate Secretary or a member of her staff shall review all such communications promptly and relay them directly to a member of your Board; provided that such communications (i) bear relevance to the Company and the interests of the shareholder, (ii) are capable of being implemented by your Board, (iii) do not servecontain any obscene or offensive remarks, (iv) are of a reasonable length, and (v) are not from a shareholder who has already sent two such communications to your Board in the last year. Your Board may modify procedures for sorting shareholders communications or adopt any additional procedures provided that they are approved by a majority of independent Directors.

Your Audit Committee also receives, reviews, and acts on complaints and concerns regarding accounting, internal accounting controls or auditing matters, including complaints regarding material ethical or criminal misconduct on the part of the Board of Directors, the Chief Executive Officer, any Board committee.officer reporting directly to the Chief Executive Officer, the Controller & Chief Accounting Officer or the chief audit officer, and complaints regarding matters that could lead to significant reputational damage to the Company. Complaints or concerns specifically related to such matters may be made directly to your Audit Committee. Correspondence to the Audit Committee should be addressed to the attention of the Audit Committee Chair (c/o Corporate Secretary), FirstEnergy Corp., 76 South Main Street, Akron, Ohio 44308-1890.

 

Audit Committee

18 8 meetings in fiscal year 20192022 PROXY STATEMENT

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Michael J. Anderson (Chair) *

    Donald T. Misheff *

    Sandra Pianalto *

    Leslie M. Turner

    * Financial Experts

The Audit Committee is primarily responsible for assisting your Board with oversight of:

  the integrity of the Company’s financial statements;

  compliance with legal, risk management and regulatory requirements;

  independent auditor’s qualifications and independence;

  performance of the Company’s internal audit function and independent auditor;

  systems of internal control with respect to the accuracy of financial records, adherence to Company policies and compliance with legal and regulatory requirements; and

  major financial risk exposures, including risks related to cybersecurity.

The Audit Committee is also directly responsible for the appointment, compensation and retention of, and the oversight of the work andpre-approval of all services provided by the Company’s independent registered public accounting firm. For a complete list of responsibilities and other information, please refer to the Audit Committee Charter available on our website atwww.firstenergycorp.com/charters.

Your Board appoints at least one member of the Audit Committee who, in your Board’s business judgment, is an “Audit Committee Financial Expert,” as such term is defined by the SEC. Your Board determined that Messrs. Anderson, Misheff and Ms. Pianalto meet this definition. All members of the Audit Committee are financially literate. As required by the applicable NYSE listing standards, to the extent any member of the Company’s Audit Committee simultaneously serves on the audit committee of more than three public companies, the Company will disclose on its website (www.firstenergycorp.com under the tab “Investors”, “Governance” and “Board of Directors”) your Board’s determination whether such simultaneous service impairs the ability of that individual to serve effectively on the Company’s Audit Committee. See the Audit Committee Report in this proxy statement for additional information regarding the Audit Committee.

In May 2019, Mr. O’Neil transitioned off of the Audit Committee, Ms. Pianalto was appointed to the Audit Committee and Mr. Anderson was appointed Chair.

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Compensation Committee

5 meetings in fiscal year 2019

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James F. O’Neil III (Chair)

                  Christopher D. Pappas

                  Sandra Pianalto

                  Leslie M. Turner

The Compensation Committee is primarily responsible for:

  discharging the responsibilities of your Board relating to compensation of certain executive officers of the Company, including our CEO;

  endorsing a compensation philosophy and objectives that support competitive pay for performance and are consistent with our corporate strategy;

  establishing the appropriate incentive compensation andequity-based plans for our senior-level officers;

  reviewing and discussing with our management the disclosures in the CD&A below and making a recommendation to your Board whether these disclosures should be included in the Company’s Annual Report on Form10-K and this proxy statement; and

  producing the Compensation Committee Report to be included in the Company’s Annual Report on Form10-K and this proxy statement.

The Compensation Committee also reviews and, if appropriate, makes recommendations to your Board regarding the compensation and benefits of ournon-employee directors. To the extent permitted under NYSE listing standards and applicable law, the Compensation Committee is authorized to delegate to one or more subcommittees. For information regarding the role of executive officers and our independent compensation consultant in determining or recommending the amount or form of executive and director compensation, see the CD&A section below. For a complete list of responsibilities and other information, refer to the Compensation Committee Charter available on our website atwww.firstenergycorp.com/charters.

Mr. O’Neil was appointed Chair of the Compensation Committee in May 2019.

Corporate Governance and Corporate Responsibility Committee

5 meetings in fiscal year 2019

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Julia L. Johnson (Chair)

                  Donald T. Misheff

                  Thomas N. Mitchell

                  Luis A. Reyes

The Corporate Governance and Corporate Responsibility Committee is primarily responsible for:

  Board succession, including ensuring the appropriate balance of diversity of attributes, experience, skills, ethnicity and gender of our directors;

  recommending Director nominees (also refer to the “Director Qualifications” section below for more details); and

  developing and periodically reviewing our corporate governance policies.

The Committee is also directly responsible for oversight of our (i) political activities and practices and (ii) our corporate citizenship practices, including sustainability, environmental and corporate social responsibility initiatives. For a complete list of responsibilities and other information, refer to the Corporate Governance and Corporate Responsibility Committee Charter available on our website atwww.firstenergycorp.com/charters.

Ms. Johnson was appointed Chair of the Corporate Governance and Corporate Responsibility and Mr. Anderson transitioned off of the Corporate Governance and Corporate Responsibility Committee in May 2019.

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Finance Committee

Proxy
Summary

 

5 meetings in fiscal year 2019

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Christopher D. Pappas (Chair)

    Michael J. Anderson

    Steven J. Demetriou

    Julia L. JohnsonCorporate
Governance & Board of Directors

 

The Finance Committee is primarily responsible for monitoring and overseeing the Company’s financial resources and strategies, with emphasis on those issues that are long-term in nature. For a complete list of responsibilities and other information, referItems to the Finance Committee Charter available on website atwww.firstenergycorp.com/charters.

Mr. Pappas was appointed Chair of the Finance Committee and Ms. Pianalto transitioned off of the Finance Committee in May 2019.

Operations, Safety and Nuclear Oversight  Committee

Be
Voted On

 

Commitments to

5 meetings in fiscal year 2019

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Thomas N. Mitchell (Chair)

        Steven J. Demetriou

        James F. O’Neil III

        Luis A. ReyesEmployees & ESG

 

The Operations, Safety and Nuclear Oversight Committee is primarily responsible for monitoring and overseeing the Company’s significant operating matters relating to the Company’s electric power generation, and distribution and transmission facilities together with the safety matters relating to such operations. The Committee is also responsible for monitoring and overseeing a retired nuclear unit owned and operated by certain Company subsidiaries. For a complete list of responsibilities and other information, refer to the Operations, Safety and Nuclear Oversight Committee Charter available on our website at www.firstenergycorp.com/charters.Executive

& Director Compensation

Mr. Demetriou was appointed to the Operations, Safety and Nuclear Oversight Committee and Ms. Johnson transitioned off of the Operations, Safety and Nuclear Oversight Committee in May 2019.

 

Other

Important

Matters / Q&A

 

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Audit CommitteeReport

The Audit Committee of your Board is charged with assisting your full Board in fulfilling its oversight responsibility with respect to the quality and integrity of the accounting, auditing, and financial reporting practices of the Company. The Audit Committee acts under a written charter that is reviewed annually, revised as necessary, and is approved by your Board. The charter specifies that the Audit Committee is directly responsible for the appointment, compensation and retention of, and the oversight of the work andpre-approval of all services provided by the Company’s independent registered public accounting firm, which was PricewaterhouseCoopers LLP during 2019. In connection with the Audit Committee’s approval of anynon-audit services, the Audit Committee considers whether the independent registered public accounting firm’s performance of anynon-audit services is compatible with the independent auditor’s independence.

As part of the Audit Committee’s annual auditor engagement process, the Audit Committee considers whether to rotate the independent registered public accounting firm. The Audit Committee also participates in the selection of and ensures the regular rotation of the lead audit partner and concurring partner of the Company’s independent registered public accounting firm every five years. PricewaterhouseCoopers LLP has been the Company’s independent auditor since 2002. The Audit Committee currently believes that there are benefits to having an independent auditor with an extensive history with the Company. In connection with its auditor engagement process, the Audit Committee considers the continued independence of PricewaterhouseCoopers LLP and considers the benefits including: quality audit work and accounting advice due to PricewaterhouseCoopers LLP’s institutional knowledge of our business and operations, accounting policies and financial systems, and internal control framework; knowledge of the utility industry; and operational efficiencies and a resulting lower fee structure because of PricewaterhouseCoopers LLP’s history and familiarity with our business. Using a framework developed by management, the Audit Committee also assesses the appropriateness and reasonableness of PricewaterhouseCoopers LLP’s fees relative to the Company’s business needs and as compared to fees incurred by peer companies of comparable financial statement risk, size and complexity of business and related internal control environment.

In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited financial statements included in the Company’s Annual Report onForm 10-K for the year ended December 31, 2019. In performing its review, the Audit Committee discussed the propriety of the application of accounting principles by the Company, the reasonableness of significant judgments and estimates used in the preparation of the financial statements, and the clarity of disclosures in the financial statements.

The Audit Committee reviewed and discussed with the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, their opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States. This discussion covered the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC.

The Audit Committee received the written disclosures and the letter from the independent registered public accounting firm regarding their independence from the Company as required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence and discussed with the independent registered public accounting firm such firm’s independence.

The Audit Committee discussed with the Company’s internal auditors and independent registered public accounting firm the overall scope, plans, and results of their respective audits. The Audit Committee met with the internal auditors and independent registered public accounting firm, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting process.

Based on the above reviews and discussions, the Audit Committee recommended to your Board that the audited financial statements be included in the Company’s Annual Report onForm 10-K for the year ended December 31, 2019, for filing with the SEC.

Audit Committee Members: Michael J. Anderson (chair), Donald T. Misheff, Sandra Pianalto and Leslie M. Turner.

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Matters Relating to the Independent Registered Public Accounting Firm

Audit Fees

The following is a summary of the fees paid by the Company to its independent registered public accounting firm, PricewaterhouseCoopers LLP, for services provided to the Company and its reporting subsidiaries during the years 2019 and 2018.

PricewaterhouseCoopers LLP billed the Company an aggregate of $6,958,580 in 2019 and $7,634,500 in 2018 in fees for professional services rendered for the audit of the Company’s annual financial statements and the review of the financial statements included in each of the Company’s Quarterly Reports onForm 10-Q, services that are normally provided in connection with statutory and regulatory filings or engagements, audit-related services andnon-audit-related services as noted below.

    Fees for Audit Year 2019      Fees for Audit Year 2018     
 

  Audit Fees(1)

  $6,951,855   $7,345,000   
 

  Audit Related Fees(2)

  $0   $163,200   
 

  Tax Fees(3)

  $0   $120,000   
 

  All Other Fees(4)

  $6,725   $6,300   
 

  Total

  $6,958,580   $7,634,500   

(1)

Professional services rendered for the audits of the Company’s and certain of its subsidiaries’ annual financial statements and reviews of unaudited financial statements included in the Company’s and its SEC reporting subsidiary’s (in 2018) Quarterly Reports on Form10-Q and for services in connection with statutory and regulatory filings or engagements, including comfort letters, agreed upon procedures and consents for financings and filings made with the SEC.

(2)

Professional services rendered in 2018 related primarily to the attestation of the Penn Power Company’s Net Earnings certificate.

(3)

Professional services rendered in 2018 in connection with the Foreign Investment in Real Property Tax Act.

(4)

Non-audit-related software subscription fees to PricewaterhouseCoopers LLP.

The Audit Committee has considered whether anynon-audit services rendered by the independent registered public accounting firm are compatible with maintaining its independence. The Audit Committee, in accordance with its charter and in compliance with all applicable legal and regulatory requirements promulgated from time to time by the NYSE and SEC, has a policy under which the independent registered public accounting firm cannot be engaged to performnon-audit services that are prohibited by these requirements. The charter further states that any engagement of the independent registered public accounting firm to perform other audit-related or anynon-audit services must have approval in advance by the Chair of the Audit Committee upon the recommendation of the Vice President, Controller and Chief Accounting Officer. Such approved engagement is then presented to the Audit Committee at its next regularly scheduled meeting. All audit andnon-audit services provided by PricewaterhouseCoopers LLP in 2019 and 2018 werepre-approved.

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Director Compensationin Fiscal Year 2019

  Name(1)

Fees Earned

or Paid

in Cash ($)(2)

Stock

Awards

($)(3)

Change in

Pension Value

and

Nonqualified

Deferred

Compensation

Earnings ($)(4)

All Other

Compensation

($)(5)

Total

($)

      

  Paul T. Addison(6)

$44,863$58,476$4,233$0$107,572
     

  Michael J. Anderson

$121,099$149,898$2,732$0$273,729
     

  Steven J. Demetriou

$100,000$149,898$0$0$249,898
     

  Julia L. Johnson

$109,148$149,898$0$0$259,046
     

  Donald T. Misheff

$250,000$149,898$0$0$399,898
     

  Thomas N. Mitchell

$114,773$149,898$743$0$265,414
     

  James F. O’Neil III

$121,705$149,898$0$0$271,603
     

  Christopher D. Pappas

$116,951$149,898$0$3,000$269,849
     

  Sandra Pianalto

$100,000$149,898$0$5,000$254,898
     

  Luis A. Reyes

$100,000$149,898$0$0$249,898
     

  Dr. Jerry Sue Thornton(6)

$38,943$58,476$0$5,000$102,419
     

  Leslie M. Turner

$100,000$149,898$0$0$249,898

(1)

Charles E. Jones, President and CEO, is not included in this table for 2019 because he was an employee of the Company and therefore received no additional compensation for his service as director. The compensation received by Mr. Jones for 2019 is shown in the 2019 Summary Compensation Table (“SCT”) below.

(2)

The amounts set forth in the Fees Earned or Paid in Cash column consist of fees earned in cash whether paid in cash, deferred into the FirstEnergy Corp. Deferred Compensation Plan for Outside Directors (“DDCP”) or elected to be received in stock in lieu of cash.

(3)

The amounts set forth in the Stock Awards column represent the equity retainer received under the FirstEnergy Corp. 2015 Incentive Compensation Plan, as amended, (“2015 Incentive Plan”) in the form of shares of common stock. Each amount constitutes the aggregate grant date fair value of stock awards for fiscal 2019 calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The equity retainer is typically paid in quarterly installments. The fair value on the grant dates for each director listed in the table was $40.385 on February 22, 2019; $41.485 on April 26, 2019; $43.955 on July 26, 2019; and $47.1800 on November 6, 2019. Share amounts are rounded down. There were no option awards or stock awards outstanding as of December 31, 2019.

(4)

The amounts set forth in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column reflect only the above-market earnings on nonqualified deferred compensation. There are no pension values for directors. The formula used to determine the above market earnings equals 2019 total interest multiplied by the difference between 120 percent of the Applicable Federal Rate for long-term rates (AFR) and the plan rate and divided by the plan rate.

(5)

The amounts set forth in the All Other Compensation column include compensation not required to be included in any other column. Charitable matching contributions made on behalf of our directors represent the entire amount in the column. Charitable matching contributions were $3,000 for Mr. Pappas, $5,000 for Ms. Pianalto and $5,000 for Dr. Thornton. The FirstEnergy Foundation supports the charitable matching contributions under its Matching Gifts Program.

(6)

Mr. Addison and Dr. Thornton retired effective May 21, 2019.

Compensation of Directors

We use a combination of cash and equity-based incentive compensation in order to attract and retain qualified candidates to serve on your Board. Equity compensation provides incentives to directors linking their personal interests to our long-term financial success and to increases in shareholder value. In setting director compensation, we take into consideration the significant amount of time that directors spend in fulfilling their duties to us as well as the skill level required of members of your Board. A review is performed every other year to ensure competitiveness ofnon-employee director compensation. Onlynon-employee directors receive the compensation described below for their service on your Board. Since Mr. Jones was an employee, he was not eligible to receive additional compensation for his service on your Board in 2019.

Fee Structure

For 2019, eachnon-employee director received a cash retainer of $100,000 and an equity retainer valued at approximately $150,000 and paid in the form of our common stock. The Chairs of the Corporate

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Governance and Corporate Responsibility, Finance, and Operations, Safety and Nuclear Oversight Committees each received an additional $15,000 cash retainer in 2019 for serving as a committee chairperson. The Chair of the Audit Committee received an additional $25,000 cash retainer in 2019, and the Chair of the Compensation Committee received an additional $20,000. The amounts paid to directors for 2019 were prorated accordingly based on the duration of their service. Mr. Misheff, thenon-executive Chairman of the Board, received an additional $150,000 cash retainer in 2019 for serving in that capacity. Ms. Turner currently directs the Company to pay her cash retainer to her wholly owned limited liability company, therefore, her cash retainer is not eligible for deferral as described below. The total annual compensation of eachnon-employee director shall not exceed the value of $750,000 in the aggregate of all cash compensation and the value of the applicable equity retainer.

Equity and cash retainers and chairperson retainers were paid in quarterly installments. Any equity compensation and any compensation deferred into equity was granted under the 2015 Incentive Plan. Directors are responsible for paying all taxes associated with cash and equity retainers. We do not gross up equity grants to directors to cover tax obligations.

We believe it is critical that the interests of directors and shareholders be clearly aligned. As such, similar to the NEOs identified in the CD&A, directors are also subject to share ownership guidelines. Within 90 days of their election to your Board, a director must beneficially own a minimum of 100 shares of our common stock. Within five years of joining your Board, each director is required to own shares of our common stock with an aggregate value of at least six times the annual cash retainer (currently $600,000 in common stock). Each director has either attained the required share ownership guideline or is expected to attain the required share ownership guideline within the allotted amount of time. The share ownership guidelines are reviewed by the Compensation Committee for competitiveness on an annual basis and were last reviewed at the Compensation Committee’s July 2019 meeting.

For 2019, the following directly and indirectly held shares were included in determining whether anon-employee director met his/her ownership guidelines:

Shares directly or jointly owned in certificate form or in a stock investment plan;

Shares held individually or jointly by a broker, or, in certain circumstances, held in trust, or in an individual retirement account (“IRA”), shares held by a spouse, or other beneficially owned shares, to the extent known by the Company; and

All units held in the DDCP, discussed below, and units held in the Allegheny Energy, Inc.Non-Employee Director Stock Plan (“AYE Director’s Plan”) or the Allegheny Energy Inc. Amended and Restated Revised Plan for Deferral of Compensation of Directors (“AYE DCD”), which units are payable in shares.

Deferred Compensation Plan for Outside Directors

The DDCP is a nonqualified deferred compensation plan that provides directors the opportunity to defer compensation. Directors may defer up to 100 percent of their cash retainer into cash or stock accounts. Deferrals into the cash account can be invested in one of nine funds, similar to the investment funds available to all of our employees through the FirstEnergy Corp. Savings Plan, or in a Company-paid annually adjusted fixed income account. The Company paid interest at an annual rate of 5.20% on funds deferred into cash accounts beginning in 2013 and 7.20% on funds deferred into cash accounts prior to 2013. The interest rate received by the directors is the same rate received by all participants under the FirstEnergy Corp. Amended and Restated Executive Deferred Compensation Plan (“EDCP”), as discussed further in the CD&A below.

For stock accounts, dividend equivalent units are accrued quarterly and applied to the directors’ accounts on each dividend payment date using the closing price of our common stock on that date. Payments made with respect to any dividend equivalent units that accrue after January 21, 2014, will be paid in cash.

Other Payments or Benefits Received by Directors

The corporate aircraft is available, when appropriate, for transportation to and from Board and committee meetings and training seminars. Mr. Misheff had the use of an office and administrative support with respect to carrying out his duties asnon-executive Chairman of the Board during his time serving in such role in 2019. We pay all fees associated with director and officer insurance and business travel insurance for our

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directors. In 2019, our directors were eligible to receive perquisites including limited personal use of the corporate aircraft, matching charitable contributions and gifts, the collective value of which was less than $10,000 for each director. Directors are responsible for paying all taxes associated with perquisites and personal benefits.

All directors have entered into written indemnification agreements, which are intended to secure the protection for our directors contemplated by our Amended and Restated Code of Regulations and Ohio law. Each indemnification agreement provides, among other things, that we will, subject to the agreement terms, indemnify a director if by reason of their corporate status as a director, the person incurs losses, liabilities, judgments, fines, penalties, or amounts paid in settlement in connection with any threatened, pending, or completed proceeding, whether of a civil, criminal, administrative, or investigative nature. In addition, each indemnification agreement provides for the advancement of expenses incurred by a director, subject to certain exceptions, in connection with proceedings covered by the indemnification agreement. As a director and officer, the agreement for Mr. Jones addresses indemnity in both roles.

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Director Qualifications

The Corporate Governance and Corporate Responsibility Committee recommends Board candidates by identifying qualified individuals in a manner that is consistent with criteria approved by your Board. In consultation with the CEO, the Chairman of the Board Chair, Vice Chair and the full Board, the Corporate Governance and Corporate Responsibility Committee searches for, recruits, screens, interviews and recommends prospective directors to provide your Board with an appropriate balance of knowledge, experience, diversity attributes and capability on your Board. Suggestions for potential Board candidates come to the Corporate Governance and Corporate Responsibility Committee from a number of sources, including a third-party search firm, incumbent directors, officers and others. TheIn connection with the Board’s active director succession planning, the Corporate Governance and Corporate Responsibility Committee has sole authority to retain and engage a third-party search firm to identify a candidate or candidates.

The Committee has actively engaged in director succession planning and regularly evaluates the addition of a director or directors with particular attributes with an appropriate mix of long-, medium-, and short-term tenured directors in its succession planning. Your Board has been able to attract high quality diverse candidates and has not used a third-party to assist with the identification of potential nominees but would consider using a third-party in the future, if needed or desired.

The Corporate Governance and Corporate Responsibility Committee considers suggestions for candidates for membership on your Board, including candidates recommended by shareholders for your Board. Provided that shareholders suggesting director candidates have complied with the procedural requirements set forth in the Corporate Governance and Corporate Responsibility Committee Charter and Amended and Restated Code of Regulations, the Corporate Governance and Corporate Responsibility Committee applies the same criteria and employs substantially similar procedures for evaluating candidates suggested by shareholders for your Board as it would for evaluating any other Board candidate. The Corporate Governance and Corporate Responsibility Committee will also give due consideration to all recommended candidates that are submitted in writing to the Corporate Governance and Corporate Responsibility Committee, in care of the Corporate Secretary, FirstEnergy Corp., 76 South Main Street, Akron, Ohio 44308-1890, received at least 120 days before the publication of the Company’s annual proxy statementProxy Statement from a shareholder or group of shareholders owning one half of one percent (0.5 percent) or more of the Company’s voting stock for at least one year, and accompanied by a description of the proposed nominee’s qualifications and other relevant biographical information, together with the written consent of the proposed nominee to be named in the proxy statementProxy Statement and to serve on your Board.

Also refer to the “Proposals and Business by Shareholders” section of the “Questions and Answers about the Annual Meeting” below for information regarding nominations under the Company’s Amended and Restated Code of Regulations.

Director Nomination Related Agreements

On March 16, 2021, your Company entered into a Director Appointment and Nomination Agreement (the “Director Nomination Agreement”) with Carl C. Icahn, Andrew Teno, Jesse A. Lynn, Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Enterprises G.P. Inc., Icahn Enterprises Holdings L.P., IPH GP LLC, Icahn Capital LP, Icahn Onshore LP, Icahn Offshore LP and Beckton Corp. (collectively, the “Icahn Group”). Pursuant to the Director Nomination Agreement, effective as of March 18, 2021, your Board, among other matters agreed to: (i) increase the size of the Board from 12 to 14 directors, resulting in a total of two vacancies; and (ii) appoint Andrew Teno and Jesse A. Lynn (the “Icahn Designees”) to serve as directors of the Company to fill such vacancies, each with a term expiring at the 2021 Annual Meeting.

On November 6, 2021, your Company entered into a Common Stock Purchase Agreement (the “Blackstone SPA”) with BIP Securities II-B L.P., an affiliate of Blackstone Infrastructure Partners L.P. (“Blackstone”), for the private placement of 25,588,535 shares of the Company’s common stock. Pursuant to the Blackstone SPA, your Board, among other matters, agreed to appoint an individual designated by Blackstone to stand for election as a director at the 2023 Annual Meeting. Blackstone has designated Mr. Sean Klimczak as its nominee.

Summaries of the terms of the Director Nomination Agreement and the Blackstone SPA are provided in the “Certain Relationships and Related Person Transactions” section below.

Attributes, Experience, Qualifications and Skills of your Board

In recruiting and selecting Board candidates, the Corporate Governance and Corporate Responsibility Committee takes into account the size of your Board and considers a “skills matrix” to determine whether those skills and/or other attributes qualify candidates for service on your Board. The attributes, experiences, qualifications and skills considered in accordance with Corporate Governance Policies and the Corporate Governance and Corporate Responsibility Committee charter for each director nominee led your Board to conclude that the nominee is qualified to serve on your Board.

FIRSTENERGY CORP.

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Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

The high-level overview below depicts some of the attributes, experiences, qualifications and skills of our director nominees the committee takes into account. It is not intended to be an exhaustive list of each director nominee’s skills or contributions to your Board. Also, additional biographical information and qualifications for each nominee is provided in the “Biographical Information and Qualifications of NomineesforNomineesfor Election as Directors” sectionbelowsectionbelow and contains information regarding the person’s service as a director, principal occupation, business experience along with key attributes, experience and skills. Each of the nominees brings a strong and unique background and skill set to your Board, giving your Board, as a whole, competence and experience in a wide variety of areas necessary to oversee the operations of the Company.

 

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202022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

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Board Nominees Skills, Diversity & Committee Memberships

 

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FIRSTENERGY CORP.

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Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

The above takes into account a level of knowledge that could include direct experience, subject matter expertise, directly managing one or more members of management engaged in such activities or exposure as a board or board committee member, including on your Board and Board committees.

Board’s Focus on Diversity

The Company and your Board is committed to a policy of inclusiveness and believes that well assembled boards consist of a diverse group of individuals who possess a variety of complementary skills and experiences. Accordingly, your Board has set a goal that, for the foreseeable future, at least 30% of your Board will be composed of diverse (by race, ethnicity, and gender combined) individuals. The Corporate Governance and Corporate Responsibility Committee regularly assesses the size and composition of your Board in light of the current operating requirements of the Company and the current needs of your Board, and is also committed to actively seeking out highly qualified women and minority candidates as well as candidates withof diverse backgrounds – including gender, race, skills, and professional experience and other attributes that contribute in the aggregate to the optimal functioning of your Board – to include in the pool from which future Board nominees are chosen. Accordingly, your Board has set a goal that it will maintain at least 30% diverse members (by race, ethnicity and gender combined) for the foreseeable future. The Corporate Governance and Corporate Responsibility Committee also considers differences in point of view, professional experience, education, and other individual skills, qualities, and attributes that contribute to the optimal functioning of your Board as a whole. Also, ourCompany’s Corporate Governance Policies also provide thatfurther opportunity for board refreshment by requiring directors who reach the age of 72to tender their resignations to the Board to be effective upon acceptance by your Board will not nominate for election anon-employee director following his or her 72nd birthday.Board.

Director Independence

Your Board annually reviews the independence of each of its members to make the affirmative determination of independence that is called for by our Corporate Governance Policies and required by the SECSecurities Exchange Commission (“SEC”) and NYSENew York Stock Exchange (“NYSE”) listing standards, including certain independence requirements of Board members serving on the Audit Committee, the Compensation Committee and the Corporate Governance and Corporate Responsibility Committee.

Your Board adheres to the definition of an “independent” director as established by the NYSE and the SEC. The definition used by your Board to determine independence is included in our Corporate Governance Policies and can be viewed by visiting our website atwww.firstenergycorp.com/www.firstenergycorp.com/charters. Allnon-employee directors who served during any part of 20192021 were independent under applicable standards, including Mr. Paul Addison and Dr. Jerry Sue Thornton, who are no longer members of your Board and who are not standing for election.standards.

Each year, our directors complete a questionnaire to assist your Board in assessing whether each director meets the applicable independence standards and the related provisions in the Company’s Corporate Governance Policies. The Company facilitates this review by examining its financial records to determine if amounts paidthere were payments made to or received from entities in which eachnon-employee director or immediate family member has a relationship based on responses to the questionnaires. Subject to the categorical standards approved by your Board and described below, a list of the relevant entities and the amounts the Company paid to or received from those entities is provided to your Board.Board for the non-employee directors. Utilizing this information, the Corporate Governance and Corporate Responsibility Committee presents to your Board (i) an evaluation, with regard to each

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director, whether the director has any material relationship with the Company or any of its subsidiaries; (ii) a recommendation of whether the amount of any payments between the Company and relevant entities could interfere with a director’s ability to exercise independent judgment; and (iii) a review of any other relevant facts and circumstances regarding the nature of these relationships, to determine whether other factors, regardless of the categorical standards your Board has adopted or under the NYSE’s independence standards, might impede a director’s independence. Based on a review of information concerning each of itsnon-employee directors and the recommendation of the Corporate Governance and Corporate Responsibility Committee, your Board will affirmatively determine whether a director may be considered “independent.”

Your Board recognizes that in the ordinary course of business, relationships and transactions may occur between the Company and its subsidiaries and entities with which some of our directors are or have been affiliated. Our Corporate Governance Policies provide categorical standards to assist your Board in determining what does not constitute a material relationship for purposes of determining a director’s independence. Accordingly, the following commercial and charitable relationships will not be considered to be a material relationship that would impair a director’sDirector’s independence: (i) if the director,Director, an immediate family member or a person or organization with which the directorDirector has an affiliation purchases electricity or related products or services from the Company or its subsidiaries in the ordinary course of business and the rates or charges involved in the transaction are fixed in conformity with law or governmental authority or otherwise meet the requirements of RegulationS-KItem 404(a) Instruction 7 of Regulation S-K,(ii) the aggregate

222022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

charitable contributions made by the Company to an organization with which a director,Director, an immediate family member or a person or organization with which the directorDirector has an affiliation were less than $100,000 in each of the last three fiscal years, or (iii) the aggregate of other payments made by the Company to another entity or organization with which the director,a Director, an immediate family member or a person or organization with which the directorDirector has an affiliation, or received by the Company from that other entity or organization, were less than the greater of $1 million or 2% of the affiliated company’s revenues in each of the last three fiscal years. Your Board does not typically consider such immaterial relationships in making independence determinations. Notwithstanding the foregoing, yourthe Board will not treat a director’sDirector’s relationship with the Company as categorically immaterial if the relationship otherwise conflicts with the NYSE corporate governance listing standards or is required to be disclosed by the Company pursuant to Item 404 of RegulationS-K.

Based on the March 20202022 independence review, your Board affirmatively determined that each of (i) Jana T. Croom and Sean T. Klimczak (our new director nominees), all other non-employee director nominees – Steven J. Demetriou, Lisa Winston Hicks, Paul Kaleta, Jesse A. Lynn, James F. O’Neil III, Andrew Teno, Leslie M. Turner and Melvin Williams – and (ii) our current Directors who are not standing for re-electionMichael J. Anderson, Steven J. Demetriou, Julia L. Johnson, Donald T. Misheff, Thomas N. Mitchell, James F. O’Neil III, Christopher D. Pappas Sandra Pianalto,and Luis A. Reyes and Leslie M. Turner – are independent pursuant to our Corporate Governance Polices, the rules and regulations of the SEC and the listing standards of the NYSE. Additionally, your Board determined that Sandra Pianalto, who did not stand for re-election at your Company’s 2021 annual meeting, was independent. In all cases, your Board determined that the nature of the business conducted and any interest ofin an entity that the applicable director in that businesshas a relationship were immaterial both to the Company and to the director. Outside of their service as a Company director, none of the Company’s independent directors currently provide professional or other services to the Company, its affiliates or any officer of the Company and none of the Company’s directors are related to any executive officer of the Company. Additionally, Mr. Jones isMessrs. Somerhalder and Strah are not considered an independent directordirectors because of histheir employment with theyour Company.

The Corporate Governance and Corporate Responsibility Committee also determined that none of the relationships described above constituted a related person transaction requiring disclosure under the heading “Certain Relationships and Related Person Transactions” in this proxy statement.Proxy Statement. Also, in each case where the director is a current executive officer of another company, any transactions constituted less than one percent of the Company’s and the other company’s consolidated gross revenues in each of the last three completed fiscal years.

 

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FIRSTENERGY CORP.

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Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Biographical Informationand

Qualifications of Nomineesfor Election as Directors

The following provides information about each director nominee as of the date of this proxy statement.nominee. The information presented below includes each nominee’s specific experiences, qualifications, attributes, and skills that contributed to the conclusion by the Corporate Governance and Corporate Responsibility Committee and your Board that he/she should serve as a director of theyour Company.

 

Michael J. Anderson

Position, Principal Occupation and Business Experience: Chairman of the board of directors of The Andersons, Inc., a diversified public company with interests in the grain, ethanol and plant nutrient sectors of U.S. agriculture, as well as in railcar leasing and repair and turf products production, since 2016. He also served as CEO and chairman of the board of directors from 2009 to 2015 and chief executive officer from 1999 to 2015, of The Andersons, Inc.

Key Attributes, Experience and Skills: Mr. Anderson received an M.B.A. in Finance and Accounting from the Northwestern University Kellogg Graduate School of Management and was a Certified Public Accountant. He participated in the Harvard Advanced Management Program. Mr. Anderson was an auditor for Arthur Young & Co. In 1996, he became president and chief operating officer of The Andersons, Inc., and he is currently its chairman. Mr. Anderson’s experience in the accounting and executive management areas are invaluable assets for your Board.

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LOGOJana T. Croom

Director Nominee

Age 68AGE: 45

 

FirstEnergy

Director since 2007DIRECTOR NOMINEE

STANDING COMMITTEES:

Committees:

Audit

(Chair); Finance

N/A

 

Steven J. DemetriouPOSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

 

Position, Principal OccupationChief financial officer for Kimball Electronics, Inc., a global electronics manufacturing company, since July 2021, after serving as vice president, finance (from January 2021 to July 2021). She previously served as vice president, financial planning and Business Experience: Chairman, chief executive officer andanalysis (from August 2019 to January 2021), director of Jacobs Engineering Groupoperations planning (from March 2017 to August 2019), and also held a number of roles of increasing responsibility including regulatory, operations and finance at NiSource Inc., a provider of technical professional and construction services, since August 2015. Chairman and chief executive officer (from 2004 to 2015) of Aleris Corporation (“Aleris”), a manufacturer of aluminum rolled products. Mr. Demetriou was chairman and chief executive officer of Aleris when it filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in 2009 and when it successfully emerged from those proceedings in June 2010. He served as a director of the OM Group (from 2005 to 2015); and director of Kraton Corporation (from 2009 to 2017).regulated public utility.

 

Key Attributes, Experience and Skills: Mr. DemetriouKEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Ms. Croom received hisher Bachelor of ScienceArts degree from The College of Wooster and a Masters of Business Administration from the Fisher College of Business at The Ohio State University. She is a tenured utility industry finance executive having worked in chemical engineering from Tufts University. Heboth the electric and natural gas business. She has acquired extensive experience inand wide-ranging leadership, accounting, audit, financial planning and senior managementanalysis, investor relations, tax, treasury and governance oversight skills through her former roles. Prior to her roles including the role of chief executive officer. In addition, he brings experience inat Kimball Electronics and NiSource, she also was employed by American Electric Power Co Inc., an investor-owned electric utility, focusing on investor relations, corporate finance and treasury. Ms. Croom’s extensive and wide-ranging leadership, accounting, audit, governance oversight and related skills will make her a variety of industries, including engineering, construction and oil and gas. His extensive executive and board experience has equipped him with leadership skills and the knowledge of board processes and functions. This experience qualifies him to serve as avaluable member of your Board.

LOGO

Age 61

FirstEnergy

Director since 2017

Committees:

Finance;
Operations, Safety

and Nuclear
Oversight

18  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

 

Julia L. Johnson

Position, Principal Occupation and Business Experience: President of NetCommunications, LLC, a national regulatory and public affairs firm focusing primarily on energy, telecommunications and broadcast regulation, since 2000. She serves as a director of the following three other public companies: American Water Works Company, Inc., MasTec, Inc., and NorthWestern Corporation.

Key Attributes, Experience and Skills: Ms. Johnson received her law degree from the University of Florida College of Law after graduating from the University of Florida with a Bachelor of Science in business administration. She is a former chairman and commissioner of the Florida Public Service Commission, which provides her with valuable insight into the electric utility industry. In her current position as president of NetCommunications, LLC, she develops strategies for achieving objectives through advocacy directed at critical decision makers. She previously served as senior vice president of Communications and Marketing at Milcom Technologies and also has additional public company board experience. Ms. Johnson’s extensive regulatory background, legal experience and additional board experience qualify her to serve as a member of your Board.

 

LOGO

Age 57

FirstEnergy

Director since 2011

Committees:

Corporate

Governance and
Corporate
Responsibility (Chair); Finance

Charles E. Jones

Position, Principal Occupation and Business Experience: President, CEO and director of the Company since 2015. He was Executive Vice President and President, FirstEnergy Utilities throughout 2014, Senior Vice President and President, FirstEnergy Utilities from 2010 to 2011, and also served as President of the Company’s utility subsidiaries from 2010 through 2014. He also serves as a director of many other subsidiaries of the Company, and served as a director and executive officer of FirstEnergy Solutions Corp. (“FES”) and certain of its subsidiaries from 2015 to 2016. From 2015 to 2017, Mr. Jones was chief executive officer of FirstEnergy Nuclear Operating Company (“FENOC”). FES, its subsidiaries and FENOC filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in March 2018.

Key Attributes, Experience and Skills: Mr. Jones received an undergraduate degree in electrical engineering from The University of Akron. He also attended the United States Naval Academy and was a member of the Institute of Electrical and Electronics Engineers. He completed the Reactor Technology Course for Utility Executives at the Massachusetts Institute of Technology and the Public Utility Executive Program at the University of Michigan. He has had an extensive career, at Ohio Edison Company and later FirstEnergy Corp., and has held various executive leadership positions, most recently Executive Vice President and President of FirstEnergy Utilities, and currently President and CEO of the Company. With this vast experience, Mr. Jones brings to your Board an extraordinary understanding of the inner workings of the public utilities industry and FirstEnergy.

24
 

LOGO

Age 64

FirstEnergy

Director since 2015

2022 PROXY STATEMENT

19  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Donald T. MisheffEmployees & ESG

Executive

& Director Compensation

Other

Position, Principal Occupation and Business Experience:Non-executive Chairman of the Board since May 2018. Retired in 2011 as managing partner (position held since 2003) of the Northeast Ohio offices of Ernst & Young LLP, a public accounting firm. He serves as a director of the following two other public companies: TimkenSteel Corp. and Trinseo S.A. He served as a director of Aleris Corporation, whose common stock is privately held (from 2015 to 2018).Important

Matters / Q&A

Key Attributes, Experience and Skills: Mr. Misheff graduated from The University of Akron with a major in accounting and is a Certified Public Accountant. As the managing partner of the Northeast Ohio offices of Ernst & Young LLP from 2003 until his retirement in 2011, he advised many of the region’s largest companies on financial and corporate governance issues. He began his career with Ernst & Young LLP in 1978 as part of the audit staff and later joined the tax practice, specializing in accounting/financial reporting for income taxes, purchase accounting, and mergers and acquisitions. He has extensive experience performing, reviewing, and overseeing the audits of financial statements of a wide range of public companies. Mr. Misheff’s vast financial and corporate governance experience, together with his extensive experience with a wide range of public companies provides an excellent background for his current position as ournon-executive Chairman of the Board.

 

LOGO 

 

LOGOSteven J. Demetriou

Director

Age AGE: 63

 

FirstEnergy

Director since 2012

Committees:

Audit, Corporate

Governance and
Corporate
Responsibility

Thomas N. MitchellDIRECTOR SINCE

Position, Principal Occupation and Business Experience: Chairman of the World Association of Nuclear Operators, an independent, nonprofit organization established to promote the highest standards of nuclear safety, since 2019. Retired in 2015 as the president, chief executive officer and director (positions held since 2009) of Ontario Power Generation Inc. (“OPG”), an Ontario-based electricity generation company. He is also a former director and member of the leadership and compensation committee of the Electric Power Research Institute, an independent, nonprofit organization for public interest energy and environmental research.

Key Attributes, Experience and Skills: Mr. Mitchell received his undergraduate degree in Engineering (Nuclear and Thermal Sciences) from Cornell University, his Master of Science degree in Mechanical Engineering from George Washington University and his LLD (Hon) from University of Ontario Institute of Technology, which is an honorary degree. He has extensive experience as a senior utility executive in the operation, modification and construction of nuclear, hydroelectric and thermal power stations. Prior to his most recent executive position at OPG, he held progressively more responsible leadership roles before being named the site vice president at the Peach Bottom Atomic Power Station and Pickering Nuclear Generating Station, where he was responsible for the safe and reliable operations of the stations. He also served as a vice president for the Institute of Nuclear Power Operations and as a Lieutenant (Naval Reactors) in the US Navy. Mr. Mitchell’s engineering, environmental, regulatory, safety and industry experience, along with his broad leadership and business skills, are essential to your Board.2017

 

STANDING COMMITTEES:

LOGOFinance (Chair);

Compensation

Age 64

FirstEnergy

Director since 2016

Committees:

Operations, Safety

and Nuclear

Oversight (Chair),
Corporate

Governance and
Corporate
Responsibility

POSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

Chair, chief executive officer and director of Jacobs Engineering Group Inc., a provider of technical professional services, including consulting, technical, scientific and project delivery for the government and private sector since August 2015. He serves as a director (non-executive board chair) of one other public company: C5 Acquisition Corp, a special purpose acquisition company since January 2022, which at this time is not an active business with significant operations. He previously served as chairman and chief executive officer (from 2004 to 2015) of Aleris Corporation, a manufacturer of aluminum rolled products and as a director of Kraton Corporation (from 2009 to 2017).

20  |  FirstEnergy Corp.2020 Proxy StatementKEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Mr. Demetriou received his Bachelor of Science degree in chemical engineering from Tufts University. He has extensive experience in leadership and senior management roles, including the role of chief executive officer. In addition, he brings experience in a variety of industries, including engineering, construction and oil and gas. His extensive executive and board experience has equipped him with leadership skills and the knowledge of board processes and functions. This experience qualifies him to serve as a member of your Board.


OTHER INFORMATION:

In assessing whether directors and director nominees, including Mr. Demetriou, have sufficient time to devote to board duties and responsibilities, the Corporate Governance and Corporate Responsibility Committee and your Board consider, among other things, the commitments of each director on the boards of other public companies.

Your Board believes that each of our director nominees has demonstrated the ability to devote sufficient time and attention

LOGOto Board and Committee duties, and otherwise fulfill the responsibilities required of directors. However, we understand that certain stakeholders may be concerned with Mr. Demetriou’s public company commitments, given his recent appointment as non-executive board chair for C5 Acquisition Corp. (“C5”), which is a special purpose acquisition company (“SPAC”) that issued its initial public offering in January 2022, in addition to serving as a director of the Company and as a chief executive officer and director of Jacobs Engineering Group Inc.

The Board has evaluated Mr. Demetriou’s current responsibilities and future commitment expectations, and is comfortable with his current public company commitments, as discussed further below. However, the Board intends to regularly evaluate Mr. Demetriou’s roles and responsibilities with respect to your Board to ensure that he continues to be able to dedicate the time necessary to fulfill his responsibilities. In addition, your Board is committed to ensuring that, by or before the filing of the 2023 proxy statement, Mr. Demetriou’s public company commitments will have been addressed in consideration of shareholder expectations.

James F. O’Neil III

Position, Principal Occupation and Business Experience: Chief executive officer and vice chairman of CUI Global Inc., a company focused on acquisition and development of innovative companies to create a diversified energy services platform. Principal owner of Forefront Solutions, LLC, which provides consulting services primarily to the energy infrastructure industry, since October 2017. Former president, chief executive officer and director of Quanta Services, Inc., a provider of specialty contracting services to the electric power and oil and gas industries (from 2011 to 2016). He also serves as a director of the following public company: Hennessy Capital Acquisition Corp IV (“Hennessy Capital”). He served as a director of NRC Group Holdings (from 2017 to 2019) and Spark Power Group Inc. (from 2018 to 2019).

Key Attributes, Experience and Skills: Mr. O’Neil received his Bachelor of Science degree in civil engineering from Tulane University. He has extensive leadership and senior management experience, including the role of chief executive officer, chief operating officer and senior vice president of operations integration and audit. His extensive executive and board experience has equipped him with leadership skills and the knowledge of board processes and functions. Additionally, Mr. O’Neil’s audit, general corporate decision-making and engineering experience makes him a valuable member to your Board.

Other Information: In assessing whether directors and director nominees have sufficient time to devote to board duties and responsibilities, the Corporate Governance and Corporate Responsibility Committee and the Board of Directors consider, among other things, whether such directors may be “overboarded,” which refers to the situation where a director sits on an excessive number of boards. Your Board believes that each of our directors, including director nominees, has demonstrated the ability to devote sufficient time and attention to Board and Committee duties, and otherwise fulfill the responsibilities required of directors. However, we understand that certain stakeholders may deem Mr. O’Neil “overboarded” due to his recent appointment as chief executive officer of CUI Global Inc. (effective as of October 1, 2019), in addition to serving as a director of the Company and as a director of Hennessy Capital.

Hennessy Capital is a special purpose acquisition company where Mr. O’Neil serves as a director, but does not serve on either of its two board committees. In its quarterly report on Form10-Q, filed with the SEC on November 8, 2019 (the “Hennessy10-Q”), Hennessy Capital disclosed that it was incorporated on August 6, 2018, “for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (“Business Combination”)”. The Hennessy10-Q also disclosed that if Hennessy Capital has not completed its Business Combination by September 5, 2020, it will, among other matters, “cease all operations except for the purposes of winding up.” As a result, the Board intends to evaluate Mr. O’Neil’s roles and responsibilities with respect to your Board as soon as practicable after this September 5, 2020 deadline, or sooner if applicable.

Mr. O’Neil

In its assessment, the Board considered that Mr. Demetriou’s participation as the non-executive Chair of C5 is not expected to be a substantial time commitment, particularly due to the fact that C5 does not have significant operations and the limited operating nature of SPACs in general. In addition, Mr. Demetriou effectively manages the demands on his time effectively in many ways:

 

    his complementary experience and specialized knowledge of the electric utility industry (both the Company and CUI Global Inc. operate in the electric utility industry) creates efficiencies which have enhanced his performance in serving your Company and the Board effectively;

he is a seasoned director where his prior and current experience as a chief executive officer at Quanta Services, Inc, one of the largest providers of specialty contracting services to electric utilities, and as chief executive officer at CUI Global Inc., creates additional efficiencies for Mr. O‘NeilDemetriou in fulfilling his roles at your Company;

Mr. O’Neil’sDemetriou’s contributions to discussions and decision making as a member of the Board, as well as on the Compensation Committee and Operations, Safety and Nuclear OversightFinance Committee, are valuable based on his chief executive experience; and

differences in the number and duration of board meetings at the three companies facilitatessupport his continued high level of attendance and performance as further discussed below.performance.

Mr. Demetriou is a highly engaged member of your Board and an active participant in all Board matters. Since becoming a director of your Company in 2017, Mr. Demetriou has attended 97% of regularly scheduled Board and respective committee meetings, including 98% meetings held in 2021. Mr. Demetriou is always well prepared for Board and committee meetings and is widely respected by fellow Board members for making informed and meaningful contributions to the decision-making process at these meetings.

 

Further, Mr. O’Neil is a highly engaged memberFIRSTENERGY CORP.

25


Proxy
Summary

Corporate
Governance & Board of your Board and actively participates in Board and committee matters. Since becoming a director of your Company in 2017, Mr. O’Neil has attended 100% of regularly scheduled Board and respective committee meetings, including all meetings held in 2019. Mr. O’Neil is always well prepared for Board and committee meetings and is widely respected by fellow Board members for making informed and meaningful contributionsDirectors

Items to the decision-making process at these meetings.Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

LOGO 

 

LOGOLisa Winston Hicks

Director

Age 61AGE: 55

 

FirstEnergy

DIRECTOR SINCE

2021

STANDING COMMITTEES:

N/A

POSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

Chairman, MV Transportation, Inc., a privately owned passenger transportation contracting firm and provider of paratransit services, in the United States, since October 2014. She served as executive vice president, general counsel and corporate secretary for MV Transportation from 2012 until 2018. Ms. Hicks also serves as a director for Robotic Research, a provider of autonomy and robotic technology.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Ms. Hicks received a Bachelor of Arts in Political Science from Stanford University and a Juris Doctorate from Harvard Law School. As executive vice president and general counsel of MV Transportation, Hicks directed all company legal affairs including its acquisition of businesses, defense and resolution of litigation, as well as corporate compliance and governance. From 2004 until 2008, Hicks was senior vice president and associate general counsel for TXU Corp., a Dallas based energy holding company. Following the acquisition of TXU Corp by private investors and its name change to Energy Future Holdings, Hicks became its corporate secretary and continued in the role of senior vice president and associate counsel managing legal and board functions including corporate governance, compliance and security programs, employee benefits and executive compensation, litigation risk and strategy. Earlier in her career she worked as a litigator in private law practice and served in various roles at the U.S. Department of Justice and in the White House where she was Associate Counsel to the President. Ms. Hicks’ legal, regulatory, compliance and energy-sector experience qualifies her to serve as a member of your Board.

LOGO

Paul Kaleta

Director since 2017

AGE: 66

 

Committees:FirstEnergy

DIRECTOR SINCE

2021

STANDING COMMITTEES:

N/A

POSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

Retired executive vice president, general counsel, federal affairs, chief compliance officer, and corporate secretary of First Solar, Inc., a global solar company, from 2014 to 2020. Managing director of SERC Consulting LLC, an energy policy and strategy firm, since 2020. Previously served as executive vice president, general counsel, shared services, chief compliance officer, and corporate secretary of NV Energy, Inc., an electric and gas utility, from 2006 to 2013.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Mr. Kaleta received his law degree from Georgetown University Law Center and his undergraduate degree from Hamilton College. He has more than 30 years of leadership and business experience as a senior executive and general counsel for companies across the energy industry, including both regulated utility and clean energy technology companies. He also has served on energy advisory and industry boards, was a partner in a Washington, D.C. law firm, and was an adjunct professor teaching energy law and business ethics. Mr. Kaleta’s varied and comprehensive utility, regulatory, energy transition, clean energy, energy sustainability and resiliency, governmental affairs, legal, and corporate governance and compliance experience qualifies him to serve as a member of your Board.

262022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

LOGO

Sean T. Klimczak

Director Nominee

AGE: 45

FirstEnergy

DIRECTOR

NOMINEE

STANDING COMMITTEES:

N/A

POSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

Senior managing director and global head of infrastructure of Blackstone Inc., a global investment firm since August 2005. He serves as a director of the following other public company: Cheniere Energy Inc., an energy infrastructure company. Mr. Klimczak was previously a director of the General Partner of Cheniere Partners (from September 2012 to August 2017).

KEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Mr. Klimczak received a Bachelor of Business Administration in Finance and Business Economics from the University of Notre Dame and a Master of Business Administration from Harvard Business School. Prior to his position at Blackstone, Mr. Klimczak was an Associate at Madison Dearborn Partners. Prior to that, he worked in the Mergers & Acquisitions department of Morgan Stanley & Company’s Investment Banking Division. Mr. Klimczak’s nomination to the Board of FirstEnergy was made pursuant to a Common Stock Purchase Agreement that was entered into by the Company and with BIP Securities II-B L.P., an affiliate of Blackstone Infrastructure Partners L.P., in connection with Blackstone’s purchase of FirstEnergy common stock. Mr. Klimczak’s energy infrastructure industry expertise and financial and investment experience qualifies him to serve as a member of your Board.

LOGO

Jesse A. Lynn

Director

AGE: 51

FirstEnergy

DIRECTOR SINCE

2021

STANDING COMMITTEES:

Corporate Governance and

Corporate Responsibility

POSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

General Counsel of Icahn Enterprises L.P., a diversified holding company engaged in a variety of businesses, including investment, energy, automotive, food packaging, real estate, home fashion and pharma, since 2014. Mr. Lynn also served as Chief Operating Officer of Icahn Capital LP, the entity through which Carl C. Icahn manages investment funds, since April 2021. Mr. Lynn also serves as a director of the following two other public companies: Xerox Holdings Corporation, a provider of print and digital document products and services, since November 2021 and Conduent Incorporated, a provider of business process outsourcing services, since April 2019. Mr. Lynn was previously a director of Cloudera, Inc., a provider of enterprise data cloud services, from August 2019 through its sale in October 2021; Herbalife Nutrition Ltd., a nutrition company, from April 2014 to January 2021; and The Manitowoc Company, Inc., a capital goods manufacturer, from April 2015 to February 2018.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Mr. Lynn received a Bachelor of Arts from the University of Michigan and a Juris Doctor from the Boston University School of Law. He has extensive experience in a variety of businesses, including investment, energy, automotive, food packaging, metals, real estate, home fashion and pharma. Prior to his current position, Mr. Lynn was Assistant General Counsel of Icahn Enterprises L.P. (from 2004 to 2014). Prior to joining Icahn Enterprises L.P., Mr. Lynn worked as an associate in the New York office of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. in its business and finance department and as an associate in the corporate group at Gordon Altman Butowsky Weitzen Shalov & Wein. Mr. Lynn’s legal experience and his experience in a variety of industries along with his broad business skills make him a valuable member of your Board.

FIRSTENERGY CORP.

27


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

LOGO

James F. O’Neil III

Director

AGE: 63

FirstEnergy

DIRECTOR SINCE

2017

STANDING COMMITTEES:

Compensation (Chair);

Operations and Safety Oversight

POSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

Chief executive officer and vice chairman of Orbital Energy Group (formerly known as CUI Global Inc.), a company focused on acquisition and development of innovative companies to create a diversified energy services platform since 2019. Principal owner of Forefront Solutions, LLC, which provides consulting services primarily to the energy infrastructure industry, since October 2017. Former president, chief executive officer and director of Quanta Services, Inc., a provider of specialty contracting services to the electric power and oil and gas industries (from 2011 to 2016). He served as a director of Hennessy Capital Acquisition Corp IV (2019 to 2020), NRC Group Holdings (from 2017 to 2019) and Spark Power Group Inc. (from 2018 to 2019).

KEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Mr. O’Neil received his Bachelor of Science degree in civil engineering from Tulane University. He has extensive leadership and senior management experience, including the role of chief executive officer, chief operating officer and senior vice president of operations integration and audit. His extensive executive and board experience have equipped him with leadership skills and the knowledge of board processes and functions. Additionally, Mr. O’Neil’s audit, general corporate decision-making and engineering experience makes him a valuable member to your Board.

LOGO

John W. Somerhalder II

Director

AGE: 66

FirstEnergy

DIRECTOR SINCE

2021

STANDING COMMITTEE:

N/A

POSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

Vice Chair and Executive Director of your Board and a member of management since March 2021. Mr. Somerhalder recently served as interim president and chief executive officer of CenterPoint Energy, Inc., an electric and natural gas utility serving several U.S. markets (from February 2020 to July 2020), and served as a member of the CenterPoint Energy’s board of directors (from 2016 through July 2020). He also served as a director of Gulfport Energy Corp (from July 2020 to May 2021), as a director and board chairman of Enable Midstream Partners, LP (from February 2020 to July 2020), as a Director of SunCoke Energy Partners GP LLC (from August 2017 to July 2019), and as director at Crestwood Equity GP LLC, the general partner of Crestwood Equity Partners LP (from October 2013 to February 2020).

KEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Mr. Somerhalder holds a Bachelor of Science degree in chemical engineering from the University of Arizona. He served as Interim President and Chief Executive Officer of Colonial Pipeline Company, a U.S. refined products pipeline company (from February 2017 to October 2017). Prior to that, he was president and chief executive officer of AGL Resources Inc., a former publicly traded energy services holding company (from March 2006 to his retirement in December 2015), and chairman of AGL Resources board of directors (from November 2007 to December 2015). Prior to joining AGL Resources, Mr. Somerhalder served in a number of roles with El Paso Corporation, a publicly traded natural gas and related energy products provider, where he spent almost 30 years, starting his career as an engineer and progressing through leadership roles before being named president of El Paso Pipeline Group and executive vice president of El Paso Corporation. He has extensive leadership and senior management experience, including the roles of chief executive officer and board chairman. His extensive energy industry, executive and board experience have equipped him with leadership skills and knowledge of the industry, and board processes and functions. Mr. Somerhalder’s extensive experience qualifies him to serve on your Board, lead efforts to rebuild trust with our external stakeholders, support our senior leadership team’s efforts to achieve its priorities, and strengthen your Company’s governance and compliance functions.

282022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

LOGO

Steven E. Strah

Director

AGE: 58

FirstEnergy

DIRECTOR SINCE

2021

STANDING COMMITTEE:

N/A

POSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

President, CEO and director of your Company since March 2021. He was President and Acting CEO (from October 2020 to March 2021), and President (since May 2020). He also served as Senior Vice President and Chief Financial Officer of your Company (from 2018 to 2020), and Senior Vice President and President of FirstEnergy Utilities (from 2015 to 2018). He also serves as a director of many other subsidiaries of the Company.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Mr. Strah received his Bachelor of Science degree in business administration from Baldwin Wallace University. His extensive career began in 1984 at The Illuminating Company, now a subsidiary of your Company, and continued at FirstEnergy Corp. He has held numerous executive leadership positions at your Company including President at various FirstEnergy subsidiaries. Mr. Strah’s vast experience brings to your Board an extraordinary understanding of the inner workings of the public utilities industry and FirstEnergy.

LOGO

Andrew Teno

Director

AGE: 37

FirstEnergy

DIRECTOR SINCE

2021

STANDING COMMITTEES:

Audit

Finance

POSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

Portfolio manager of Icahn Capital LP., a diversified holding company engaged in a variety of businesses including investment, energy, automotive, food packaging, metals, real estate, home fashion and pharma, since October 2020. Prior to his position at Icahn Capital, Mr. Teno worked at Fir Tree Partners (from 2011 to 2020), a NY based private investment firm that invests worldwide in public and private companies, real estate and sovereign debt. Mr. Teno serves as a director of the following two public companies: Herc Holdings Inc. (an equipment rental supplier) and Cheniere Energy, Inc. (an energy infrastructure company). He served as a director of Eco-Stim Energy Solutions (from March 2017 to December 2018).

KEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Mr. Teno received an undergraduate business degree from the Wharton School at the University of Pennsylvania. Prior to his current position at Icahn Capital, Mr. Teno worked at Fir Tree Partners, a NY based private investment firm. Prior to Fir Tree, he worked at Crestview Partners as an associate in their private equity business and at Gleacher Partners, a boutique mergers and acquisitions firm. Mr. Teno’s investment expertise and experience in a variety of industries, along with his business skills, make him a valuable member of your Board.

FIRSTENERGY CORP.

29


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

LOGO

Leslie M. Turner

Director

AGE: 64

FirstEnergy

DIRECTOR SINCE

2018

STANDING COMMITTEES:

Audit;

Compensation

POSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

Retired in March 2018 as senior vice president, general counsel and corporate secretary (positions held since 2012) of The Hershey Company, a global confectionery company.

KEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Ms. Turner received her law degree from the Georgetown University Law Center after graduating from the New York University with a Bachelor of Science degree. She also received a Master of Laws in Law and Government from the American University, Washington College of Law. Ms. Turner has extensive and wide-ranging leadership, legal, governance and corporate strategy skills through her former roles with The Hershey Company and The Coca-Cola Company. Ms. Turner served as senior vice president, general counsel, and corporate secretary of The Hershey Company from 2012 until her retirement in March 2018. In this role, Ms. Turner was the leader of Hershey’s legal, government relations, corporate secretary, and corporate security functions. She also advised Hershey on M&A opportunities and other stakeholder considerations facing publicly traded companies. Prior to joining Hershey, Ms. Turner’s career included progressively more responsible leadership roles at Coca-Cola North America, Akin Gump Hauer & Feld, LLP and the senior executive service level of the federal government. Ms. Turner’s legal experience and additional regulatory experience qualify her to serve as a member of your Board.

LOGO

Melvin Williams

Director

AGE: 58

FirstEnergy

DIRECTOR SINCE

2021

STANDING COMMITTEES:

Corporate Governance and

Corporate Responsibility;

Operations and NuclearSafety Oversight

POSITION, PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE:

Retired in 2020 as president of Nicor Gas, a natural gas distribution company and subsidiary of the Southern Company, and senior vice president of Southern Company Gas (positions held since 2015).

KEY ATTRIBUTES, EXPERIENCE AND SKILLS:

Mr. Williams received his Bachelor of Science degree from the Savannah State University. Prior to his most recent positions, he held progressively more responsible leadership roles including senior vice president, planning and business services at Nicor Gas and vice president and general manager at Atlanta Gas Light Company and Florida City Gas Company. Over 32 years of utility experience that includes sales, marketing, regulatory, and utility operations enables Mr. Williams to provide valuable insight and qualifies him to serve as a member of your Board.

302022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

21  |  FirstEnergy Corp.2020 Proxy Statement

Board Committees


LOGOYour Board has established five standing committees and two special Board oversight committees, which are described below. All committees are comprised solely of independent directors as determined by your Board in accordance with our Corporate Governance Policies, which incorporate the NYSE listing standards and applicable SEC rules. Presented below are the current committee memberships. Following the Annual Meeting your newly elected Board will review and update these memberships.

 

  Audit Committee9 meetings in fiscal year 2021    

LOGO

 

Christopher D. PappasMichael J. Anderson (Chair) *

    Donald T. Misheff *

    Andrew Teno *

    Leslie M. Turner

 

Position, Principal Occupation and Business Experience: Retired in May 2019 from Trinseo S.A., a producer of plastics, latex and rubber, after serving as president and chief executive officer (from 2010 to 2019) and special adviser (2019). He serves as a director of two public companies: Trinseo S.A. and Univar Inc. (lead independent director), a chemical distributor and provider.

Key Attributes, Experience and Skills: Mr. Pappas received an M.B.A. from the Wharton School, University of Pennsylvania and an undergraduate degree in Civil Engineering from the Georgia Institute of Technology. He served in various leadership capacities at NOVA Chemicals Corporation, Dow Chemical, and DuPont Dow Elastomers. His extensive executive and board experience has equipped him with leadership skills and the knowledge of board processes and functions. Additionally, Mr. Pappas’ general corporate decision-making and senior executive experience with a commodity-based business provides a useful background for understanding the operations of the Company.    * Financial Experts

  

LOGOThe Audit Committee is primarily responsible for assisting your Board with oversight of:

 

Age 64  the integrity of the Company’s financial statements, and financial reporting and disclosure controls processes;

 

FirstEnergy

Director since 2011  adherence to legal, compliance, risk management and regulatory requirements, including oversight of the Company’s Ethics & Compliance Program;

 

Committees:

Compensation; Finance (Chair)  independent auditor’s qualifications, independence, and performance;

 

  performance of the Company’s internal audit function; and

  the Company’s systems of internal controls over financial reporting with respect to the accuracy of financial records.

The Audit Committee’s Compliance Oversight Sub-committee discussed further below was established to assess and implement changes as appropriate in your Company’s compliance program. The Audit Committee is also directly responsible for the appointment, compensation and retention of, and the oversight of the work and pre-approval of all services provided by the Company’s independent registered public accounting firm. For a complete list of responsibilities and other information, please refer to the Audit Committee Charter available on our website at www.firstenergycorp.com/charters.

Your Board appoints at least one member of the Audit Committee who, in your Board’s business judgment, is an “Audit Committee Financial Expert,” as such term is defined by the SEC. Your Board determined that Messrs. Anderson and Misheff meet this definition. All members of the Audit Committee are financially literate and are independent pursuant to our Corporate Governance Policies, the rules and regulations of the SEC and the listing standards of the NYSE. As required by the applicable NYSE listing standards, to the extent any member of the Company’s Audit Committee simultaneously serves on the audit committee of more than three public companies, the Company will disclose on its website (www.firstenergycorp.com/board) your Board’s determination whether such simultaneous service impairs the ability of that individual to serve effectively on the Company’s Audit Committee. See the Audit Committee Report in this Proxy Statement for additional information regarding the Audit Committee.

FIRSTENERGY CORP.

31


Sandra Pianalto

Position, Principal Occupation and Business Experience: Ms. Pianalto retired in May 2014 as president and chief executive officer of the Federal Reserve Bank of Cleveland, a position she held since 2003. Prior to retiring, Ms. Pianalto also chaired the Federal Reserve’s Financial Services Policy Committee, which is a committee of senior Federal Reserve Bank officials responsible for overall direction of financial services and related support functions for the Federal Reserve Banks and for leadership in the evolving U.S. payment system. Ms. Pianalto is an executive in residence at the University of Akron. She also serves as a director of the following three other public companies: Eaton Corporation plc, Prudential Financial, Inc. and The J.M. Smucker Company.

Key Attributes, Experience and Skills: Ms. Pianalto received a master’s degree in economics from The George Washington University and a bachelor’s degree in economics from the University of Akron. She is also a graduate of the Advanced Management Program at Duke University’s Fuqua School of Business. Ms. Pianalto has extensive experience in monetary policy and financial services, and brings wide-ranging leadership and operating skills through her former roles with the Federal Reserve Bank of Cleveland and experience serving as a director of other public companies. Ms. Pianalto joined the Federal Reserve Bank of Cleveland in 1983 as an economist in the research department and held progressively more responsible leadership roles before being named president and chief executive officer. As president and chief executive officer of the Federal Reserve Bank of Cleveland, she developed expertise in economic research, supervision of financial institutions, and payment services to banks and the U.S. Treasury. In this role, Ms. Pianalto also managed approximately 950 employees. Ms. Pianalto’s comprehensive experience qualifies her to provide substantial guidance and oversight to your Board, particularly in overseeing the Company’s finances.Proxy
Summary

 

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

LOGOEmployees & ESG

Executive

& Director Compensation

Other

Age 65Important

FirstEnergy

Director since 2018

Committees:

Audit;

CompensationMatters / Q&A

22  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

 

  Compensation Committee12 meetings in fiscal year 2021    

LOGO

 

Luis A. ReyesJames F. O’Neil III (Chair)

    Steven J. Demetriou

    Julia L. Johnson

    Leslie M. Turner

The Compensation Committee is primarily responsible for:

 

Position, Principal Occupation and Business Experience: Retired in 2011 as a Regional Administrator (position held since 2008) of  carrying out the U.S. Nuclear Regulatory Commission (the “NRC”), a federal regulatory agency.

Key Attributes, Experience and Skills: Reyes received his undergraduate degree in Electrical Engineering and his Master of Science degree in Nuclear Engineering fromresponsibilities delegated by the University of Puerto Rico. He has extensive experience in the nuclear field and has held senior leadership positions with the NRC, an independent government agency that regulates commercial nuclear power plants and other uses of nuclear materials such as in nuclear medicine. He joined the NRC in 1978 where he held progressively more responsible leadership roles before being named executive director of operations in 2004, where he managed the agency’sday-to-day operationsBoard relating to the safe usereview and determination of radioactive materials for beneficial civilian purposes while protecting peopleexecutive compensation; and

  provide general oversight of the environment. HeCompany’s compensation philosophy and practices and human capital initiatives.

The Compensation Committee also served as regional administrator for NRC Region II, overseeing all new commercial nuclear power plant constructionreviews and, if appropriate, makes recommendations to your Board regarding the compensation and benefits of our non-employee directors. To the extent permitted under NYSE listing standards and applicable law, the Compensation Committee is authorized to delegate its responsibilities to one or more sub-committees. For information regarding the role of executive officers and our independent compensation consultant in determining or recommending the United States as well as safetyamount or form of executive and operating plant inspections indirector compensation, see the southeast United States. Reyes retired from the NRC in 2011 with 33 yearsCD&A section below. For a complete list of service. Reyes’ engineering, safety, environmental, regulatoryresponsibilities and industry experience is essentialother information, refer to the FirstEnergy Board.Compensation Committee Charter available on our website at www.firstenergycorp.com/charters.

Effective May 18, 2021, Mr. Demetriou and Ms. Johnson were appointed to the Compensation Committee.

  Corporate Governance and Corporate Responsibility Committee12 meetings in fiscal year 2021    

LOGO

Julia L. Johnson (Chair)

    Jesse A. Lynn

    Christopher D. Pappas

    Luis A. Reyes

    Melvin D. Williams

 

  

LOGOThe Corporate Governance and Corporate Responsibility Committee is primarily responsible for:

 

Age 68  the Company’s director nominations process,

 

FirstEnergy

Director since 2013  the Company’s corporate governance policies; and

 

Committees:  oversight of the Company’s policies and practices relating to corporate responsibility.

Corporate

The Committee is also directly responsible for oversight of our (i) political activities and practices and (ii) our Company’s corporate citizenship practices and ESG strategy. For a complete list of responsibilities and other information, refer to the Corporate Governance and Corporate Responsibility Committee Charter available on our website at www.firstenergycorp.com/charters.

Effective May 18, 2021, Mr. Williams was appointed to, and Messrs. Misheff and Mitchell transitioned off, the Corporate Governance and Corporate Responsibility Committee.

322022 PROXY STATEMENT


Proxy
Summary

Corporate
Responsibility;Governance & Board of Directors

Items to Be
Voted On

Commitments to

Operations, Safety and Nuclear OversightEmployees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

  Finance Committee9 meetings in fiscal year 2021    

LOGO

Steven J. Demetriou (Chair)

    Michael J. Anderson

    Thomas N. Mitchell

    Christopher D. Pappas

    Andrew Teno

 

The Finance Committee is primarily responsible for monitoring and overseeing the Company’s financial resources and strategies, with emphasis on those issues that are long-term in nature. For a complete list of responsibilities and other information, refer to the Finance Committee Charter available on website at www.firstenergycorp.com/charters.

Effective May 18, 2021, Mr. Mitchell was appointed to, and Ms. Johnson transitioned off, the Finance Committee.

  Operations and Safety Oversight Committee4 meetings in fiscal year 2021    

LOGO

Thomas N. Mitchell (Chair)

    James F. O’Neil III

    Luis A. Reyes

    Melvin D. Williams

The Operations and Safety Oversight Committee is primarily responsible for monitoring and overseeing the Company’s significant operating matters relating to the Company’s electric power generation and distribution and transmission operations, together with safety, reliability, environmental strategy, climate change, environmental protection and sustainability, and quality matters relating to such operations. For a complete list of responsibilities and other information, refer to the Operations and Safety Oversight Committee Charter available on our website at www.firstenergycorp.com/charters.

Effective May 18, 2021, Mr. Williams was appointed to, and Mr. Demetriou transitioned off, the Operations and Safety Oversight Committee.

FIRSTENERGY CORP.

33


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

  Special Board Oversight Committees

LOGO

 

Leslie M. Turner (Chair)

Position, Principal Occupation and Business Experience: Retired in March 2018 as senior vice president, general counsel and corporate secretary (positions held since 2012) of The Hershey Company, a global confectionery company.

Key Attributes, Experience and Skills: Ms. Turner received her law degree from the Georgetown University Law Centerafter graduating from the New York University with a Bachelor of Science degree. She also received a Master of Laws in Law and Government from the American University, Washington College of Law. Ms. Turner has extensive and wide-ranging leadership, legal, governance and corporate strategy skills through her former roles with The Hershey Company and The Coca-Cola Company. Ms. Turner served as senior vice president, general counsel, and corporate secretary of The Hershey Company from 2012 until her retirement in March 2018. In this role, Ms. Turner was the leader of Hershey’s legal, government relations, corporate secretary, and corporate security functions. She also advised Hershey on M&A opportunities and other stakeholder considerations facing publicly traded companies. Prior to joining Hershey, Ms. Turner’s career included progressively more responsible leadership roles at Coca-Cola North America, Akin Gump Hauer & Feld, LLP and the senior executive service level of the federal government. Ms. Turner’s legal experience and additional regulatory experience qualify her to serve as a member of your Board.

  

LOGOCompliance Oversight Sub-committee of the Audit Committee is primarily responsible for assessing your Company’s corporate compliance program and overseeing the implementation of recommended enhancements, as appropriate.

 

Age 62Members:Leslie M. Turner (Chair),Julia L. Johnson, Thomas N. Mitchell, Luis A. Reyes and Andrew Teno

 

FirstEnergy  3 meetings in fiscal year 2021

Director since 2018LOGO

 

Committees:Paul Kaleta (Chair)

Special Litigation Committee is authorized to take all actions as it deems advisable, appropriate, and in the best interests of the Company and its shareholders with respect to pending shareholder derivative litigation and demands.

Audit;

Members:Paul Kaleta (Chair),Lisa Winston Hicks, Jesse A. Lynn and Melvin D. Williams

  37 meetings in fiscal year 2021

Effective July 1, 2021, the Special Litigation Committee was created, and the Independent Review Committee and the Demand Review Committee were dissolved.

In addition and as described in greater detail in the “Board Oversight – Board Response to Government Investigations” section above, on February 9, 2022 the Special Litigation Committee agreed to a settlement term sheet to resolve multiple shareholder derivative lawsuits that included, among other things, an agreement that your Board will (1) form a special Board committee to initiate a review process of the current senior executive team, to begin within 30 days of the 2022 Annual Meeting of Shareholders; and (2) and cause the reconstituted Corporate Governance and Corporate Responsibility Committee to oversee the implementation and third-party audits of Board-approved action plans with respect to political and lobbying activities.

342022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

23  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Items to Be Voted On

 

Item 1

 

Election of Directors

 

Your Board recommends that you vote FOR All Nominees. all nominees in Item 1

You are being asked to vote for the following 1112 nominees (10 current directors and two new director nominees (Ms. Jana T. Croom and Mr. Sean T. Klimczak) to serve on your Board for a term expiring at the annual meeting of shareholders in 20212023 and until their successors shall have been elected: Jana T. Croom, Steven J. Demetriou, Lisa Winston Hicks, Paul Kaleta, Sean T. Klimczak, Jesse A. Lynn, James F. O’Neil III, John W. Somerhalder II, Steven E. Strah, Andrew Teno, Leslie M. Turner and Melvin Williams. Mr. Klimczak’s nomination to the Board of FirstEnergy was made pursuant to a Common Stock Purchase Agreement that was entered into by the Company and BIP Securities II-B L.P., an affiliate of Blackstone Infrastructure Partners L.P., in connection with Blackstone’s purchase of FirstEnergy common stock in 2021. Michael J. Anderson, Steven J. Demetriou, Julia L. Johnson, Charles E. Jones, Donald T. Misheff, Thomas N. Mitchell, James F. O’Neil III, Christopher D. Pappas, Sandra Pianalto, Luis A. Reyes,are not standing for re-election at the Annual Meeting, and Leslie M. Turner.his/her term on your Board will expire at the conclusion of the Annual Meeting.

The “Biographical Information and Qualifications of Nominees for Election as Directors” section of this proxy statementProxy Statement provides information for all nominees for election at the Annual Meeting. The “Director“Board Qualifications” section of this proxy statementProxy Statement provides information relating to your Board’s and Corporate Governance and Corporate Responsibility Committee’s review of nominees. Your Board has no reason to believe that the persons nominated will not be available to serve after being elected. If any of these nominees would not be available to serve for any reason, shares represented by the appointed proxies will be voted either for a lesser number of directors or for another person selected by your Board. However, if the inability to serve is believed to be temporary in nature, the shares represented by the appointed proxies will be voted for that person who, if elected, will serve when able to do so.

Pursuant to the Company’s Amended and Restated Code of Regulations, at any election of directors, a nominee shall be elected to your Board only if the vote “For” the candidate exceed the votes “Against” the nominee; abstentions and brokernon-votes will have no effect. Our Corporate Governance Policies also provide that in an uncontested election of directors (i.e., an election where the only nominees are those recommended by your Board), any nominee for director who receives a greater number of votes “Against” his or her election than votes “For” his or her election will promptly tender his or her resignation to the Corporate Governance and Corporate Responsibility Committee following certification of the shareholder vote. The Corporate Governance and Corporate Responsibility Committee will promptly consider the tendered resignation and will recommend to your Board whether to accept or reject the tendered resignation no later than 60 days following the date of the shareholders’ meeting at which the election occurred. In considering whether to recommend acceptance or rejection of the tendered resignation, the Corporate Governance and Corporate Responsibility Committee will consider factors deemed relevant by the committee members, including the director’s length of service, the director’s particular qualifications and contributions to the Company, the reasons underlying the majority withheld vote, if known, and whether these reasons can be cured, and compliance with stock exchange listing standards and the Corporate Governance Policies. In considering the Corporate Governance and Corporate Responsibility Committee’s recommendation, your Board will consider the factors considered by the Corporate Governance and Corporate Responsibility Committee and any such additional information and factors your Board believes to be relevant. Your Board will act on the Corporate Governance and Corporate Responsibility Committee’s recommendation no later than at its next regularly scheduled Board meeting.

 

Your Board Recommends That You Vote“For” All Nominees in Item 1.

 

24  |  FirstEnergy Corp.2020 Proxy Statement

FIRSTENERGY CORP.

35


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Item 2

 

Ratification of the Appointment of the Independent Registered Public Accounting Firm For 20202021

 

Your Board recommends that you vote FOR Item 2.2

You are being asked to ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm to examine the books and accounts of the Company for the fiscal year ending December 31, 2020.2022. While our Amended and Restated Code of Regulations does not require shareholders to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm, we are submitting the proposal for ratification as a matter of good corporate governance. However, if shareholders do not ratify the appointment, the Audit Committee will reconsider retaining PricewaterhouseCoopers LLP.LLP in future years. Even if the appointment is ratified, the Audit Committee, at its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders. A representative of PricewaterhouseCoopers LLP is expected to attend the Annual Meeting and will be available to respond to appropriate questions and have an opportunity to make a statement if he or she wishes to do so. We refer you to the “Matters Relating to the Independent Registered Public Accounting Firm” section of this proxy statementProxy Statement for information regarding services performed by, and fees paid to, PricewaterhouseCoopers LLP during the years 20182020 and 2019.2021. Item 2 requires the affirmative vote of a majority of the votes cast and abstentions will have no effect. There can be no brokernon-votes on Item 2 as it is considered a “routine” matter under applicable NYSE rules.

 

Your Board Recommends That You Vote“For” Item 2.

 

25  |  FirstEnergy Corp.2020 Proxy Statement

362022 PROXY STATEMENT


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Item 3

 

Approve, on an Advisory Basis, Named Executive Officer Compensation

 

Your Board recommends that you vote FOR Item 3.3

The following proposal provides shareholders the opportunity to cast an advisory,non-binding vote to approve the compensation of the NEOs (a“Say-on-Pay” vote) as further described in the Compensation Discussion and Analysis (“CD&A&A”) and the related compensation tables and narrative disclosure. This resolution is required pursuant to Section 14A of the Securities Exchange Act of 1934. Currently, the advisory vote is held annually. The next advisory vote on NEO compensation is scheduled to occur at the Company’s 20212023 Annual Meeting of Shareholders. Your Board strongly supports the Company’s executive pay practices and asks shareholders to support its executive compensation program by adopting the following resolution:

“RESOLVED, that the shareholders approve, on an advisory basis, the compensation of the FirstEnergy Corp. Named Executive Officers, as such compensation is disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables, and the other related narrative executive compensation disclosure contained in the proxy statement.”

The primary objectives of the Company’s executive compensation program are to attract, motivate, retain, and reward the talented executives, including the NEOs, who we believe can provide the performance and leadership to achieve success in the highly complex energy industry. Our executive compensation program is centered on apay-for-performance philosophy. After robust benchmarking and shareholder outreach, the Compensation Committee and your Board approved a number of key changes effective in 2018 and have generally maintained the same structure and design for the executive compensation program, for 2019, to better align executive pay with shareholder interests.

In deciding how to vote on this proposal, we encourage you to read the CD&A for a more detailed discussion of our executive compensation programs and practices applicable to the NEOs, beginning on page 43.54.

Your Board strongly believes that our compensation philosophy, in conjunction with continued shareholder outreach, is in the best interests of shareholders. We will continue to annually review and evaluate all compensation plans and programs with the goal of aligning such plans and programs with market practice where appropriate and with the best interests of our shareholders. Item 3 is an advisory proposal that requires the affirmative vote of a majority of the votes cast; abstentions and brokernon-votes will have no effect.

Although this advisory vote isnon-binding, your Board and the Compensation Committee value the views of our shareholders and expect to consider the voting results when considering future executive compensation practices for the NEOs.

 

Your Board Recommends That You Vote“For” Item 3.

 

26  |  FirstEnergy Corp.2020 Proxy Statement

FIRSTENERGY CORP.

37


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Item 4

 

ApproveShareholder Proposal Requesting a Report Relating to Electric Vehicles and Charging Stations with Regards to Child Labor Outside of the FirstEnergy Corp. 2020 Incentive Compensation PlanUnited States

 

XYour Board recommends that you vote FORAGAINST Item 4.

SubjectSteven J. Milloy, 12309 Briarbush Lane, Potomac, MD 20854, plans to shareholder approval, your Board has adoptedintroduce the FirstEnergy Corp. 2020 Incentive Compensation Plan (later referred to asfollowing resolution at the Plan). The purposeAnnual Meeting. We have been notified that Mr. Milloy is the beneficial owner of the Plan is to promote the success of your Company and its subsidiaries by providing incentives to certain employees and directors that are expected to help link their personal interests to the long-term financial success of your Company and its subsidiaries and to help increase shareholder value. By adopting the Plan, your Board believes your Company will continue to be able to attract, motivate and retain the employees and directors whose judgment, interest, efforts, and special skills will help enable your Company to succeed. The Plan provides for equity, equity-based and cash-based awards the Company intends to grant under its Short-Term Incentive Program or Long-Term Incentive Program. The Plan will be effective when it receives approval by the shareholders of your Company and will terminate on the 10th anniversary of the effective date (unless terminated earlier pursuant to its terms).

Purpose of the Proposal

You are being asked to approve the proposed Plan, including the authority to issue shares (as described below) for awards under the Plan. Based on the number of shares available under the current FirstEnergy Corp. 2015 Incentive Compensation Plan, including as amended, (referred to as the Predecessor Plan), and the Company’s historical grant practices, approval of the Plan is necessary in order to have sufficient shares available in the future for your Company’s customary annual incentive awards and other awards to attract, retain and motivate certain employees in specific situations. The affirmative vote of a majority of the votes cast is required to approve the Plan. Under NYSE requirements for the approval of equity plans, abstentions will be counted and have the same effect as “against” votes, and brokernon-votes will have no effect. A summary of the principal features of the Plan is provided below, but is qualified in its entirety by reference to the full text of the Plan that is attached as Appendix A to this proxy.

Why We Believe You Should Vote for this Item

The Plan authorizes the Committee to provide stock options, stock appreciation rights (referred to below as SARs), restricted stock, restricted stock units (referred to below as RSUs), performance shares, other stock-based awards, cash-based awards and dividends and dividend equivalents for the purposes described above. Some of the key features of the Plan that reflect your Company’s commitment to effective management of equity and incentive compensation are set forth below.

Your Company believes its future success depends in part on its ability to attract, motivate, and retain high quality employees and directors and that the ability to provide equity-based and incentive-based awards under the Plan is critical to achieving this success. Your Company would be at a severe competitive disadvantage if it could not use share-based awards to recruit and compensate its employees and directors. The use of common stock as part of your Company’s compensation program is also important because equity-based awards are an essential component of its compensation program for certain employees, as they help link compensation with long-term shareholder value creation and reward participants based on service and/or performance.

As of March 9, 2020, 2,784,972 shares of common stock remained available for issuance under the Predecessor Plan. If the Plan is not approved, your Company may be compelled to increase significantly the cash component of its employee and director compensation, which approach may not necessarily align employee and director compensation interests with the investment interests of your Company’s shareholders. Replacing equity awards with cash also would increase cash compensation expense and use cash that might be better utilized.

The following includes aggregated information regarding your Company’s view of the overhang and dilution associated with the Predecessor Plan and the potential dilution associated with the Plan. This information is as of March 9, 2020. As of that date, there were approximately 541,730,312 shares of common stock outstanding:

Outstanding full-value awards (restricted stock, RSUs and performance shares, based on maximum performance): 4,073,306 shares (approximately 0.75% of the outstanding common stock);

27  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Outstanding stock options: 80,257 shares (approximately 0.01% of the outstanding common stock) (outstanding stock options have a weighted average exercise price of $37.75 and a weighted average remaining term of less than 1 year);

In summary, total common stock subject to outstanding awards, as described above (full-value awards and stock options): 4,153,563 shares (approximately 0.77% of the outstanding common stock);

Total common stock available for future awards under the Predecessor Plan: 2,784,972 shares (approximately 0.51% of the outstanding common stock) (however, as noted above, no further grants will be made under the Predecessor Plan upon the effective date of the Plan so your Company views these shares, which exclude anticipated dividend equivalents that are paid under the Predecessor Plan, as “rolling into” the new Plan based on the design of the new Plan);

In summary, the total number of shares of common stock subject to outstanding awards (4,153,563 shares, including the anticipated dividend equivalents under the Predecessor Plan of 250,000 shares), plus the total number of shares of common stock available for future awards under the Predecessor Plan (2,784,972 shares), represents a current overhang percentage of 1.28% (in other words, the potential dilution of your Company’s shareholders represented by the Predecessor Plan);

Proposed common stock available for awards under the Plan: 10,000,000 shares, assuming none of the 2,784,972 shares remaining available under the Predecessor Plan are granted prior to effectiveness of the Plan (approximately 2.36% of the outstanding common stock – this percentage reflects the simple dilution of your Company’s shareholders that would occur if the Plan is approved); and

The total common stock subject to outstanding awards as of March 9, 2020 (4,153,563 shares, including the anticipated dividend equivalents under the Predecessor Plan of 250,000 shares), plus the proposed common stock available for future awards under the Plan (12,784,972 shares), represent a total overhang of 16,938,535 shares (3.13%) under the Plan.

Based on the closing price on the NYSE for your Company’s common stock on March 9, 2020 of $42.93 per share, the aggregate market value as of March 9, 2020 of the 10,000,000 new shares of common stock requested under the Plan was $429,300,000.

In fiscal years 2017, 2018, and 2019, your Company granted awards under the Predecessor Plan covering approximately 862,187 shares, 887,063 shares, and 650,249 shares, respectively. Based on your Company’s basic weighted average common stock outstanding for those three fiscal years of 444,058,676, 491,828,691, and 535,069,588, respectively, for the three-fiscal-year period 2017-2019, the average burn rate, not taking into account forfeitures, was 0.17% (the individual years’ burn rates were 0.19% for fiscal 2017, 0.18% for fiscal 2018, and 0.12% for fiscal 2019).

In determining the number of shares to request for approval under the Plan, your Company’s management team worked with the Committee to evaluate a number of factors, including your Company’s recent share usage and criteria expected to be utilized by institutional proxy advisory firms in evaluating this proposal for the Plan.

If the Plan is approved, your Company intends to utilize the shares authorized under the Plan to continue its practice of incentivizing key individuals through equity grants. Your Company currently anticipates that the shares requested in connection with the approval of the Plan will last for about 5 years, based on your Company’s historic grant rates and the approximate current share price, but could last for a different period of time if actual practice does not match recent rates or the share price changes materially. As noted below, the Committee generally retains full discretion under the Plan to determine the number and amount of awards to be granted under the Plan, subject to the terms of the Plan, and future benefits that may be received by participants under the Plan may not be determinable at this time.

Your Company believes that it has demonstrated a commitment to sound equity compensation practices in recent years. Your Company recognizes that equity compensation awards dilute shareholders’ equity, so it has carefully managed its equity incentive compensation. Your Company’s equity compensation practices are intended to be competitive and consistent with market practices, and it believes its historical share usage has been responsible and mindful of shareholder interests, as described above.

In evaluating this proposal, you should consider all of the information in this proposal.

28  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Material Features of the Plan

Plan Administration.    Generally, the Plan will be administered by the Compensation Committee of your Board (later referred to in this Item 4 as the Committee). However, the Plan is administered by the full Board or the Committee with respect to awards granted tonon-employee directors. With respect to awards granted to employees, the Committee has the discretionary power to, among other things, determine the nature and terms of awards and interpret the terms of the Plan, any award agreement and any other agreement or document related to the Plan. In addition, the Committee is authorized to take any action it determines in its sole discretion to be appropriate subject only to the express limitations contained in the Plan, and no authorization in any Plan section or other provision of the Plan is intended or may be deemed to constitute a limitation on the authority of the Committee. With respect to awards granted tonon-employee directors, your Board has the discretionary power to, among other things, interpret the terms of the Plan, any award agreement and any other agreement or document related to the Plan. The Committee also may adopt such rules, regulations, forms, instruments, and guidelines for administering the Plan as it deems necessary or proper. The Committee may under certain conditions delegate to an officer of your Company the authority to grant a certain number of awards to employees or directors who are not deemed to be insiders for purposes of Section 16 of the Exchange Act. Actions taken and interpretations and determinations made by the Committee will be final and binding upon participants, your Company and all other individuals.

Eligibility.    All employees of your Company and its subsidiaries, plus allnon-employee directors of your Company, are eligible to participate in the Plan. The Plan authorizes the Committee to designate any employee of your Company and its subsidiaries as a participant in the Plan. Your Board may designate anynon-employee director of your Company as a participant in the Plan. As of March 9, 2020, there were zero employees of your Company, approximately 12,316 employees of your Company’s subsidiaries and10 non-employee directors of your Company eligible to participate in the Plan. The basis for participation in the Plan by eligible persons is the selection of such persons by the Committee or your Board (or their proper delegate) in its discretion. Our current expectation is that, in general, all regular employees (approximately 12,316 as of the date of this proxy statement) of your Company and its subsidiaries may receive cash-based awards granted under the Plan under your Company’s short-term incentive programs and all executives of the organization (approximately 414 as of the date of this proxy statement) may receive equity or equity-based awards granted under the Plan under your Company’s long-term incentive program.

Shares Available Under the Plan.    Subject to adjustment as described in the Plan and the share counting rules set forth in the Plan, the maximum number of81 shares of your Company’s common stock, par value $0.10 per share, availablestock.

Child Labor Audit

Resolved:

Shareholders request that, beginning in 2022, First Energy report to shareholders on the extent to which its business plans with respect to electric vehicles and their charging stations may involve, rely or depend on child labor outside the United States.

Supporting Statement:

First Energy’s business plans involve the promotion of electric vehicles. First Energy hopes to profit from the charging of such vehicles.

But according to Amnesty International and media reports:

— Cobalt is an expensive metal used in electric car batteries.

— 59% of the global cobalt supply comes from the Democratic Republic of the Congo

— Cobalt mining in the Congo is often done by children — as many as 40,000 — working in brutal and unsafe conditions. A euphemism for awards granted underthese children is “informal” workers.

— Many of these children are injured and killed in these conditions.

— Such child labor is a gross violation of human rights.

In addition, the Plan (including dividendsglobal cobalt supply change is now controlled by Communist China, which is a known and egregious violator of human rights.

More information on these human rights violations may be found at https://junkscience.com/2020/10/mean-and-unclean-electric-cars-powered-by-child-labor-in-africa/.

Shareholders have the right to know the extent to which, if any and intentionally or dividend equivalents paid in shares) is:not, First Energy’s business plans rely on or involve the direct or indirect exploitation of child labor and/or the violation of the human rights of child workers outside the United States.

Your Company’s Response — Item 4

Your Board has carefully considered the foregoing shareholder proposal and unanimously recommends a vote AGAINST it for the following reasons:

With respect to material and equipment purchases and related services, your Company’s suppliers are required to comply with FirstEnergy’s Code of Conduct and Supplier Code of Conduct, and we work directly with suppliers and through industry coalitions to address supply chain social and environmental issues.

 

10,000,000 shares, plus

the total number of shares remaining available for grant under the Predecessor Plan as of the effective date of the Plan, plus

the total number of shares that are subject to awards currently outstanding under the FirstEnergy Corp. 2015 Incentive Compensation Plan, including as amended, that are not used due to the forfeiture, cancellation or expiration of such awards.

Assuming target level payouts, as of March 9, 2020, there are approximately 4,599,092 shares remaining available under the Predecessor Plan and approximately 2,339,443 shares underlying outstanding awards granted under the Predecessor Plan (or the prior plan); assuming maximum level payouts, these amounts would be 2,784,972 shares and 4,153,563 shares, respectively. Actual results will not be determined until the end of each applicable performance period and may be adjusted upward or downward subject to the achievement of performance targets. In connection with the approval of the Plan, no further awards will be granted under the Predecessor Plan. Awards previously issued under the Predecessor Plan will continue to be governed in accordance with the terms of such plan. As of March 9, 2020, the closing price of a common share of your Company was $42.93. Shares available for issuance under the Plan may be authorized and unissued shares, treasury shares or shares obtained on the open market.

If an award granted under the Plan (in whole or in part) is cancelled or forfeited, expires, is settled for cash, or is unearned, the shares subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, again be available under the aggregate share limit. If, after the effective date, any shares subject to an award granted under the Predecessor Plan are forfeited, or an award granted under the Predecessor Plan (in whole or in part) is cancelled or forfeited, expires, is settled

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for cash, or is unearned, the shares subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, be available for awards under the Plan. The maximum number of shares that may be issued under an award will be counted against the aggregate share limit at the time of grant and reserved for issuance, unless the award agreement provides that the award will be paid in cash. Any award that is to be paid in cash pursuant to the applicable award agreement, whether or not the award is denominated in shares, will not result in any shares being counted against the aggregate share limit and reserved for issuance. Any shares underlying dividend equivalents that are payable in shares shall be counted against the aggregate share limit when issued or credited, but shares underlying dividend equivalents that are forfeited or cancelled, expire, are paid in cash or are unearned, shall be available again under the Plan. Any dividends or dividend equivalents that are payable in cash under the applicable award agreement, whether or not such dividends or dividend equivalents are denominated in shares, shall not result in any shares being counted against the aggregate share limit.

Adjustments.    In the event of any corporate event or transaction (including a change in the shares of your Company or the capitalization of your Company) such as a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend, stock split, reverse stock split, split up or split off, spinoff or spinout, other distribution of stock or property of your Company, combination of shares, exchange of shares, dividendin-kind or other like change in capital structure, number of outstanding shares or distribution (other than normal cash dividends) to shareholders of your Company, issuance of rights or warrants, or any similar corporate event or transaction, the Committee, in order to prevent dilution or enlargement of the participants’ rights under the Plan, will substitute or adjust, as applicable, the number and kind of shares that may be issued under the Plan or under particular forms of awards, the number and kind of shares subject to outstanding awards, the exercise price applicable to outstanding awards, other award terms, and other value determinations applicable to outstanding awards. Further, the Committee, in its sole discretion, may make appropriate adjustments in the terms of any awards under the Plan to reflect, or related to, the changes or distributions described above and to modify any other terms of outstanding awards, including modifications of performance goals and changes in the length of performance periods.

Subject to certain conditions as described in the Plan, the Committee may make adjustments in the terms and conditions of, and the criteria included in, awards, including in recognition of unusual or nonrecurring events affecting one or more participants, your Company or the financial statements of your Company or of changes in applicable laws, regulations or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

Allowances for Conversion Awards and Assumed Plans. Shares issued or transferred under awards granted under the Plan in substitution for or conversion of, or in connection with an assumption of, stock options, SARs, restricted stock, RSUs, or other stock or stock-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with your Company or any of its subsidiaries will not count against (or be added to) the aggregate share limit or other Plan limits. Additionally, shares available under certain plans that we or our subsidiaries may assume in connection with certain corporate transactions from another entity may be available for certain awards under the Plan, under circumstances further described in the Plan, but will not count against (or be added to) the aggregate share limit or other Plan limits.

No Liberal Share Counting Provisions.    The Plan prohibits “liberal share counting” by requiring that no shares tendered or otherwise used in payment of a stock option’s exercise price may be added back into the aggregate share limit. The Plan also provides that no shares withheld or otherwise used in satisfaction of tax withholding obligations may be added back into the aggregate share limit. The full number of shares covered by a SAR, to the extent that it is settled in shares, and whether or not all shares are actually issued to a participant upon exercise of the SAR, will be considered used and therefore may not be added back to the aggregate share limit. If your Company repurchases shares with stock option exercise proceeds, those shares will not be added to the aggregate plan limit.Lastly, if a participant has elected to give up the right to receive compensation in exchange for shares based on fair market value, such shares will not count against the aggregate plan limit.

Non-Employee Director Compensation Limit.    Nonon-employee director will be granted, in any one calendar year, compensation for such service having an aggregate maximum value (measured at the date of grant as applicable and calculating the value of any awards based on the grant date fair value for financial reporting purposes) in excess of $750,000.

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Prohibition on Repricing of Options or SARs.    Subject to the adjustment provisions described above in the subsection titled “Adjustments”, in no event will the Committee or your Board, without first obtaining the approval of your Company’s shareholders, have the right to:

cancel outstanding stock options or SARs for the purpose of replacing or regranting such stock options or SARs with an exercise price that is less than the original exercise price of the stock option or SAR;

change the exercise price of a stock option or SAR to an exercise price that is less than the original exercise price; or

cancel an outstanding stock option or SAR with an exercise price that is more than the fair market value of a share on the date of cancellation in exchange for cash or another award.

Performance Measures.    Awards under the Plan may be conditioned upon the attainment of performance measures. Performance measures are the measurable performance objective or objectives established pursuant to the Plan for participants who have received performance-based awards. Any performance measure(s) may be used to measure the performance of your Company or any subsidiary as a whole or any business unit or segment of your Company or a subsidiary. Any performance measures may also be used as a comparison of the performance of your Company, a subsidiary or a division to the performance of a group of comparator companies, or a published or special index. The Committee may select a share price performance measure as compared to various stock market indices. The Committee also has the authority to provide for accelerated vesting of any award based on the achievement of performance goals pursuant to the performance measures. In establishing performance measures, the Committee may provide that any financial factor that in whole or in part comprises any performance measure will be determined in accordance with U.S. generally accepted accounting principles (later referred to as GAAP) or that any such financial factor may benon-GAAP (i.e., that such financial factor may be adjusted to exclude from its calculation one or more GAAP ornon-GAAP items). If the Committee determines that a change in the business, operations, corporate structure or capital structure of your Company, or the manner in which it conducts its business, or other events or circumstances render the performance measures unsuitable, the Committee may in its discretion modify such performance measures or the goals or actual levels of achievement regarding the performance measures, in whole or in part, as the Committee deems appropriate and equitable.

Performance goals and performance measures under the Plan may be selected by the Committee in its sole discretion. Anon-exhaustive list of performance measures that could be used for performance-based awards under the Plan includes the following: net earnings or net income (before or after taxes); income; retained earnings; earnings per share; net sales or revenue growth; net operating profit or income; operating earnings; return measures (including return on assets, capital, invested capital, equity, sales or revenue); cash flow (including operating cash flow, free cash flow, cash flow return on equity and cash flow return on investment); earnings before taxes, interest, depreciation and/or amortization (later referred to as EBITDA); adjusted EBITDA; gross or operating margins; productivity ratios; share price (including growth measures and total shareholder return); costs or cost control; margins; operating efficiency; operating and maintenance cost management; demand-side management (including conservation and load management); market share; service reliability; energy production availability performance; results of customer satisfaction or employee satisfaction surveys; aggregate product price and other product price measures; working capital; economic value added (later referred to as EVA®), which is net operating profit after tax minus the sum of capital multiplied by the cost of capital; management development; succession planning; shaping legislative and regulatory initiatives and outcomes; taxes; safety record; depreciation and amortization; total shareholder return; workforce hiring plan measures; air quality control project management; environmental; risk management; technology upgrade measures; financial contribution to earnings from special projects or initiatives; capital expenditures; generation output; power supply sourcing adequacy; results of asset acquisitions; results of asset divestitures; capitalization; credit metrics; credit ratings; compound growth rates (earnings, revenue, income from continuing operations, cash generation, etc.); generation outage duration; transmission outage duration; distribution outage duration; value creation; effective tax rate; financing flexibility; financing capability; and value returned to shareholders.

Types of Awards.    The Plan permits awards in the form of stock options, SARs, restricted stock, RSUs, performance shares, other stock-based awards, cash-based awards and dividends and dividend equivalents. Each award is evidenced by an agreement by which the Committee establishes its specific terms and conditions. An agreement, certificate, resolution or other type or form of writing or other evidence

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approved by the Committee or your Board (as applicable) that sets forth the terms and conditions of an award granted under the Plan will be considered the award agreement for such award. An award agreement may be in an electronic medium, may be limited to notation on the books and records of your Company and, unless otherwise determined by the Committee your Board (as applicable), need not be signed by a representative of the Company or a participant. In addition,non-employee Directors are eligible to receive any type of award, which may or may not be subject to vesting requirements.

Stock Options.Awards under the Plan may take the form of stock options that may betax-favored incentive stock options ornon-qualified stock options. If an award under the Plan is made in the form of stock options, in general, the exercise price of the option may not be less than the fair market value of the underlying shares on the date of grant (except with respect to stock options issued in substitution for, in conversion of, or in connection with certain corporate transactions as described above). The term of any stock option cannot exceed ten years. The Committee is entitled to set all terms in connection with a participant’s right to exercise an award and may impose such conditions as it determines. No participant may be awarded incentive stock options that are first exercisable during any calendar year which involve shares having a fair market value, determined at the time of grant, in excess of $100,000 (the stock options in excess of this amount will be treated asnon-qualified stock options). The maximum number of shares that may be issued with respect to incentive stock options is 10 million shares. Options can be settled in shares or in cash, as determined by the Committee and provided in the applicable award agreement. Stock options (in whole or in part) may become exercisable upon certain events, including a participant’s death, disability, or termination of employment under certain circumstances, as determined by the Committee.

Stock Appreciation Rights.Awards under the Plan may take the form of a SAR, with terms as determined by the Committee. Each SAR allows the holder to realize the value of the difference between the exercise price set by the Committee and the market value of a share when the SAR is exercised. Except with respect to SARs issued in substitution for, in conversion of, or in connection with certain corporate transactions as described above, the exercise price set by the Committee may not be less than the fair market value of the underlying shares as of the date of grant. The term of a SAR cannot exceed ten years. If the value of the stock has not increased during its term, the SAR will have no value. SARs may be settled in cash, shares, or a combination of cash and shares, as determined by the Committee and provided in the applicable award agreement. SARs (in whole or in part) may become exercisable upon certain events, including a participant’s death, disability, or termination of employment under certain circumstances, as determined by the Committee.

Restricted Stock.Awards under the Plan may take the form of shares of restricted stock, with terms as determined by the Committee. Restricted stock involves the issuance to participants of shares subject to restrictions on transferability and any other conditions or restrictions the Committee may impose. The restrictions lapse if either the holder remains employed by your Company or its subsidiaries for a period of time established by the Committee under the applicable award agreement or satisfies other conditions or restrictions, including performance-based restrictions, during the period of time established by the Committee. Participants holding shares of restricted stock granted under the Plan may be granted the right to exercise full voting rights with respect to those shares prior to the lapse of the restrictions on the shares. Restricted stock (in whole or in part) may become nonforfeitable or vest upon certain events, including a participant’s death, disability, or termination of employment under certain circumstances, as determined by the Committee.

Restricted Stock Units.    Awards under the Plan may take the form of RSUs, with terms as determined by the Committee. An RSU is the right of the participant to receive one share of common stock, or its cash equivalent (or a combination of cash and shares), upon the satisfaction of restrictions or requirements set forth in the applicable award agreement. Requirements may consist of remaining in the employ of your Company or a subsidiary for a certain period of time or the achievement of performance goals. The participant will have no rights of ownership in the shares subject to the RSUs and shall have no right to vote such shares until the shares, if any, are issued to the participant upon satisfaction of the award’s underlying requirements. RSUs (in whole or in part) may become nonforfeitable or vest upon certain events, including a participant’s death, disability, or termination of employment under certain circumstances, as determined by the Committee.

Performance Shares.Awards under the Plan may take the form of performance shares, with terms as determined by the Committee. The period of time during which performance goals are measured will be of such duration as the Committee shall determine. Performance shares are denominated in shares of common stock and may be settled in cash, shares, or a combination of cash and shares, as determined by

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the Committee. Performance shares (in whole or in part) may vest upon certain events, including a participant’s death, disability, or termination of employment under certain circumstances, as determined by the Committee.

Other Stock-Based Awards and Cash-Based Awards.Other stock-based awards are awards of stock-based compensation (including unrestricted shares) that do not fit within the scope of the other specifically enumerated types of awards but are denominated in shares or based on the price of your Company’s common stock. Terms of these awards will be determined by the Committee. The Committee may make cash-based awards with a range of payment levels. Cash-based awards are denominated in dollar amounts. Other stock-based awards and cash-based awards may be based upon the achievement of performance goals. Other stock-based awards and cash-based awards may be settled in cash, shares, or a combination of cash and shares, as determined by the Committee. Cash-based awards or other stock-based awards (in whole or in part) may become nonforfeitable or vest upon certain events, including a participant’s death, disability, or termination of employment under certain circumstances, as determined by the Committee.

Awards toNon-Employee Directors.    Your Board or the Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting of any type of an award tonon-employee directors of your Company. Each grant of an award to anon-employee director will be upon such terms and conditions as approved by your Board or the Committee and will be evidenced by an award agreement in such form as will be approved by your Board or the Committee. Each award agreement will specify in the case of a stock option and free-standing SAR, an exercise price per share, which (except with respect to stock options or SARs issued in substitution for, in conversion of, or in connection with certain corporate transactions as described above) will not be less than the fair market value per share on the date of grant. Each stock option and SAR granted under the Plan to anon-employee director will expire not more than 10 years from the date of grant. If anon-employee director subsequently becomes an employee of your Company or a subsidiary while remaining a member of your Board, any award held by such individual at the time of such commencement of employment will not be affected by such employment.Non-employee directors may be granted, or may be permitted to elect to receive, pursuant to procedures established by your Board or the Committee, all or any portion of their annual retainers, meeting fees or other fees in shares or restricted shares (or other awards) in lieu of cash.

Transferability of Awards.     Except as otherwise provided in an applicable award agreement or as determined by the Committee, no award granted under the Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and in no event may an award be transferred for value.

Dividends and Dividend Equivalents.    Awards of restricted stock, RSUs, performance shares, cash-based awards and other stock-based awards may provide for the issuance of dividends, dividend equivalents and/or other distributions with respect to the shares subject to the awards. Awards of stock options or SARs may not provide for the issuance of dividends, dividend equivalents or other distributions on either a current or deferred basis. With respect to any award of restricted stock, RSUs, performance shares, cash-based awards or other stock-based awards, any dividends, dividend equivalents and/or other distributions on such awards will be deferred until and paid contingent upon the vesting of such awards (including, if applicable, the achievement of the relevant performance goals).

Change in Control of the Company – Double Trigger Vesting Provision.    The following description of the treatment of awards in the event of a change in control of your Company shall apply unless otherwise determined by the Committee regarding an award (as reflected in the applicable award agreement). Upon a change in control of your Company, if a participant retains or is granted a “replacement award” (as described in the Plan) by the successor or acquiring entity, then such replacement award will remain subject to its vesting and/or conditions of exercise after the change in control. If, however, a participant’s employment (or service) is terminated by your Company (or successor entity) for any reason other than cause (generally, as described in the Plan or in the applicable award agreement) in connection with or during the two years after the change in control, then such replacement awards will become fully vested and/or exercisable and all stock options or SARs held by the participant as of the date of the change in control or that constitute replacement awards will remain exercisable until the earlier of one year following the termination of employment or service (unless the agreement provides for a longer term of exercisability after termination of employment or service) or the original termination date of the stock option or SAR. A “replacement award” under the Plan is an award related to publicly traded stock granted by the successor or acquiring entity that is of at least equal value and with no less favorable terms and conditions as the awards held by the participant as of the date of the change in control.

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Upon a change in control, except to the extent a replacement award is retained by or provided to the participant to replace or continue an award, a stock option or SAR will immediately become fully vested and exercisable, and a then-outstanding award whose lapse of restrictions depends solely on service will vest in full and be free of restrictions. The treatment of any other award type will be as determined by the Committee and reflected in the applicable award agreement. However, if, upon a change in control, a participant does not retain or is not granted a replacement award by the successor or acquiring entity, the Committee may:

determine that any or all outstanding awards granted under the Plan, whether or not exercisable, will be canceled and terminated and that in connection with such cancellation and termination the holder of such award may receive for each share of common stock subject to such awards a cash payment (or the delivery of shares of stock, other securities or a combination of cash, stock and securities equivalent to such cash payment) equal to the difference, if any, between the consideration received by shareholders of your Company in respect of a share of common stock in connection with such transaction and the purchase price per share, if any, under the award multiplied by the number of shares of common stock subject to such award (or if the exercise price of an award is greater than the value of the consideration received by shareholders, cancel such award without payment); or

provide that the period to exercise stock options or SARs granted under the Plan shall be extended (but not beyond the expiration of such stock options or SARs).

In general terms, subject to some additional considerations described in the Plan document, and except as may be otherwise set forth in an applicable award agreement, a “change in control” consists of: (1) the acquisition of twenty-five percent (25%) or more of the outstanding common stock or voting power of your Company; (2) the incumbent members of your Board cease to hold a majority, unless a majority of such incumbent members vote to approve the new members; (3) consummation of a reorganization, sale or other disposition of all or substantially all of the assets of your Company, where your Company’s shareholders hold less than 60% of the combined voting power of the surviving company or certain other control thresholds or requirements are not met; or (4) the approval by the shareholders of your Company of a complete liquidation or dissolution of your Company. A “change of control” is defined by reference to your Company (and not its subsidiaries and affiliates).

Withholding Taxes. With respect to withholding required upon the lapse of restrictions, settlement or any other taxable event arising as a result of an award that is payable through the issuance and delivery of shares, unless the Committee determines otherwise, each participant will satisfy his or her withholding requirement by having the Company withhold a number of shares having a fair market value on the date the withholding amount is to be determined in an amount not to exceed the maximum rate for the participant in the applicable jurisdiction.

Recoupment. The Plan and awards granted under the Plan will be subject to your Company’s Executive Compensation Recoupment Policy, as in effect from time to time.

Plan Amendment and Termination; Fractional Shares.    Subject to certain limitations, the Committee may, at any time and from time to time, alter, amend, modify, suspend or terminate the Plan and any award agreement in whole or in part. However, expect for certain changes permitted under the Plan, no termination, amendment, suspension or modification of the Plan or an award agreement will materially and adversely affect any award previously granted under the Plan without the written consent of the participant who received such award (except as permitted pursuant to the Plan’s adjustment provisions described above or in connection with amendments deemed advisable to conform the Plan or any award agreement to applicable laws, regulations and requirements or stock exchange rules). No fractional shares will be issued or delivered under the Plan, and the Committee will decide whether cash, awards or other property will be issued or paid in lieu of fractional shares (or whether fractional shares will be forfeited or otherwise eliminated for no consideration).

Tax Effects

The following is a brief summary of certain of the Federal income tax consequences of certain transactions under the Plan based on Federal income tax laws in effect. This summary, which is presented for the information of shareholders considering how to vote on this proposal and not for Plan participants, is not intended to be complete and does not describe Federal taxes other than income taxes (such as Medicare and Social Security taxes), or state, local or foreign tax consequences.

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Tax Consequences to Participants.

Restricted Stock. The recipient of restricted stock generally will be subject to tax at ordinary income rates on the fair market value of the restricted stock (reduced by any amount paid by the recipient for such restricted stock) at such time as the restricted stock is no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Code (“Restrictions”). However, a recipient who so elects under Section 83(b) of the Code within 30 days of the date of transfer of the shares will have taxable ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares (determined without regard to the Restrictions) over the purchase price, if any, of such restricted stock. If a Section 83(b) election has not been made, any dividends received with respect to restricted stock that are subject to the Restrictions generally will be treated as compensation that is taxable as ordinary income to the recipient.

Performance Shares, Cash-Based Awards and Other Stock-Based Awards. No income generally will be recognized upon the grant of performance shares, cash-based awards or other stock-based awards. Upon payment in respect of theearn-out of performance shares, cash-based awards and other stock-based awards, the recipient generally will be required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received and the fair market value of any unrestricted common stock received.

Nonqualified Stock Options. In general:

no income will be recognized by an optionee at the time anon-qualified stock option is granted;

at the time of exercise of anon-qualified stock option, ordinary income will be recognized by the optionee in an amount equal to the difference between the option price paid for the shares and the fair market value of the shares, if unrestricted, on the date of exercise; and

at the time of sale of shares acquired pursuant to the exercise of anon-qualified stock option, appreciation (or depreciation) in value of the shares after the date of exercise will be treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held.

Incentive Stock Options. No income generally will be recognized by an optionee upon the grant or exercise of an “incentive stock option” as defined in Section 422 of the Code. If common stock is issued to the optionee pursuant to the exercise of an incentive stock option, and if no disqualifying disposition of such shares is made by such optionee within two years after the date of grant or within one year after the transfer of such shares to the optionee, then upon sale of such shares, any amount realized in excess of the option price will be taxed to the optionee as a long-term capital gain and any loss sustained will be a long-term capital loss.

If common stock acquired upon the exercise of an incentive stock option is disposed of prior to the expiration of either holding period described above, the optionee generally will recognize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at the time of exercise (or, if less, the amount realized on the disposition of such shares if a sale or exchange) over the exercise price paid for such shares. Any further gain (or loss) realized by the participant generally will be taxed as short-term or long-term capital gain (or loss) depending on the holding period.

SARs. No income will be recognized by a participant in connection with the grant of a SAR. When the SAR is exercised, the participant normally will be required to include as taxable ordinary income in the year of exercise an amount equal to the amount of cash received and the fair market value of any unrestricted common stock received on the exercise.

RSUs. No income generally will be recognized upon the award of RSUs. The recipient of an RSU award generally will be subject to tax at ordinary income rates on the fair market value of unrestricted common stock on the date that such shares are transferred to the participant under the award (reduced by any amount paid by the participant for such RSUs), and the capital gains/loss holding period for such shares will also commence on such date.

Tax Consequences to Your Company or its Subsidiaries. To the extent that a participant recognizes ordinary income in the circumstances described above, your Company or the subsidiary for which the participant performs services will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not

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an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended from time to time (the “Code”) and is not disallowed by the $1 million limitation on certain executive compensation under Section 162(m) of the Code.

Registration with the SEC

Your Company intends to file a Registration Statementon Form S-8 relating to the issuance of common stock under the Plan with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, as soon as practicable after approval of the Plan by your Company’s shareholders.

New Plan Benefits

In general, it is not possible to determine the specific amounts and types of awards that may be awarded in the future under the Plan because the grant and actual settlement of awards under the Plan will be subject to the discretion of the plan administrator. However, our 2020 compensation program for ournon-employee directors contemplates thatnon-employee directors will be awarded stock grants on a quarterly basis (referred to later in this proxy statement as thenon-employee directors’ equity retainer) with a value of approximately $37,500 per director per quarter ($150,000 annually in the aggregate), of which one installment of approximately $37,500 per director ($375,000 in the aggregate) will have been granted under the Predecessor Plan. If the Plan is approved, we intend for the remainingnon-employee director stock grants for 2020 to be paid under the Plan. The following table sets forth what each of thenon-employee directors are expected to receive under the Plan for the remainder of 2020 (note, the information for this table for each of the NEOs, for all of your Company’s current executive officers as a group, and for all of your Company’s employees (including all current officers who are not executive officers), as a group, respectively, is zero, due to the discretionary nature of new grants under the Plan):

New Plan Benefits

FirstEnergy Corp. 2020 Incentive Compensation Plan

Name and Position

  Dollar Value($)   Number of
Shares of
Common
Stock(2)
 

Non-Executive Director Group(1)

  $        112,500            2,621 
(1)

Proxy
Summary

The dollar value and numberCorporate
Governance & Board of shares of common stock are presented on a per person basis. There are currently10 non-employee directors that comprise theNon-ExecutiveDirectors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Group.Compensation

(2)

Reflects the number of shares to be awarded for the remainder of 2020 based on the closing price of $42.93 on March 9, 2020. Actual stock grants for the remaining payments to be paid in 2020 will be based on average high and low prices at the time the grants are made.Other

Equity Compensation Plan Information

The following table contains information as of December 31, 2019, regarding compensation plans for which shares of FE common stock may be issued.

Plan category

  Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
 Weighted-average
exercise price of
outstanding options,
warrants and rights
 Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
   (a) (b) (c)
Equity compensation plans approved by security holders  4,316,337(1) 37.75(2) 3,947,410(3)
Equity compensation plans not approved by security holders(4)  0 0 0

Total

  4,316,337 37.75 3,947,410

Important

(1)

Represents shares of common stock that could be issued upon exercise of outstanding options granted under the FirstEnergy 2007 Incentive Compensation Plan (“2007 ICP”) and Predecessor Plan. This number also includes 1,930,139 shares subject to outstanding awards of stock based RSUs granted under the Predecessor Plan if paid at target for the threeMatters / Q&A

 

36  |Your Company believes in the importance of ethical sourcing in its supply chain and is committed to responsible business practices. In accordance with our Standard Terms and Conditions for material and equipment purchases and related services, your Company’s business partners, including our suppliers, are required to comply with FirstEnergy’s Code of Conduct (the “Code”). In addition, pursuant to the Code, our business partners such as suppliers, consultants, representatives and agents are also required to follow FirstEnergy’s Supplier Code of Conduct (the “Supplier Code”). All suppliers must meet FirstEnergy’s standards, including fair employment practice; compliance with laws, including labor and human rights laws, regulations, and rules; and environmental protection and sustainability. More specifically, suppliers must ensure that child labor is not used in the performance of the work with FirstEnergy Corp.2020 Proxy Statement

or any company. The Code and the Supplier Code can be found at: www.firstenergycorp.com/responsibility.


LOGORegarding electric vehicles purchased for our own operations, FirstEnergy currently works with two major manufacturers of vehicles based in the United States both of which have robust supply chain programs specifically addressing cobalt sourcing issues, including their participation in the Responsible Cobalt Initiative. Your Company also participates in the Electric Utility Industry Sustainable Supply Chain Alliance, a coalition of utilities and suppliers working together to advance sustainability best practices in utility supply chain activities and supplier networks.

outstanding cycles, as well as 1,930,139 additional shares assuming maximum performance metrics are achieved for the 2017-2019, 2018-2020 and 2019-2021 cycles of stock based RSUs, 2,883 outstanding EDCP related shares to be paid in stock and 372,919 shares related to the FirstEnergy Deferred Compensation Plan for Outside Directors that will be paid in stock. Not reflected in the table are 21,282 shares related to the Allegheny Energy, Inc.Non-Employee Director Stock Plan (“AYE Director’s Plan”) and Allegheny Energy, Inc. Amended and Restated Revised Plan for Deferral of Compensation for Directors (“AYE DCD”) that will be paid in stock per the election of the recipient.
(2)

Only FirstEnergy options were included in the calculation for determining the weighted-average exercise price.

(3)

Represents shares available for issuance, assuming maximum performance metrics are achieved (or approximately 5,877,549 available assuming performance at target) for the 2017-2019, 2018-2020, and 2019-2021 cycles of stock-based RSUs, with respect to future awards under the Predecessor Plan and future accruals of dividends on awards outstanding under Predecessor Plan. Additional shares may become available under the Predecessor Plan due to cancellations, forfeitures, cash settlements or other similar circumstances with respect to outstanding awards. In addition, nominal amounts of shares may be issued in the future under the AYE Director’s Plan and AYE DCD to cover future dividends that may accrue on amounts previously deferred and payable in stock, but new awards are no longer being granted under the AYE Director’s Plan, AYE DCD or the 2007 ICP.

(4)

All equity compensation plans have been approved by security holders.

EffectivenessAs an electric service provider, your Company is responding to the needs and Vote Requireddesires of its customers and policymakers relating to the adoption of electric vehicles and access to charging infrastructure.

ApprovalFirstEnergy does not manufacture electric vehicles or electric vehicle charging stations. FirstEnergy also cannot control or project the types of this proposal requiresvehicles that consumers or businesses may purchase or use within our service area, or control the affirmative votebattery technologies that such vehicles may utilize. Similarly, FirstEnergy cannot control or project how electric vehicle manufacturers might work with their battery suppliers to possibly transition to technologies that are not reliant on cobalt, or address issues related to the sourcing of cobalt as a raw material.

Issues relating to child labor and human rights associated with cobalt production are likely best addressed through existing manufacturing supply chain initiatives and industry trade groups that have a direct influence on such practices.

Your Company’s business strategy appropriately recognizes and seeks to respond to near- and long-terms trend towards transportation electrification.

Increased deployment of electric vehicles is occurring as part of a majoritybroader evolution of transportation – one driven by consumers, policymakers, and other stakeholders seeking to address a range of issues, including the reduction of carbon emissions. FirstEnergy’s business strategy is designed to plan for and respond to these trends, and it is incumbent on your Company to plan for how the electric delivery systems will need to respond to these trends to ensure continued reliability and performance.

Although FirstEnergy is expanding the use of electric vehicles in its fleets and is promoting the use of electric vehicles to mitigate climate change, as discussed above, the issues associated with the sourcing of cobalt are far beyond the scope of FirstEnergy’s supply chain or business plans. FirstEnergy acknowledges that there have been supply chain issues involving human rights identified with the sourcing of cobalt, which is used as a key element for the production of rechargeable batteries, including those used with electric vehicles. However, FirstEnergy believes that the Company’s supply chain policies and partnerships with other companies and trade groups discussed above mitigate these concerns as they relate to FirstEnergy.

Summary

Your Company’s suppliers are required to comply with FirstEnergy’s Code of Conduct and Supplier Code of Conduct. Accordingly, all of our suppliers must meet FirstEnergy’s standards, including a requirement that suppliers must ensure that child labor is not used in the performance of the votes cast. Under NYSE requirements forwork with FirstEnergy or any company. Based on the approvalabove, your Board recommends that you vote AGAINST this shareholder proposal because your Board believes it is not in the best interests of equity plans, abstentions will be countedour shareholders and have the same effect as an “Against” vote, and brokernon-votes will have no effect.Company.

 

XYour Board Recommends That You VoteFor”Against” Item 4. 4.

37  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

 

Item5

FIRSTENERGY CORP.

39


Proxy
Summary

 

Approve a Management ProposalCorporate
Governance & Board of Directors

Items to Authorize Your BoardBe
Voted On

Commitments to Make Certain Future Amendments to the Company’s Amended and Restated Code of Regulations

Employees & ESG

Executive

Your Board recommends that you vote FOR Item 5.& Director Compensation

Other

Important

Matters / Q&A

Your Board has determined it is in the best interests of the Company and its shareholders to seek shareholder approval of an amendment to the Company’s Amended and Restated Code of Regulations (the “Regulations”) to grant your Board authority to make certain future amendments to the Regulations.Even if this proposal is approved, our shareholders would continue to retain the power to adopt, amend, and repeal the Regulations without action by your Board. Also, without shareholder approval, the Ohio Revised Code and the Regulations would still prohibit any amendments to the Company’s Regulations to effect changes in certain areas deemed by the Ohio legislature to be important substantive rights reserved to the shareholders as further described below.

Background and Governance Considerations

Many jurisdictions, such as Delaware, allow the board of directors of a corporation to amend its bylaws (which are the Delaware law counterpart to the Ohio code of regulations) without shareholder approval. In 2006, the Ohio Revised Code was amended to allow boards of directors of Ohio corporations to make certain amendments to their regulations without shareholder approval, if such authority is provided in or permitted by the articles or regulations, so long as such amendments do not divest or limit the shareholders’ power to adopt, amend, or repeal the regulations of the corporation. The amendment to the Ohio Revised Code was intended to provide Ohio corporations with the same flexibility afforded to companies in many other jurisdictions, permitting the board of directors to amend certain bylaw provisions without shareholder approval, and many publicly held Ohio corporations subsequently have revised their regulations to grant this authority to their boards of directors. The Company’s Regulations currently require that all amendments be approved and adopted by our shareholders.

Proposed Amendment

The Ohio Revised Code imposes limitations that prohibit directors from amending corporate regulations to modify certain substantive rights of shareholders. Your Board does not seek to change any of these substantive rights of shareholders. Accordingly, even if shareholders approve this proposal, your Board may not amend the Company’s Regulations to do any of the following:

specifying the percentage of shares a shareholder must hold in order to call a shareholders’ meeting;

specifying the length of the time period required for notice of a shareholders’ meeting;

specifying that shares that have not yet been fully paid can have voting rights;

specifying requirements for a quorum at a shareholders’ meeting;

prohibiting shareholder or director actions from being authorized or taken without a meeting;

defining terms of office for directors or providing for classification of directors;

requiring greater than a majority vote of shareholders to remove directors without cause;

establishing requirements for a quorum at directors’ meetings, or specifying the required vote for an action of the directors;

delegating authority to committees of the board to adopt, amend, or repeal regulations; and

removing the requirement that a control share acquisition of an issuing public corporation be approved by shareholders of the acquired corporation.

If this proposal is approved, our Regulations will be amended to allow your Board to amend the Regulations to the extent permitted by the Ohio Law. The proposed amendment will also allow your Board to more

38  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

efficiently address evolving governing norms similarly to other publicly held companies. Accordingly, your Board would be able to make ministerial and other changes to the Regulations without the time-consuming and expensive process of seeking shareholder approval, which would continue to be required if this proposal is not approved. Even if shareholders approve this proposal, shareholders will continue to retain the power to adopt, amend, and repeal the Regulations without action by your Board, and will therefore have the ability to override any amendments made by your Board should they determine that course to be appropriate.

We will be required to promptly notify our shareholders of any amendment that your Board makes to the Regulations by filing a current report on Form8-K with the SEC.

The full proposed amendments to the Regulations is set forth in Appendix B, with additions indicated by underlining. The summary above is qualified in its entirety by reference to the full text of the proposed amendments in Appendix B.

Effectiveness and Vote Required

Your Board has adopted resolutions approving and recommending that shareholders approve the amendment to the Regulations reflected in Appendix B, which is subject to the approval of the amendment by shareholders at the Annual Meeting, and authorizing the preparation and filing of any document necessary or advisable to implement such amendment. The amendment, if approved by the shareholders at the Annual Meeting, would become effective immediately. Approval of this proposal requires the affirmative vote of at least a majority of the voting power of the Company. Abstentions and brokernon-votes will be counted and have the same effect as a vote “against” this item.

Your Board Recommends That You Vote“For” Item 5.

39  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Shareholder Proposal

One shareholder proposal has been submitted for consideration and action by our shareholders.

The shareholder resolution and proposal, for which the Company and your Board disclaim responsibility, are set forth below and are reproduced verbatim in accordance with the applicable rules and regulations. The shareholder resolution and proposal may contain assertions that we believe are factually incorrect. We have not attempted to refute any and all inaccuracies.After careful consideration, your Board recommends that you vote “AGAINST” the shareholder proposal in Item 6 for the reasons noted in the Company’s response following the shareholder proposal.

 

Item 65

 

Shareholder Proposal Requesting Removal of Aggregation Limit for Proxy Access GroupsRegarding Special Shareholder Meetings

 

XYour Board recommends that you vote AGAINST Item 6.5.

John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, California 90278, plans to introduce the following resolution at the Annual Meeting. We have been notified that Mr. Chevedden is the beneficial owner of no less than 5090 shares of your Company’s common stock.

NOTE: The graphic below was submitted as part of the shareholder’s proposal.

Proposal 65MakeSpecial Shareholder Proxy Access More AccessibleMeeting Improvement

LOGO

Shareholders request thatask our board of directorsto take the steps necessary to enable as manyamend the appropriate company governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting.

One of the main purposes of this proposal is to give shareholders as may be neededthe right to aggregateformally participate in calling for a special shareholder meeting regardless of their length of stock ownership to the fullest extent possible.

It is important to adopt this proposal to make up for our lack of a shareholder right to act by written consent by a majority of shares outstanding. Many companies provide for both a shareholder right to call a special shareholder meeting and a shareholder right to act by written consent.

Southwest Airlines and Target are companies that do not provide for shareholder written consent and yet provide for 10% of shares to equal 3% of our stock owned continuouslycall for3-years in order a special shareholder meeting.

FirstEnergy shareholders gave 45%-support to enablea shareholder proposal for the shareholder right to act by written consent. This 45%-support likely represented 51%-support from the shares that have access to independent proxy access.

Proxy access for shareholders enables shareholdersvoting advice and are not forced to put their own director candidatesrely on the biased voting advice of FE management.

FirstEnergy management should support a proposal topic that earns majority shareholder support—especially at a company ballot to see if they can be elected. A competitive election is goodlike FE where the stock price performs so poorly and was fined $230 million in the Ohio nuclear bribery scandal. To partially compensate for everyone. This proposal can help ensure that our management will nominate directors with outstanding qualifications in order to avoid giving shareholdersnot having a reason to exercise their right to use proxy access.written consent by a majority we need a right for 10% of shares to call a special shareholder meeting.

AsA more reasonable right to call a practical matter any group attempting proxy accessspecial meeting might make for more of an incentive for our directors to perform better since a special meeting can elect a new director. For instance Mr. Donald Misheff, FirstEnergy Chairman, received 56 million negative votes at the 2021 annual meeting. This was up to 15-times the negative votes of other FE directors.

And FirstEnergy should plan on the participation of 6%stock was at $82 in stock2008.

It is important to be prepared for FirstEnergy challenging stock ownership by exploiting technical rules in regard to proof of stock ownership.

Underadopt this proposal it is likely that the number of shareholders who participate in the aggregation process would still be a modest number due to the administrative burden on shareholders to qualify as one of the aggregation participants. Plus it is easymake up for management to reject potential aggregating shareholders. The administrative burden on shareholders leads to a number of potential technical errors by shareholders that management can easily detect.

Shareholders should be able to select the ownership structureour lack of a group requesting proxy access. Shareholders are in the best positionshareholder right to know whether it will be more practical to have a few big shareholders or a greater number of smaller shareholders and should not be saddled with inflexible rules. The directors of many companies promote “one sizes does not fit all” in their proxies and this principle should apply here.act by written consent.

Please vote yes:

MakeSpecial Shareholder Proxy Access More Accessible —Meeting Improvement – Proposal 65

 

40  |  FirstEnergy Corp.2020 Proxy Statement

402022 PROXY STATEMENT


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Your Company’s Response — Item 

In 2019, after receiving overwhelming shareholder approval of a proposal to amend our Amended and Restated Code of Regulations, we implemented a proxy access provision for our shareholders that is aligned with current best practices. Proxy access, as further described below, allows eligible shareholders to include their own nominee or nominees for election to your Board in our proxy materials, along with your Board-nominated candidates. The proxy access provision included in our Amended and Restated Code of Regulations provides shareholders with meaningful and appropriate proxy access rights, while taking into account the need to balance the rights of certain shareholders with protecting the interests of all our shareholders. The shareholder proposal seeks the adoption of provisions that would unnecessarily disrupt that balance and are inconsistent with current market practice.5

Your Board has carefully considered thisthe foregoing shareholder proposal and unanimously recommends a vote AGAINST it for the following reasons:

FirstEnergy Shareholders Already Have the Ability to Call Special Shareholder Meetings

Your Board believes that shareholders should have the ability to call special meetings and has continued to give serious consideration to the issue. In 2011, after careful consideration and consultation with numerous shareholders, your Board presented, and our shareholders approved by over 97% of the votes cast (85% of shares then outstanding), the right of holders of 25% or more of the outstanding shares of FirstEnergy to call a special meeting of shareholders. Since then, we have regularly engaged with shareholders on a wide range of governance topics, and shareholders, on the whole, have not identified this threshold percentage as a concern to your Board or to management. However, based on your Board’s ongoing review of this topic, as further discussed below we anticipate seeking shareholder approval in 2023 to further reduce this threshold to allow for the right of holders of FirstEnergy to call a special meeting of shareholders to 20% or more of the outstanding shares from the existing 25%.

Anticipated 20% Ownership Threshold Strikes a Reasonable and Appropriate Balance

Your Board continues to support a reasonable and appropriate ownership threshold to call a special meeting for the following reasons:

Your Board believes that a 20% ownership threshold for the right to call a special meeting strikes a reasonable and appropriate balance between empowering shareholders with an important right and protecting against the risk that a small minority of shareholders with potentially narrow, short-term interests would call a special meeting.

Shareholder meetings are significant events that require a substantial monetary commitment on the part of your Company and attention of your Board, officers and employees, thus diverting attention away from their focus on meeting our business objectives and enhancing shareholder value.

Allowing a small minority of shareholders to call a special meeting for any reason would permit such minority to pursue self-interested goals, which could be detrimental to the interest of a majority of our shareholders and other stakeholders.

Your Board also considered the composition of the Company’s shareholder base, which currently includes several shareholders that individually hold greater than 5% of our common stock.

Company to Propose Reducing Special Meeting Threshold to 20% (from the existing 25%)

This non-binding shareholder proposal requests that your Board “take the steps necessary to amend the appropriate company governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting.” In 2011, your Board successfully obtained shareholder approval to provide the existing right of holders of 25% or more of the outstanding shares of FirstEnergy to call a special meeting of shareholders.

Based on your Board’s ongoing review of this topic, we anticipate seeking shareholder approval at the Company’s 2023 annual meeting of shareholders to further reduce this threshold to allow for the right of holders of 20% or more of the outstanding shares of FirstEnergy to call a special meeting of shareholders. Due to the requirement to file a preliminary proxy statement and the required timing of such filing, this management proposal is to be presented at next year’s annual meeting of shareholders. Your Board cannot unilaterally adopt the proposed amendment because a shareholder vote is necessary under our governing documents and Ohio Law. Your Board believes reducing the threshold to 20% more appropriately and effectively implements the policy at issue and serves the best interests of our shareholders.

FirstEnergy’s Robust Shareholder Outreach and Engagement and Practices Provide Shareholders Opportunities to Express Opinions on Topics of Interest

Your Board and management continue to view our commitment to ongoing dialogue with our shareholders as key to the Company’s success. To that end, and as discussed in detail earlier in this Proxy Statement in the “Shareholder Outreach and Engagement Program” section, your Company’s leaders meet regularly with shareholders to discuss key developments, our strategy and operational performance. We also meet with shareholders throughout the year to discuss perspectives on corporate governance, executive compensation matters and related disclosures.

FIRSTENERGY CORP.

41


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Moreover, our governance policies promote open communication between shareholders and the Board. The Company encourages shareholders to communicate directly as described in the “Communications with your Board of Directors” section above. Our shareholders also are empowered in other important rights that make the proponent’s request unnecessary. Specifically:

Proxy Access: A group of up to 20 shareholders, representing at least 3% of outstanding shares held for at least three years, can nominate up to two director nominees or 20% of the Board – these nominees, if qualified, would be included in the Company’s proxy materials.

Annual Election of All Directors: Each director nominee stands for election each year, making them subject to shareholder review at each Annual Meeting of Shareholders.

Summary

Your Board believes that 20% of our shareholders should agree that a matter requires shareholder action before a special meeting is called. Based on your Board’s ongoing review of this topic and as further discussed above, we anticipate seeking shareholder approval in 2023 to further reduce this threshold to allow for the right of holders of 20% (from the existing 25%) or more of the outstanding shares of FirstEnergy to call a special meeting of shareholders.

If the proponent’s request was implemented, a relatively small minority of shareholders – potentially with narrow, short-term interests – could possibly call an unlimited number of special meetings, without regard to how costs and other burdens might impact the Company’s future success or to pursue goals at odds with the interests of the vast majority of shareholders. Your Board believes reducing the threshold to 20% more appropriately and effectively implements the policy at issue and serves the best interests of our shareholders. Therefore, your Board recommends that you vote AGAINST this shareholder proposal because your Board believes it is not in the best interests of our shareholders. Forshareholders and the following reasons, your Board recommends that you vote AGAINST Item 6.Company.

X Your Board Recommends That You Vote “Against” Item 5.

422022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Our shareholders already have meaningful and appropriate proxy access rights that were overwhelmingly approved by our shareholders at the 2019 Annual Meeting.Commitment to Employees

As a general matter, proxy access provisions permit certain shareholdersOur commitment to include a specified number of director nominees in our proxy materials for our annual meeting of shareholders. Prior to adopting the current proxy access provision in our Amended and Restated Code of Regulations, we engaged in extensive dialogue with many shareholders (asemployees is an essential part of our ongoing OutreachESG priorities. Our people are the force that move our company forward – that advance our business strategy and Engagement Program) regarding proxy access. In additionESG performance and turn our vision and goals into a reality. We have chosen to askinghighlight the human capital management topics that comprise our shareholderscommitment to employees separately here in the Proxy Statement. Additional ESG topics will be discussed in the following sections. As the topics below illustrate, we are dedicated to developing an inclusive, equitable, rewarding and safe work atmosphere and empowering a diverse and innovative team to make our customers’ lives brighter and our communities stronger.

Human Capital Management

FirstEnergy strives to be the employer of choice in our operating areas, known for our diverse team, our culture of equity and inclusion and our dedication to helping our approximately 12,400 employees reach their viewsfull potential. We want our culture to empower employees to support our mission, build satisfying and engaging careers at FirstEnergy and drive our success.

Our core values – Integrity, Safety, DEI, Performance Excellence, and Stewardship are the foundation for how FirstEnergy operates, behaves and interacts every day. Our core values encompass what matters most at FirstEnergy. They identify the beliefs or ideals expected by everyone in the organization and guide the decisions made and actions taken. Built upon our core values, our talent management and total rewards processes are designed to attract, retain, focus, reward and develop a diverse and skilled workforce of high-performing employees and teams.

FirstEnergy’s financial and operational performance is the result of our employees’ efforts and behaviors. We aim to foster an environment where integrity and ethical behaviors are expected from all levels within the organization. By focusing not only on proxy access generally,what we discussed certain specific termsachieve but, how we achieve it, we build upon and conditionssupport the Company’s mission to be a forward-thinking electric utility that is powered by a diverse team of employees committed to ethics and integrity and doing the right thing every time. Behaviors such as courage, accountability, customer focus, collaboration and trust are encouraged, and employees are accountable for making the right decisions and speaking up when something does not seem consistent with our core values or violates the FirstEnergy Code of Conduct.

Driving a Culture of Compliance and Integrity

Your Board has enhanced its oversight, including the formation of a Compliance Oversight Sub-committee of the then-proposed proxy access right. These discussions focused both onAudit Committee – comprised entirely of independent directors – tasked with overseeing the potential benefits and risks of proxy access. We also conducted a detailed review of the SEC’s prior proposed regulations in this area, which have since been vacated, and benchmarked our proposed proxy access provisions against proxy access provisions at other public companies. In 2019, our shareholders overwhelmingly approved at the 2019 Annual Meeting, and your Board adopted, the proxy access shareholder right currently included in our Amended and Restated Code of Regulations.

The proxy access right that was approved by shareholders in 2019 and that we adopted, among other matters, allows groups of up to twenty shareholders holding an aggregate of 3%assessment of the Company’s stock for at least 3 years to nominate individuals representing up to 20%corporate compliance program and governance practices. This sub-committee, supported by independent counsel and compliance advisors, assists in making recommendations, and overseeing the implementation of the Board (but not less than two shareholder nominated candidates) and to have their candidate(s) included in our proxy statement. Nominations are subjectenhancements to the eligibility, procedural,Company’s corporate compliance program, structure and disclosure requirements set forth ingovernance practices, with the goal of building a best-in-class culture of compliance. Key initial actions are designed to enhance our Amendedcompliance program and Restated Code of Regulations.include:

We believePeople: centralizing the current provisions balance the rights of shareholders while also protecting their interests and are alignedcompliance function with current best practices and the views of many of our shareholders. For instance, benchmarking shows that of the companies that have adopted proxy access, over 90% have implemented a twenty-shareholder or less aggregation limit. Abandoning this common and common sense limit would impose unpredictable and possibly onerous burdens on the Company.dedicated personnel

Allowing an unlimited number of shareholders to aggregate their shares for proxy access purposes would enable small shareholders with narrow, special interests to exercise disproportionate influence over the director nomination process, and expose the Company to costly administrative burdens.

The existing twenty-shareholder aggregation limit protects shareholders in two ways. First, it ensures that proxy access is available to shareholders who have a significant economic stake in the Company and is not driven by some who might have narrow, special interests rather than the long-term interests in the Company. Second, it relieves the Company of the significant administrative burden of having to review and verify eligibility information for an unlimited number of shareholders. After extensive consultation with our shareholders prior to adopting proxy access, we concluded that our existing aggregation limit protects us adequately from these risks, while at the same time ensuring broad access to the proxy access right.

Our commitment to governance best practices, including the existing proxy access right, already ensures Board accountability without unnecessary risk.

We meet with our shareholders throughout the year to share perspectives on long-term strategy, key industry developments, corporate governance and executive compensation. In addition, we maintain a

 

41  |  FirstEnergy Corp.2020 Proxy Statement

Hiring Antonio Fernández as Chief Ethics and Compliance Officer, reporting administratively to the Chief Legal Officer, and reporting to the Audit Committee and its Compliance Oversight Sub-committee

Implementing a dedicated corporate ethics and compliance office, with appropriate resources

Establishing an ethics and compliance steering committee

Processes: enhance compliance standards, policies, and procedures, focusing on

Remediating tone at the top material weakness

Political and charitable donations

Interactions with government officials

FIRSTENERGY CORP.

43


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

LOGO

Third-party management

Financial controls and approval authorities

Reporting: augment reporting mechanisms from employees to the Board and back

 

Multiple channels of reporting and transparency in process

portfolio

Communicate compliance updates through regular cadence of newsletters, updates on the Company Intranet, townhalls, etc.

Concern Management training for leaders and employees

Benchmarking: metrics to measure program

Data analytics and trend or issue spotting

Continuous improvement and sustainability through regular assessments

Department of Justice elements for an effective compliance program

Safety

Safety is a business and cultural imperative embedded in every aspect of governance practices designed to hold your Board accountable and maximize long-term shareholder value. These practices, whichoperations. It is making sure we are described in further detail above in this proxy statement, include annual director elections, a majority voting standard in uncontested elections,doing the right thing at the right time, every time, so everyone returns home safely every day. Having the power to keep each other safe means accepting the responsibility to look out for shareholdersourselves and each other. There is consistent reinforcement of the shared and personal accountability for controlling exposure to call special meetings,hazards, and continuously improving safety behaviors, systems and controls. Zero life-changing events (“LCEs”) is our shared mission. With emphasis on “Leading with Safety,” leaders and employees receive safety training and reinforcement of exposure control concepts to improve job site exposure identification, communication and mitigation to prevent LCEs. FirstEnergy continues to enhance and reinforce leader and employee safety training and exposure control concepts to improve job site exposure identification, communication and mitigation to prevent life changing events. Further, FirstEnergy continues to expand its “Leading with Safety” experiences with its employees to achieve excellence in personal, contractor and public safety.

442022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

COVID-19 Response

As the company continues to navigate the impact of COVID-19, employees’ overall health and wellness remains a primary focus. Throughout the pandemic, we have sought opportunities for growth, flexibility, innovation and continuous improvement – key tenets of our commitment to performance excellence.

Below are some measures taken for the safety and well-being of our employees:

Enhanced safety protocols are in place to protect employees reporting to company facilities. Safety procedures include increased cleaning, masking and social distancing. Field employees are assigned to smaller work groups known as pods, and HVAC systems in company-owned buildings have been upgraded to ensure the offices are safe for the employees who need to be on site.

Approximately half of our workforce continues to work remotely to mitigate the risk of exposure for office-based employees. Our workplace return strategy is being developed to continue to accommodate a more flexible, mobile way of working, while still meeting the needs of the business.

As part of our Total Rewards program, company-paid time off was provided to employees who contractedCOVID-19, were required to be under quarantine,and/or neededto care for family members impacted by the virus. This additional time did not require the use of personal sick time or vacation. We also provided employees with up to four hours of paid time off to receive any form of COVID-19 vaccination, allowed employees to carry over unused 2020 and 2021 paid time off and vacation hours to be used in subsequent years through 2024, and enhanced in-network medical coverage for treatment of COVID-19 and access to telehealth providers, with zero cost share for employees. Lastly, FirstEnergy modified our 401(k) Savings Plan program to align with the federal CARES Act provisions to provide more options and flexibility to plan participants.

We developed COVID-19 protocols that became FirstEnergy’s COVID-19 Medical Screening Process or Hotline. A medical staff consisting of 14+ nurses and doctors and many non-medical intake teams were assembled to manage questions and support processes for COVID-19 related illnesses, perform contact tracing and safely return employees to work.

We temporarily implemented a COVID-19 medical illness and return-from-travel intake application as part of our “Safe Workplace” initiative. We formed a Chronic Condition Return Team, to develop protocols for employees who were considered high-risk if exposed to COVID-19 due to a pre-existing chronic medical condition, evaluate and manage their safe return to the workplace, or use paid time off hours during the health emergency.

We created a Workplace Return Team that is responsible for monitoring COVID-19-related factors across our five-state service territory to determine the best course of action to keep employees safe and heathy. Like many other businesses, we’re assessing the lessons we’ve learned from operating through a pandemic to determine our workplace of the future.

Employees returning from certain storm activities were offered free COVID-19 testing and company sponsored onsite clinics to provide vaccination opportunities for employees.

To continue protecting employees’ health and safety and to align with Centers for Disease Control and Prevention (CDC) guidance, which FirstEnergy has followed since the beginning of the pandemic, we will continue to follow CDC guidance regarding masks and other safety protocols and update employees accordingly.

FIRSTENERGY CORP.

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Additionally, we strengthened our commitment to helping people in need throughout our communities that were hit hard by COVID-19 both in monetary or food donations to food banks and pantries, or safely volunteering at local nonprofit organizations; our employees showed eagerness to help others affected by the global pandemic. We believe by taking extra measures to care for our employees during these unprecedented times, we allow our employees to better serve our communities and customers who rely on us to continually provide their energy needs.

Diversity, Equity and Inclusion

Diversity, Equity and Inclusion is a core value, as well as a corporate objective because a diverse, equitable and inclusive work environment delivers better service to customers, strong operational performance, innovation and a safe and rewarding work experience for employees. FirstEnergy is focused on hiring and developing the best talent to build a diverse workforce for the future, advancing a culture of equity, inclusion and belonging and enhancing our diversity focus with customers, communities and suppliers.

FirstEnergy has increased our focus to advance racial equality and social justice in our communities and in our workplace. Here are some of the highlights:

LOGO

We expanded our DEI Council membership to diversify representation by race/ethnicity, geography and leader level. Currently, we have a 17-member Executive DEI Council – sponsored by our President & CEO – that aims to enhance workforce diversity, create an inclusive work environment, and provide oversight and guidance for FirstEnergy’s integrated DEI strategy. The actions taken in 2021 will continue to expand and evolve to better serve our employees and drive our DEI initiatives.

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With a commitment from top leadership over the last several years, we moved our DEI efforts forward by building within our culture:

 

  A cross-functional DEI Working Group to
develop action plans and oversee DEI
activities across the organization
  

  DEI Implementation Teams, consisting of over 200
employees, in each business unit to effectively
implement actions tailored to each group’s unique
needs
   
             
       
 

  Employee Business Resource Groups
(“EBRGs”) consisting of more than 2,600
members to help celebrate our differences and
support our recruiting, retention, community
and employee development efforts
  

  An annual employee survey to understand their
perceptions about diversity, equity and inclusion,
soliciting their ideas and engaging them in actions to
improve
   
     
             
       
 

  Ongoing training, education and dialogue
forums on a variety of DEI topics for
employees and leaders
  

  Continuing to enhance transparency of DEI data,
talent processes and measurement of progress in an
annual publication to all employees
             
       
 

  A recruiting strategy that leverages
an FE Ambassador Network of 400
employees to help build a diverse talent
pipeline and attract top talent
    
  

FIRSTENERGY CORP.

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Through our core values of DEI and stewardship, we believe we can positively impact our customers, communities and other stakeholders, and strive to protect the environment. Stewardship is about putting the needs of our customers, communities and each other first so we are good corporate citizens and environmentally responsible. By doing this, we seek and listen to feedback and focus on understanding the needs of our internal and external customer. We also actively support development initiatives that enrich and strive to create equity in our communities.

LOGO

Workforce Pay Equity and Compensation

As part of our commitment to DEI, we employed an independent Board Chairman, alongthird party to provide an analysis of our employees’ pay and our pay practices in 2019. Our goal was to ensure there were no pay gaps for female or racially or ethnically diverse employees when compared to all employees. The results validated that goal and confirmed that our internal policies and processes support pay equity and are applied consistently. We take pride in the fact that our employees are treated equitably and provided with our existing proxy access right. wages that are competitive and consistent with positions, skill levels, experience and knowledge.

Employee Growth and Development

We believe understanding our rapidly changing industry and our Company strategy is key to our employees’ abilities to support our mission and meet our customers’ evolving needs. We are committed to preparing our high-performing workforce for the future and

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helping employees reach their full potential. We provide employees with opportunities to develop their skills and competencies and prepare our emerging leaders for expanded responsibilities. Our career management process requires that these practices preserveemployees put an intentional focus on their development and identify development plans that support their ability to learn and grow in their current roles and to help prepare for future opportunities. We provide tools, programs and resources to support employees in owning their careers and development.

Toward that end, we are actively engaged in the Board’s accountability without the expense and risk associated with eliminating the proxy access aggregation limit of twenty shareholders.following initiatives:

LOGO

Talent

Management

We have robust processes to support recruiting, career management, succession planning, and employee and leadership development. In 2021, we strengthened our recruiting processes to ensure transparency, consistency and inclusivity and better ensure unbiased selection of the best candidates. We enhanced our diversity recruiting practices, requiring expanded racial/ethnic diversity on the candidate slates for a broader range of positions and increasing our investment by $200,000 for additional outreach and support to programs and organizations that support racially/ethnically diverse talent.

  We have now trained over 300 hiring champions and experts across FirstEnergy to participate in diverse interviewing panels and continue to provide greater transparency into our talent management processes.

  This transparency fosters a more robust exchange of information and feedback between employees and leaders and promotes a clearer understanding of career management and development opportunities. Meaningful conversations between leaders and their employees empower employees to take ownership of their careers, build trust, and lead to a more inclusive workplace.

  We demonstrated continued agility by successfully facilitating all our leadership training programs, talent reviews, recruiting, co-op/intern program and onboarding processes to virtual formats.

LOGO

Mentoring

Program

We expanded our mentoring program, which is available to all non-physical workers, by encouraging all high performing, high potential racially/ethnically diverse talent to participate in support of their ongoing development.

  This program provides the ability for employees to select a mentor from across the organization. It enhances learning, teamwork and collaboration throughout FirstEnergy, cultivates an environment for professional growth and encourages leaders to guide and prepare colleagues.

  Our mentoring program supports the development and retention of employees, increases job satisfaction for mentees and mentors, and facilitates skill and knowledge-sharing across the Company. Since its inception, over 500 people have participated in the formal program, and it continues to grow.

LOGO

Employee & Leadership Development

We offer multiple leadership and employee development experiences aligned to our core values to build a highly qualified, engaged and diverse leadership pipeline.

  Our New Supervisor and Manager Program (“NSM”), designed to provide consistent training and development to new FirstEnergy leaders, graduated 143 participants in 2021. The NSM program has now graduated over 2,300 leaders since its inception in 2008.

  The Experienced Leader Program (“ELP”) bridges the development between new supervisors and managers and senior executives by providing a development path for experienced manager and director-level employees. Through this program, we equip our leadership with the right tools to coach and support their teams and ultimately drive FirstEnergy’s long-term success. After successfully completing the pilot ELP in 2020, we completed two additional rounds of the Experienced Leader Program in 2021 with more than 45 manager and director-level employees.

  The Discover FE program is a development opportunity to educate employees about FirstEnergy and the utility industry and provide transparency into the innerworkings of all business units. The Distribution Line curriculum was piloted in 2020 and a Day in the Life experience is under development to provide a hands-on component available to learners after completing the self-paced training. A three-year roadmap has been developed to build out curricula to span every business unit in the company.

  The Educate to Elevate program, which creates a pathway to secondary education for employees seeking a 2- or 4-year college degree is now operational in four geographic territories in the FirstEnergy footprint. For the Fall 2021 semester, 49 employees are enrolled to pursue an associate and/or bachelor’s degree.

FIRSTENERGY CORP.

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LOGO

Power

Systems

Institute

 

Your Board recommendsWe are focused on increasing the number of candidates in our Power Systems Institute (“PSI”), an award-winning program for recruiting and developing the next generation of highly trained, dedicated and motivated line and substation workers.

  Upon completion of the 21-month program, students receive an associate degree and are eligible to be hired by FirstEnergy. Since the PSI program’s inception, we have hired more than 2,000 graduates across our service territory.

  Over the next five years, we plan to enhance our PSI recruitment efforts by building and expanding partnerships with community organizations in each of our service areas. These community organizations will enable us to identify and engage individuals and populations that youhave been traditionally under-represented in the PSI program.

vote “AGAINST”

  As these partnerships mature both the organizations and FirstEnergy will be able to meet mutually beneficial objectives that serve the greater community.

  In addition, FirstEnergy has initiated an Equal Access scholarship for the PSI program. The objective of this shareholder proposal (Item 6).scholarship is to mitigate some of the financial barriers currently associated with the program. The scholarship is designed to assist students with living expenses during the program and is another resource to strengthen our recruiting efforts.

 X502022 PROXY STATEMENT

42  |  FirstEnergy Corp.2020 Proxy Statement


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LOGO

Our Commitment to ESG

We believe our success requires strong management and oversight of ESG matters, as well as transparency and accountability regarding where we need to improve and how we’re going to succeed. We also believe staying true to our mission and core values means executing our corporate responsibility approach to pursue objectives and initiatives that positively impact our stakeholders.

The ESG priorities that are discussed in the introduction comprise our corporate responsibility approach and also support the three pillars of our company strategy. In those core ESG areas, we strive to provide transparency, identify risks and opportunities, improve our performance and drive accountability.

In addition to the content below, please see “Our Commitment to Employees” above in this section of the Proxy Statement and our Corporate Responsibility website for additional information on the company’s approach and management of ESG topics important to FirstEnergy. Additionally, this Proxy Statement contains important content on Board, corporate governance and executive compensation topics relevant to the governance component in ESG and essential to our strong governance foundation at FirstEnergy

Climate Strategy and Oversight

Our Climate Strategy, in alignment with our overall strategy is a major catalyst to modernize our transmission and distribution systems, support widespread electrification and increased renewables, and incorporate emerging smart technologies. It also includes our efforts to reduce greenhouse gas emissions across our company and achieve carbon neutrality by 2050. The key components of our Strategy include:

 

Protecting and enhancing our transmission system to enable a clean-energy and reduced carbon future.

Building a technologically advanced distribution platform that improves grid reliability and resiliency, while also enabling our company and customers to support a low carbon economy through efforts such as electrification.

Committing to a thoughtful and just transition of our regulated coal generation fleet, while being innovative and forward-thinking as we explore near-term opportunities to reduce emissions, incorporate renewable resources and implement emerging technologies that support our company’s mission. This includes a goal to own at least 50 MW of solar generation in West Virginia by 2025.

Integrating carbon pricing into our financial forecasting, advocating for regulatory and legislative policies that support our efforts toward a carbon-neutral future and driving innovative cross-functional initiatives that modify our business practices and asset replacement strategies to be more environmentally responsible.

We have a responsibility to our stakeholders to proactively mitigate the company’s climate change risks and capitalize on emerging opportunities in a decarbonized economy – all while meeting the changing energy needs of our diverse customer base. Oversight, accountability and risk mitigation of our Climate Strategy and greenhouse gas reduction goals occur at the highest levels of our company, where our Board of Directors, Corporate Governance and Corporate Responsibility Board Committee, executive-level steering committee and business unit leadership guide our efforts.

Political and Public Policy Engagement

We are making significant changes in our approach to political and public policy engagement. Our participation in the public policy process will be more focused than it was in the past, with additional oversight and significant disclosure around lobbying activities. Our recently revised Political and Public Engagement Policy, available on our website, describes the criteria for certain political contributions and ballot initiative expenditures and the process for approving such contributions and expenditures. Also, your Board’s Corporate Governance and Corporate Responsibility Committee periodically reviews this policy and related practices as well as dues and/or contributions to industry groups and trade associations.    

Based on feedback from our shareholder engagement and outreach, we expanded our website disclosure to include reports on federal and state level lobbying, as well as the lobbying portion of certain trade association dues.

FIRSTENERGY CORP.

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Physical Security and Cybersecurity

FirstEnergy is committed to protecting its employees, customers, facilities, and the ongoing reliability of its electric system. We work closely with state and federal agencies and our peers in the electric utility industry to identify physical and cyber security risks, exchange information, and put safeguards in place to comply with strict reliability and security standards. From a security standpoint, the electric utility sector is one of the most regulated industries. We have comprehensive cyber and physical security plans in place, but we don’t publicly disclose details about these measures that could aid those who want to harm our customers, our employees and our assets.

Your Board has identified cybersecurity as a key enterprise risk and prioritizes the mitigation of this risk. Your Board receives cybersecurity updates at each of its regularly scheduled meetings. The Audit Committee reviews our cybersecurity risk management practices and performance, primarily through reports provided by management. The Audit Committee also reviews and discusses with management the steps taken to monitor, control, and mitigate such exposure. Among other things, these reports have focused on incident response management and recent cyber risk and cybersecurity developments.

Security enhancements are also a key component of FirstEnergy’s Energizing the Future transmission investment program. The Company invests heavily in sophisticated and layered security measures that use both technology and hard defenses to protect critical transmission facilities and our digital communications networks.

Unrelenting Customer Focus

We recognize that our more than 6 million utility customers depend on us to provide the reliable energy they need every day of the year. One of the ways we hold ourselves accountable for service reliability is by including metrics – distribution System Average Interruption Duration Index (SAIDI) and Transmission Outage Frequency (TOF) – in our KPIs. We also set longer-term goals to drive improvement. We’re targeting a 20% reduction in transmission outage frequency on 100 kV-and-above lines by 2025, compared to our 2019 baseline. On the distribution side, we’re targeting a 5%, or nine-minute, reduction in the duration of service interruptions by 2025, compared to our 2019 baseline.

We are building a culture with FE Forward that helps us to maintain a strategic and unrelenting focus on our customers. Through FE Forward, we are putting the customer experience at the center of all we do and developing and implementing improvements designed to create a more modernized and effortless customer experience. This includes delivering a superior customer experience today, anticipating customer expectations, and getting ahead of market demands in the future.

Community Vitality

The FirstEnergy Foundation invests in nonprofit organizations to enable positive, sustainable changes that strengthen the communities we serve. The Foundation’s priorities range from supporting key safety initiatives and promoting workforce and economic development to improving social and cultural aspects of our region. As an overarching priority in line with our companywide focus on DEI, the Foundation also supports organizations and initiatives that serve diverse populations and enhance inclusion.

Our corporate giving strategy also focuses on initiatives that parallel our business interests, while helping our communities and the people who live in them achieve greater success. Whether directed to the United Way or local foodbanks, our corporate contributions and philanthropic outreach support organizations and projects dedicated to improving the environmental, economic, social, educational and cultural aspects of our communities.

We are also committed to supporting employee volunteerism through a robust Employee Volunteer Program and the long-term economic health of the communities we serve through development initiatives that create jobs, support local suppliers and attract new businesses throughout our service area.

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ESG Oversight and Management

Board and executive-level oversight of these ESG topics and other governance topics discussed throughout this Proxy Statement is vital to our commitment to corporate responsibility and our company’s success.

FirstEnergy’s Board committees each provide oversight and guidance on distinct environmental, social and governance related topics. For a breakdown of their ESG oversight responsibilities, please review the committee charters (www.firstenergycorp.com/charters) and visit the Board Governance page of our Corporate Responsibility website (www.fecorporateresponsibility.com). In addition to these ESG oversight roles and responsibilities, our Corporate Responsibility Department, Corporate Responsibility Executive-Level Steering Committee, and Corporate Governance and Corporate Responsibility Board Committee work to ensure the transparency and accountability of FirstEnergy’s ESG efforts and continuously strive to improve our ESG performance across the company.

ESG Accountability and Transparency

FirstEnergy is committed to providing stakeholders with information about our corporate responsibility approach and ESG initiatives and performance. As part of our commitment to transparency and accountability, we have a dedicated Corporate Responsibility website, which details FirstEnergy’s progress on ESG-related topics. We also are working toward disclosing ESG information in alignment with leading sustainability reporting frameworks, including the Sustainability Accounting Standards Board, Taskforce on Climate-Related Financial Disclosures, Global Reporting Initiative and Edison Electric Institute ESG/Sustainability Template.

Setting goals and disclosing our progress are also critical parts of demonstrating transparency and accountability on ESG matters. Our companywide goals, available on our Corporate Responsibility website, are designed to prepare us to meet our customers’ future energy needs and move us closer to our vision for a more resilient, innovative, diverse and sustainable FirstEnergy.

In addition, our annual key performance indicators (KPIs) that make up our Short-Term Incentive Program for employees also have strong ties to ESG. Our KPIs measure performance and improvement in areas that are high priorities for the company and critical to our continued success. Among others, those areas include customer reliability, customer service, environmental protections, safety and diversity, equity and inclusion. These incentive-based KPIs support our commitment to strong ESG performance.

FIRSTENERGY CORP.

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Executive Compensation

Compensation Committee Report

The Compensation Committee reviewed and discussed the Compensation Discussion and Analysis (“CD&A&A”) with management and based on such review and discussions, the Compensation Committee recommended to your Board that the CD&A be included (or incorporated by reference, as applicable) in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2019,2021, and 2020this 2022 Proxy Statement.

Compensation Committee: James F. O’Neil III (Chair), Christopher D. Pappas, Sandra Pianalto,Steven Demetriou, Julia L. Johnson, and Leslie M. Turner.

Compensation Discussion and Analysis

Introduction

This CD&A provides an overview of the Company’s strategy and performance, shareholder engagement process, and 20192021 executive compensation programs and decisions, and initial plans for the 20202022 executive compensation programs. This CD&A focuses on the compensation of our NEOs, who are as follows, for fiscal year 2019 who were as follows:2021:

 

Named Executive Officer  Current Title

 CharlesSteven E. JonesStrah

  President and CEOChief Executive Officer (“CEO”)

 Steven E. StrahK. Jon Taylor

Senior Vice President, Chief Financial Officer (“CFO”) and Strategy

Hyun Park

  Senior Vice President and Chief FinancialLegal Officer (“CFO”CLO”)

John W. Somerhalder II

Vice Chair and Executive Director

Samuel L. Belcher

  Senior Vice President, and President, FirstEnergy Utilities

 Robert P. Reffner

Senior Vice President and General Counsel

 Bennett L. Gaines

Senior Vice President, Corporate Services and Chief Information Officer

 Leila L. Vespoli

Former Executive Vice President, Corporate Strategy, Regulatory Affairs and Chief Legal Officer

 James F. Pearson

Former Executive Vice President, FinanceOperations

During 2018,Key Executive Officer Transitions and Appointments

On March 7, 2021, the Board appointed Mr. Belcher becameStrah to the position of CEO, effective as of March 8, 2021. The Board also elected Mr. Strah as a Director of the Company, effective as of March 8, 2021. Mr. Strah had previously served as Acting CEO since October 29, 2020, in addition to serving as the President of the Company, a position to which he was promoted in May 2020 after previously serving as Senior Vice President and President, FirstEnergy Utilities and was appointed as an executive officerCFO of the Company. As a former employee andCompany since March 2018.

On December 22, 2020, the Board appointed Mr. Park to the position of Senior Vice President and Chief Nuclear Officer (“CNO”)CLO, effective as of FirstEnergy Nuclear Operating Co (“FENOC”) and dueJanuary 11, 2021. On February 17, 2021, the Board appointed Mr. Somerhalder to the positions of Vice Chair and Executive Director, each effective as of March 1, 2021. Mr. Somerhalder serves as a member of FirstEnergy’s executive leadership team in a transitional capacity while the Company focuses on advancing its immediate strategic reviewpriorities. Due to exit competitive generation,the transitional nature of his role, Mr. BelcherSomerhalder did not participate in all of the same compensation programs as the other NEOs. We have outlined where there are material differences toin the compensation programs for Mr. Belcher inSomerhalder within this proxy statement. Unless otherwise noted, however, all information contained in

Mr. Taylor was appointed to the CD&A appliesposition of Senior Vice President, CFO and Strategy effective August 1, 2021, after serving as Senior Vice President and CFO since May 2020. Mr. Belcher was appointed to Mr. Belcher.the position of Senior Vice President, Operations, effective August 1, 2021, after serving as Senior Vice President and President, FirstEnergy Utilities since 2018.

Through FirstEnergy’s “FE Tomorrow” initiative in 2018, the Company implemented a cost cutting initiative to define the corporate services FirstEnergy would need to support its regulated businesses. Through the initiative, FirstEnergy sought to ensure the Company has the talent, organizational and cost structure to efficiently service customers and achieve its earnings growth targets. In support of the FE Tomorrow initiative, more than 80% of eligible employees, totaling nearly 500 people in the shared services, utility services and sustainability organizations accepted a Voluntary Enhanced Retirement Package (“VERP”) that included severance compensation and a temporary pension enhancement. In July 2018, the Compensation Committee recommended, and the Board approved the Executive Voluntary Enhanced Retirement Program(“E-VERP”) for executive officers other than the CEO, including certain NEOs. Of the eligible executives, Ms. Vespoli and Mr. Pearson elected to participate in theE-VERP and each retired effective as of April 1, 2019. TheE-VERP contained substantially the same terms as the VERP and is discussed further in the CD&A. Refer toE-VERP Benefits on pages 54 and 93 for more information.

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Additional Information

This CD&A refers touses certain capitalized terms, which are defined in the Glossary of Terms, beginning on page 71.78. In general, we use the term “CEO” in this CD&A to refer to the individual serving as our Chief Executive Officer. For 2021, that included Mr. Strah in his role as Acting CEO beginning October 29, 2020, through March 7, 2021. In addition, certain of the performance incentive metrics discussed and utilized in measuringpay-for-performance are based onnon-GAAP figures, and each defined term explains itsthe definitions for those metrics in the Glossary of Terms explain the calculation methodology to the closest GAAP measure. The Compensation Committee believes that using suchnon-GAAP metrics best aligns NEO incentive opportunity with Company performance, which directly supports long-term shareholder value. Use of suchnon-GAAP metrics are helpful to understand and evaluate performance trends when assessingpay-for-performance and are aligned with key aspects of the Company’s financial performance disclosures.

43  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

CD&A Quick Reference Guide

 

Key Sections

Core Topics

    Page    

  Key SectionsCore TopicsPage
Executive Summary  

•  Fulfilling our Commitments

•  Looking to the Future  Executive Summary

 

  Shareholder Engagement andSay-on-Pay Results

 

  Our Responses to Shareholder Feedback

 

  4556
 

Governance of Our Executive Compensation Programs

Compensation

Programs

  

  Compensation Philosophy

 

  What We Do and Don’t Do

 

  Role of our Compensation Committee, Management and Compensation Consultant

 

  Benchmarking

 

  4858
 

Components of

Total Direct

Compensation

Programs

  

  Key Elements of 2019 Executive2021 NEO Compensation

 

•  E-VERP Benefits

  Compensation Mix

 

  Determination of Compensation for 20192021

 

-  2019  Target Compensation (Base Salary + Target Incentive Compensation)

 

-  2019  Incentive Compensation Programs

 

-  2019 FE Short-Term Incentive Program (“FE STIP”)  STIP

 

-  2019 FE Long-term Incentive Program (“FE LTIP”)

•  2019  KPIs and Weightings for FE STIP

 

  LTIP (other than Mr. Somerhalder)

  Performance-based and Time-based Equity Award for Mr. Somerhalder

  Incentive Compensation Payouts for 20192021

 

-  FE  STIP Payout

 

-  FE LITP  LTIP Payouts in 2019 (for NEOs other than Mr. Belcher)Somerhalder)

 

-  Performance-Adjusted Restricted Stock Unit  Award Payout (“Transition Award”)Vesting for Mr. BelcherTaylor

 

•  Potential Negative Discretion for the 2017-2019 FE LTIP Cycle and the Transition Award

  Outstanding Award Cycles (2018-2020(2020-2022 and 2019-2021)2021-2023)

 

  Realized Compensation

 

•  2020  2022 Incentive Plan Design and NEO Compensation

 

  5363

FIRSTENERGY CORP.

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  Key SectionsCore TopicsPage

Other Compensation

Policies and Practices

  

  Retirement Benefits, EDCP,Executive Deferred Compensation Plan (“EDCP”), Personal Benefits and Perquisites

 

  Severance and Change in Control (“CIC”) Policies

 

  Share Ownership Guidelines

 

  Hedging Policies

 

  Clawback Policy

 

  Risk Assessment of Compensation Programs

 

•  impact of Tax Requirements on Compensation

  6473

Key PerformanceCD&A Glossary of Terms

Indicator (“KPI”)

Results and RSU

Index Scores

  

•  2017-2019 Cycle FE LTIP Details

•  2018-2019 Transition Award Details (Belcher only)

70

CD&A Glossary of

Terms

  Key Terms and Definitions

  7178

44  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Executive Summary

Over the past year, we have made many changes to resolve legacy issues, strengthen our financial position and capitalize on long-term strategic investments designed to serve our customers’ evolving energy needs. With our progress in these areas, together with our strong business model and operational momentum, we believe FirstEnergy is well positioned for the future.

At the heart of our transformation is our commitment to embed a culture of uncompromising integrity throughout the Company, drive accountability, demonstrate our core values, and increase transparency. We have added additional independent board members and strengthened our leadership team with key hires, including a chief legal officer, a chief ethics and compliance officer, a chief information officer, a chief risk officer and new vice presidents of internal audit, and rates and regulatory affairs. We have enhanced our governance policies, procedures and disclosures, and established effective controls as we build a best-in-class compliance program. We remain committed to fostering a diverse, equitable and inclusive work environment, which supports a culture of integrity by delivering better service to customers, stronger operational performance, innovation and a safe and rewarding work experience for employees. We will continue working every day to drive these cultural changes and keep ethics, integrity and accountability at the center of everything we do.

FulfillingOver the past year FirstEnergy’s leadership team has consistently demonstrated a commitment to making positive changes that will transform our Commitments

In 2019, FirstEnergy successfully executed its growth strategies and met its commitments to stakeholders as it continued its transformationcompany into a premier, customer-focused, pure-play regulated utility. Key achievements during the year include:

Drivingquantifiable reliability enhancements through our customer-focused investments;

Enhancingtransparency and engagement with stakeholders;

Delivering strong financial performance andmeeting our commitments to investors; and

Increasing shareholder returns through ahigher dividend payout.

FirstEnergy’s regulated growth strategy is focused on strengthening and modernizing its distribution and transmission systems to enhance reliability and improve operational efficiency. With annual capital investmentsforward-thinking leader in the range of $2.8 billion to $3 billion for the foreseeable future, FirstEnergy intends to build on the scale and scope of its regulated operations to achieve long-term, sustainable, customer-focused growth.

Regulated Transmission

In its Regulated Transmission business, FirstEnergy continues to upgrade and update the power grid to ensure customers benefit from a stronger, smarter and more secure transmission system for years to come. In areas where FirstEnergy has already made significant investments through itsEnergizing the Futureprogram, the Company has recognized a nearly 58% reduction in the duration of customer interruptions caused by transmission outages, and a 64% reduction in the number of customers affected by such outages. In 2019, FERC accepted FirstEnergy’s application to move its New Jersey transmission assets onto a forward-looking formula rate structure effective January 1, 2020, subject to refund. Moving to this rate structure supports the continued expansion of the Company’sEnergizing the Future investments.

Regulated Distribution

In its Regulated Distribution business, the Company isour industry. We will continue working to ensure continued service reliabilitycomplete this transformation and evaluating new technologies such as energy storage and microgrids, to prepare the distribution griddeliver long-term value for all of the future. Recently approved infrastructure investment initiatives, including the Ohio Grid Modernization Program, Pennsylvania Long-Term Infrastructure Improvement Plans and JCP&L Reliability Plus Infrastructure Investment Program, provide a framework for the utility growth plan and modernization efforts.our stakeholders.

FirstEnergy has established a strong track record of meeting its commitments to investors and the larger financial community. Based on publicly available guidelines on Institutional Shareholder Services methodology, FirstEnergy generated a Total Shareholder Return (“TSR”), or stock price change plus the value of reinvested dividends, over the last three years of 20.7% and over the last year of 31.3%. The Compensation Committee and Board continue to have strong confidence in the executive team and are proud of the strategic and operational results in 2019. Through the continued successful execution of its regulated growth strategies, FirstEnergy is returning value to investors through its dividend, including a 3% increase for the quarterly payment to shareholders of record as of February 7, 2020.

Looking to the Future

Strategic Plan

The Company has also advanced initiatives designed to help meet the future energy needs of customers, drive shareholder value, and build a more innovative, diverse and sustainable corporate culture. These efforts are guided by the Company’s mission to be a forward-thinking electric utility powered by a diverse team of employees committed to making customers’ lives brighter, the environment better and our communities stronger.

45  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

To offer additional clarity into the Company’s future opportunities and its strategies in a rapidly changing industry, FirstEnergy published its first Strategic Plan in November 2019. Building on the Company’s Core Values, the five-year plan describes how FirstEnergy will:

Address the needs and preferences of its diverse customer base, including providing customers with products and services beyond electricity to help them save money and make their lives easier, brighter and more secure;

Enable a strong, secure and technologically advanced grid through the continuation of theEnergizing the Futureprogram;

Further reduce its environmental impact;

Continue to build a diverse and inclusive workforce; and

Empower and support our communities.

ESG Transparency and Commitments

In November 2019, the Company published a comprehensive Corporate Responsibility Report to inform and engage stakeholders on its robust environmental, social and governance (“ESG”) efforts. The Company plans to update this report annually and intends to use it as a mechanism to set and track corporate goals, and provide transparency on its progress on ESG initiatives.

The Corporate Responsibility Report complements FirstEnergy’s Climate Report, published in April 2019. That report examined how the Company’s strategies as a fully regulated utility are aligned with the emerging technology trends that support a lower-carbon future and assessed the business risks associated with a carbon-constrained economy.

To date, FirstEnergy has achieved an 80% reduction of carbon dioxide (CO2) emissions as a result of its transformation to a high-performance, pure-play regulated utility. This reduction achievement positions FirstEnergy ahead of schedule to meet its aggressive goal of reducing such emissions by at least 90% below 2005 levels by 2045. The company continues to evaluate its goals for its regulated generation portfolio and assess the opportunities to further reduce CO2 emissions and achieve this reduction goal.

Shareholder Engagement andSay-on-Pay Results

Our Board and management are committed to engaging our shareholders and soliciting their perspectives on key performance, compensation and governance issues. Consistent with prior years, select board members and management representatives conducted extensive outreach during 2019, focused on the top 100 shareholders, who accounted for approximately 68% of the outstanding shares at that time. 2021.

Our 20192021 Say-On-Pay vote successfully passed with 98%over 96% support, an increase over the 2018Say-On-Pay vote of 95%, which we believe wasconsider to be a direct resultstrong endorsement of the substantial changes thatour pay practices. In 2021, we made tocontinued with a similar design and structure of our incentive compensation plans and programs, for 2018. Accordingly, in 2019, we continued with the design of those plans and programs and did not make further changes following the 2019Say-On-Pay voting results.

We continue to engage with shareholders and gather feedback on our compensation programs to use in our annual review of our incentive programs. Our outreach efforts includedin-person discussions and phone calls with many of our top 25 shareholders (holding about 58% of our outstanding shares). Although not all shareholders accept our invitation, we held meetings with shareholders representing more than 22% of our outstanding shares. Many of our top 25 shareholders did not request additional meetings after the 2019 Proxy Statement was issued but, overall, our investors acknowledged our proactive outreach and the positive changes we have made to our programs.

making only a few modifications. In an effort to align our compensation programs with the interests of shareholders, improve the relationship between pay and performance, better tie our executive compensation programs to our business strategies, and drive the right executive behaviors, the following summary ofwe proactively made incentive design changes were proactively made to FirstEnergy’s incentive programs beginning with awards granted in 2018 and continuing for awards in 2019.through 2021.

 

46  |  FirstEnergy Corp.2020 Proxy Statement

562022 PROXY STATEMENT


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Our Responses to Shareholder Feedback

 

  
Shareholder Feedback  Actions
Shareholders want pay for performancepay-for-performance alignment; metrics should drive Company strategy and long-term shareholder value  

•  With the support of the Compensation Committee and the Board, in 2017 Mr. Jones voluntarily reduced his FE STIP opportunity (120% to 115%) and FE LTIP opportunity (600% to 545%) to levels established in 2015, which reduction continued for his 2018 and 2019 compensation.

  Programs linked to key drivers of shareholder value:

 

   FE  STIP tied to a funding “gate” based on Operating Earnings in 2019;Earnings;

 

  FE  LTIP tied to Operating Earnings per Share (“Operating EPS”) and Capital Effectiveness, both of which are strong indicators of shareholder value in the utility industry; and

 

  External segment reporting is consistent with the internal financial reports to regularly assess performance of the business and allocate resources.resources;

•  Maintained FE

  Generally maintained LTIP:

 

  Includes a Relative Total Shareholder Return (“RTSR”) modifier, which will increase or decrease the FE LTIP payout based on performance against companies in the S&P 500 Utilities Index to enhance link to shareholder value; and

 

  Includes a TSR cap (if absolute TSR is negative over the three-year FE LTIP period, the payout will be capped at 100%);

  Maintained the stretch (maximum) payout opportunity level at 200% of target in the STIP after an increase from 150% in 2020, and decreased the threshold payout opportunity level from 50% to 25% of target in the LTIP. These payout opportunity levels are consistent with market practices and further align the incentive program with that of your Company’s peers; and

  Maintained current cap on STIP and LTIP (maximum payout 200%).

  

•  In order to further align the previously awarded FE LTIP cycle for 2017-2019 with long-term shareholder value, added an absolute TSR cap for Messrs. Belcher, Jones, Pearson, Strah, and Ms. Vespoli that limits the FE LTIP maximum possible payouts as follows:

  Capped at 100% if the absolute TSR is negative over the respective three-year performance periods;

  Based on a continuous function for absolute TSR growth between 0% and 10% for the 2017-2019 cycle; and

  Paid as earned (up to the max of 200%) if the absolute TSR growth over the performance period is greater than 10%.

•  The calculation uses the average stock price for the month of December (in other words, December 2016 and December 2019 for the 2017-2019 cycle) and assumes dividends are reinvested.

•  Maintained current caps on FE STIP (maximum payout 150%) and FE LTIP (maximum payout 200%).

Shareholders prefer performance-based vs. time-based awards  

  100% performance-based long-term incentives, a leading practice compared to our peer groups.

Shareholders prefer3-year cumulative vs. successive annual performance periods for the long-term incentive plans  

  Maintained3-year cumulative goals focused on an Operating EPS KPI tied to Regulated Distribution, Regulated Transmission and Corporate/Other and3-year Average Capital Effectiveness;

 

  Maintained3-year RTSR modifier with an absolute TSR cap; and

 

  Maintained FE LTIP design with cumulative metrics instead of annual accumulation of points.

47  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

 

  
Shareholder FeedbackActions
Goals need to be set rigorously and the process needs to be transparent  

  Maintained additional stretch-level performance measure through goal setting process. As an example, in the 2019 FE2021 STIP, we added $0.06 cents$0.04 to the stretch-level KPI Operating EPS above what was communicated to investors in November 2018;2020;

 

  Established performance levels to align pay opportunity with performance; and

 

•  Goals established  Established goals with detailed reconciliations following an independent assessment of the rigor of incentive compensation performance goals for their reasonableness and competitiveness.

FE STIP and FE LTIP metrics should be relevant to the business and not overlapping  

•  FE  STIP incorporates a financial Operating Earnings goal,and cash flow goals, operational goals, safety goals, and Diversity and Inclusion (“D&I&I”) goals; and

 

•  Maintained increased safety KPI metrics in FE STIP only  LTIP incorporates 3-year cumulative Operating EPS growth and average Capital Effectiveness goals to ensure no overlapping metrics across performance incentive programs.reward the achievement of longer-term goals and to drive shareholder value.

FIRSTENERGY CORP.

57


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Governance of our Executive Compensation Programs

Compensation Philosophy

The primary objectives of our executive compensation programs are to:

 

Attract, retain, focus and reward talented executives who drive our success in the highly complex utility industry by offering competitive total compensation for our executives overall;

Promote the long-term financial health of the business, and the creation of value for the sustained benefit of shareholders, by emphasizing long-term incentives in the pay mix;

Attract, retain, focus and reward our talented and diverse executive team who drive our success in the highly complex utility industry by offering competitive total compensation for our executives overall;

 

Reflect our collective commitment to ensuring that we conduct business with integrity, help all employees do the right thing and treat our coworkers and communities with the respect we all deserve;

Promote the long-term financial health of the business, and the creation of value for the sustained benefit of shareholders, by emphasizing long-term incentives in the pay mix;

 

Seek to calibrate pay for performance to help ensure the interests of our executives and shareholders are aligned, such that 50th percentile compensation is realized for strong corporate performance, above 50th percentile compensation is realized for exceptional performance, and below 50th percentile compensation is realized for below expected performance;

 

Tie executive awards to corporate results as well as to overall business unit performance to hold executives accountable for their areas of responsibility;

Tie executive awards to corporate results as well as to overall business unit performance to hold executives accountable for their areas of responsibility;

 

Recognize individual contributions, including individual performance, experience, and future potential in determining actual pay levels to ensure that the Company retains our most critical talent; and

Recognize individual contributions, including individual performance, experience, and future potential in determining actual pay levels to help ensure that the Company retains our most critical talent; and

 

Conduct ourselves in a way that comports with standards of good governance, consistent with creating long-term value for shareholders.

Conduct ourselves in a way that comports with standards of good governance, consistent with creating long-term value for shareholders, and encourages a culture of diversity, equity and inclusion.

 

48  |  FirstEnergy Corp.2020 Proxy Statement

582022 PROXY STATEMENT


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

What We Do and Don’t Do

We continually strive to make improvements to our executive compensation plans and programs. Below is a summary consistent with previous disclosures of what we do and don’t do with respect to executive compensation, the totality of which we believe aligns with the long-term interests of our shareholders and with commonly viewed best practices in the market:

 

What We DoWHAT WE
DO

LOGO

  

LOGO What We Don’t Do  Pay-for-performance

Pay-for-performance

•  FE  LTIP is 100% at risk, with no solely time-based vesting requirements

•  FE  STIP is 100% at risk

LOGO   Threshold andcaps on incentive awards:

  Threshold financial performance hurdle for Operating Earnings must be achieved before any FE STIP award is paid

  Individual FE STIP awards capped at 150% (vs. industry caps at 200%) (consistent with our peer companies)

  Individual FE LTIP awards capped at 200% (consistent with the industry)our peer companies) and capped at 100% if absolute TSR over the performance period is negative

 

LOGO Non-overlapping financial performance measures in our short-STIP and long-term incentive plansLTIP

LOGO   Combination of absolute and relative performance goals

 

LOGO   Robust stock ownership guidelines

 

EnhancedLOGO   Clawback policy applicable to financial and reputational harm, and other Detrimental Activitydetrimental activity

 

LOGO   Mitigate undue risk through compensation design, corporate policies, and effective governance

 

LOGO   AnnualSay-on-Pay vote

 

LOGO   Double-trigger CIC provisions

 

Independent compensation consultant for theLOGO   Compensation Committee comprised of only independent directors supported by an independent compensation consultant

WHAT WE
DON’T DO

 

LOGO

  

LOGO    LOGO    No executive hedging or pledging is permitted

 

LOGO    LOGO    No employment agreements

 

LOGO    LOGO    No excise taxgross-upsgross-up provisions for our NEOs

 

LOGO    LOGO    No excessive perquisites

LOGO    No repricing of underwater stock options without shareholder approval – stock options not currently used in plan design

 

LOGO    No excessive perquisites

LOGO    LOGO    No payment of dividend equivalents on unearned awards

LOGO    No new entrants in the SERP – SERP closed since 2014

Role of our Compensation Committee, Management and Compensation Consultant

The Compensation Committee is responsible for overseeing executive compensation and making recommendations to the Board for establishing appropriate salary and incentive compensation for our NEOs,executive officers, which includes our NEOs. The Compensation Committee oversees executive compensation in accordance with our compensation philosophy, which incorporates a consistent and uncompromising commitment to ethical conduct in all that we do, while also aligning our executives’ interests with Company and business unit performance, business strategies and corporate objectives, including ESG-related goals, and drivers for growth in shareholder value. The Compensation Committee is further responsible for administering our compensation plans in a manner consistent with these objectives. In this process, the Compensation Committee evaluates information provided by its independent compensation consultant and our CEO, as discussed below. Since December 2017, the Compensation Committee has engaged the services of Farient Advisors (“Farient”) as the Compensation Committee’s independent compensation consultant. The Compensation Committee reviews the mix and level of compensation by each component individually and in the aggregate. The Compensation Committee, using tally sheets and accumulated wealth summaries, also reviews current and previously awarded but unvested compensation.

49  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Management identifies high-potential executive successors, including a focuscontinually works to identifyensure that high-performing, diverse leaders.leaders within the Company are appropriately recognized and considered during succession planning discussions. The Company’s talent philosophy is that all leaders, regardless of level, must demonstrate the ability to motivate future performance, be accountable for their behaviors and results, deliver results and enable employees to do their best every day. Executive succession is reviewed periodically by the CEO, the Senior Vice President and Chief Human Resources Officer and Corporate Services, and the Compensation Committee. Executive succession plans are previewed by the Compensation Committee, as applicable, and with the full Board at its annual strategy retreat. Consistent with the D&I initiative, the Compensation Committee has emphasized social responsibility at the Company, introducing goals and KPI metrics related to diversity and inclusion beginning in 2018.

FIRSTENERGY CORP.

59


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

With respect to our CEO’s compensation, the Compensation Committee also annually:

 

Reviews, determines, and recommends to the Board the Company’s goals and objectives; and

 

 

Makes compensation recommendations to the Board for its approval or ratification based upon the CEO’s performance, competitive compensation benchmarking survey data and the utility peer group proxy data.

The Compensation Committee and Board are responsible for establishing the compensation of the NEOs.Company’s Section 16 Officers, including the NEOs, as well as the remaining most senior leaders. Neither the CEO nor any other NEO makes recommendations for setting his or hertheir own compensation. The recommendation of the CEO’s compensation is determined in Compensation Committee meetings during an executive session and is presented to the independent members of your Board for review and approval. Annually, the Compensation Committee also reviews the goals and targets of the incentive compensation programs with a focus on setting challenging, but realistic, targets to drive performance and to improve shareholder value over the long term.

The CEO, with guidanceinput from Human Resources and Mr. Somerhalder, typically makes recommendations to the Compensation Committee with respect to the compensation of the other NEOs.NEOs (excluding Mr. Somerhalder due to the transitional nature of his role). The CEO possesses insight regarding individual performance, experience, future promotion potential, and intentions in retaining particular senior executives. The CEO presents his recommendations to the Compensation Committee for review. However, the Compensation Committee may modify or disregard the CEO’s recommendations. Farient, as discussed below, regularly provides market-level commentary and observations regarding compensation adjustments to the Compensation Committee.

The Compensation Committee also engaged Farient to provide independent advice with respect to executive and director compensation and corporate governance matters related to executive compensation. The Compensation Committee reliedrelies on Farient’s expertise in benchmarking and familiarity with competitive compensation practices in the utility and general industry sectors. In addition, the Compensation Committee regularly requestedrequests advice from Farient concerning the design, communication, and implementation of our incentive compensation plans and other programs. In 2019, the Compensation Committee elected to meet with Farient without management (including the CEO) present, in an executive session after most of the regularly scheduled Compensation Committee meetings.

The services provided by Farient to the Compensation Committee in 20192021 included:

 

 

Review of our compensation philosophy, including the alignment of our executive compensation practices with our compensation philosophy and assessing potential changes to address trends in market practice and shareholder expectations;

 

 

Review of our peer groups used for compensation benchmarking purposes for executives and directors;

 

 

Independent review and assessment of the rigor of incentive compensation performance goals and the goal setting process, including:

 

 o

Evaluating historical and projected performance;

 

 o

Reviewing analyst estimates to understand external expectations;

 

 o

Analyzing historical and projected peer data; and

 

 o

Calculating the probability of achievement of targets to assess the competitiveness of goals.goals;

 

 

Analysis of competitive compensation practices for executives and directors within our peer groups;

 

50  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

 

Review of the description of our executive compensation practices in our annual proxy statement and apprising the Compensation Committee of itsFarient’s recommendations and necessarysuggested changes;

 

 

Review of share ownership guidelines;

 

 

Review of all aspects of FE STIP and FE LTIP plan designs, including measures, weightings, leverage, and cash versus equity mix;

 

 

Review of our current clawback policy against SEC proposed provisions and alignment with competitive practice, including review of enhancements enacted in 2019 to broaden the scope of the clawback policy to reach both financial and reputational harm and Detrimental Activity;practice;

 

 

Review of CIC benefits to help ensure alignment with our compensation philosophy and competitive practice;

 

 

Regularly informing the Compensation Committee of legislative and regulatory changes, market trends and current issues with respect to executive compensation, and educating members on our processes, plans and programs; and

 

602022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Preparation for and attendance at all Compensation Committee meetings, including executive sessions, if applicable and as needed.needed; and

Ad hoc analysis and research for the Compensation Committee as requested and when necessary.

The Compensation Committee considered representations from Farient that they were an independent consultant and that there were no conflicts of interest. The Compensation Committee assessed the independence of Farient, as required by SEC and NYSE rules and requirements. The Compensation Committee also considered and assessed relevant factors that could give rise to a potential conflict of interest with respect to Farient and their work. Based on this review, the Compensation Committee is not aware of any conflict of interest that has been raised by the work performed by Farient.

Benchmarking

The Compensation Committee uses competitive benchmarking data to evaluate compensation practices and develop compensation recommendations for each of the NEOs, excluding Ms. Vespoli and Mr. Pearson due to their retirements effective April 1, 2019.NEOs. The Company uses a combination of a utility peer group and a general industry peer group to determine an overall competitive total rewards package. Employee and executive compensation, executive benefits and perquisites, broad-based benefits (retirement benefits, death benefits, long-term disability and health care) and director compensation are all benchmarked against the same peer groups.groups. The Compensation Committee uses competitive “blended” market data (in other words, the average of the revenue-regressed 50th50th percentile of our utility peer group and general industry peer group, referred to as the “Blended Median”) to set compensation levels, to determineassist in determining any adjustmentadjustments and to assess the competitiveness of the base salary, short- and long-term target incentive opportunities and total target compensation. The Compensation Committee considers a range of 80% to 120% of the Blended Median for each component of pay to be competitive.competitive for any covered individual.

In 2017, a comprehensive peer group review was performed in whichFor 2021, the peer groups were selected. The peer groups were comprised of a utility peer group of 22 companies and a general industry peer group is comprised of 44 companies. Withcompanies that are both larger and smaller than FirstEnergy by revenue size. The median revenue of the exceptionutility and general industry peer groups are aligned with FirstEnergy’s revenue of periodic merger and acquisition activity, our utilityapproximately $11 billion in 2021. The 2021 peer group has remained consistent and generally unchanged overgroups were based on the last 10 years. following criteria:

LOGO

FIRSTENERGY CORP.

61


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Due to merger and acquisition activity, EMC CorporationArconic Inc. was removed from the general industry peer group in 2018. The 2019 peer groups were based on the following criteria:

Included companies with revenues between $8 and $30 billion (a range of approximately 0.5 to 2.0 times our revenue) with whom we compete for talent;

Included companies within a close geographic proximity to the Company; and

Excluded companies and industries whose compensation or business models significantly differ from utilities, such as financial services, health care, retail, franchise, media and companies that are internationally headquartered.

51  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

and replaced with Howmet Aerospace, Inc. for 2021 benchmarking. As a result, the peer groups for 20192021 included the following 2223 utility peer companies and 4432 general industry peer companies:

 

20192021 Utility Peer Group

 

AES CORPORATION

AMEREN CORPORATION

AMERICAN ELECTRIC POWER CO INC

CENTERPOINT ENERGY INC

CMS ENERGY CORP.CORP

CONSOLIDATED EDISON, INC

DOMINION RESOURCES, INC

DTE ENERGY COMPANY

 

DUKE ENERGY CORPORATION

EDISON INTERNATIONAL

ENTERGY CORPORATION

EVERSOURCE ENERGY

EXELON CORPORATION

NEXTERA ENERGY, INC

NISOURCE INC

NRG ENERGY, INC

 

NRG ENERGY, INC.

PG&E CORPORATION

PPL CORPORATION

PUBLIC SERVICE ENTERPRISE GROUP

SEMPRA ENERGY

SOUTHERN COMPANY

WEC ENERGY GROUP

XCEL ENERGY INC

20192021 General Industry Peer Group

 

3M COMPANY

AIR PRODUCTS & CHEMICALS INC

ALCOA CORPORATION

AUTOMATIC DATA PROCESSING INC

BAXTER INTERNATIONALBALL CORPORATION

BORGWARNER INC

BRISTOL MYERS SQUIBB COCAMPBELL SOUP COMPANY

COLGATE-PALMOLIVECONAGRA BRANDS, INC

EASTMAN CHEMICAL COMPANY

CONAGRA FOODS,EATON CORPORATION

FORTUNE BRANDS HOME & SECURITY, INC

CUMMINSHANESBRANDS, INC

CSX CORP.

EATON CORP

ECOLAB INC

ELI LILLY & CO

EMERSON ELECTRIC CO

GENERAL MILLS, INC

 

GENUINE PARTS COHARLEY-DAVIDSON, INC

HONEYWELL INTERNATIONAL INC

HORMEL FOODS CORPORATION

HOWMET AEROSPACE, INC

KELLOGG COMPANY

L 3 HARRIS TECHNOLOGIES, INC

MASCO CORPORATION

ONEOK INC

PARKER HANNIFIN CORP

PPG INDUSTRIES INC

PVH CORP

ROCKWELL AUTOMATION, INC

STANLEY BLACK & DECKER, INC

TEXTRON INC

THE CLOROX COMPANY

THE ESTEE LAUDER COMPANIES INC

THE GOODYEAR TIRE & RUBBER CO

HALLIBURTONTHE HERSHEY COMPANY

HONEYWELL INTERNATIONAL INC

ILLINOIS TOOL WORKS INC

INTERNATIONAL PAPER CO

JABIL CIRCUIT INC

KELLOGG CO

KIMBERLY CLARK CORP

L3 HARRIS TECHNOLOGIES, INC(1)

NAVISTAR INTERNATIONAL CORP

NORFOLK SOUTHERN CORP

NORTHROP GRUMMAN CORP

ONEOK INC

OWENS CORNING

PACCAR INC

PARKER HANNIFIN CORP

PPG INDUSTRIES INC

THE PROGRESSIVE CORPORATION

QUALCOMM INCORPORATED

RAYTHEON COMPANY

STRYKER CORPORATION

TEXTRON INC

THE MOSAIC COMPANY

THE SHERWIN WILLIAMS COCOMPANY

UNION PACIFIC CORP

WASTE MANAGEMENT, INC

WHIRLPOOL CORPORATION

XEROX CORPORATION

(1)

L3 Technologies, Inc. completed a merger of equals transaction in June 2019 with Harris Corporation to create a new company, L3 Harris Technologies, Inc.V.F.CORPORATION

In February 2019,December 2020, at the Compensation Committee’s request, Farient accumulatedcollected benchmark compensation data for our peer companies based on Willis Towers Watson executive surveys and AonHewitt’s Total Compensation Measurement database, and determined that our executives’ total direct compensation, in the aggregate, continues to be positioned at approximately the 50th percentile of the market. The total compensation for our NEOs excluding Ms. Vespoli(excluding Mr. Strah since he was promoted into the CEO role in March 2021 and Mr. Pearson,Somerhalder due to the transitional nature of his role), in the aggregate, is 92%was approximately 99% of the Blended Median, which is within the established competitive range of 80% to 120%.

 

52  |  FirstEnergy Corp.2020 Proxy Statement

622022 PROXY STATEMENT


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Components of Total Direct Compensation Programs

Key Elements of 2019 Executive2021 NEO Compensation

The key elements of our executiveNEO compensation program to attract, retain and motivate key executive leaders are described below:

 

Element

        Description        

 

 

Description

Key Characteristics and Considerations

  Base Salary        

 

FIXED CASH

Bi-weekly, fixed cash

compensation

designed to reward

past performance

and motivate strong

performance

in the future

   
Base SalaryBi-weekly,fixed cash compensation designed to reward past performance and motivate strong performance in the future

  The Compensation Committee uses the Blended Median to set base salary levels and determineassist in determining any adjustments

 

  Other factors including individual experience, performance, impact by role, and recent compensation adjustments for the NEO mayare also be considered

 

  The Compensation Committee, CEO and Board annually review each NEO’s base salary (excluding Mr. Somerhalder’s base salary due to the transitional nature of his role)

   
FE Short-Term Incentive Program (FE STIP) 

Variable cash compensation  Short-Term designed

  Incentive

  Program

  (STIP)

VARIABLE CASH

COMPENSATION

Designed to reward Reward

the achievementAchievement of

near-term corporate

and business
unit objectives
based on financial,
operational, safety

and D&I performance

measures, includingESG-related goals

 

  The Compensation Committee uses the Blended Median to set target opportunity levels

 

  Completelyat-risk compensation and 100% performance-based

 

  Payouts may range from 0% to 150%200% of target opportunity levels

 

  For 2019,2021, the FE STIP goals included:

 

–  Financial:   Financial:Operating Earnings and business unit financial performance, and Company cash flow performance

 

–  Operational:   Operational:Includes a mix of customer, reliability and environmental operating metrics

 

–  Safety:   Safety: Includes OSHA reportable incidents, LCEsLife Changing Events (“LCEs”) and Days Away/Restricted or Job Transfer Rate (“DART RateRate”)

 

–  D&I: Includes metrics for diverse succession planning, diverse professional hiring, and improvementpercentage of “agree” and “strongly agree” responses on the employee survey inclusion survey scoringindex

 

–  Ethics and Compliance Modifier: Serves as a negative modifier at the individual level, with downward adjustments only, that can range from 0% to 100%

  A threshold financial performance hurdle must be reached based on Operating Earnings (as(as defined below on page 72)79)

 

  Weighted50%60%-70% for corporate financial performance and30%-50%-40% for operational performance, including safety and D&I

   
FE Long-Term Incentive Program (FE LTIP) 

Variable cash and equity compensation  Long-Term designed to reward the achievement of longer-term goals and drive shareholder value and growth

  Incentive

  Program

  (LTIP)(1)

 

VARIABLE EQUITY COMPENSATION
Designed to reward
the achievement of
longer-term goals
and drive shareholder
value and growth

  The Compensation Committee uses the Blended Median to set target opportunity levels

 

  Completelyat-risk compensation and 100% performance-based consisting of performance-adjusted RSUs

 

  Comprised entirely of performance-adjusted RSUs with 2/3 of the earned award payable in stock and 1/3 of the earned award payablesettled in cash

 

  The 2019-20212021-2023 cycle of the FE LTIP will vest, if at all, after a three-year performance period based on the achievement of two equally-weighted financial KPIs measured over the performance period, which are weighted equally:period:

 

–  Operating EPS Growth (cumulative)

 

–  Average Capital Effectiveness

 

•  RTSR modifier may increase or decrease payout up to 25% based on performance against companies within the S&P 500 Utility Index

 

 Includes a payout cap (100% target) if absolute TSR is negative over the three-year performance period

 

  Payouts may range from 0% to 200% of target opportunity levels

(1) Mr. Somerhalder does not participate in the LTIP. For more details see the next page as well as the “Performance-based and Time-based Equity Award for Mr. Somerhalder” section.

FIRSTENERGY CORP.

63


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

53  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

E-VERP Benefits

As mentioned above, Ms. Vespoli and Mr. Pearson elected to participate in theE-VERP. The effective date of Ms. Vespoli’s and Mr. Pearson’s retirement was April 1, 2019. Active executive officers, other than the CEO, who were age 58 or older with at least 10 years of service as of December 31, 2018, were eligible to participate. TheE-VERP included the following benefits:

alump-sum payment equivalent to what the employee would have received under the FirstEnergy Executive Severance Benefits Plan;

a continuation of health care benefits for the equivalent severance period;

a temporary pension enhancement of $1,500 monthly up to age 65, with a minimum of 24 monthly payments; and

payment of unused PTO.

Additionally, as is the case for executive officers who retire, Mr. Pearson and Ms. Vespoli were also eligible to receive retirement benefits including benefits under the Master Pension Plan, EDCP, prorated awards under the FE STIP and FE LTIP based on their participation until their retirement date, and, with respect to Ms. Vespoli, the SERP. For more information on the Master Pension Plan, EDCP and SERP, refer to page 84. For more information on payouts as a result of theE-VERP, refer to page 93.

Compensation Mix

We review our compensation philosophy, pay mix and pay vehicles for our NEOs annually to help ensure that they support our strategy and align with shareholder interests. The Compensation Committee sets NEO overall compensation levels consistent with the Blended Median but provides a greater portion of target pay in the form of performance-based FE LTIP awards compared to our peer groups. Under our compensation design, the percentage of pay that is based on performance increases as a NEO’s responsibilities increase. As shown in theThe charts below of base salary, FE STIP and FE LTIP, approximately 87% ofillustrate the CEO’spay mix as well as the variable pay mix based on each NEO’s final 2021 total target pay and 74% of our other NEOs’ average target pay was performance-based, and approximately 72% oflevels as described in the CEO’s total target pay and 54% of our other NEOs’ average target pay was predicated on long-term performance in 2019.

CEO 2019 Pay Mix at Target

Other NEOs

2019 Pay Mix at Target

LOGO

LOGO

Determination of Compensation for 2019

2019“2021 Target Compensation (Base Salary + Target Incentive Compensation)” section below. For the NEOs, the values shown are effective as of December 31, 2021. Mr. Somerhalder’s pay mix for 2021 is made up of approximately 19% for his base salary, 19% for his target STIP award, 31% for his performance-based RSUs and 31% for his time-based restricted stock. The charts below do not include Mr. Somerhalder due to the transitional nature of his role.

LOGO

Determination of Compensation for 2021

Target Compensation (Base Salary + Target Incentive Compensation)

In January 2019,December 2020, the Compensation Committee reviewed a competitive benchmarking analysis prepared by Farient. This report assessed each then-serving NEO’s compensation levels and mix against the Blended Median. In February 2019,2021, the Committee decided, with input from management,the CEO and Farient, to approve increases in compensation for certain NEOs and other executive officers to continue to align with the Blended Median, in the aggregate (within the 85% to 120% competitive range). These increases follow two consecutive years in 2017 and 2018 in which there were no increases in base salary or target short-term and long-term incentive opportunities as a percent of salary for NEOs (excluding promotions).

54  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

aggregate.

For 2019,2021, target opportunities continued to be set at or near the Blended Median of our peer groups. 2019As of December 31, 2021, target compensation levels for the NEOs were as follows:

 

Executive

2019 Base

Salary

2019 Target

Opportunity FE STIP

(% of Salary)

2019 Target

Opportunity

FE LTIP Awards

(% of Salary)(3)

2019 Target

Total

Compensation  

     

Charles E. Jones

$1,133,000115%545%$8,610,800
     

Steven E. Strah(1)

$650,00080%235%$2,697,500
     

Samuel L. Belcher(1)

$610,00075%215%$2,379,000
     

Robert P. Reffner(2)

$550,00070%175%$1,897,500
     

Bennett L. Gaines(1)

$465,00065%125%$1,348,500
     

Leila L. Vespoli

$759,20085%255%$3,340,480
     

James F. Pearson

$660,40090%320%$3,368,040

Executive

  

2021 Base

Salary

  

2021 Target

Opportunity STIP

(% of Base Salary)

 

2021 Target

Opportunity

LTIP Awards

(% of Base Salary)(4)

 

2021 Other Equity

Opportunity

(% of Base Salary)(4)

 

2021 Target

Total

Compensation

Steven E. Strah(1)

   

$

1,100,000

   

 

115

%

  

 

450

%

  

 

N/
A


  

$

7,315,000

K. Jon Taylor(2)

   

$

725,000

   

 

85

%

  

 

250

%

  

 

N/
A


  

$

3,153,750

Hyun Park

   

$

650,000

   

 

75

%

  

 

225

%

  

 

N/
A


  

$

2,600,000

John W. Somerhalder II

   

$

750,000

   

 

100

%

  

 

N/A

  

 

334

%

  

$

4,005,000

Samuel L. Belcher(3)

   

$

700,000

   

 

75

%

  

 

250

%

  

 

N/
A


  

$

2,975,000

(1) Reflects annualized base salary rate and target opportunity levels as a percent of base salary in effect following Mr. Strah’s promotion from Acting CEO to President and CEO in March 2021. Following his promotion to Acting CEO in October 2020, Mr. Strah received an increase from $800,000 to $950,000 in his annualized base salary rate and 90% to 100% in STIP target opportunity level, and his LTIP target opportunity level had remained at 275%.

(2) Reflects annualized base salary rate and target opportunity levels as a percent of base salary in effect following Mr. Taylor’s promotion from SVP and CFO to SVP, CFO and Strategy in August 2021. In February 2021, while Mr. Taylor served as SVP and CFO, he received an increase from $600,000 to $675,000 in base salary rate and increases from 75% to 85% in STIP target opportunity level and 225% to 250% in LTIP target opportunity.

(3) Reflects annualized base salary rates and target opportunity levels as a percent of base salary in effect following increases in February 2021. Prior to Mr. Belcher’s increase, the annual base salary rate was $650,000 and STIP and LTIP target opportunity levels were 75% and 235%, respectively.

(4) For each of the NEOs other than Mr. Somerhalder, all LTIP awards, if earned, are paid 1/3 in cash and 2/3 in stock. Equity awards granted to Mr. Somerhalder in 2021 are described below in the “Performance-based and Time-based Equity Award for Mr. Somerhalder” section.

 

(1)
642022 PROXY STATEMENT


Proxy
Summary

Reflects annualized increases in base salary and target opportunity levels as a percentCorporate
Governance & Board of base salary effective March 2019. PriorDirectors

Items to their increases, salaries were $600,000 for Mr. Strah, $565,000 for Mr. Belcher and $440,840 for Mr. Gaines. FE STIP and FE LTIP target opportunity levels were 75% and 235% for Mr. Strah, 70% and 180% for Mr. Belcher, and 65% and 125% for Mr. Gaines, respectively.Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

(2)

Reflects annualized increase in base salary and target opportunity levels as a percent of base salary as a result of his promotion from VP and General Counsel to SVP and General Counsel due to Ms. Vespoli’s retirement. Following his promotion in 2018 and an increase in March 2019, Mr. Reffner’s salary was $465,000 and his prior FE STIP and FE LTIP target opportunity levels were 65% and 100%, respectively.

(3)

All NEOs will have 1/3 of their FE LTIP paid in cash and 2/3 paid in stock.

The maximum payout under both the FE STIP is 150% of an individual’s target opportunity, and the maximum payout under the FE LTIP is 200% of an individual’s target opportunity. However, unlike market practices, the FE LTIP is 100% performance-based.performance-based and does not contain any time-based components. The NEOs may earn nothing, or may receive payments that are below their target opportunities for the incentive awards if the Company falls short of itspre-established goals, andor may earn above their target opportunities if the Company performs above itspre-established goals. Except in limited circumstances as described in the plan documents, the Compensation Committee may use negative discretion to make downward adjustments to awards based on a formula or discretionary basis but may not make upward adjustments.awards.

2019 Incentive Compensation Programs

Shareholders previously approved the 20072015 Incentive Compensation Plan, and 2015in May 2020, shareholders approved the new 2020 Incentive Compensation Plan (the(together, the “Incentive Compensation Plans”). The purpose of the Incentive Compensation Plans is to promote the success of FirstEnergy by providingpermitting the grant of incentives to certain employees and directors that link their personal interests to both short-term performance on key metrics and the long-term financial success of theyour Company to increase shareholder value, providing for various types of awards including equity and equity-based awards and cash-based awards. At the core of our incentive compensation philosophy, integrity is the foundation and reflects our collective commitment to ensuring that we conduct business ethically with honesty, humility and accountability.

TheAs outlined above in the “Role of our Compensation Committee, Management and Compensation Consultant” section, the Compensation Committee, with support from Farient, conducted its annual goal rigor analysis to establish the goal ranges for the 2019 FE2021 STIP and FE LTIP awards. In setting the goals, the Compensation Committee considers prior year results, company performance, investor expectations, and strategic accomplishments for the year and over the long-term, on both a relative and absolute basis. The Compensation Committee expects goals that are realistic but challenging and that drive differentiating performance year-over-year.

2019 FE STIP

The FE STIP provides annual cash awards to executives whose contributions support the achievement of theyour Company’s identified financial and operational KPI goals, which are linked to the Company’s business strategy and corporate objectives, includingESG-related goals. The Compensation Committee annually reviews the goals and targets with a focus on setting challenging but realistic targets that are intended to align with shareholder value.

55  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

The Compensation Committee annually establishes the KPIs under the FE STIP that must be satisfied for a NEO to receive an award for such performance period and recommends that the Board approve the relative weightings for each KPI with respect to each participating NEO.

The Compensation Committee recommended, and the Board approved, the following design elements for the 2019 FE2021 STIP:

 

PreserveMaintained the stretch (maximum) payout opportunity level at 200% of target to remain consistent with market practices and align the incentive program with that of your Company’s peers;

Preserved focus on an Operating Earnings KPI, (shiftingas distinguished from the LTIP KPI (which is Operating EPS goal to the FE LTIP)EPS);

Added a new financial KPI centered around your Company’s cash flow while eliminating Operations and Maintenance (“O&M”) as a standalone metric:

 

  

MaintainCash Flow KPI (Cash from Operations less Capital Expenditures) is intended to drive additional organizational focus on the cash generated from our business as well as optimize working capital and reinforce the importance of conserving and managing cash; and

O&M continues to be an important measure of our financial discipline, and impacts the Cash Flow KPI;

Maintained weighting of safety metrics at 15% in FEthe STIP to promote the Company-wide safety Core Value, while eliminating safety in the FE LTIP to better align with market practice and so as not to duplicate measures;our core value of safety:

 

  

IncorporateMaintained the weightings of DART Rate and LCEs into the safety KPI,at 7.5% in 2021. Weightings were increased from 5% to 7.5% in 2020 while also maintaining OSHAeliminating Occupational Safety and Health Administration (“OSHA”) Recordable Incidents as a metric;compensable metric.

 

o

FIRSTENERGY CORP.

65


Proxy
Summary

As noted in the CD&A GlossaryCorporate
Governance & Board of Terms, OSHA Recordable Incidents for the Target is based ontop-quartile, Stretch is based on thetop-decile, and Threshold is based on the industry average OSHA rates for all EEI Companies participating in the survey (relevantDirectors

Items to each business unit) as reported in the 2017 EEI Health and Safety Survey.Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Maintained weighting of D&I KPI goals at 15%:

 

  

ContinueThe Compensation Committee increased the weighting from 10% to 15% in 2019; and

For 2021, added racially/ethnically diverse performance gates for the succession planning and diverse hiring components of the D&I Index to help ensure continued progress in these two areas; and

Continued the use of a financial performance threshold for the FE STIP, requiring that financial performance as measured by Operating Earnings is met before operational performance is rewarded; andrewarded. For 2021, achieving the Operating Earnings threshold of $1,306 million, including the cost of the STIP payments, was required before a payout could be made.

 

662022 PROXY STATEMENT


Proxy
Summary

 

Increase weightingCorporate
Governance & Board of D&I KPI goals from 10%Directors

Items to 15%.Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

o

The Compensation Committee maintained the same goals from 2018 to 2019 since the Company performed below Threshold in 2018 and the Company was still in the early stages with its D&I initiative.

FE STIP payouts are driven by financial, operating, safety, and D&I metrics, with 70% of the CEO’s opportunity and50-60% of the other NEOs’ opportunities tied to corporate and business unit financial performance and the remaining opportunities tied to operating, safety and D&I metrics. For 2019, the Operating Earnings threshold of $1,188 million, including the cost of the STIP payments, must be achieved before a payout is made.

Based on the 2019 Operating Earnings result of $1,362 million, the total FE STIP payout was $118.0 million. Because the threshold of Operating Earnings was achieved, the 2019 FE STIP payout was paid as earned in accordance with the financial performance, and operational, safety, and D&I performance against KPIs.

56  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

2019 KPIs and Weightings for FE STIP

The Compensation Committee reviewed, and the Board approved, the FE STIP performance metrics and weightings for each of the NEOs at a January 2019 meeting.in February 2021. For 2019,2021, the NEOs had the following metrics and weightings.

 

   
KPI Measures  Rationale     CEO &    
Vice

Chair

     All Other    

NEOs

 
Financial

 

  Operating

  Earnings

  

  Drives shareholder value while providing greater focus on driving the Regulated Distribution and Regulated Transmission businesses

 

  Increases in Operating Earnings indicate growth and efficiency of the business

 

  Provides a consistent and comparable measure of performance to help shareholders understand performance trends

 

 

40%

 

 

35%

 

  Cash from Operations less      

  Capital Expenditures

  

  Drives organizational focus on cash flow while optimizing working capital and managing capital expenditures

 

 

30%

 

 

25%

 
Operational

 

  Operations Index

  

  Based on five key operating metrics equally weighted

 

  Focused on customer service, reliability and environmental metrics that drive the Company’s long-term success

 

 

 

N/A

 

 

10%

 
Safety

 

  Systemwide DART

 

 

  Systemwide LCEs

  

  Measured for the Company and each business unit

 

  Based on two key metrics that are equally weighted: systemwide LCEs and DART Rate

 

  Safety metrics include LCEs and DART Rate to consider severity of injuries and drive better conversations with employees

 

  Fatality Reduction Rule applies – in the event of a fatality of any employee, other than certain no-fault fatalities, there will be no payout on the Safety KPI as part of the STIP

 

  Infectious Disease Reduction Rule applies – in the event of secondary workplace exposure to COVID-19 infection, there will be no impact to the payout on the Safety KPI as part of the STIP

 

 

 

 

15%

 
Diversity & Inclusion

 

  Diversity and Inclusion

  Index

  

  Integral part of a successful revenue generating business and innovation

 

  Based on three key metrics that are equally weighted

 

  Measures diverse succession planning, diverse hiring, and percentage of “agree” and “strongly agree” responses on the employee survey inclusion index

 

  Racially and ethnically diverse performance gates that must be achieved to trigger payout of diverse succession planning and diverse hiring metrics.

 

 

15%

FIRSTENERGY CORP.

67


KPI MeasuresRationale  CEO  

  All Other  

NEOs

Financial

Operating

EarningsProxy
Summary

 

•   Drives shareholder value while providing greater focus on driving the Regulated Distribution and Regulated Transmission businesses

•   Increases in Operating Earnings indicate growth and efficiencyCorporate
Governance & Board of the business

•   Provides a consistent and comparable measure of performance to help shareholders understand performance trends

70%60%

(50% for

Belcher

only)

Operational

Systemwide O&M

•   Monitors spending and focuses on overall cash flow and liquidity within the regulated distribution, regulated transmission and Corporatenon-deferred labor

N/A10%
(Belcher
only)

Operations IndexDirectors

 

•   Based on six key operating metrics equally weighted

•   Focused on customer service, reliability and environmental metrics that drive the Company’s long-term success

10%

Safety

Systemwide OSHA

Items to Be
Voted On

 

•   A Core Value of the CompanyCommitments to

•   Measured for the Company and each business unit

•   Based on three key metrics that are equally weighted: OSHA reportable incidents, systemwide LCEs and DART Rate

•   Safety metrics include LCEs and DART Rate to consider severity of injuries and drive better conversations with employees

•   Fatality Reduction Rule applies – in the event of a fatality of any employee, other than certainno-fault fatalities, there will be no payout on the Safety KPI as part of the FE STIP

Employees & ESG

 15%

Executive

Systemwide DART

Systemwide LCEs

Diversity InclusionDirector Compensation

Diversity and Inclusion
Index
 

•   Integral part of a successful revenue generating business and innovationOther

•   Based on three key metrics that are equally weightedImportant

•   Measures diverse succession planning, diverse hiring, and improvement on inclusion survey scoringMatters / Q&A

15%

 

57  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Threshold, Target,target, and Stretchstretch levels are established for the KPIs based on Operating Earnings, cash flow, and achieving continuous improvement in safety and operational performance. Management and the Compensation Committee strive to set challenging and achievable goals and establish all threshold, target and stretch STIP goals at equal or more rigorous levels compared to the prior year, whenever possible. In 2019,2021, the Threshold, Target, Stretchthreshold, target, and actual KPI resultsstretch levels under the FE STIP for the NEOs were (dollars in millions):

 

2019 FE STIP Goal Ranges(1)
2019 KPI Measures Threshold      Target  Stretch  Actual Result  Payout Result     

2021 STIP Goal Ranges(1)

2021 STIP Goal Ranges(1)

2021 KPI Measures  Threshold Target Stretch
   

Financial

              

 

  

 

  

 

Operating Earnings

 $1,188      $1,269  $1,394  $1,362  Meets Target        $1,306 $1,360 $1,436

Cash Flow (Cash From Operations Less Capital Expenditures)

   $(260) $(160) $40

Operational

              

 

  

 

  

 

Systemwide O&M (Belcher only)

 $1,453      $1,439  $1,410  $1,431  Meets Target     

Operations Index

 2.50      5.00  7.50  5.13  Meets Target         2.50  5.00  7.50

Safety

              

 

  

 

  

 

Systemwide OSHA Recordable

Incidents

 1.22      0.82  0.55  0.98  Meets Threshold     

Systemwide LCE

 2      1  0  0  Meets Stretch         2  1  0

Systemwide DART Rate

 0.67      0.39  0.25  0.64  Meets Threshold         0.67  0.36  0.22

Diversity and Inclusion

              

 

  

 

  

 

Diversity & Inclusion Index

 1.50      3.00  4.50  2.73  Meets Threshold     

Diversity and Inclusion Index

    1.50  3.00  4.50

(1) Interpolated for performance between discrete points. Refer to page 70 for details regarding 2021 payouts.

(1)

Interpolated for performance between discrete points. Refer to page 59 for details regarding 2019 payout.

2019 FE LTIP (other than Mr. Somerhalder)

The 2019 FE2021 LTIP design was maintainedremained relatively unchanged from 2020, continuing to include financial goals focused on the regulated businesses,including a cumulative three-year performance period for measuring goals, and maintaining a relative shareholder performance measure. See the chart below on page 59,69, which identifies the KPI measures under the 2019 FE2021 LTIP for more information. For information on Mr. Somerhalder’s long-term incentive compensation, see the “Performance-based and Time-Based Equity Award for Mr. Somerhalder” section below.

The FE LTIP is comprised entirely of performance-adjusted RSUs with 2/3 of the earned award payable in Company stock and 1/3 of the earned award payable in cash. Both the stock-settled and cash-settled portions of the performance-adjusted RSU awards have a minimum payout of 0% and a maximum payout of 200% based on a formulaic structure where actual performance results are evaluated against the threshold, target and stretch performance goals over a three-year performance period. Performance results are interpolated on a straight-line basis between the minimum payout and maximum payout. The RTSR modifier is applied to the formulaic result for the payout percentage to determine the final payout amount.amount, up to a total award maximum of 200%. For the 2021-2023 cycle, the threshold payout, if earned, will decrease from 50% to 25% of target which is consistent with market practices and more closely aligns with the performance required by our peers. For this cycle, the RTSR modifier will adjust final LTIP payouts by up to plus or minus 25%, based on the performance of our stock compared to our peers in the S&P 500 Utility Index between the 25th and 85th percentiles. The 85th percentile is a higher hurdle to achieve than the level applicable in previous cycles (which was the 75th percentile) and also more closely aligns with the performance required by our peers, and is more advantageous to shareholders.

The Compensation Committee recommended, and the Board approved the FE LTIP grants for the NEOs (other than Mr. Somerhalder) at their regularly scheduledthe Board’s meeting in February 2019.on March 17, 2021. For 2019,2021, the grant date for performance-adjusted RSUs for both the stock-settled and cash-settled portions of the awards was March 1, 2019.17, 2021. We use the target FE LTIP award by individual divided by the average of the high and low prices of our common stock as of the date of grant to determine the number of units comprising each participating NEO’s award of performance-adjusted RSUs. Any equity grants awarded or vesting in proximity tonear an earnings announcement or other market event are coincidental.

The “Grants of Plan-Based Awards in Fiscal Year 2019”2021” table provides the target number of performance-adjusted RSUs granted to each NEO in 20192021 based on the percentage of base salary as described earlier in the CD&A. Additional details regarding the 2019-20212021-2023 LTIP grants are provided in the narrative following the “Grants of Plan-Based Awards in Fiscal Year 2019”2021” table.

682022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

The 2019 FE2021 LTIP uses two performance measures, weighted equally: Cumulative Operating EPS and Average Capital Effectiveness. These performance measures support continued financial improvement and increase focus on earnings across the Company’s Regulated Distribution and Regulated Transmission businesses. This creates a direct line of sight for executives to balance the value of our investments with the earnings they produce and drives shareholder value. In addition, Average Capital Effectiveness measures the financial effectiveness of investment in operational assets over the performance period. A high ratio

58  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

indicates the business generates larger returns on its investment in operational assets and vice versa. The KPIs used for performance-adjusted RSUs under the FE LTIP in 20192021 were based on:

 

KPI MeasuresRationale

 

ProgramCumulative Operating EPS

  

 

KPI Measures

Rationale

FE LTIPCumulative Operating EPSAnon-GAAP measure of the financial performance of business units’ contribution to Operating Earnings growth over the 2019-20212021-2023 cycle.

Average Capital Effectiveness

  

Anon-GAAP measure of the financial return effectiveness on our capital investment in operational assets of the business units’units over the 2019-20212021-2023 cycle.

The performance goals for the 2019-20212021-2023 performance period are based on:

 

2019 FE LTIP Goal Ranges

2021 LTIP Goal Ranges

2021 LTIP Goal Ranges

 
 
2019 Financial KPIs  Threshold       Target       Stretch     
2021 Financial KPIs  Threshold   Target   Stretch 

Cumulative Operating EPS

  $6.88       $7.44       $8.10       $7.24   $7.85   $8.32 

Average Capital Effectiveness

  3.83%       4.15%       4.52%        3.81   4.13   4.38

The RTSR modifier is calculated over the three-year performance period as compared against the S&P 500 Utility Index. The modifier operates as follows:

 

 

Plus 25%, up to the maximum of 200%, will be earned if upper quartile RTSR performance at the eighty-fifth (85th) or above percentile is achieved;

 

 

Minus 25%, if lower quartile (25th percentile and below) RTSR performance is achieved; and

 

 

Between the lower25th and upper quartile85th RTSR performance, using a straight-line interpolation will be utilized to determine the modifier percentage.percentage between -25% and +25%.

If the Company’s absolute TSR is negative for the three-year cumulative performance period of 2019-2021,2021-2023, the LTIP awards will be capped at a target opportunity level of payout (100%).

Performance-based and Time-based Equity Award for Mr. Somerhalder

In his role as Vice Chair and Executive Director, Mr. Somerhalder has helped to lead efforts to rebuild trust with FirstEnergy’s external stakeholders as well as support FirstEnergy leadership’s efforts to achieve its priorities and strengthen the company’s governance and compliance functions. On February 17, 2021, in order to attract and retain Mr. Somerhalder, the Compensation Committee recommended, and the Board approved as part of Mr. Somerhalder’s compensation package, an equity award which was divided evenly between the following:

Time-based restricted stock with a grant date value of approximately $1,252,500 (167% of 2021 base salary); and

Performance-based RSUs with a target value of approximately $1,252,500 (167% of 2021 base salary) with the ability to pay out from 0% to 200% of target based on actual performance.

Mr. Somerhalder’s time-based restricted stock was granted effective March 1, 2021, and will vest upon completion of his executive service, and the restrictions on the award will continue to apply for one year beginning on the vesting date and ending on the first anniversary of the vesting date (i.e., one year holding requirement). Your Board believed that it was important to align Mr. Somerhalder’s performance goals with that of other executives at the Company. Accordingly, on July 20, 2021, at the recommendation of the Compensation Committee, the Board approved the same performance measures for Mr. Somerhalder’s performance-based RSUs that are included in the 2021-2023 cycle of the 2021 LTIP as detailed above. Mr. Somerhalder will vest

FIRSTENERGY CORP.

69


Proxy
Summary

Corporate
Governance & Board of Directors

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in the performance-based RSUs upon the completion of his executive service and, if earned, the award will be paid out at the end of the performance period (December 31, 2023), based on the achievement of actual performance results. Given the transitional nature of his role, Mr. Somerhalder is not expected to receive annual LTIP awards during his executive service to FirstEnergy.

Incentive Compensation Payouts for 20192021

FE STIP Payout

In February 2020,2022, based on actual 20192021 KPI results, the Compensation Committee recommended, and the independent members of the Board approved, the following 2021 short-term incentive KPI results for our NEOs (dollars in millions):

2021 STIP Results

 
  2021 KPI Measures  Threshold   Target   Stretch   Actual Results   Payout Results 

Financial

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Operating Earnings

  $1,306   $1,360   $1,436   $1,438    Meets Stretch 

Cash Flow (Cash From Operations Less Capital Expenditures)

  $(260  $(160  $40   $232    Meets Stretch 

Operational

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

 

Operations Index

  

 

 

 

2.50

 

 

  

 

 

 

5.00

 

 

  

 

 

 

7.50

 

 

  

 

 

 

4.27

 

 

   

Between
Threshold and
Target
 
 
 

Safety

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Systemwide LCE

   2    1    0    0    Meets Stretch 

 

Systemwide DART Rate

  

 

 

 

0.67

 

 

  

 

 

 

0.36

 

 

  

 

 

 

0.22

 

 

  

 

 

 

0.56

 

 

   

Between
Threshold and
Target
 
 
 

Diversity and Inclusion

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

 

Diversity and Inclusion Index

  

 

 

 

1.50

 

 

  

 

 

 

3.00

 

 

  

 

 

 

4.50

 

 

  

 

 

 

0.68

 

 

   
Below
Threshold
 
 

In February 2022, based on actual 2021 KPI results, the Compensation Committee recommended, and the independent members of the Board approved or ratified, the following 20192021 short-term incentive award payouts for our NEOs:

 

Executive

2019 Base

Salary

2019 Actual

STIP Award

Payout ($)

Payout as a %

of Base Salary

    

Charles E. Jones

$1,133,000$1,615,111143%

Steven E. Strah

$650,000$626,59096%

Samuel L. Belcher

$610,000$540,57589%

Robert P. Reffner

$550,000$463,91884%

Bennett L. Gaines

$465,000$364,20578%

Leila L. Vespoli(1)

$759,200$191,73725%

James F. Pearson(1)

$660,400$176,59627%
  Executive  

2021 Base

Salary

  

2021 STIP

Award - Actual
Payout ($)

  

Actual Payout as
a

% of STIP Target
Opportunity

 

Actual
Payout as a

% of Base

Salary(1)

Steven E. Strah

   $1,100,000   $1,977,256    160%   180%

K. Jon Taylor

   $725,000   $915,874    149%   126%

Hyun Park

   $650,000   $704,676    149%   111%

John W. Somerhalder II

   $750,000   $1,006,534    160%   160%

Samuel L. Belcher

   $700,000   $780,258    149%   111%

(1)

Refer to Realized Compensation on page 62 and E-VERP Benefits on page 93 for more information.

(1) Actual payout as a percentage of base salary for Mr. Park and Mr. Somerhalder is calculated using a prorated 2021 base salary based on their dates of hire.

59  |  FirstEnergy Corp.2020 Proxy Statement


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FE LTIP Payouts in 2019 (for NEOs other than Mr. Belcher)Somerhalder)

The FE LTIP for the 2017-20192019-2021 cycle used a formersimilar design compared toas the 2018-20202020-2022 and 2019-20212021-2023 cycles (see “Outstanding Award Cycles (2018-2020(2020-2022 and 2019-2021)2021-2023)” below). AtBeginning with the beginning of each year in the award2018-2020 LTIP cycle, the KPICommittee approved an incentive structure that measures actual performance against threshold, target and stretch goals were set for that yearbased on 3-year cumulative and were scored by points awarded for attaining a specified level of performance for each of the three components. Threshold, Target, and Stretch performanceaverage goals were established each year for each KPI. Each component was scored annually against that year’s established goals for a total of nine independent values over the three-yearperformance period. Points were accumulated for each annual period in the cycle, with a range from 0 to 4.50 points possible per year. “Target performance” across all three KPIs was set at 3.00 points for the year or 9.00 points in the aggregate for the three-year cycle. Threshold opportunity payout was earned at 5.40 points for the three-year performance period; Target opportunity payout was earned at 6.75 points; 150% of Target opportunity payout was earned at 8.10 points; and maximum opportunity payout (200% of Target) was earned at 12.15 points or above.

RSU Index Performance Measures

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The RSU Index in our 2017-2019 FE2019-2021 LTIP was comprised of the following threetwo performance measures, weighted equally: Cumulative Operating EPS and Average Capital Effectiveness.

Additionally, FirstEnergy’s three-year annualized RTSR ranked at the 27th percentile relative to the S&P 500 Utility Index during the 2019-2021 performance cycle, which triggered the RTSR modifier and resulted in equal thirds: Capital Effectiveness Index, FFO to Adjusted Debt Index and Safety Index.

The detailsan interpolated result that reduced the final LTIP payout by 23% for all award participants. Based on the KPIs, metrics and resultsaverage of Company stock prices for December 2021, the 2017 – 2019average stock price with reinvested dividends of $44.84 was greater than the average stock price in December 2018 of $38.14 needed to pay the 2019-2021 LTIP cycle ofas earned (capped at 200%). As a result, the FE LTIP are illustrated on page 70. absolute TSR modifier did not apply to reduce the 2019-2021 cycle payout.

Below is a summary of the RSU Index Scoreresults for the 2017-20192019-2021 cumulative performance period:

 

2017-2019 RSU Index Score (FE LTIP)
KPI Measures  

Annual     

Target     

  2017       2018       2019       

Total     

Points     

Capital Effectiveness Index

  1.00       1.09       1.50       1.40       3.99     

FFO to Adjusted Debt Index

  1.00       1.28       1.50       1.50       4.28     

Safety Index

  1.00       0.84       1.04       0.80       2.68     

Totals

  3.00       3.21       4.04       3.70       10.95     
2019-2021 LTIP Results

KPI Measures

  

Threshold

 

Target

 

Stretch

 

Actual Results

 

Payout Results

Cumulative Operating EPS

   

$

6.88

  

$

7.44

  

$

8.10

  

$

7.74

  

 

Between Target and Stretch

Average Capital Effectiveness

   

 

3.83

%

  

 

4.15

%

  

 

4.52

%

  

 

4.35

%

  

 

Between Target and Stretch

Given that the points were cumulative over each three-year cycle, the performance-adjusted RSUs for the 2017-2019 cycle earned a total of 10.95 points. Based on the total points,results of the two performance measures and the RTSR modifier for the 2019-2021 cycle described above, the independent members of the Board approved the payout was 185%at 127% of target payout opportunity.opportunity, plus dividend equivalents, for our participating NEOs. Upon his hire in January 2021, Mr. Park was granted prorated stock-based performance-adjusted RSUs based on annual salary and total LTIP target opportunity and a proration factor of one-third for the 2019-2021 LTIP cycle. In March 2020,2022, the performance-adjusted RSUs granted in 20172019 were paid in shares of our common stock and cash respectively as follows: Mr. Jones: 272,892Strah: 35,967 shares and $5,975,174;$742,784; Mr. Strah: 48,040Taylor: 10,659 shares and $1,066,472;$221,517; Mr. Reffner: 18,694Park: 14,385 shares and $408,799;n/a for cash-based RSUs; and Mr. Gaines: 24,147Belcher: 30,744 shares and $542,474; Ms. Vespoli: 59,146 shares and $1,312,988; and Mr. Pearson: 64,462 shares and $1,437,727. For Ms. Vespoli and Mr. Pearson, the performance-adjusted RSUs for the 2017-2019 cycle were prorated due to their retirements effective April 1, 2019, as discussed further on page 93. Any fractional shares for the stock-based performance-adjusted RSUs were paid in cash.$643,453.

Performance-Adjusted Restricted Stock Unit Award Payout (Transition Award)Vesting for Mr. BelcherTaylor

A 2018-2019 Transition Award was approved by the Compensation Committee and the Board at the February 2018 meeting and was provided to certain executives, including Mr. Belcher, who were previously participants in the FES/FENOC 2017 FES Replacement Long-Term Incentive Plan (“FESR-LTIP”) and were appointed to positions within FE Service Company effective March 5, 2018. The previous FES 2017R-LTIP was an annual cash-based program in effect for fiscal 2017 with a target opportunity percentage equal toone-third (1/3) of what otherwise would have been granted under the FE LTIP for 2017-2019 cycle. The 2018-2019 Transition Award was provided to replace the value of the 2018-2019 portion of the FE LTIP and make the participants whole on the FE LTIP grant opportunity for the 2017-2019 cycle.

The KPIs and results for the Transition Award were based on the 2018-2019 performance under KPIs used for the 2017-2019 FE LTIP grant. As the FESR-LTIP was provided as a cash payment in 2017, the Transition Award was settled entirely in stock to more closely align with the FE LTIP grant for the 2017-2019 cycle, in which awards are settledtwo-thirds in stock andone-third in cash. The grant date used for the Transition Award wasOn March 5, 2018, withMr. Taylor was awarded a restricted stock award and a cash retention award under the grant value equalingtwo-thirds of the target opportunity percentage and base salary in effect as of March 1, 2017.

60  | FirstEnergy Corp.2020 Proxy Statement


LOGO

Threshold, Target, 2015 Incentive Compensation Plan upon his promotion to President, Ohio Operations to retain him during the assignment and Stretch performance goals were established both years for each KPI. Each component was scored annually against that year’s established goals forto support the CFO succession plan. These awards vested 100% on April 1, 2021, with respect to 8,708 shares (rounded) at a totalvalue of six independent values over thetwo-year period. Points were accumulated for each annual period in the cycle, with a range from 0 to 4.50 points possible per year. “Target performance” across all three KPIs was set at 3.00 points$299,106 for the year or 6.00 points in the aggregate for thetwo-year cycle. Threshold opportunity payout was earned at 3.60 points for thetwo-year performance period; Target opportunity payout was earned at 4.50 points; 150% of Target opportunity payout was earned at 5.40 points;restricted stock award and maximum opportunity payout (200% of Target) was earned at 8.10 points or above.

The results$750,000 for the Transition Award were as follows:cash retention award.

2018-2019 RSU Index Score (Belcher)
KPI Measures  

Annual     

Target     

  2018       2019       

Total     

Points     

Capital Effectiveness Index

  1.00       1.50       1.40       2.90     

FFO to Adjusted Debt Index

  1.00       1.50       1.50       3.00     

Systemwide OSHA

  1.00       1.04       0.80       1.84     

Totals

  3.00       4.04       3.70       7.74     

Given that the points were cumulative over thetwo-year cycle, the performance-adjusted RSUs of the 2018-2019 cycle meets target performance, earning a total of 7.74 points. Based on the total points, the payout of the Transition Award was at 193% of target payout opportunity. In March 2020, the performance-adjusted RSUs granted under the Transition Award were paid in shares of our common stock. As a result, Mr. Belcher received a payment of 22,235 shares.

Potential Negative Discretion for the 2017-2019 FE LTIP Cycle and the Transition Award

To further align pay and the performance of the 2017-2019 FE LTIP cycle and the Transition Award for Mr. Belcher with long-term shareholder value, in February 2018 the Compensation Committee recommended, and the Board approved, the addition of an absolute TSR cap for Mr. Jones, Mr. Strah, Mr. Belcher, Mr. Pearson, and Ms. Vespoli. The absolute TSR cap was intended to limit the FE LTIP maximum possible payouts to 100% if the absolute TSR was negative over the respective three-year performance period, based on a continuous function for absolute TSR growth between 0% and 10% for the 2017-2019 cycle, and was set be paid as earned (up to the max of 200%) with the absolute TSR growth greater than 10%.

The calculation used the average stock price for the month of December (in other words, December 2016 and December 2019 for the 2017-2019 cycle) and assumed dividends were reinvested. Based on the average of FirstEnergy stock prices for December 2019, the average stock price of $48.23 was greater than the goal of $36.49 needed to pay the FE 2017-2019 LTIP cycle as earned (capped at 200%). Thus, the 2017-2019 FE LTIP cycle was paid as earned.

The Compensation Committee believes this formulaic approach demonstrated the Company’s commitment to our shareholders. The Compensation Committee retains the right to apply negative discretion based on future conditions or unexpected conditions. However, the addition of the absolute TSR cap to the 2017-2019 FE LTIP cycle helped to align our legacy long-term incentive program design for these executive officers to the incentive compensation design that was approved in 2018 and maintained for 2019.

61  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Outstanding Award Cycles (2018-2020(2020-2022 and 2019-2021)2021-2023)

TheParticipating NEOs were granted the following number of target RSUs (rounded) in 20182020 and 20192021 for each three-year FE LTIP cycle, respectively. Cash-settled RSUs have been rounded for illustration. Although dividend equivalents accrue and are reinvested throughout the performance period, subject to the same restrictions and performance conditions of the underlying awards, they are excluded in the tablestable below.

 

 

At Target

 

       
Executive 

Number of     

Cash-Settled     

RSUs     

granted for the     

2018-2020     

Cycle     

 

Number of     

Stock-Settled     

RSUs     

granted for the     

2018-2020     

Cycle     

 

Total RSUs     

granted for the     

2018-2020     

Cycle     

 

Number of     

Cash-Settled     

RSUs     

granted for the     

2019-2021     

Cycle     

 

Number of     

Stock-Based     

RSUs     

granted for the     

2019-2021     

Cycle     

 

Total RSUs     

granted for the     

2019-2021     

Cycle     

       

Charles E. Jones

 62,906      127,559      190,465      50,071      101,534      151,605     
       

Steven E. Strah

 14,436      29,057      43,493      12,448      25,056      37,504     
       

Samuel L. Belcher

 10,457      20,914      31,371      10,783      21,417      32,200     
       

Robert P. Reffner

 4,304      8,738      13,042      7,832      15,800      23,632     
       

Bennett L. Gaines

 5,711      11,287      16,998      4,795      9,476      14,271     
       

Leila L. Vespoli(1)

 19,905      39,810      59,715      15,844      31,688      47,532     
       

James F. Pearson(1)

 21,796      43,389      65,185      17,349      34,537      51,886     

(1)

Refer toE-VERP Benefits on page 93 for more information.

Number of Performance-Based RSUs Granted At Target

Executive

  

Number of

Cash-Settled

RSUs

granted for the

2020-2022

Cycle

  

Number of

Stock-Settled

RSUs

granted for the

2020-2022

Cycle

  

Total RSUs

granted for the

2020-2022

Cycle

  

Number of

Cash-Settled

RSUs

granted for the

2021-2023

Cycle

  

Number of

Stock-Based

RSUs

granted for the

2021-2023

Cycle

  

Total RSUs

granted for the

2021-2023

Cycle

Steven E. Strah

   

 

12,466

   

 

24,781

   

 

37,247

   

 

46,342

   

 

92,684

   

 

139,026

K. Jon Taylor

   

 

5,291

   

 

10,673

   

 

15,964

   

 

15,735

   

 

31,660

   

 

47,395

Hyun Park

   

 

   

 

21,524

   

 

21,524

   

 

13,692

   

 

27,384

   

 

41,076

John W. Somerhalder II

   

 

   

 

   

 

   

 

   

 

33,210

   

 

33,210

Samuel L. Belcher

   

 

11,419

   

 

22,985

   

 

34,404

   

 

16,318

   

 

32,833

   

 

49,151

The values shown for Mr. Pearson and Ms. VespoliPark are based on the originalprorated number of RSUs granted for each FELTIP cycle. Upon his hire in January 2021, Mr. Park was granted prorated LTIP awards based on annual salary and total LTIP target opportunity and based on a proration factor of one-third for the 2019-2021 LTIP cycle priorand two-thirds for the 2020-2022 LTIP cycle. Equity awards granted to their retirements effective April 1, 2019. As a result of their retirements, the RSUs

FIRSTENERGY CORP.

71


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Mr. Somerhalder following his hire are described above under “Performance-based and Time-based Equity Award for both the 2018-2020 and 2019-2021 cycles will be prorated and vest based on actual performance. For more information, refer to the following section.Mr. Somerhalder”. Given that the 2018-20202020-2022 and 2019-20212021-2023 cycles of performance-adjusted RSUs are based on three-year cumulative metrics, the performance and actual payout is unknown at this time.

Realized Compensation

We provide this alternative view of compensation paid to the NEOs as a supplement to, but not as a substitute for, the Summary Compensation Table (“SCT”) because this realized compensation table below illustrates the way our Compensation Committee views the actual compensation earned or received by our NEOs in 20192021 under the FE STIP, and the 2017-20192019-2021 cycle of the FE LTIP (and, in the case of Mr. Belcher, the 2018-2019 Transition Award).

Based on the KPIs and weightings in 2019, Mr. Jones was paid at 124.0% of target opportunity under the FE STIP while our remaining NEOs (other than Mr. Belcher) were paid at 120.5%. All NEOs (other than Mr. Belcher) were paid at 185% of target opportunity for the 2017-2019 cycle of the FE LTIP. Mr. Belcher was paid at 118.2% of target opportunity under the FE STIP and at 193% of target opportunity for the 2018-2019 Transition Award. For more information, refer to the 2019 KPIs and Weightings for FE STIP section on page 57.

62  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

The table below summarizes realized compensation in 20192021 for our NEOs:

 

       
Executive

2019

Earned

Salary

2019 FE
STIP

(Paid in

2020)

Performance-

Adjusted RSUs

(Earned in three-

year period

ended in 2019,

Paid in 2020)

Performance-

Adjusted RSUs

(Earned in two-

year period

ended in 2019,

Paid in 2020)

Other
Compensation
(2)

Total 2019

Realized

Compensation

Charles E. Jones

$1,136,113$1,615,111$18,091,568N/AN/A$20,842,792

Steven E. Strah

$643,599$626,590$3,199,450N/AN/A$4,469,639

Samuel L. Belcher

$604,308$540,575N/A$987,237N/A$2,132,120

Robert P. Reffner

$537,594$463,918$1,238,823N/AN/A$2,240,335

Bennett L. Gaines

$462,322$364,205$1,614,607N/AN/A$2,441,134

Leila L. Vespoli(1)

$185,629$191,737$3,939,075N/A$1,728,633$6,045,074

James F. Pearson(1)

$161,471$176,596$4,299,829N/A$1,570,179$6,208,075

Executive

  

2021

Earned

Salary

  

2021 STIP

(Paid in

2022)

  

Performance-

Adjusted RSUs

(Earned in three-

year period

ended in 2021,

Paid in 2022)

  

Restricted
Stock

Award

(Vested in
2021)(1)

  

Cash
Retention

Award

(Vested in
2021)(2)

  

Total 2021

Realized

Compensation

Steven E. Strah

   

$

1,076,236

   

$

1,977,256

   

$

2,237,932

   

 

N/A

   

 

N/A

   

$

5,291,424

K. Jon Taylor

   

$

686,209

   

$

915,874

   

$

664,612

   

$

299,106

   

$

750,000

   

$

3,315,801

Hyun Park

   

$

635,714

   

$

704,676

   

$

597,984

   

 

N/A

   

 

N/A

   

$

1,938,374

John W. Somerhalder II

   

$

632,555

   

$

1,006,534

   

 

N/A

   

 

N/A

   

 

N/A

   

$

1,639,089

Samuel L. Belcher

   

$

694,148

   

$

780,258

   

$

1,921,481

   

 

N/A

   

 

N/A

   

$

3,395,887

(1) Reflects the value of Mr. Taylor’s restricted stock award; 100% of the award vested on April 1, 2021, as discussed on page 71.

(1)

Amounts are prorated for Ms. Vespoli’s and Mr. Pearson’s retirement effective April 1, 2019.

(2)

Upon their retirements, Ms. Vespoli received $110,588 for 434 hours and Mr. Pearson received $240,489 for 1,902 hours of banked and frozen vacation earned prior to 2008, when FirstEnergy’s vacation policies were revised, and employees and executives could no longer accumulate banked vacation. Due to their participation in theE-VERP, Ms. Vespoli and Mr. Pearson received alump-sum payment of $1,518,400 and $1,320,800, which was equivalent to what they would have received under the FirstEnergy Severance Benefits Plan. Additionally, Ms. Vespoli received $99,645 for 273 hours and Mr. Pearson received $8,890 for 28 hours of unused PTO. Refer toE-VERP Benefits on page 93 for more information.

2020(2) Reflects the value of Mr. Taylor’s cash retention award; 100% of the award vested on April 1, 2021, as discussed on page 71.

2022 Incentive Plan Design and NEO Compensation

Following substantial changes to our short-term and long-term incentive compensation programs in 2018 andas well as strongSay-on-Pay voting results, in 2018 and 2019, the Company has maintained the same general structure and design, with a few key modifications, for both of our incentive compensation programs for 2020,through 2021, for the NEOs listed below. Consistency and stability are important aspects of programs that are designed appropriately. As such, the 2020The 2022 design and goals of our short-term incentive compensation programsprogram has a relatively similar structure to that of prior years with a few key modifications. In February 2022, your Board approved a new operational focus on customer experience goal called the Engaged Customer Relationship Score (“ECR Score”). ECR Score replaces First Call Resolution as a metric within the Operations Index for 2022 and measures overall customer experience through surveys conducted to assess residential customers’ perceptions of brand trust, service satisfaction and product experience. An additional adjustment for the 2022 STIP consists of revisions to the DEI Index. Since its inclusion as a KPI in 2018, the DEI Index continues to be comprised of key metrics that measure diverse succession planning, diverse hiring, and scoring through the DEI employee survey. For 2022, the DEI Index continues to evolve to drive accelerated improvement in meeting our workforce aspirations and advancement for diverse groups while we remain committed to maintaining an intentional focus on building a more inclusive culture. Our definition of diverse includes females, historically underrepresented racially and ethnically diverse groups, individuals who identify as LBGTQ+ and/or people with disabilities, and has recently been expanded to include individuals with military service. Also new for 2022, the succession planning component of our DEI Index has been updated to measure the percentage of companywide manager-and-above succession plans that have minimal changes. In December 2019,one or more diverse candidates who are ready to fill the Committee approved increasingposition within two years. Consistent with 2021, this metric will also include a performance gate for improving the percentage of succession plans that include one or more racially and ethnically diverse successors.

The LTIP will maintain Cumulative Operating EPS for the 2022-2024 cycle and increase the weighting from 50% to 65%. Average Capital Effectiveness and the Relative TSR modifier will be eliminated and replaced with a standalone Relative TSR metric, weighted at 35%. Relative TSR will be measured against the S&P 500 Utility Index. Threshold performance begins if our performance is at the 25th percentile, while stretch (maximum)performance, with a maximum payout opportunity level from 150%of 200%, begins at the 85th percentile. This change in design, which puts more emphasis on Relative TSR, more closely aligns with the interests of our shareholders and is similar to 200%metrics used by our utility peer companies. Consistent with the 2021-2023 cycle, the threshold payout for the 2022-2024 LTIP will be at 25% of target, in the 2020 FE STIP. Management believes the timing of this change aligns well with the Company’s transition to a fully regulated company and coincides with the final vesting of the FE LTIP cycle under the former design based upon annual goals. As a result, the Company will need to have additional earnings to cover the cost of paying the FE STIPmaximum payout remaining at 200%. This change is also consistent with market practices and will further align our incentive program with that of our peers.

Executive2020 Base Salary2020 STIP (as a % of
Base Salary)
2020 LTIP (as  a % of
Base Salary)

Charles E. Jones

$1,133,000115%545%

Steven E. Strah

$675,00085%245%

Samuel L. Belcher

$650,00075%235%

Robert P. Reffner

$580,00070%200%

Bennett L. Gaines

$475,00065%125%

In February 2020, the Committee decided, with input from management, to approve increases in compensation for certain NEOs and other executive officers given the Company’s continued progress toward becoming a fully regulated utility, the successful achievement of several strategic initiatives in 2019, and changes in market data provided by our independent consultant. The Committee, at Mr. Jones’ request, also recommended to the Board, and the Board approved, that there be no changes to Mr. Jones’ salary and target incentive compensation levels. The Board agreed with this determination, despite Mr. Jones’ exceptional performance and leadership during a pivotal period of transition giving Mr. Jones’ pay positioning and recentSay-on-Pay feedback. The Board is supportive of pay increases for Messrs. Strah, Belcher and Reffner, given that they continue to perform well in their respective positions, and such increasesPayout will continue to move them withinbe capped at 100% of target if our Absolute TSR is negative over the competitive range and with respect to the Blended Median.three-year performance period.

 

63  |  FirstEnergy Corp.2020 Proxy Statement

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LOGO

For 2022, target opportunities continue to be set at or near the Blended Median of our peer groups. The 2022 target compensation levels for the NEOs are as follows:

 

Executive

  

2022 Base

Salary Rate

  

2022 STIP (as a %

of Base Salary)

 

2022 LTIP (as a %

of Base Salary)

Steven E. Strah

   

$

1,250,000

   

 

125

%

  

 

525

%

K. Jon Taylor

   

$

785,000

   

 

85

%

  

 

250

%

Hyun Park

   

$

700,000

   

 

75

%

  

 

225

%

John W. Somerhalder II

   

$

750,000

   

 

100

%

  

 

N/A

Samuel L. Belcher

   

$

750,000

   

 

75

%

  

 

250

%

Other Compensation Policies and Practices

Retirement Benefits

We offer retirement benefits to all of our NEOs through our qualified plan, the FirstEnergy Corp. Master Pension Plan, and our nonqualified supplemental plans, under the FirstEnergy Corp. Pension PlanAmended and theRestated Executive Deferred Compensation Plan (“EDCP”), respectively. and the FirstEnergy Corp. Cash Balance Pension Restoration Plan (“Cash Balance Restoration Plan”). The qualified plan benefit historically has been based on earnings, length of service, and age at retirement and is considered a defined benefit plan under the IRC.Internal Revenue Code (“IRC”). For employees hired or rehired on or after January 1, 2014, the qualified plan benefit uses a cash-balance formula based on age and service. The qualified plan benefit is subject to applicable federal and plan limits. The EDCP isand Cash Balance Restoration Plan are designed to provide a benefit to executives that is competitive and comparable to that for our general employee population.

Additionally,In recognition of Mr. Jones participates inPark’s extensive legal expertise, first-hand experience dealing with crisis situations, utility industry knowledge, and compliance focus, as well as to incentivize him to join the Supplemental Executive RetirementCompany and to encourage retention, Mr. Park will be provided an additional credit of $275,000 into the Cash Balance Restoration Plan (“SERP”). Ms. Vespoli was a participant in the SERP prior to her retirement in April 2019. Messrs. Strah, Belcher, Reffner, Gaines and Pearson are not participants in the SERP. In 2014, the SERP was formally closed to new entrants to better align our executive retirement benefits with current market practices. Historically, participation in the SERP was provided to certain key executives as part of the integrated compensation program intended to attract, focus, motivate, and retain top executives who are in positions to make significant contributions to our business. Pursuant to a historical arrangement, Mr. Reffner and Mr. Gaines are eligible to be credited withafter five years of continuous employment. Pursuant to an arrangement upon his hire, Mr. Belcher is eligible to receive five additional years of credited service for purposes of calculating the nonqualified supplemental pension benefit. For more information, refer to the “Pension Benefits as of December 31, 2019”2021” table on page 83.87. Retirement benefits for the NEOs are further discussed in the narrative section following the Pension Benefits table later in this proxy statement.

EDCP (Elective Deferrals)

NEOs may elect to defer a portion of their compensation into the EDCP. They may defer from 1% to 50% of base salary to a cash retirement account; from 1% to 100%85% of FE STIP awards to either a cash or stock account; and from 1% to 100%85% of FE LTIP awards to a stock account. In 2019,Due to the transitional nature of his role, Mr. Somerhalder was eligible to participate in the EDCP was amended forand make elective deferrals beginning in 2020,from 1% to reduce the maximum deferral for FE STIP50% of base salary to a cash retirement account and FE LTIP from 100%1% to 85% of STIP awards to account for the local and FICA taxation required to be withheld upon deferral and to simplify the communications for participants as well as the plan administration.either a cash or stock account. The EDCP offers executives the opportunity to accumulate assets denominated both in cash and in Company common stock, on atax-favored basis. Beginning in 2017, any deferral elections to a cash or stock account made by a participant will ultimately be paid only in cash based upon his/herthe participant’s distribution elections.

Earnings on deferrals in the EDCP stock accounts of NEOs track FirstEnergy shares. Earnings on deferrals into the cash retirement accounts of NEOs were credited at the Moody’s Corporate Long-term Bond Yield Index rate plus 3% for funds deferred prior to 2013 and the Moody’s Corporate Long-term Bond Yield Index rate plus 1% for funds deferred in 2013 and later. Any above-market interest earnings for 2021 are included in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the SCT.

Personal Benefits and Perquisites

The Company does not provide excessive perquisites to our NEOs.

In 2019,2021, our NEOs could use the corporate aircraft for limited personal use. Mr. Jones is authorized to use either a commercial carrier or our corporate aircraft for any business or personal travel at his discretion. With CEO approval, other executives, including the NEOs, may from time to time use our corporate aircraft for personal travel, which may include family travel. We have a written policy that sets forth guidelines regarding the personal use of the corporate aircraft by executive officers and other employees in accordance with the

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IRS regulations and customary compensation practices. FirstEnergy’s executive relocation program provides reimbursement or payment for relocation-related expenses, including travel, temporary living expenses, new home closing costs, home sale assistance, and gross-up on certain relocation benefits for estimated federal, state and FICA taxes on expenses which are not tax deductible.

The Compensation Committee believes the foregoing perquisite isperquisites are reasonable, competitive, and consistent with our overall compensation philosophy.

Severance Benefits uponUpon an Involuntary Separation

In the event of an involuntary separation without cause, the CEO’s severance benefits, if any, wouldare to be determined by the Compensation Committee, in its discretion, and approved by the independent members of the Board. TheAll other NEOs are covered in the event of an involuntary separation under the FirstEnergy Corp. Amended and Restated Executive Severance Benefits Plan (the “Severance Plan”).

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Upon Mr. Strah’s appointment to CEO in March 2021, he is no longer eligible to be covered under the Severance Plan in the event of an involuntary separation without cause.

The Severance Plan provides severance benefits to executives who are involuntarily separated due to the sale or closing of a facility, merger, acquisition, corporate restructuring, reduction in the workforce or job elimination. Benefits under the Severance Plan are also offered if an executive rejects a job assignment that would result in the occurrence of any one or more of the following events: (1) a 15% or greater reduction in the executives’executive’s then current base salary; (2) a requirement that the executive make a 50 mile50-mile or greater relocation from his or her current residence for reasons related to the new job; or (3) a requirement that the executive to make a 50 mile50-mile or greater change in his or her daily commute from their residence to a new reporting location.

The Severance Plan provides for three weeks of base paysalary for each full year of service with a minimum benefit of 52 weeks of base salary and a maximum benefit of 104 weeks of base salary. Additionally, executives who elect continuation of health care for the severance period will be provided this benefit at active employee rates.rates, not to exceed 18 months. Executives must pay taxes on any continuation of health care value in excess of what employees with the same level of service would receive under the FirstEnergy Employee Severance Benefits Plan.

CIC Plan

The Compensation Committee believes that the your Company’s Change in Control Severance Plan (“CIC PlanPlan”) is aligned with the market practices of our peer groups and it is available to all NEOs. OfAll of the NEOs the CIC Executives (as defined below) participated in the CIC Plan in 2019.2021. The initial term of the CIC Plan commenced on January 1, 2017. Annually, the Committee determines if any changes need to be recommended to the Board for approval. If no changes are needed, then the CIC Plan will automatically renew for an additional year. In September 2019,December 2021, the Compensation Committee determined that no changes were needed and the term of the CIC Plan automatically extended to December 31, 20212023 by its terms. All CIC Executives, as well as allnon-participatingparticipating NEOs are eligible for the same level of benefits, which include:

 

 

Atwo-times base salary plus target bonusSTIP award multiplier for cash severance;

 

 

The annual FE STIP paid at target, prorated for the number of days worked in the year;

 

 

Beginning withIf the 2017-2019 FE LTIP cycle, if the FE LTIP is not replaced by thea buyer, FE LTIP awards will be paid at target, prorated for the number of full months worked in the cycle;

 

 

Outplacement services for one year following the CIC, capped at a value of $30,000; and

 

 

Non-competition andnon-disparagement obligations that protect the Company.

There are no excise tax“gross-up” provisions. Payments are “cut back” in the event that an excise tax would otherwise apply to the safe harbor amount minus one dollar, unless the participant would receive greaterafter-tax proceeds absent such cutback. In such a case, the CIC Executiveparticipating NEOs will receive payment of all CIC benefits and will be responsible for paying any excise tax imposed on the payment.

Share Ownership Guidelines

We believe it is critical that the interests of executives, directors and shareholders are clearly aligned. Therefore, the Compensation Committee has continued to refinemaintains share ownership guidelines to promote meaningful stock ownership by our executives, including our participating NEOs and directors. TheYour Company not only wants executives to meet their required share ownership levels in a timely manner, but also to build an ownership mentality and demonstrate commitment to aligning their interests with shareholders.

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These guidelines specify the value of Company shares that our participating executives must accumulate within five years of becoming an executive officer. Additionally, executives who are not on track to meet their required share ownership levels or have failed to achieve required share ownership levels within the five-year compliance period may be subject to the following consequences imposed at the discretion of the Compensation Committee, subject to approval by the Board:

 

 

Reduce or eliminate the annual FE STIP award opportunity (as necessary) and consider replacement with a discretionary stock award; and/or

 

 

Require executives to purchase sufficient shares to meet their required share ownership levels.

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Each participating executive is required to retain all Company shares earned under equity grants or purchased or accumulated until the executive meets his or her share ownership guidelines. Additionally, executives are prohibited from selling shares held in excess of the share ownership guidelines without permission from the CEO. The specific share ownership guidelines are based on a multiple of an executive officer’s base salary, with the higher multiples applicable to the executives having the highest levels of responsibility.

The share ownership multiples for the continuing NEOs in 20192021 were as follows:

 

NEO

Executive

  Share Ownership Multiples     Multiple

Mr. JonesSteven E. Strah

  

7X base salary

Mr. StrahK. Jon Taylor

  

4X base salary

Mr. BelcherHyun Park

  

3X base salary

Ms. ReffnerJohn W. Somerhalder II(1)

  3X base salary     

N/A

Mr. GainesSamuel L. Belcher

  

3X base salary

(1) Mr. Somerhalder is not subject to the Company’s share ownership guidelines for executives due to the transitional nature of his role. Refer to the “Director Compensation in Fiscal Year 2021” section for more information on ownership guidelines for directors.

To be consistent with an entirely performance-based long-term incentive plan design, unvested performance-adjusted RSUs are not counted as eligible shares for executives to meet their share ownership requirements. The following types of holdings will count toward the share ownership guidelines:

 

 

Shares directly or jointly owned in certificate form or in a stock investment plan, including 60% of any unvested restricted stock;

 

 

Shares owned through the FirstEnergy Corp. Savings Plan;

 

 

Shares held individually or jointly by a broker, or, in certain circumstances, held in trust, or in an IRA, shares held by a spouse, or other beneficially owned shares, to the extent known by the Company; and

 

 

Units deferred pursuant to the EDCP.

All continuing NEOs haveAs of December 31, 2021, Messrs. Taylor and Belcher had met their share ownership requirements. Ms. VespoliMr. Strah and Mr. Pearson are no longer executive officers of the CompanyPark have not yet met their share ownership requirements, but have until March 8, 2026, and are no longer subjectJanuary 11, 2026, respectively, to the stockmeet their share ownership guidelines.requirements. Although the Compensation Committee established share ownership guidelines for executives, such equity ownership typically does not impact the establishment of compensation levels. The Compensation Committee does review previously granted awards, both vested and unvested, that are still outstanding on a regular basis.

Hedging Policies

As described more in this section, we prohibit our employees (including officers) and directors from engaging in hedging or monetizing transactions that would allow them to own Company securities without the full risks and rewards of ownership, including economic exposure to potential decreases in the market value of Company securities.

TheYour Company has adopted formal policies as part of its Insider Trading Policy regarding hedging practices. The following categories of “Covered Persons” are covered by our Insider Trading Policy:

 

 

all of the Company’s independent directors;

 

 

all officers (including NEOs) and employees of the Company and its affiliates and subsidiaries; and

 

FIRSTENERGY CORP.

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any other persons that the Company determines should be covered, such as contractors, consultants and professional advisors who have access to material nonpublic information.

In addition to the Insider Trading Policy applying to Covered Persons, the following are also covered by our Insider Trading Policy;Policy:

 

 

the portfolio manager and other individuals who can trade in (or make changes in investments in) Company Securities for the Covered Persons; and

 

66  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

 

the Covered Persons’ Related Persons (except family members who do not reside with a Covered Person — unless such family member confers with the Covered Person when making investment decisions in Company Securities or is directed, influenced or controlled by the Covered Person with respect to transactions in Company Securities); and

 

 

any entities that the Covered Persons influence or control.

For these purposes, we consider “Related Persons” of a Covered Person to be her family members and others who reside with her, and any family members who doesdo not live with her but whose transactions in Company Securities are directed, influenced or controlled by her. In addition, “Company Securities” broadly includes all securities of the Company and of its direct and indirect subsidiaries, including but not limited to common stock, options, preferred stock, convertible debentures or other debt securities, and warrants (as well as derivative securities not issued by the Company or its subsidiaries, such as exchange-traded put or call options or swaps relating to any of the foregoing securities).

The Insider Trading Policy generally prohibits a Covered Person from engaging in certain transactions regarding Company Securities owned by her or that she beneficially owns, but the Insider Trading Policy does not apply to transactions in Company Securities where such transactions are not initiated by the Covered Person or approved by her, or are not subject to her influence or control (such as mutual fund transactions in Company Securities). More specifically, the prohibition on pledging, hedging or other monetization transactions for Covered Persons explicitly covers a number of possible transactions:

 

 

Company directors and Company “officers” (under Exchange Act Rule16a-1(f)) are prohibited from engaging in short-termopposite-way trading within asix-month period; and

 

 

Covered Persons are prohibited from engaging in short sales, trading in market-based put and call options or othernon-compensatory derivative securities, or engaging in specific hedging and monetization transactions, such as prepaid variable forward contracts, equity swaps, collars and exchange funds.

In addition, under the Insider Trading Policy, certain “Designated Insiders” (Company directors, Company “Executive Officers” under Exchange Act Rule3b-7, Company “officers” under Exchange Act Rule16a-1(f)), members of the Company’s executive council, members of its disclosure committee and certain other employees with regular access to financial information or otherwise as identified from time to time by the Company), are prohibited from holding Company Securities in a margin account, pledging Company Securities as collateral for a loan, or placing standing or limit orders on Company Securities that remain effective after the day on which they are placed (apart from Company-authorized Rule10b5-1 trading plans). Other Covered Persons may place standing or limit orders on Company Securities that remain effective after the day on which they are placed, but only for short durations and in a manner that complies with Company restrictions and procedures set forth in the Insider Trading Policy (such aspre-clearance procedures).

Clawback Policy

TheYour Company has a clawback policy (its “Recoupment Policy”) that covers all current or former Executive Officers,executive officers, Section 16 Officersofficers and other selected executives. In 2019, the Compensation Committee approved enhancements to the Recoupment Policy to continue the previously existing clawback provisions in the event of a financial restatement of the Company, and expanded to include clawback provisions in the event of certain other Detrimental Activity,detrimental activity, as defined in the Recoupment Policy, resulting in significant operational, financial or reputational harm to the Company as determined in good faith by the Compensation Committee. In the event that the Company is required to file a financial restatement due to material noncompliance with financial reporting requirements under U.S. securities laws, regardless of misconduct or contribution to the restatement requirement, the clawback policy allows for recoupment of incentive-based compensation granted, vested or accrued after January 1, 2014, and during the three-year period preceding the filing of the accounting restatement, to the extent such compensation received exceeded what would have been received based on the corrected data relating to the restatement. In the event of significant or material

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operational, financial or reputational harm resulting from Detrimental Activity,an executive’s detrimental activity, the Compensation Committee may direct the Company to recoup from such executive incentive-based compensation granted, vested or accrued in an amount as reasonably determined by the Compensation Committee in good faith.

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Risk Assessment of Compensation Programs

At the request of the Compensation Committee, completed on an annual basis, management assessedannually assesses the risks associated with our compensation policies, practices, and programs for employees. In addition,its analysis, management specifically paid particular attention to those programs that allow for variable payouts where an employee may potentially be able to influence payout factors in those programs. The Compensation Committee reviewed management’s assessment and concurred with its conclusions. Based on this assessment, the Compensation Committee concluded that the risks associated with our compensation policies and practices are not reasonably likely to have a material adverse effect on theyour Company.

The Compensation Committee and management designed our compensation programs to align our executives’ interests with the long-term interests of our shareholders without encouraging excessive risk taking. In this regard, our compensation structure contains various features intended to mitigate excessive risk taking. These features include, among others:

 

 

The mixcompensation structure is designed to link an appropriate portion of compensation among base salary, and short- andto the Company’s long-term incentive programs is not overly weighted toward short-term incentives, and thus, does not encourage excessive risk taking;performance;

 

 

Our annualThe periodic benchmarking of the compensation programs and overall compensation structure are used to evaluate the Company’s policies as compared to market practices;

Annual incentive compensation is based on multiple, diversified, company-based performance metrics, including financial, safety/operational, and business unit measures that are consistent with our long-term goals;strategy;

 

 

Other than the Transition Award for Mr. Belcher,Internal controls and standards of ethics and business conduct mitigate risk and support our long-term incentive compensation goals. We employ various auditing processes on a regular basis in 2019 consisted entirely of performance-adjusted RSUs that vest over a three-year period, emphasizing the achievement of performance over a longer time horizon;an effort to assure compliance with these controls and standards; and

 

 

The Compensation Committee, comprised entirely of independent directors, oversees ouryour Company’s compensation policies and practices and is responsible for reviewing approving and/orand recommending forBoard approval by the Board, where necessary,for executive compensation, including annual incentive compensation plansprograms applicable to senior management employees, and other compensation plans as appropriate; and

Certain of our executives are required to own a specified level of shares to comply with share ownership guidelines, encouraging a long-term focus on enhancing shareholder value.appropriate.

Additionally, our Vice President, Chief Risk Officer participated in the discussion with senior management regarding the establishment of goals and their weightings and measurements for our short- and long-term incentive compensation programs and the 20192021 performance results. The Chief Risk Officerresults and provided his view to the Compensation Committee that:

 

 

The measurement of 20192021 performance results were conducted in accordance with prescribed methodologies and precluded any beneficiary from controlling the calculation;

 

 

Proposed goals would not create inappropriate incentives or inadvertently encourage willingness to embrace risk exposures other than those we encounter in the normal course of our business;

 

 

By avoiding individually based goals or goals applicable only to a small group of employees, the risk of encouraging inappropriate behavior is greatly mitigated; and

 

 

There are adequate controls in place so that the beneficiary of any incentive payout cannot unilaterally control the measurement methodology.

For additional information regarding theyour Company’s risk management process and your Board’s role in risk oversight, see the related discussion in the “Corporate Governance and Board of Directors Information” section of this proxy statement.

Impact of Tax Requirements on Compensation

Section 162(m) of the IRC generally limits the tax deduction to $1 million for certain compensation paid to certain of our executive officers (and, beginning in 2018, certain former executive officers). Historically, compensation that qualified as “performance-based compensation” could be excluded from this $1 million limit. This exception was repealed, effective for taxable years beginning after December 31, 2017, except for certain compensation arrangements in place as of November 2, 2017 for which transition relief is available. The Compensation Committee and your Board sought from time to time to potentially qualify executive compensation as tax deductible under Section 162(m) as in effect prior to 2018, where we believed it was in

68  |  FirstEnergy Corp.2020 Proxy Statement

FIRSTENERGY CORP.

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LOGO

our best interest and in the best interest of our shareholders. However, we have not permitted this tax provision to distort the effective development and execution of our compensation program in the past, nor will we in the future.

We continue to evaluate the impact of the revisions to Section 162(m) of the IRC for their potential impact on the Company. Regardless of that impact, however, we will continue to design and maintain executive compensation arrangements that we believe will attract, retain, focus, and reward the executive talent that we need to compete successfully, even if in certain cases such compensation is not deductible for federal income tax purposes. In addition, because of the continued development of the application and interpretation of Section 162(m) and the regulations issued thereunder, there can be no assurance that compensation intended to satisfy the requirements for deductibility under Section 162(m), as in effect prior to 2018, will in fact be deductible.

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KPI Results and RSU Index Scores

2017 – 2019 Cycle FE LTIP Details

  2017 (except Mr. Belcher)  2018  2019  Totals  
    Threshold   Target  Stretch  Result  Threshold   Target  Stretch  Result  Threshold   Target  Stretch  Result      

Capital Effectiveness Index(1)

                                                    

FE Consolidated

  14.55%   14.94%   15.47%   15.05%   3.64%   3.91%   4.29%   4.29%   3.75%   4.01%   4.40%   4.32%     

Regulated Distribution

  16.85%   17.14%   17.60%   17.25%   n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a        

Regulated Transmission

  11.28%   11.51%   11.87%   11.54%   n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a        

Total Points

              3.26                  n/a                  n/a        

RSU Index Score (A)

              1.09                  1.50                  1.40      3.99    
FFO/Adjusted
Debt Index
                                                    

FE Consolidated

  18.37%   19.09%   20.11%   19.21%   16.08%   16.83%   17.91%   18.83%   12.25%   12.90%   13.82%   14.50%     

Regulated Distribution

  34.74%   35.71%   37.27%   38.02%   n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a        

Regulated Transmission

  20.00%   20.66%   21.70%   21.26%   n/a      n/a      n/a      n/a      n/a      n/a      n/a      n/a        

Total Points

              3.85                  n/a                  n/a        

RSU Index Score (B)

              1.28                  1.50                  1.50      4.28    

Safety Total Points

  1.21      0.89      0.45      0.99      1.22      0.82      0.55      0.80      1.22      0.82      0.55      0.98        

RSU Index Score (C)

              0.84                  1.04                  0.80      2.68    

Total RSU Index Score (A+B+C)

              3.21                  4.04                  3.70      10.95    

(1)

The Capital Effectiveness Index was calculated using Adjusted EBITDA for 2017 and Operating Earnings for 2018 and 2019.

2018 – 2019 Transition Award Details

For Mr. Belcher, the 2018 and 2019 KPIs under the 2017-2019 FE LTIP and results are as shown in the tables above, with total points of 4.04 for 2018 and 3.70 for 2019, with the total projected points in the 2018-2019 cycle at 7.74 points.

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CD&A Glossary of Terms

Average Capital Effectiveness: Measures the financial effectiveness of investment in operational assets over the 2019-2021 cycle.time. Creates a direct line of sight for executives to balance the value of our investments with the earnings they produce and create value for shareholders. It is a ratio of Operating Earnings over Net PlanPlant in Service (“NPIS”) plus Construction Work in Progress (“CWIP”). Operating Earnings are an important measure of profitability. The NPIS plus CWIP is the value of the assets being used to generate revenues and profits. A high ratio indicates the business generates larger returns on its investment in operational assets and vice versa.

Cash from Operations less Capital Effectiveness Index:Expenditures: Measures the financial effectiveness of the Company’s investment in operational assets. TheCash from Operations less Capital Effectiveness IndexExpenditures is acalculated using aggregate operating earnings (a non-GAAP financial measure representing a ratio for 2017: Adjusted EBITDA over NPIS less nuclear fuel plus CWIP; and for 2018 and 2019: Operating Earnings over NPIS plus CWIP. The index is based on the ratios for FE Consolidated and the RegulatedDistribution/Regulated Transmissionbusiness segments. Adjusted EBITDA is also anon-GAAP financial measure and consists of Operating Earnings before interest, investment income, taxes, depreciation and amortization. NPIS less nuclear fuel plus CWIP is the value of the assets the Company is using to generate revenues and profits.

For purposes of calculating the Capital Effectiveness Index (1) anyyear-end adjustments to capital from pension/other postemployment benefitsmark-to-market, any reclassification of items from Property, Plant & Equipment as well as retirement studies, consolidation or deconsolidation of entities, and (2) excluded from KPI Operating Earnings is the summation of all major storm costs in operations and maintenance (“O&M”) above budget. In addition, for 2017: impairments of assets that impact NPIS or CWIP not assumed in the original assumptions or storm costs to capital above budget are excluded from NPIS. For 2018: (i) the impact of all Special Items that are excluded from Operating Earnings shall be excluded from FFO and Adjusted Debt, (ii) the impact of the Ohio Distribution Modernization Rider, (iii) the impact of refunds provided to customers associated with tax reform, (iv) preferred dividends, (v) the impact of strategic decisions (e.g. divestitures, acquisitions) including associated tax impacts, and (vi) any impacts from asset retirement obligation studies or plans. For 2019: (i) the impact of refunds provided to customers associated with tax reform, (ii) the impacts of legal reserves or related expenses, (iii) the impacts of preferred stock and related dividends, (iv) all costs associated with the early redemption, repurchase, or remarketing of debt, (v) contributionsreported externally to the pension plan, (vi) impactinvestment community), adjusted for non-cash items, changes in working capital and capital expenditures. Cash from Operations less Capital Expenditures explains the sources and uses of tax paymentscash from ongoing regular business activities and receipts under the intercompany tax sharing arrangement, and (vii) the impacts of current taxes.

CIC Executives: Mr. Strah, Mr. Belcher, Mr. Reffner, Mr. Gaines, Ms. Vespoli and Mr. Pearson.investments.

Corporate/Other:The Corporate/Other business segment.

CWIP:Construction Work in Progress.

DART Rate:OSHA-Recordable IncidentsOSHA-recordable incidents that involve days away from work, days of restricted work activity, and/or days of job transfer in the period per 100 employees. DART cases are work-related injuries or illnesses that result in at least one day of lost time, transfer or restriction excluding the day of injury.

Detrimental Activity: Refers to an Executive Officer’s:executive officer’s: (i) use for profit or disclosure to unauthorized persons of confidential information or trade secrets of the Company or any of its subsidiaries; (ii) breach of any contract with or violation of any fiduciary obligation to the Company or any of its subsidiaries, that results in (or was reasonably likely to result in) significant operational, financial or reputational harm (generally meaning behaviors resulting in financial harm or reputational damage to the Company or any of its subsidiaries) to the Company or any of its subsidiaries, such breach or violation may include, but is not limited to, engagement in any unethical conduct, fraud, dishonesty, violations of Company policy or the law, recklessness, gross negligence, failure to act, or other misconduct including but not limited to sexual harassment or misconduct, data security violations, or criminal activities; or (iii) engagement in conduct described in (ii) above that, even absent a breach of contract or violation of any fiduciary duty, is (or was reasonably likely to be) materially detrimental to the Company or any of its subsidiaries; in each case as determined by the Compensation Committee reasonably and in good faith.

Diversity and Inclusion Index: Measures diverse succession planning, diverse hiring, and improvementpercentage of “Agree” and “Strongly Agree” responses on the D&I employee survey inclusion survey scoring.index items. Measures earn points based on the level of performance; all components within the index are weighted equally. For the purposes of this KPI, “diverse” is defined as female, historically under-represented racial and ethnic demographic groups (Black andor African American, Alaskan Native

71  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

American or Alaska Native, Asian, American, Native Hawaiian and otheror Pacific Islander, people of two or more races; Hispanic andor Latino ethnicity), LGBTQIA (Lesbian, Gay, Bisexual, Transgender, Queer/Questioning, Intersex, and Asexual)LGBTQ+ (lesbian, gay, bisexual, transgender, queer/questioning+), and/or Disabled.

EBITDA: Earnings before interest, taxes, depreciation and amortization.disabled.

Environmental Excursions and Notices of Violation (‘NOVs’):Measures issues related to air emissions, water discharges or other unauthorized releases from facilities, that exceed the allowable limitations, conditions or deadlines established in the facilities’ environmental permitsand applicable NOVs issued by a Federal, Statefederal, state or Local Regulatory Agencylocal regulatory agency for the violation of an environmental law or regulation.

FE Consolidated:Refers collectively to Regulated Distribution, Regulated Transmission and Corporate/Other.

FFO/Adjusted Debt Index:Measures annual cash flow generated by the business in comparison to its outstanding debt and is used by credit rating agencies to evaluate the creditworthiness of the Company. Focuses on improving cash position and balance sheet, since cash flows and current debt levels have been an area of focus by our investors.

The index is anon-GAAP financial measure and is based on the ratios for FE Consolidated and the Regulated Distribution/Regulated Transmission business segments. FFO is also anon-GAAP financial measure and consists of net income adjusted for depreciation and amortization, investment impairment, pension and OPEBmark-to-market adjustment, deferred taxes, asset removal costs charged to income, and certain othernon-cash items. Adjusted Debt is also anon-GAAP financial measure and consists of short-term borrowings (net of pension contribution), long-term debt (excluding securitized debt), and operating lease obligations.

The FFO/Adjusted Debt Index excludes the following in 2019: (i) the impact of all Special Items that are excluded fromnon-GAAP Operating Earnings shall be excluded from FFO and Adjusted Debt, (ii) the impacts associated with restructuring the business or other strategic decisions including the associated tax impacts, (iii) the impact of the Ohio Distribution Modernization Rider, (iv) the impact of refunds provided to customers associated with tax reform, (v) major storm costs that are above budgeted amounts of $141.2 million for 2019 ($67.4 million from Capital and $73.8 million from O&M), (vi) the impacts of legal reserves or related expenses, (vii) the impacts of preferred stock and related dividends, (viii) all costs associated with the early redemption, repurchase, or remarketing of debt, (ix) contributions to the pension plan, (x) unfunded pension/OPEB liability and securitized debt, (xi) impact of tax payments and receipts under the intercompany tax sharing arrangement, and (xii) the impacts of current taxes.

First Call Resolution:Transactional voice of customer survey that measures the percent of customer issues resolved on a single interaction with a contact center representative.

KPI (Key Performance Indicators): Financial or operational metrics used to measure Company performance and aligned to our key business objectives. KPIs are used in setting threshold, target and stretch performance goals for our incentive compensation programs.

LCEs:Life Changing Events include life-threatening work-related injuries or illnesses that required immediate life-preserving rescue action, and if not applied immediately would likely have resulted in the death of that person; life-altering work-related injuries or illnesses that resulted in a permanent and significant loss of a major body part or organ, function, or function thereof, that permanently changes or disables that person’s normal life activity; and work-related fatalities.

NPIS:Net Plant in Service.

Ohio Distribution Modernization Rider: A rider with the Public Utilities Commission of Ohio which provided for funds through certain retail customer charges to be used directly or indirectly in support of distribution grid modernization in Ohio.

782022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Operating Earnings: Operating Earnings(non-GAAP) is based on the 2019 Budget. It is calculated using the aggregate GAAP earnings adjusted for special items that are consistent with the Company’s external operating earnings(non-GAAP) reporting. Results for 20192021 will exclude the following: (i)the impacts associatedof O&M costs for storms that are considered major events, such as named storms (tropical storms, hurricanes, and winter storms) with restructuringtotal costs of $20 million or higher (except that all other storm costs, including all capital costs for storms, will not be excluded), (ii) the businessimpacts of unforeseen legislative or regulatory changes (i.e., tax reform, SEC/DOJ penalties and fines as a result of the ongoing investigations) or other strategic decisions that are approved by the Finance and Compensation Committees including the associated tax impacts, (ii) the impact of the Ohio Distribution Modernization Rider, (iii) the impact of refunds providedbut not limited to customers

72  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

associated with tax reform that exceeded budgeted amounts,(iv) non-deferred major stormaccelerated O&M expenses above or belowspending and variances to budget around interest costs under the budgeted amount of $25 million, (v) the impacts of legal reserves or related expenses, (vi) the impacts of legal reserves or related expenses, (vii) the impacts of preferred stock and related dividends, and (viii) all costs associated with the early redemption, repurchase, or remarketing of debt. External segment reporting is consistent with the internal financial reports to regularly assess performance of the business and allocate resources.Company’s liquidity management strategy.

Operating EPS: Measured on the performance of the business units’ contribution to operating earnings (non-GAAP)growth over the course of 2019-2021,2021-2023, including RD, RT, and Corporate/Other segments (including the remaining competitive business that previously comprised the Competitive Energy Services segment).segments. Results for 20192021 will exclude the following: (i) the impactimpacts of all Special ItemsO&M costs for storms that are excluded fromnon-GAAP Operating Earnings,considered major events, such as named storms (tropical storms, hurricanes, and winter storms) with total costs of $20 million or higher (except that all other storm costs, including all capital costs for storms, will not be excluded), (ii) the impacts associated with restructuringof unforeseen legislative or regulatory changes (i.e., tax reform, SEC/DOJ penalties and fines as a result of the businessongoing investigations) or other strategic decisions that are approved by the Finance and Compensation Committees including the associated tax impacts, (iii) the impact of the Ohio Distribution Modernization Rider, (iv) the impact of refunds providedbut not limited to customers associated with tax reform that exceed budgeted amounts,(v) non-deferred major stormaccelerated O&M expenses above or belowspending and variances to budget around interest costs under the budgeted amountCompany’s liquidity management strategy, and (iii) share dilution that exceeds external guidance of $25up to $600 million (for 2019), $26annually in 2022 and 2023, inclusive of approximately $100 million (for 2020in annual stock investment and 2021), (vi) the impacts of legal reserves or related expenses, (vii) the impacts of legal reserves or related expenses, (viii) the impacts of preferred stock and related dividends, (ix) all costs associated with the early redemption, repurchase, or remarketing of debt, and (x) any deviation from weighted average shares used in establishing the Operation EPS calculation, which was based on the expected schedule of conversion and issuances of 540 million (for 2019), $43 million (for 2020) and $46 million (for 2021).employment benefit plans. External segment reporting is consistent with the internal financial reports to regularly assess performance of the business and allocate resources.

Operations Index:Metric made up of the follow sixfollowing five components, weighted equally (refer to each component for a separate definition):

 

1.

SAIDI;

 

2.

TOF;

 

3.

First Call Resolution;

 

4.

Environmental Excursions and NOVs; and

 

5.

Reg Gen EFOR.

OSHA Recordable Incidents:Measures the OSHA-recordable incidents in the period per 100 employees. OSHA-recordable incidents are work-related injuries or illnesses that result in a fatality, medical treatment, or at least one day of lost time, job transfer or restricted duty excluding the day of injury. Includes all incidents that were resolved and reported on the 2019 OSHA log by January 2, 2020. The calculation is defined as:

= (# of incidents x 200,000 Hours) ÷ Number of Actual Productive Hours Worked

The 200,000 hours is a constant that represents the equivalent of 100 employees working 40 hours per week, 50 weeks per year, and provides the standard base for the incidence rates, as per the Bureau of Labor Statistics. Target is based ontop-quartile, Stretch is based ontop-decile, and Threshold is based on the industry average OSHA rates for all EEI Companies participating in the survey (relevant to each business unit) as reported in the 2017 EEI Health and Safety Survey.

Reg Gen EFOR: The percentage of generation that was not available versus the amount of time a unit was requested to be online.

Regulated Distribution or RD:The Regulated Distribution business segment. Refers collectively to The Cleveland Electric Illuminating Company, Jersey Central Power & Light Company, Metropolitan Edison Company, Monongahela Power Company, Ohio Edison Company, The PotomacToledo Edison Company, Metropolitan Edison Company, Pennsylvania Power Company, Pennsylvania Electric Company, and the distribution assets of Jersey Central Power & Light, Monongahela Power Company, The ToledoPotomac Edison Company, and West Penn Power Company.

RSUs (Restricted Stock Units): An equity vehicle commonly used in long-term incentive programs to reward employees and promote ownership within the company.Company. RSUs represent the right to receive future delivery of actual stock or cash subject to vesting restrictions (service-based and/or performance-based).

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LOGO

Regulated Transmission or RT:The Regulated Transmission business segment. Refers collectively to the transmission assets of Jersey Central Power & Light Company, Monongahela Power Company, The Potomac Edison Company, and West Penn Power Company; FirstEnergy Transmission, LLC, and its subsidiaries, American Transmission Systems, Incorporated, Potomac-Appalachian Transmission Highline, LLC, Trans-Allegheny Interstate Line Company, andMid-Atlantic Interstate Transmission.

RTSR (Relative Total Shareholder Return): The total return of a stock to a shareholder for our Company measured against the total return of stock for other companies within a selected peer group. The calculation is based on a set period (e.g., three years) and assumes that dividends are reinvested over this period. RTSR is a common performance measure used within long-term incentive plans and helps to align executive payouts to shareholder value creation.

SAIDI:Distribution System Average Interruption Duration Index is the average total duration of outage minutes in a year for each customer served adjusted for major storms.

Systemwide O&M: Measures RD, RT, and Corporate/Othernon-deferred labor and other-than-labor costs based on the 2019 Budget.

FIRSTENERGY CORP.

79


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

TOF:Transmission Outage Frequency measures the transmission line frequency of outages (total number of transmission circuit outages divided by average number of circuits) on 100kV to 500kV circuits after adjustment for major events (Six Sigma). Transmission circuit outages are defined as any loss of flow, momentary or sustained, that is a result of an automatic switching operation. Scheduled outages, emergency forced outages, and operational outages are excluded from the calculation.

TSR (Total Shareholder Return): A measure of stock price appreciation and dividend payments over a period of time.

 

74  |  FirstEnergy Corp.2020 Proxy Statement

802022 PROXY STATEMENT


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Compensation Tables

20192021 Summary Compensation Table

The following table summarizes the total compensation paid to or earned by each of our NEOs for the fiscal years ended December 31, 2019, 2018,2021, 2020, and 2017,2019, as applicable:

 

Name and Principal

Position

 Year  

Salary

($)

  

Bonus

($)

  

Stock

Awards

($)(2)

  

Non-Equity

Incentive Plan

Compensation

($)(3)

  

Change in

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings

($)(4)

  

All Other

Compensation

($)(5)

  

Total

($)

     

SEC Total

Without

Change In

Pension Value

and

Nonqualified

Deferred

Compensation

Earnings

($)(6)

 

Charles E. Jones

President & CEO

  2019  $1,136,113  $0  $6,247,802  $      1,615,111  $      5,611,583  $74,050  $14,684,659   $      9,073,076 
  2018  $1,136,113  $0  $7,018,621  $1,662,674  $1,265,019  $40,701  $11,123,128   $9,858,109 
  2017  $1,136,113  $0  $6,208,144  $1,383,655  $6,530,282  $23,691  $15,281,885   $8,751,603 

Steven E. Strah

SVP & CFO

  2019  $643,599  $0  $1,545,570  $626,590  $3,189,722  $28,647  $6,034,128   $2,844,406 
  2018  $594,835  $0  $1,602,699  $574,240  $696,989  $26,749  $3,495,512   $2,798,523 
  2017  $561,539  $0  $1,097,892  $425,641  $1,875,015  $16,888  $3,976,975   $2,101,960 

Samuel L. Belcher

  2019  $604,308  $0  $1,327,003  $540,575  $418,704  $13,650  $2,904,240   $2,485,536 

SVP & President, FE

  2018  $548,060  $434,700  $1,503,221  $506,951  $101,296  $11,087  $3,105,315   $3,004,019 

Utilities

          

Robert P. Reffner

  2019  $537,594  $0  $973,901  $463,918  $479,043  $13,435  $2,467,891   $1,988,848 

SVP & General Counsel

          

Bennett L. Gaines

  2019  $462,322  $0  $588,121  $364,205  $558,635  $3,800  $1,977,083   $1,418,448 

SVP, Corporate Services & Chief

  2018  $442,051  $0  $626,379  $365,657  $0  $8,062  $1,442,149   $1,442,149 

Information Officer

          

Leila L. Vespoli(1)

  2019  $185,629  $0  $1,958,835  $191,737  $2,941,983  $      1,744,328  $7,022,512   $4,080,529 

EVP, Corporate Strategy,

  2018  $761,286  $0  $2,200,498  $823,483  $322,011  $16,372  $4,123,650   $3,801,639 

Regulatory Affairs & Chief Legal Officer

  2017  $761,286  $0  $1,946,403  $719,783  $1,681,039  $9,100  $5,117,611   $3,436,572 

James F. Pearson(1)

  2019  $161,471  $0  $2,138,277  $176,596  $3,200,025  $1,582,583  $7,258,952   $4,058,927 

EVP, Finance

  2018  $662,214  $0  $2,402,070  $758,454  $55,023  $17,838  $3,895,599   $3,840,576 
  2017  $662,214  $0  $2,124,671  $662,943  $2,512,687  $15,451  $5,977,966   $3,465,279 

Name and Principal

Position

 Year  

Salary

($)

 

Bonus

($)(2)

 

Stock

Awards

($)(3)

 

Non-Equity

Incentive Plan

Compensation

($)(4)

 

Change in

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings

($)(5)

 

All Other

Compensation

($)(6)

 

Total

($)

  

SEC Total

Without

Change In

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings

($)(7)

Steven E. Strah

President & CEO

  

 

 

 

2021

 

   

 

$

 

1,076,236

 

  

 

$

 

 

  

 

$

 

5,755,252

 

  

 

$

 

1,977,256

 

  

 

$

 

1,876,204

 

  

 

$

 

29,114

 

  

 

$

 

10,714,062

 

   

 

$

 

8,837,858

 

  

 

 

 

2020

 

   

 

$

 

776,058

 

  

 

$

 

 

  

 

$

 

1,614,667

 

  

 

$

 

852,146

 

  

 

$

 

2,527,603

 

  

 

$

 

21,758

 

  

 

$

 

5,792,232

 

   

 

$

 

3,264,629

 

  

 

 

 

2019

 

   

 

$

 

643,599

 

  

 

$

 

 

  

 

$

 

1,545,570

 

  

 

$

 

626,590

 

  

 

$

 

3,189,722

 

  

 

$

 

28,647

 

  

 

$

 

6,034,128

 

   

 

$

 

2,844,406

 

K. Jon Taylor

SVP, CFO & Strategy

  

 

 

 

2021

 

   

 

$

 

686,209

 

  

 

$

 

750,000

 

  

 

$

 

1,962,017

 

  

 

$

 

915,874

 

  

 

$

 

216,628

 

  

 

$

 

12,115

 

  

 

$

 

4,542,843

 

   

 

$

 

4,326,215

 

  

 

 

 

2020

 

   

 

$

 

521,807

 

  

 

$

 

 

  

 

$

 

692,019

 

  

 

$

 

414,591

 

  

 

$

 

329,051

 

  

 

$

 

24,759

 

  

 

$

 

1,982,227

 

   

 

$

 

1,653,176

 

  

 

 

 

    

 

    

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    

 

 

 

 

 

Hyun Park(1)

SVP & Chief Legal Officer

  

 

 

 

2021

 

   

 

$

 

635,714

 

  

 

$

 

 

  

 

$

 

2,459,075

 

  

 

$

 

704,676

 

  

 

$

 

42,875

 

  

 

$

 

895,969

 

  

 

$

 

4,738,309

 

   

 

$

 

4,695,434

 

  

 

 

 

    

 

    

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    

 

 

 

 

 

  

 

 

 

    

 

    

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    

 

 

 

 

 

John W. Somerhalder II(1)

Vice Chair &

Executive Director

  

 

 

 

2021

 

   

 

$

 

632,555

 

  

 

$

 

 

  

 

$

 

2,717,970

 

  

 

$

 

1,006,534

 

  

 

$

 

42,404

 

  

 

$

 

17,205

 

  

 

$

 

4,416,668

 

   

 

$

 

4,374,264

 

  

 

 

 

    

 

    

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    

 

 

 

 

 

  

 

 

 

    

 

    

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    

 

 

 

 

 

Samuel L. Belcher

SVP, Operations

  

 

 

 

2021

 

   

 

$

 

694,148

 

  

 

$

 

 

  

 

$

 

2,034,701

 

  

 

$

 

780,258

 

  

 

$

 

255,317

 

  

 

$

 

11,842

 

  

 

$

 

3,776,266

 

   

 

$

 

3,520,949

 

  

 

 

 

2020

 

   

 

$

 

647,132

 

  

 

$

 

 

  

 

$

 

1,491,410

 

  

 

$

 

487,501

 

  

 

$

 

671,168

 

  

 

$

 

12,228

 

  

 

$

 

3,309,439

 

   

 

$

 

2,638,271

 

  

 

 

 

2019

 

   

 

$

 

604,308

 

  

 

$

 

 

  

 

$

 

1,327,003

 

  

 

$

 

540,575

 

  

 

$

 

667,407

 

  

 

$

 

13,650

 

  

 

$

 

3,152,943

 

   

 

$

 

2,485,536

 

(1) Mr. Park was appointed to the position of Senior Vice President and CLO, effective as of January 11, 2021. Mr. Somerhalder was appointed to the positions of Vice Chair and Executive Director, each effective as of March 1, 2021.

(2) Mr. Taylor was granted a cash retention award in 2018, which vested on April 1, 2021, and was paid on April 16, 2021.

(3) The amounts set forth in the “Stock Awards” column for 2021 represent grants provided under the Incentive Compensation Plans at the aggregate grant date fair value calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 “Stock Compensation” and are based on target payout. The assumptions used in determining values for the 2021 fiscal year are reflected in Note 6 to the Notes to the Consolidated Financial Statements of the Company’s Annual Report on Form 10-K filed with the SEC on February 16, 2022. The grant date fair value at the maximum payout level for each of the NEOs for the 2021-2023 LTIP cycle is as follows: Strah: $11,510,503; Taylor: $3,924,034; Park: $3,400,838; Somerhalder: $2,930,915; and Belcher: $4,069,403. The amount for Mr. Park includes values from prorated LTIP awards which were granted upon his hire on January 11, 2021, and based on his annual salary and total LTIP target opportunity including one-third of the 2019-2021 LTIP cycle and two-thirds of the 2020-2022 LTIP cycle. The prorated LTIP awards were granted as stock-based performance-adjusted RSUs. The grant date fair value at the maximum payout level for these awards are: $489,025 for the 2019-2021 LTIP cycle and $1,028,288 for the 2020-2022 LTIP cycle. The amount for Mr. Somerhalder includes the value of time-based restricted stock granted upon his hire on March 1, 2021, which will be subject to a one-year holding requirement after vesting, and the value of performance-based RSUs, which covers the performance period of 2021-2023 and were granted at the recommendation of the Compensation Committee and approved by the independent members of the Board on July 20, 2021. These awards are not payable to the executive until the vesting date or other qualifying event shown in the Outstanding Equity Awards at Fiscal Year-End 2021 table or the 2021 Post-Termination Compensation and Benefits table described later in this proxy statement.

(4) The amounts set forth in the “Non-Equity Incentive Plan Compensation” column for 2021 were earned under the STIP for 2021 and were paid in the first quarter of 2022.

(5) The amounts set forth in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column for 2021 reflect the aggregate increase in actuarial value to the NEOs of all defined benefit and actuarial plans (including supplemental plans) accrued during the year and above-market earnings on nonqualified deferred compensation. The disclosure assumes 3.02% (qualified pension), 2.98% (nonqualified supplemental pension) and 2.71% (nonqualified cash balance restoration plan) are the discount rates for the present value obligation calculations. The change in values for the pension plans for 2021 are as follows: Strah: $1,869,542; Taylor: $210,155; Park: $42,875; Somerhalder: $42,404; and Belcher: $252,103. The change in pension value is heavily dependent on the discount rate and mortality assumptions and does not represent the actual value of the change in pension benefit accrued by the NEO during the year. The formula used to determine the above market earnings equals 2021 total interest multiplied by the difference between 120% of the AFR and the plan rate and divided by the plan rate. The above market earnings on nonqualified deferred compensation for 2021 are as follows: Strah: $6,662; Taylor: $6,473; Park: $0; Somerhalder: $0; and Belcher: $3,214.

 

(1)

FIRSTENERGY CORP.

81


Proxy
Summary

Mr. Pearson and Ms. Vespoli both retired effective April 1, 2019.Corporate
Governance & Board of Directors

(2)

The amounts set forth in the Stock Awards column for 2019 represent grants provided under the Incentive Compensation Plans at the aggregate grant date fair value calculated in accordance with FASB ASC Topic 718 “Stock Compensation” and are based on target payout. The assumptions used in determining values for the 2019 fiscal year are reflected in Note 6Items to the Combined Notes to the Consolidated Financial Statements of the Company’s Annual Report on Form10-K filed with the SEC on February 10, 2020. The grant date fair value at the maximum payout level for each of the NEOs for 2019 is as follows: Jones: $12,495,604; Strah: $3,091,140; Belcher: $2,654,005; Reffner: $1,947,802; Gaines: $1,176,244; Vespoli: $3,917,670; and Pearson: $4,276,554. These awards are not payable to the executive until the vesting date or other qualifying event shown in the Outstanding Equity Awards at FiscalYear-End 2019 table (for Ms. Vespoli and Mr. Pearson) or the 2019 Post-Termination Compensation and Benefits table described later in this proxy statement.Be
Voted On

(3)

The amounts set forth in theNon-Equity Incentive Plan Compensation column for 2019 were earned under the FE STIP for 2019 and were paid in the first quarter of 2020.Commitments to

Employees & ESG

(4)

The amounts set forth in the Change in Pension Value and Nonqualified DeferredExecutive

& Director Compensation Earnings column reflect the aggregate increase in actuarial value to the NEO of all defined benefit and actuarial plans (including supplemental plans) accrued during the year and above-market earnings on nonqualified deferred compensation. The disclosure assumes 3.34% (qualified pension), 3.28% (nonqualified supplemental pension), and 3.01% (SERP) are the discount rates for the present value obligation calculations. The change in values for the pension plans for 2019 are as follows: Jones: $5,606,026; Strah: $3,175,105; Belcher: $413,481; Reffner: $475,289; Gaines: $558,635; Vespoli: $2,894,498; and Pearson: $3,123,560. The change in pension value is heavily dependent on the discount rate and mortality assumptions and does not represent the actual value of the change in pension benefit accrued by the NEO during the year. The formula used to determine the above market earnings equals 2019 total interest multiplied by the difference between 120% of the AFR and the plan rate and divided by the plan rate. The above market earnings on nonqualified deferred compensation for 2019 are as follows: Jones: $5,557; Strah: $14,617; Belcher: $5,223; Reffner: $3,754; Gaines: $0; Vespoli: $47,485; and Pearson: $76,465.

Other

Important

Matters / Q&A

 

75  |(6) The following table sets forth detail about the amounts for 2021 in the “All Other Compensation” column and includes compensation not required to be included in any other column:

Name

  

401(k)

Employer

Contributions

($)(a)

  

Health Care

Employer

Contributions

($)(b)

  

Wellness

Program

($)(c)

  

Charitable

Matching

($)(d)

  

Group

Personal

Excess

Liability

($)(e)

  

Life

Insurance

($)(f)

  

Personal

Aircraft

Usage

($)(g)

  

Relocation

($)(h)

  

Temporary
Living

($)(h)

  

Total

($)

Steven E. Strah

   $8,700   $1,000   $   $   $1,092   $1,571   $16,751   $   $   $29,114

K. Jon Taylor

   $8,700   $1,000   $   $288   $1,092   $1,035   $   $   $   $12,115

Hyun Park

   $8,325   $   $   $   $1,092   $928   $75,857   $761,457   $48,310   $895,969

John W. Somerhalder II

   $6,971   $   $   $   $1,092   $696   $   $   $8,446   $17,205

Samuel L. Belcher

   $8,700   $1,000   $50   $   $1,092   $1,000   $   $   $   $11,842

a) The value of matching Company contributions under the FirstEnergy Corp.2020 Proxy Statement Savings Plan, which were subject to a maximum of $8,700.

b) The value of Company contributions to the NEOs’ Health Savings Accounts or FirstEnergy Corp. Savings Plan or cash.

c) The value of Company credits under the broad-based wellness program, which are subject to a maximum of $600 annually.

d) The value of charitable matching contributions for 2021. The Company provides a dollar-for-dollar match, up to $5,000 annually, of employee contributions to qualified nonprofit organizations and educational institutions.

e) Premiums for all NEOs covered under the group personal excess liability insurance policy in 2021.

f) Employer cost for basic life insurance premiums in 2021. Coverage for each of Messrs. Park and Somerhalder was prorated for a partial year of coverage due to their hires during 2021.

g) In light of Mr. Park’s relocation from California to Ohio, the Company authorized personal usage of corporate aircraft. The value of the personal use of corporate aircraft is calculated based on the actual invoiced costs or the aggregate variable operating costs to the Company, including fuel costs, trip-related maintenance, universal weather-monitoring costs, on-board catering, landing/ramp fees, and other miscellaneous variable costs. Fixed costs which do not change based on usage, such as pilots’ salaries, the amortized costs of the aircraft, and the cost of maintenance not related to trips are excluded. NEOs’ spouses and immediate family members may accompany NEOs on Company aircraft using unoccupied space on flights that were already scheduled, and the Company incurs no aggregate incremental cost in connection with such use.

h) The value of benefits provided for Mr. Park and Mr. Somerhalder under the Executive Relocation Package. FirstEnergy’s executive relocation program provides reimbursement or payment for certain relocation-related expenses including, but not limited to travel, temporary living expenses, new home closing costs, home sale assistance, and tax gross-ups on certain relocation expenses. The tax gross-ups totaled $68,428 for Mr. Park and $2,555 for Mr. Somerhalder and are included in the totals above. Mr. Park relocated from California to Ohio while Mr. Somerhalder continued to work remotely and traveled to Ohio on an as needed basis.

(7) The amounts set forth in the “SEC Total Without Change In Pension Value and Nonqualified Deferred Compensation Earnings” column differ substantially from, and are not a substitute for, the amounts required to be reported in the Total column pursuant to SEC regulations. We are presenting this supplemental column to illustrate how the Compensation Committee views the annual compensation elements for the NEOs. The column adjusts the amount reported in the Total column, as determined under applicable SEC rules, by subtracting the value reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column to show how year-over-year changes in these values impact total compensation. The change in pension value amount reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column does not reflect current compensation and represents the present value of an estimated stream of payments to be made following retirement. The methodology used to report the change in pension value under applicable accounting rules is sensitive to external variables such as assumptions about life expectancy and changes in the discount rate determined at each year end, which are functions of economic factors and actuarial calculations that do not relate to the Company’s performance and are outside of the control of the Compensation Committee.

822022 PROXY STATEMENT


LOGO

(5)

Proxy
Summary

The following table sets forth detail about the amounts for 2019 in the All Other Compensation column and includes compensation not requiredCorporate
Governance & Board of Directors

Items to be included in any other column:Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

                                                                                                                                                                                             
Name 

401(k)

Employer

Contributions

($) (a)

  

Health Care

Employer

Contributions

($) (b)

  

Wellness

Program

($) (c)

  

Charitable

Matching

($) (d)

  

Group

Personal

Excess

Liability

($) (e)

  

Life

Insurance

($) (f)

  

Personal

Aircraft

Usage

($) (g)

  

Payments

Upon

Retirement

($) (h)

  Total ($) 

Charles E. Jones

 $        8,400  $        1,000  $        100  $        2,600  $1,024  $        1,618  $        59,308   -  $74,050 

Steven E. Strah

 $8,400  $1,000   -  $2,500  $1,024  $928  $14,795   -  $28,647 

Samuel L. Belcher

 $8,165  $1,000   -  $2,590  $1,024  $871   -   -  $13,650 

Robert P. Reffner

 $8,400  $1,000   -  $2,500  $1,024  $511   -   -  $13,435 

Bennett L. Gaines

 $1,019  $1,000  $325   -  $1,024  $432   -   -  $3,800 

Leila L. Vespoli

 $8,400  $1,000   -  $5,000  $1,024  $271   -  $        1,728,633  $1,744,328 

James F. Pearson

 $8,400  $1,000  $600   -  $1,024  $236  $1,144  $1,570,179  $        1,582,583 

a)

The value of matching Company contributions under the FirstEnergy Corp. Savings Plan for all of the NEOs up to the maximum of $8,400.

b)

The value of Company contributions to the NEOs’ Health Savings Accounts or FirstEnergy Corp. Savings Plan or cash.

c)

The value of Company credits under the broad-based wellness program up to the maximum of $600 annually.

d)

The value of charitable matching contributions for 2019. The Company provides adollar-for-dollar match, up to $5,000 annually, of employee contributions to qualified nonprofit organizations and educational institutions.

e)

Premiums for all NEOs covered under the group personal excess liability in 2019.

f)

Employer cost for basic life insurance premiums in 2019. Ms. Vespoli’s and Mr. Pearson’s coverage was prorated due to their retirements.

g)

The value of the personal use of the corporate aircraft is calculated based on the aggregate variable operating costs to the Company, including fuel costs, trip-related maintenance, universal weather-monitoring costs,on-board catering, landing/ramp fees, and other miscellaneous variable costs. Fixed costs which do not change based on usage, such as pilots’ salaries, the amortized costs of the aircraft, and the cost of maintenance not related to trips are excluded. NEOs’ spouses and immediate family members may accompany NEOs on Company aircraft using unoccupied space on flights that were already scheduled, and the Company incurs no aggregate incremental cost in connection with such use.

h)

Upon their retirements, Ms. Vespoli received $110,588 for 434 hours and Mr. Pearson received $240,489 for 1,902 hours of banked and frozen vacation earned prior to 2008 and based on the effective pay rate as of December 31, 2008, when FirstEnergy’s vacation policies were revised, and employees and executives could no longer accumulate banked vacation. Due to their participation in theE-VERP, Ms. Vespoli and Mr. Pearson received alump-sum payment of $1,518,400 and $1,320,800, respectively, which was equivalent to what they would have received under the FirstEnergy Severance Benefits Plan. Additionally, Ms. Vespoli received $99,645 for 273 hours and Mr. Pearson received $8,890 for 28 hours of unused and deferred PTO in 2019. Refer toE-VERP Benefits on page 93 for more information.

(6)

The amounts set forth in the SEC Total Without Change In Pension Value column differ substantially from, and are not a substitute for, the amounts required to be reported in the Total column pursuant to SEC regulations. We are presenting this supplemental column to illustrate how the Compensation Committee views the annual compensation elements for the NEOs. The column adjusts the amount reported in the Total column, as determined under applicable SEC rules, by subtracting the value reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column to show how year-over-year changes in these values impact total compensation. The change in pension value amount reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column does not reflect current compensation and represents the present value of an estimated stream of payments to be made following retirement. The methodology used to report the change in pension value under applicable accounting rules is sensitive to external variables such as assumptions about life expectancy and changes in the discount rate determined at each year end, which are functions of economic factors and actuarial calculations that do not relate to the Company’s performance and are outside of the control of the Compensation Committee.

76  |  FirstEnergy Corp.2020 Proxy Statement


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Grants of Plan-Based Awards in Fiscal Year 20192021

The following table summarizes the stock awards granted to our NEOs during 20192021 as well as threshold, target, and maximum amounts payable under the applicable short-termSTIP and long-term compensation plans.LTIP programs.

 

          Estimated Possible
Payouts Under
Non-Equity Incentive
Plan Awards(3)
  Estimated Future
Payouts Under
Equity Incentive
Plan Awards(4)
  

All Other

Stock

Awards:

Number of

Shares of

Stock or

Units (#)

 

Grant

Date Fair

Value of

Stock

and

Option

Awards

($)(5)

 
Name 

Grant/Payout

Type

 

Grant

Date(1)

  

Board
Action

Date(2)

  

Threshold

($)

  

Target

($)

  

Maximum

($)

  

Threshold

(#)

  

Target

(#)

  

Maximum

(#)

 

Charles E. Jones

 FE STIP  -   -  $651,475  $1,302,951  $1,954,424   -   -   -  -  - 
 Performance-Adjusted

RSUs

– Stock-Based

  3/1/2019   2/19/2019   -   -   -   50,767   101,534   203,068  - $4,184,318 
 Performance-Adjusted

RSUs

– Cash-Based

  3/1/2019   2/19/2019   -   -   -   25,036   50,071   100,142  - $2,063,484 

Steven E. Strah

 FE STIP  -   -  $260,000  $520,000  $780,000   -   -   -  -  - 
 Performance-Adjusted

RSUs

– Stock-Based

  3/1/2019   2/19/2019   -   -   -   12,528   25,056   50,112  - $1,032,583 
 Performance-Adjusted

RSUs

– Cash-Based

  3/1/2019   2/19/2019   -   -   -   6,224   12,448   24,896  - $512,987 

Samuel L. Belcher

 FE STIP  -   -  $228,752  $457,500  $686,252   -   -   -  -  - 
 Performance-Adjusted

RSUs

– Stock-Based

  3/1/2019   2/19/2019   -   -   -   10,709   21,417   42,834  - $882,616 
 Performance-Adjusted

RSUs

– Cash-Based

  3/1/2019   2/19/2019   -   -   -   5,392   10,783   21,566  - $444,387 

Robert P. Reffner

 FE STIP  -   -  $192,500  $385,000  $577,500   -   -   -  -  - 
 Performance-Adjusted

RSUs

– Stock-Based

  3/1/2019   2/19/2019   -   -   -   7,900   15,800   31,600  - $651,134 
 Performance-Adjusted

RSUs

– Cash-Based

  3/1/2019   2/19/2019   -   -   -   3,916   7,832   15,664  - $322,767 

Bennett L. Gaines

 FE STIP  -   -  $151,125  $302,252  $453,376   -   -   -  -  - 
 Performance-Adjusted

RSUs

– Stock-Based

  3/1/2019   2/19/2019   -   -   -   4,738   9,476   18,952  - $390,515 
 Performance-Adjusted

RSUs

– Cash-Based

  3/1/2019   2/19/2019   -   -   -   2,397   4,795   9,590  - $197,606 

Leila L. Vespoli

 FE STIP  -   -  $79,560  $159,120  $238,680   -   -   -  -  - 
 Performance-Adjusted

RSUs

– Stock-Based

  3/1/2019   2/19/2019   -   -   -   15,844   31,688   63,376  - $1,305,894 
 Performance-Adjusted

RSUs

– Cash-Based

  3/1/2019   2/19/2019   -   -   -   7,922   15,844   31,688  - $652,941 

James F. Pearson

 FE STIP  -   -  $73,278  $146,555  $219,833   -   -   -  -  - 
 Performance-Adjusted

RSUs

– Stock-Based

  3/1/2019   2/19/2019   -   -   -   17,269   34,537   69,074  - $1,423,304 
 Performance-Adjusted

RSUs

– Cash-Based

  3/1/2019   2/19/2019   -   -   -   8,675   17,349   34,698  - $714,973 

Name

 

  Grant/Payout  

Type

 

  Grant  

Date(1)

  

  Board  

Action

Date(2)

  

 

Estimated Possible Payouts Under

  Non-Equity Incentive Plan Awards(3)  

  

 

  Estimated Future Payouts Under  

Equity Incentive Plan Awards(4)

  

  All Other  

Stock

Awards:

Number of

Shares of

Stock or

Units

  

Grant

  Date Fair  

Value of

Stock

and

Option

Awards(5)

 
 Threshold  Target  Maximum  Threshold  Target  Maximum 
          ($)  ($)  ($)  (#)  (#)  (#)  (#)  ($) 

 

 STIP        617,584   1,235,166   2,470,328                
 

Steven E.

Strah

   2021 RSUs – Cash-
  Based
  3/17/21   3/17/21            11,585   46,342   92,684      1,918,412 
   2021 RSUs –
  Stock-Based
  3/17/21   3/17/21            23,171   92,684   185,368      3,836,840 

 

 STIP        308,125   616,251   1,232,501                
 

K. Jon Taylor

   2021 RSUs – Cash-
  Based
  3/17/21   3/17/21            3,934   15,735   31,470      651,388 
   2021 RSUs –
  Stock-Based
  3/17/21   3/17/21            7,915   31,660   63,320      1,310,629 

 

 STIP        237,071   474,144   948,289                
 

Hyun Park

   2021 RSUs – Cash-
  Based
  3/17/21   3/17/21            3,423   13,692   27,384      566,803 
   2021 RSUs –
  Stock-Based
  3/17/21   3/17/21            6,846   27,384   54,768      1,133,615 
 

 

   2020 RSUs –
  Stock-Based
  1/11/21   12/22/20            10,762   21,524   43,048      514,144 
 
 

 

   2019 RSUs –
  Stock-Based
  1/11/21   12/22/20            5,381   10,762   21,524      244,513 

 

 STIP        314,384   628,768   1,257,534                
 

John W.

Somerhalder II

   2021 RSUs – Cash-
  Based
          ��                   
   2021 RSUs –
  Stock-Based
  7/20/21   7/20/21            8,303   33,210   66,420      1,465,458 
 
 

 

   Restricted Stock  3/1/21   2/17/21                     37,139   1,252,513 

 

 STIP        262,501   525,000   1,050,000                
 

Samuel L.

Belcher

   2021 RSUs –   Cash-
  Based
  3/17/21   3/17/21            4,079   16,318   32,636      675,514 
   2021 RSUs –
  Stock-Based
  3/17/21   3/17/21            8,208   32,833   65,666      1,359,188 

(1) Except as noted in this footnote, the effective grant date for the 2021 Performance-Adjusted RSUs is March 17, 2021, due to the accounting rules under FASB ASC Topic 718. The effective grant date for the prorated 2020 and 2019 Performance-Adjusted RSUs (stock-based) granted to Mr. Park is January 11, 2021. The effective grant date for the 2021 Performance-Adjusted RSUs (stock-based) granted to Mr. Somerhalder is July 20, 2021. The effective grant date for the Restricted Stock award granted to Mr. Somerhalder is March 1, 2021.

(2) The dates set forth in the “Board Action Date” column for these awards represent the date your Board took action to grant the awards.

(3) The amounts set forth in the “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” columns reflect the potential payouts for each NEO under the STIP based upon the achievement of KPIs described in the CD&A. If the threshold level of performance was not achieved, no payout would be made. The amounts reported in this column were calculated using annualized STIP target opportunity levels as a percent of base salary, prorated for the following NEO hires during 2021: Mr. Park’s start date on January 11, 2021, and Mr. Somerhalder’s start date on March 1, 2021.

(4) The amounts set forth in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns reflect the threshold, target, and maximum payouts for each NEO, based upon the achievement of the performance measures described in the CD&A and reported in the Stock Awards column of the SCT. The Performance-Adjusted RSUs-Cash-Based amounts have been rounded in this table. If the threshold level of performance is not achieved, no payout will be made.

(5) The grant date fair value was computed in accordance with FASB ASC Topic 718 and is also reported in the “Stock Awards” column of the SCT. The Performance-Adjusted RSUs components are valued based on a Monte-Carlo simulation of $41.397 for the 2021 Performance-Adjusted RSUs (other than Mr. Somerhalder); $44.127 for the 2021 Performance-Adjusted RSUs (for Mr. Somerhalder); $23.887 for the 2020 Performance-Adjusted RSUs (for Mr. Park); and $22.720 for the 2019 Performance-Adjusted RSUs (for Mr. Park). The Restricted Stock award (for Mr. Somerhalder) is valued at $33.725 based on the average high and low stock price on the grant date.

 

(1)

FIRSTENERGY CORP.

83


Proxy
Summary

The effective grant date for the Performance-Adjusted RSUs is March 1, 2019 dueCorporate
Governance & Board of Directors

Items to the accounting rules under ASC 718.Be
Voted On

(2)

The dates set forth in the Board Action Date column for these awards represent the date your Board took actionCommitments to grant the awards.

Employees & ESG

(3)

The amounts set forth in the Estimated Possible Payouts UnderNon-Equity Incentive Plan Awards columns reflect the potential payouts for each NEO under the FE STIP based upon the achievement of KPIs described in the CD&A. If the threshold level of performance is not achieved, no payout will be made.Executive

& Director Compensation

(4)

The amounts set forth in the Estimated Future Payouts Under Equity Incentive Plan Awards columns reflect the threshold, target, and maximum payouts for each NEO, based upon the achievement of the performance measures described in the CDOther

Important

Matters / Q&A and reported in the Stock Awards column of the SCT. The Performance-Adjusted RSUs-Cash-Based have been rounded in this table. If the threshold level of performance is not achieved, no payout will be made.

(5)

The grant date fair value was computed in accordance with FASB ASC Topic 718. The Performance-Adjusted RSUs components are valued based on a Monte-Carlo simulation of $41.211.

 

77  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Performance-Adjusted RSUs

The following chart summarizes the details of the FE LTIP grants for the 2019-20212021-2023 cycle:

 

Performance-Adjusted RSUs

Weighting

  2/3rd stock-based and 1/3rd cash-based (solely stock-based for Mr. Somerhalder)

Granted

  Annually (one-time grant for Mr. Somerhalder)

Grant Date

  In early March (in July for Mr. Somerhalder)

Grant Price

  

Average high and low stock price on the grant date (to convert the target LTIP opportunity for each eligible NEO into units); Monte Carlo simulation is used to determine the grant date fair value under FASB ASC Topic 718

Performance Period

  3 years, cliff vest on March 1 (for all NEOs other than Mr. Somerhalder)

Performance Measures

  

Cumulative Operating EPS;

Average Capital Effectiveness; and

RTSR modifier overlay

Threshold Opportunity Payout

25%

Target Opportunity Payout

  50%
Target Opportunity Payout

100% (capped at a target level of payout if the Company’s absolute TSR is negative for the three-year performance period)

Maximum Opportunity Payout

  200%

Settled

  

Stock or cash, as applicable

Dividend Equivalent Units

  

Reinvested based on the average high and low stock price on the payable date, subject to same restrictions as initial grant

Payout

  

Based on the average high and low stock price on the vesting date

Performance-Adjusted RSUs

Performance-adjusted RSUs are described in the CD&A and are a component of our FE LTIP. On March 1, 2020,2022, the performance-adjusted RSUs granted in 20172019 became vested. As previously stated, the total points earnedtwo performance measures in the FE LTIP 2017-20192019-2021 cycle, were 10.95 points, resultingalong with the 23% reduction based on performance of the relative TSR modifier, resulted in a payout at 185%127% of target opportunity for this grant. On March 1, 2020, the performance-adjusted RSUs for Mr. Belcher’s 2018-2019 Transition Award became vested. As previously stated, the total points earned in the 2018-2019 Transition Award were 7.74, resulting in a payout at 193% of target opportunity. The vesting period for performance-adjusted RSUs granted in 20182020 and 20192021 will end on March 1, 2021,2023, and March 1, 2022,2024, respectively, although performance is measured through December 31 of the year prior to vesting. Performance-adjusted RSUs settled in stock are treated as a fixed expense and performance adjusted RSUs settled in cash are treated as amark-to-market expense for accounting purposes and are valued in accordance with FASB ASC Topic 718.

For more information regarding performance-adjusted RSUs and time-based restricted stock awarded to Mr. Somerhalder in 2021, see the “Performance-based and Time-Based Equity Awards for Mr. Somerhalder” section on page 69.

Other Information

For more information regarding certain compensation arrangements with our NEOs, please refer to the “Potential Post-Employment Payments” section on page 89.92. For more information regarding the amount of various compensation elements in proportion to total compensation, see the NEO pay mix charts in the “Compensation Mix” section on page 54.64.

 

78  |  FirstEnergy Corp.2020 Proxy Statement

842022 PROXY STATEMENT


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Outstanding Equity Awards at FiscalYear-End 20192021

The following table summarizes the outstanding equity award holdings of our NEOs as of December 31, 2019:2021:

 

 Stock Awards 

Option Awards

 Stock Awards     
Name 

Number of

Securities

Underlying

Unexercised

Options

(#)

Exercisable

 

Number of

Securities

Underlying

Unexercised

Options (#)

Unexercisable

 

Option

Exercise

Price

($)

 

Option

Expiration

Date

  

Number of

Shares or

Units of

Stock That

Have Not

Yet Vested

(#)(1)

 

Grant

Type

 

Market Value

of Shares or

Units of

Stock That

Have Not

Vested

($)(3)

  

Equity

Incentive

Plan
Awards:

Number of

Unearned

Shares,

Units or

Other
Rights

That Have

Not Yet

Vested

(#)(1)(4)

 Grant Type(5) 

Equity

Incentive

Plan Awards:

Market or

Payout

Value of

Unearned

Shares,

Units or

Other Rights

That Have

Not Yet

Vested

($)(3)

  

Grant

Type(1)

 

Number of

Shares or

Units of

Stock That

Have Not

Vested

(#)(4)(5)

 

Market

Value of

Shares or

Units of

Stock That

Have Not

Vested

($)(6)

 Grant Type(1) 

Equity

Incentive

Plan Awards:

Number of

Unearned

Shares,

Units or

Other Rights

That Have Not

Vested

(#)(4)

   

Equity

Incentive

Plan Awards:

Market or

Payout

Value of

Unearned

Shares,

Units or

Other Rights

That Have Not

Vested

($)(6)

 
  

Charles E. Jones

  80,257   $    37.75   2/25/2021      270,515  2017 Performance-

Adjusted RSUs –

Stock-Based

 $    13,147,029 
         133,405  2017 Performance-

Adjusted RSUs –

Cash-Based

 $6,483,483 
         272,033  2018 Performance-

Adjusted RSUs –

Stock-Based

 $13,220,804 
         134,153  2018 Performance-

Adjusted RSUs –

Cash-Based

 $6,519,836 
         208,276  2019 Performance-

Adjusted RSUs –

Stock-Based

 $10,122,214 
         102,711  2019 Performance-

Adjusted RSUs –

Cash-Based

 $4,991,755 

Steven E. Strah

         47,622  2017 Performance-

Adjusted RSUs –

Stock-Based

 $2,314,429  2019 Performance-Adjusted

RSUs – Stock-Based

  35,633  $1,481,976  2020 Performance-Adjusted

RSUs – Stock-Based

  26,820   $1,115,444 
         23,811  2017 Performance-

Adjusted RSUs –

Cash-Based

 $1,157,215 
         61,967  2018 Performance-

Adjusted RSUs –

Stock-Based

 $3,011,596  2019 Performance-Adjusted

RSUs – Cash-Based

  17,703  $736,268  2020 Performance-Adjusted

RSUs – Cash-Based

  13,492   $561,132 
         30,786  2018 Performance-

Adjusted RSUs –

Cash-Based

 $1,496,200 
         51,398  2019 Performance-

Adjusted RSUs –

Stock-Based

 $2,497,943        2021 Performance-Adjusted

RSUs – Stock-Based

  95,531   $3,973,134 
         25,535  2019 Performance-

Adjusted RSUs –

Cash-Based

 $1,241,001 
         2021 Performance-Adjusted

RSUs – Cash-Based

  47,766   $1,986,588 

K. Jon Taylor

 2019 Performance-Adjusted

RSUs – Stock-Based

  10,560  $439,190  2020 Performance-Adjusted

RSUs – Stock-Based

  11,552   $480,448 
 2019 Performance-Adjusted

RSUs – Cash-Based

  5,280  $219,595  2020 Performance-Adjusted

RSUs – Cash-Based

  5,726   $238,144 
       2021 Performance-Adjusted

RSUs – Stock-Based

  32,633   $1,357,206 
       2021 Performance-Adjusted

RSUs – Cash-Based

  16,219   $674,548 

Hyun Park

 2019 Performance-Adjusted

RSUs – Stock-Based

  14,251  $592,699  2020 Performance-Adjusted

RSUs – Stock-Based

  22,442   $933,363 
       2021 Performance-Adjusted

RSUs – Stock-Based

  28,226   $1,173,919 
       2021 Performance-Adjusted

RSUs – Cash-Based

  14,113   $586,960 

John W. Somerhalder II

 RS(2)  38,275  $1,591,857  2021 Performance-Adjusted

RSUs – Stock-Based

  33,882   $1,409,152 

Samuel L. Belcher

      24,346   RS (2)  $    1,183,216   22,041  2018 Transition
Award RSUs–

Stock-Based

 $1,071,193  RS(3)  13,286  $552,565  2020 Performance-Adjusted

RSUs – Stock-Based

  24,876   $1,034,593 
         44,602  2018 Performance-

Adjusted RSUs –

Stock-Based

 $2,167,657 
         22,300  2018 Performance-

Adjusted RSUs –

Cash-Based

 $1,083,780  2019 Performance-

Adjusted RSUs – Stock-
Based

  30,458  $1,266,748  2020 Performance-Adjusted

RSUs – Cash-Based

  12,359   $514,011 
         43,933  2019 Performance-

Adjusted RSUs –

Stock-Based

 $2,135,144 
         22,120  2019 Performance-

Adjusted RSUs –

Cash-Based

 $1,075,032  2019 Performance-Adjusted

RSUs – Cash-Based

  15,335  $637,783  2021 Performance-Adjusted

RSUs – Stock-Based

  33,842   $1,407,489 
       2021 Performance-Adjusted

RSUs – Cash-Based

  16,820   $699,544 

(1) The awards set forth in the “Grant Type” column are described in the CD&A and Grants of Plan-Based Awards narrative section of this proxy statement. The vesting dates are as follows: 2019 performance-adjusted RSU – stock-based (March 1, 2022); 2019 performance-adjusted RSU – cash-based (March 1, 2022); 2020 performance-adjusted RSU – stock-based (March 1, 2023); 2020 performance-adjusted RSU – cash-based (March 1, 2023); 2021 performance-adjusted RSU – stockbased (March 1, 2024); 2021 performance-adjusted RSU – cash-based (March 1, 2024); and Mr. Somerhalder’s performance-adjusted RSU – stock-based vests upon the completion of his executive service and if earned, the award will be paid out at the end of the performance period (December 31, 2023), based on the achievement of actual performance results.

 

79  |  FirstEnergy Corp.2020 Proxy Statement

FIRSTENERGY CORP.

85


LOGO

Option Awards

  Stock Awards         
Name 

Number of

Securities

Underlying

Unexercised

Options

(#)

Exercisable

  

Number of

Securities

Underlying

Unexercised

Options (#)

Unexercisable

  

Option

Exercise

Price

($)

  

Option

Expiration

Date

  

Number of

Shares or

Units of

Stock That

Have Not

Yet Vested

(#)(1)

  

Grant

Type

  

Market Value

of Shares or

Units of

Stock That

Have Not

Vested

($)(3)

  

Equity

Incentive

Plan
Awards:

Number of

Unearned

Shares,

Units or

Other
Rights

That Have

Not Yet

Vested

(#)(1)(4)

  Grant Type(5) 

Equity

Incentive

Plan Awards:

Market or

Payout Value
of Unearned

Shares,

Units or

Other Rights

That Have

Not Yet

Vested

($)(3)

 
  

Robert P. Reffner

         18,532  2017 Performance-

Adjusted RSUs –

Stock-Based

 $900,655 
         9,128  2017 Performance-

Adjusted RSUs –

Cash-Based

 $443,621 
         18,635  2018 Performance-

Adjusted RSUs –

Stock-Based

 $905,661 
         9,179  2018 Performance-

Adjusted RSUs –

Cash-Based

 $446,099 
         32,411  2019 Performance-

Adjusted RSUs –

Stock-Based

 $    1,575,175 
         16,066  2019 Performance-

Adjusted RSUs –

Cash-Based

 $780,808 
  

Bennett L. Gaines

         23,937  2017 Performance-

Adjusted RSUs –

Stock-Based

 $1,163,338 
         12,112  2017 Performance-

Adjusted RSUs –

Cash-Based

 $588,643 
         24,071  2018 Performance-

Adjusted RSUs –

Stock-Based

 $1,169,851 
         12,180  2018 Performance-

Adjusted RSUs –

Cash-Based

 $591,948 
         19,439  2019 Performance-

Adjusted RSUs –

Stock-Based

 $944,735 
         9,836  2019 Performance-

Adjusted RSUs –

Cash-Based

 $478,030 
  

Leila L. Vespoli(6)

         83,781  2017 Performance-

Adjusted RSUs –

Stock-Based

 $4,071,757 
         41,891  2017 Performance-

Adjusted RSUs –

Cash-Based

 $2,035,903 
         83,543  2018 Performance-

Adjusted RSUs –

Stock-Based

 $4,060,190 
         41,772  2018 Performance-

Adjusted RSUs –

Cash-Based

 $2,030,119 
         63,422  2019 Performance-

Adjusted RSUs –

Stock-Based

 $3,082,309 
         31,711  2019 Performance-

Adjusted RSUs –

Cash-Based

 $1,541,155 
  

James F. Pearson(6)

         91,312  2017 Performance-

Adjusted RSUs –

Stock-Based

 $4,437,763 
         45,870  2017 Performance-

Adjusted RSUs –

Cash-Based

 $2,229,282 
         91,054  2018 Performance-

Adjusted RSUs –

Stock-Based

 $4,425,224 
         45,740  2018 Performance-

Adjusted RSUs –

Cash-Based

 $2,222,964 
         69,124  2019 Performance-

Adjusted RSUs –

Stock-Based

 $3,359,426 
         34,723  2019 Performance-

Adjusted RSUs –

Cash-Based

 $1,687,538 

80  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

(1)

Proxy
Summary

The numberCorporate
Governance & Board of shares set forth in both the Number of Shares or Units of Stock That Have Not Yet Vested and the Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Yet Vested columns include all dividends or dividend equivalents earned and reinvested through December 31, 2019. The Performance-Adjusted RSUs have been rounded up in this table.Directors

(2)

Mr. Belcher’s restricted stock award is graded vesting. The vesting dates for Mr. Belcher’s award is 50% on March 8, 2020 and 50% on March 8, 2025.Items to Be
Voted On

(3)

The values set forth in both the Market Value of Shares or Units of Stock That Have Not Vested and the Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Yet Vested columns are determined by multiplying the number of shares or units by our common stock closing price of $48.60 on the last business day of December 31, 2019.Commitments to

Employees & ESG

(4)

The number of shares or units set forth in the Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Yet Vested column is based on actual performance of 185% for 2017 performance-adjusted RSUs (except for Mr. Belcher) and maximum performance at 200% for 2017 and 2018 performance-adjusted RSUs. The performance factor for Mr. Belcher’s 2018-2019 Transition Award performance-adjusted RSUs was 193%.Executive

& Director Compensation

(5)

The awards set forth in the Grant Type column are described in the CDOther

Important

Matters / Q&A and Grants of Plan-Based Awards narrative section of this proxy statement. The vesting dates are as follows: 2017 performance-adjusted RSU — stock-based (March 1, 2020); 2017 performance-adjusted RSU — cash-based (March 1, 2020); 2018 performance-adjusted RSU — stock-based (March 1, 2021); 2018 performance-adjusted RSU — cash-based (March 1, 2021); 2019 performance-adjusted RSU — stock-based (March 1, 2022); and 2019 performance-adjusted RSU — cash-based (March 1, 2022). For Mr. Belcher, the Transition Award RSUs – stock-based vests March 1, 2020.

(6)

The number of shares or units and dollar values have not been prorated in the table to reflect Ms. Vespoli and Mr. Pearson’s retirements effective April 1, 2019 under the Equity Incentive Plan Awards columns. For more information about prorated awards and payouts for 2019, refer to the “RSU Index Performance Measures” section on page 60 and the “Realized Compensation” section on page 62.

 

81(2) Mr. Somerhalder’s restricted stock award vests upon the completion of his executive service and will be subject to a one-year  |  FirstEnergy Corp. holding requirement after vesting.

(3) Mr. Belcher’s restricted stock award vested 50% on March 8, 2020, Proxy Statement

and the remaining 50% will vest on March 8, 2025.


LOGO(4) The number of shares set forth in both the “Number of Shares or Units of Stock That Have Not Vested” and the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” columns include all dividends or dividend equivalents earned and reinvested through December 31, 2021. The Performance-Adjusted RSUs have been rounded up to the nearest whole unit in this table.

(5) The number of shares or units set forth in the “Number of Shares or Units of Stock That Have Not Vested” column is based on actual performance of 127% for the 2019 performance-adjusted RSUs. This payout result includes a 23% reduction for the performance of the relative TSR modifier. For the 2020-2022 and 2021-2023 LTIP cycles, target performance is assumed.

(6) The values set forth in both the “Market Value of Shares or Units of Stock That Have Not Vested” and the “Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested” columns are determined by multiplying the number of shares or units by our common stock closing price of $41.59 on December 31, 2021.

Option Exercises and Stock Vested in 20192021

The following table summarizes the vesting of stock awards held by our NEOs during 2019.2021.

 

Name Award Type 

Number of Shares

Acquired on

Exercise (#)

 Value Realized
on Exercise
($)(1)
 

Number of Shares

Acquired on

Vesting (#)(2)(3)

 

Value Realized on

Vesting ($)(4)

 

Charles E. Jones

 

2016 Performance-Adjusted RSUs

(stock-based)

 - - 296,605 $    12,080,725 
 

2016 Performance-Adjusted RSUs

(cash-based)

 - - - $6,040,333 

Steven E. Strah

 

2016 Performance-Adjusted RSUs

(stock-based)

 - - 47,646 $1,940,631 
 

2016 Performance-Adjusted RSUs

(cash-based)

 - - - $970,292 

Samuel L. Belcher(5)

 

2016 Performance-Adjusted RSUs

(stock-based converted to cash)

 - - - $888,601 
 

2016 Performance-Adjusted RSUs

(cash-based)

 - - - $432,281 

Robert P. Reffner

 

2016 Performance-Adjusted RSUs

(stock-based)

 - - 18,541 $755,181 
 

2016 Performance-Adjusted RSUs

(cash-based)

 - - - $371,931 

Bennett L. Gaines

 

2016 Performance-Adjusted RSUs

(stock-based)

 - - 23,948 $975,433 
 

2016 Performance-Adjusted RSUs

(cash-based)

 - - - $493,551 

Leila L. Vespoli

 Stock Options 120,386 $    753,192 -  - 
 

2016 Performance-Adjusted RSUs

(stock-based)

 - - 84,470 $3,440,482 
 

2016 Performance-Adjusted RSUs

(cash-based)

 - - - $1,720,189 

James F. Pearson

 

2016 Performance-Adjusted RSUs

(stock-based)

 - - 92,063 $3,749,742 
 

2016 Performance-Adjusted RSUs

(cash-based)

 - - - $    1,883,613 
      Stock Awards

Name

  Award Type  

Number of Shares

Acquired on

Vesting (#)(1)(2)

  

Value
Realized on

Vesting
($)(3)

Steven E. Strah

  2018 Performance-Adjusted RSUs (stock-based)    47,916   $1,615,967
   2018 Performance-Adjusted RSUs (cash-based)       $802,805

K. Jon Taylor

  2018 Performance-Adjusted RSUs (stock-based)    14,650   $494,071
  2018 Performance-Adjusted RSUs (cash-based)       $247,017
   2018 Restricted Stock Award    8,708   $299,106

Hyun Park

           
            

John W. Somerhalder II

           
            

Samuel L. Belcher

  2018 Performance-Adjusted RSUs (stock-based)    34,488   $1,163,108
   2018 Performance-Adjusted RSUs (cash-based)       $581,520

(1) For all NEOs other than Messrs. Park and Somerhalder, the number of shares set forth in the “Number of Shares Acquired on Vesting” column reflect the number of 2018 performance-adjusted RSUs (settled in stock), which vested on March 1, 2021. For Mr. Taylor, this column also reflects the number of restricted stock (rounded) that vested on April 1, 2021. The number of shares includes dividend equivalent units earned and reinvested through the vesting date.

(1)

This value equals the number of shares for which the option was exercised multiplied by the excess of the weighted average market price ($44.0065) of our common stock on the exercise date over the exercise price per share ($37.75).

(2)

The number of shares set forth in the Number of Shares Acquired on Vesting column reflect the number of 2016 performance-adjusted RSUs (settled in stock), which vested on March 1, 2019. The number of shares includes dividend equivalent units earned and reinvested through the vesting date. The number of shares were rounded down and the fractional share value was paid in cash and is less than the value of one share.

(3)

The number of units from the 2016 performance-adjusted RSUs (settled in cash), which vested on March 1, 2019 are as follows: Mr. Jones: 148,301.8069; Mr. Strah: 23,822.5326; Mr. Belcher: 21,816.8731 (stock-based RSUs converted to cash), 10,613.3231 (cash-based RSUs); Mr. Reffner 9,131.6209; Mr. Gaines: 12,117.6186; Ms. Vespoli: 42,233.9470; and Mr. Pearson: 46,246.3409.

(2) The number of units from the 2018 performance-adjusted RSUs (settled in cash), which vested on March 1, 2021 are as follows: Mr. Strah: 23,804.449; Mr. Taylor: 7,324.448; and Mr. Belcher: 17,243.000. The number of units includes dividend equivalent units earned and reinvested through the vesting date.

(3) The amounts set forth in the “Value Realized on Vesting” column are based on the average high/low stock price on the vesting date, which was $33.725 for the 2018 performance-adjusted RSUs and $34.35 for Mr. Taylor’s 2018 Restricted Stock Award. The performance-adjusted RSUs for all NEOs, other than Messrs. Park and Somerhalder, were paid at 146% of target. The amounts include certain stock-based 2018 performance-adjusted RSUs that were deferred under the EDCP according to the NEOs’ election in the following amounts: $1,505,821 for Mr. Strah; and $463,989 for Mr. Taylor.

862022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

82  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

(4)

The amounts set forth in the Value Realized on Vesting column are based on the average high/low stock price on the vesting date, which was $40.73 for the 2016 performance-adjusted RSUs. The performance-adjusted RSUs for all NEOs, other than Mr. Belcher, were paid at 193% of target. The performance-adjusted RSUs for Mr. Belcher were paid at 200% of target.

(5)

Due to his position with FENOC at the time, the 2016 performance-adjusted RSUs for Mr. Belcher were previously modified to pay only in cash.

Post-Employment Compensation

Pension Benefits as of December 31, 20192021

The following table provides information regarding the pension benefits of our NEOs as of December 31, 2019:2021:

 

  Name  Plan Name 

Number of

Years

Credited

Service (#)(1)

 

Present

Value of

Accumulated

Benefit

($)(2)

  

Payments
During Last
Fiscal Year

($)

 

  Charles E. Jones

  

Qualified Plan

 41 $2,375,856   - 
  

Nonqualified (Supplemental) Plan

  $    26,024,795   - 
  

Supplemental Executive Retirement Plan

  $0               -             
    

 

 

  

 

 

 
  

Total

   

$    28,400,651

   - 

  Steven E. Strah

  

Qualified Plan

 35 $2,070,630   - 
  

Nonqualified (Supplemental) Plan

  $7,266,476   - 
  

Supplemental Executive Retirement Plan

   N/A   - 
    

 

 

  

 

 

 
  

Total

  $9,337,106   - 

  Samuel L. Belcher

  

Qualified Plan

 7 $252,179   - 
  

Nonqualified (Supplemental) Plan

  $634,554   - 
  

Supplemental Executive Retirement Plan

   N/A   - 
    

 

 

  

 

 

 
  

Total

  $886,733   - 
  Robert P. Reffner  

Qualified Plan

 12 $518,873   - 
  

Nonqualified (Supplemental) Plan

 17 $1,609,290   - 
  

Supplemental Executive Retirement Plan

   N/A   - 
    

 

 

  

 

 

 
  

Total

  $2,128,163   - 

  Bennett L. Gaines

  

Qualified Plan

 13 $631,042   - 
  

Nonqualified (Supplemental) Plan

 18 $2,070,229   - 
  

Supplemental Executive Retirement Plan

   N/A   - 
    

 

 

  

 

 

 
  

Total

  $2,701,271   - 

  Leila L. Vespoli(3)

  

Qualified Plan

 34 $2,469,765  $68,546   
  

Nonqualified (Supplemental) Plan

  $    12,361,015  $    473,719   
  

Supplemental Executive Retirement Plan

  $1,367,128  $53,090   
    

 

 

  

 

 

 
  

Total

  $16,197,908  $595,355   

  James F. Pearson(3)

  

Qualified Plan

 42 $2,505,375  $117,474   
  

Nonqualified (Supplemental) Plan

  $11,983,521  $490,171   
  

Supplemental Executive Retirement Plan

   N/A   N/A   
    

 

 

  

 

 

 
  

Total

  $14,488,896  $607,645   

Name

  Plan Name  

Number of

Years

Credited

Service (#)(1)

  

Present

Value of

Accumulated

Benefit

($)(2)

Steven E. Strah

  

Qualified Plan

   

 

37

   

$

2,481,026

  

Nonqualified (Supplemental) Plan

   

 

37

   

$

11,237,792

  

Nonqualified (Cash Balance Restoration Plan)

         

 

N/A

   

Total

         

$

13,718,818

K. Jon Taylor

  

Qualified Plan

   

 

12

   

$

450,952

  

Nonqualified (Supplemental) Plan

   

 

12

   

$

832,319

  

Nonqualified (Cash Balance Restoration Plan)

         

 

N/A

   

Total

         

$

1,283,271

Hyun Park(3)

  

Qualified Plan

   

 

0

   

$

20,300

  

Nonqualified (Supplemental) Plan

         

 

N/A

  

Nonqualified (Cash Balance Restoration Plan)

   

 

0

   

$

22,575

   

Total

         

$

42,875

John W. Somerhalder II(3)

  

Qualified Plan

   

 

0

   

$

20,300

  

Nonqualified (Supplemental) Plan

         

 

N/A

  

Nonqualified (Cash Balance Restoration Plan)

   

 

0

   

$

22,104

   

Total

         

$

42,404

Samuel L. Belcher

  

Qualified Plan

   

 

9

   

$

380,911

  

Nonqualified (Supplemental) Plan

   

 

14

   

$

2,068,504

  

Nonqualified (Cash Balance Restoration Plan)

         

 

N/A

   

Total

         

$

2,449,415

(1)

Pursuant to a historical arrangement, Messrs. Reffner and Gaines are eligible to receive five additional years of credited service for purposes of the nonqualified (supplemental) pension calculation, resulting in 17 and 18 years of credited service, respectively.

(2)

The amounts set forth in the Present Value of Accumulated Benefit column are determined as of December 31, 2019, using the following assumptions: December 31, 2019 discount rates of 3.34% (qualified plan), 3.28% (nonqualified supplemental plan), and 3.01% (supplemental executive retirement plan) and thePri-2012 mortality table projected generationally using scaleMP-2019 (base year 2012) for the qualified plan andPri-2012 mortality table with white collar adjustment projected generationally using scaleMP-2019 (base year 2012) for the nonqualified plans at the earliest unreduced age.

(3)

Ms. Vespoli and Mr. Pearson retired effective April 1, 2019.

(1) Pursuant to a historical arrangement, Mr. Belcher is eligible to receive five additional years of credited service for purposes of the nonqualified (supplemental) pension calculation, resulting in 14 years of credited service. As a result of this arrangement, the amounts in the Present Value of Accumulated Benefit column for Mr. Belcher has an increased value of $882,538.

83(2) The amounts set forth in the “Present Value of Accumulated Benefit” column are determined as of December 31, 2021, using the following assumptions: December 31, 2021 discount rates of 3.02% (qualified plan), 2.98% (nonqualified supplemental plan) and 2.71% (nonqualified cash balance restoration plan) and the Pri-2012 mortality table projected generationally using scale   |  FirstEnergy Corp.2020 Proxy StatementMP-2020 (base year 2012) for the qualified plan and Pri-2012 mortality table with white collar adjustment projected generationally using scale MP-2020 (base year 2012) for the nonqualified plans at the earliest unreduced age.

(3) As of December 31, 2021, Mr. Park and Mr. Somerhalder are not vested in their pension benefits. In recognition of Mr. Park’s extensive legal and energy sector expertise and in order to incentivize Mr. Park to join the Company as well as encourage retention, Mr. Park will be provided an additional credit of $275,000 into the Cash Balance Restoration Plan after five years of continuous employment.


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Pension Benefits

Qualified and Nonqualified Plans

We offer a qualified and nonqualified (supplemental) planpension plans to provide retirement benefits to all of our NEOs. We pay the entire cost of these plans. Retirement benefits from the qualified plan provided under the FirstEnergy Corp. Master Pension Plan (“Master Pension Plan”) for employees hired prior to January 1, 2014, are calculated using pensionable earnings up to the applicable federal and plan limits. As described in the CD&A, theThe Master Pension Plan was amended to provide a cash-balance formula for all employees hired or rehired on or after January 1, 2014. In conjunction with the new cash-balance formula, the Company adopted a new nonqualified supplemental plan (“Cash Balance Restoration Plan”), which will provideprovides a benefit, based upon the cash-balance formula, to eligible executives hired or rehired on or after January 1, 2014, but without the restriction of federal limits that apply under the qualified pension plan. All of the NEOsMessrs. Strah, Taylor and Belcher were hired prior to January 1, 2014, and are subject to the traditional pension formulas discussed below. Messrs. Park and Somerhalder were hired after January 1, 2014, and are subject to the cash-balance formula discussed below.

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Traditional Supplemental Pension Plan:The traditional supplemental plan provided under the EDCP provides a benefit based upon the formula used in the qualified plan for pre-2014 hires but is calculated using all pensionable earnings without the restrictions of federal and certain plan limits. Based on the applicable formula of the plan under which the NEO is a participant, the retirement benefit from the qualified and nonqualified plans for pre-2014 hires will be the benefit determined using one or more of the following three formulas:

 

 1.

Career Earnings Benefit Formula: A fixed (2.125%) factor is applied to the executive’s total career earnings to determine the accrued (age 65) career earnings benefit. Pensionable earnings under the career earnings formula generally include base salary, annual incentive awards, and other similar compensation.

 

 2.

Adjusted Highest Average Monthly Base Earnings Benefit Formula: The benefit is equal to the sum of A and B where A is the highest average monthly base earnings (“HAMBE”) times the sum of:

 

1.58% times the first 20 years of benefit service;

1.58% times the first 20 years of benefit service;

 

1.18% times the next 10 years of benefit service;

1.18% times the next 10 years of benefit service;

 

0.78% times the next 5 years of benefit service; and

0.78% times the next 5 years of benefit service;

 

1.10% times each year of benefit service in excess of 35 years;

1.10% times each year of benefit service in excess of 35 years.

and B is an amount equal to 0.32% times number of years of service (up to 35 years) times the difference between the HAMBE and the lesser of 150% of covered compensation or the Social Security Wage Base, except that B cannot be less than zero.

The HAMBE for the qualified plan are the highest 48 consecutive months of base earnings the executive had in the 120 months immediately preceding retirement or other termination of employment. Pensionable earnings under the qualified plan HAMBE formula generally include base salary and deferred compensation of base salary after 2004. The pensionable earnings under the nonqualified plan HAMBE formula are the same as the qualified plan described above except that deferred compensation of base salary excluded under the qualified plan and annual incentive awards that are paid or deferred are included. Covered compensation represents the average (without indexing) Social Security Taxable Wage Base in effect for each calendar year during the35-year period that ends when the executive reaches the Social Security normal retirement age.

 

 3.

Final Average Total Pay (“FATP”) Formula: The pension benefit under FATP is calculated by determining the HAMBE, multiplying this amount by a fixed factor (1.2%) and then multiplying it by the number of years of Benefit Service at the time of separation or retirement. This amount is then divided by 12 to determine the accrued & vested monthly pension benefit amount.

Under the Master Pension Plan provisions for pre-2014 hires, normal retirement is at age 65 and the completion of five years of eligibility service. The earliest retirement is at age 55 if the employee has at least 10 years of eligibility service. Messrs. Jones, Reffner and Gaines are currently eligible for an unreduced pension benefit, as was Mr. Pearson at the time of his retirement date (April 1, 2019). Mr. Strah is currently eligible for a reduced pension benefit based on the Early Retirement Reduction Table below as was Ms. Vespoli at the time of her retirement date (April 1, 2019) and Mr.Messrs. Taylor and Belcher will become eligible when he turnsthey turn 55 in 2023.2028 and 2023, respectively. The earliest retirement age without reduction for the qualified plan is age 60 with the exception of those covered under the FATP plan. The earliest retirement age without reduction for FATP is age 62.

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Early Retirement Reduction Table

 

If payment
begins at age
 

        The benefit is        

multiplied by

  

The benefit is

multiplied by

60 and up 100%  

100%

59 88%  

88%

58 84%  

84%

57 80%  

80%

56 75%  

75%

55 70%  

70%

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FATP Early Retirement Reduction Table

 

If payment
begins at age
 

        The benefit is        

multiplied by

  

The benefit is

multiplied by

62 and up 100%  

100%

61 96%  

96%

60 92%  

92%

59 88%  

88%

58 84%  

84%

57 80%  

80%

56 76%  

76%

55 72%  

72%

TheUnder the Master Pension Plan provisions for pre-2014 hires, the accrued benefits vest upon the completion of five years of service. The benefits generally are payable in the case of a married employee in the form of a qualified spouse 50% joint and survivor annuity or in the case of an unmarried employee in the form of a single life annuity. Unmarried employees can designate anon-spouse beneficiary to receive up to a 100% joint and survivor annuity depending upon thenon-spousal beneficiary’s age. For the married employee, there also is an option to receive the benefit as a joint and survivor annuity with or without apop-up provision or a period certain annuity. The annuity provides a reduced monthly benefit, payable to the employee until death. If a joint and survivor annuity is chosen, the employee’s named beneficiary will receive 25%, 50%, 75%, or 100% of the employee’s benefit based on the employee’s and the beneficiary’s ages and the elected percentage to be continued after the employee’s death. Under thepop-up provisions, the monthly payment to the employee“pops-up” to the single life annuity amount if the beneficiary predeceases the employee. The period certain annuity provides a reduced benefit for the life of the employee and continues the benefit to the named beneficiary for a guaranteed period if the employee’s death occurs before the end of the 5, 10 or15-year period, as elected. No further payments are made if the employee’s death occurs after the end of the elected period.

As noted in the CD&A, pursuant to a historical arrangement, Mr. Reffner and Mr. Gaines areBelcher is eligible to be credited with five years of additional service for purposes of calculating the supplemental pension benefit. For more information, refer to the “Pension Benefits as of December 31, 2019”2021” table on page 83.87.

Supplemental Executive RetirementCash Balance Formula and Cash Balance Restoration Plan: The Cash Balance Restoration Plan (“SERP”)

In additionis a non-qualified plan providing certain key employees hired or rehired on or after January 1, 2014, with a benefit that is generally equal to the qualified and nonqualified plans, certain NEOs may receive additional nonqualified benefits frombenefit that the SERP. Currently, only two active employees are eligible for a SERP benefit upon retirement, and no new participantsparticipant would have been provided eligibility since 2001. In 2014, the Committee formally closed the SERP to new entrants.

Of the NEOs, only Mr. Jones is a continuing participant in the SERP. Ms. Vespoli was also eligible for a SERP benefit upon her retirement effective April 1, 2019. The NEOs who are participants in the SERP, or the NEO’s surviving spouse, are eligible to receive a supplemental benefit after termination of employment

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due to retirement, death, disability, or involuntary separation. Whether or not a supplemental benefit under the SERP will be paid is determined in accordance with, and shall benon-forfeitable, uponcash-balance formula of the date the NEO terminates employment under the conditions describedqualified Master Pension Plan but for certain federal limitations.

Participants in the cash-balance portion of the Master Pension Plan receive a benefit amount based on a hypothetical account balance that is credited with Pay Credits and Interest Credits. A Pay Credit is credited annually and is equal to a percentage of the participant’s eligible compensation. Pensionable earnings include base salary, plus the following sections:

Retirement Benefit

An eligible NEO who retiresamounts paid within any specified period commencing on or after age 55 and who has completed 10 years of service will be entitledJanuary 1, 2014: overtime pay; bonuses paid pursuant to receive, commencing at retirement, a monthly supplemental retirement benefit under the SERP equal to (a) 65% of the average of the highest 12 consecutive full months of base salary earningsformal bonus program; annual incentives or cash sales incentive awards paid to the NEO in the 120 consecutive full months prior to termination of employment, including any salaryservice; annual incentives that are earned after December 31, 2013, but deferred intounder a non-qualified plan; sales commissions; and lump sum merit awards. On December 31st of each year, the EDCP or the FirstEnergy Corp. Savings Plan, but excluding any incentive payments, or (b) 55% of the average of the highest 36 consecutive full months of base salary earningsparticipant’s age (years and annual incentive awards paid to the NEO in the 120 consecutive full months prior to termination of employment, including any salary deferred into the EDCP and FirstEnergy Corp. Savings Plan, whichever is greater, multiplied by the number of months of service the executive has completed after having completed 10months) plus years of service up(years and months) are added together to a maximum of 60 months, divided by 60, less:determine “points”. The participant’s points are used to determine the applicable Pay Credit percentage for the participant for that year, as shown in the chart below.

 

1.
Points (age + service)Pay Credit

Less than 40 points

The monthly primary Social Security benefit to which the executive may be entitled upon retirement (or the projected age 62 benefit if retirement occurs prior to age 62), irrespective of whether the executive actually receives such benefit at the time of retirement; and4%

40 - 49 points

5%

50 - 59 points

6%

60 - 69 points

7%

70 - 79 points

8%

80+ points

9%

 

2.

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Items to which the executive may be entitled upon retirement under the Pension Plan and nonqualified supplemental pension, calculated based on the NEO’s marital status at the time of such retirement as follows:Be
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InAn Interest Credit is applied annually to a participant’s prior year account balance and is based on the case of a married NEO in the form of a 50% joint and survivor annuity.

In the case of an unmarried NEO, in the form of a single life annuity.

For an NEO who retires prior to attaining age 65, the net dollar amount above shall be reduced further byone-fourth30-Year of 1% for each month the commencement of benefits under the SERP precedes the month the executive attains age 65.

Death Benefit

If a married NEO that participates in the SERP dies, 50%Treasury rate from November of the NEO’s SERPprior year.

A cash-balance participant will vest in their Master Pension Plan benefit actuarially adjustedafter three years of eligible service. Regardless of the vested participant’s age at separation from service, the participant will have the option to defer or immediately commence their pension benefit at separation from service. Available forms of payment for the NEO’s and spouse’s ages will be paid to the NEO’s surviving spouse. In general, payment will begin the firstcash-balance portion of the month following the laterMaster Pension Plan include: Single Life Annuity, 50% Joint & Survivor Annuity, 75% Joint & Survivor Annuity, 100% Joint & Survivor Annuity and lump sum distribution. The Cash Balance Restoration Plan benefit is paid as a lump sum benefit as of the date of termination. Early reduction factors do not apply.

If the NEO would have attained age 55 or death and continue forvested participant elects to defer the remainderpayment of the surviving spouse’s life. If the NEO had at least 10 years of eligibility service before January 1, 2009, the payment will begin on the first day of the month following the NEO’s death. For an NEO who dies prior to attaining age 65, the benefit shall be reduced further byone-fourth of 1% for each month the commencement precedes the NEO’s attainment of age 65, with a maximum reduction of 30%.

Disability Benefit

If an NEO participant in the SERP terminates employment due to a disability, he/she may be entitled to receive a monthly supplemental retirementcash-balance benefit under the SERP.Master Pension Plan, annual Interest Credits will continue to apply until the participant elects to commence. If applicable, SERP payments will commence ona vested participant dies before commencing benefits, a death benefit is generally payable to the firstparticipant’s surviving spouse or other beneficiary.

Effective as of their hires in 2021, Mr. Park and Mr. Somerhalder are participants in the month following the NEO’s attaining age 60 if the disability termination occurs before age 55. If the disability termination occurs on or after the NEO attains age 55, applicable SERP payments will begin the firstcash-balance formula of the month following termination. The retirement benefit will equal the greater of 65% of the NEO’s base salary earnings as set forth in (a) of the Retirement Benefit section above, or 55% of the NEO’s base salary earnings plus their annual incentive awards as set forth in (b) of theRetirement Benefit section above. That amount will be reduced by disability benefits the NEO is projected to receive from Social Security, the Master Pension Plan and in the FirstEnergy Corp. Long Term DisabilityCash Balance Restoration Plan. The disabilityAs of December 31, 2021, Mr. Park and Mr. Somerhalder are not eligible for a pension benefit continues until the NEO attains age 65, is no longer disabled or dies, whichever occurs first. Upon attaining age 65, benefits are calculated as described in the Retirement Benefit section above. In the eventcompletion of death, benefits are calculated as described in the Death Benefit section above.

In 2018, the Compensation Committee approved a second amendment to the SERP in order to comply with Departmentthree years of Labor regulations under the Employee Retirement Income Security Act of 1974, which amendment modified the claims procedures for disability benefits.

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eligibility service.

Nonqualified Deferred Compensation as of December 31, 20192021

The following table summarizes nonqualified deferred compensation earned or contributed by or on behalf of our NEOs during 2019.2021.

 

  Name

 

  

Executive

Contributions

in Last FY

($)(1)

 

   

Registrant

Contributions

in Last FY

($)

 

   

Aggregate

Earnings

in Last FY

($)(2)

 

   

Aggregate

Withdrawals/

Distributions

($)(3)

 

   

Aggregate

Balance at
Last

FYE

($)(4)

 

 

  Charles E. Jones

  $0   $                0   $190,914   $0   $1,223,619 

  Steven E. Strah

  $2,106,401   $0   $233,207   $0   $1,767,679 

  Samuel L. Belcher

  $939,356   $0   $140,789   $110,124   $809,544 

  Robert P. Reffner

  $55,505   $0   $27,210   $0   $284,279 

  Bennett L. Gaines

  $0   $0   $0   $0   $0 

  Leila L. Vespoli

  $0   $0   $488,038   $2,742,064   $3,716,958 

  James F. Pearson

  $170,872   $0   $326,386   $359,854   $    4,733,964 

Name

  

Executive

Contributions

in Last FY

($)(1)

   

Registrant

Contributions

in Last FY

($)

   

Aggregate

Earnings

in Last FY

($)(2)

   

Aggregate

Withdrawals/

Distributions

($)

   

Aggregate

Balance at
Last FYE

($)(3)

 

Steven E. Strah

  $97,698   $   $1,265,230   $   $6,035,883 

K. Jon Taylor

  $667,317   $   $902,210   $   $3,701,414 

Hyun Park

  $   $   $   $   $ 

John W. Somerhalder II

  $855,554   $   $   $   $ 

Samuel L. Belcher

  $1,197,258   $   $450,941   $   $1,744,037 

(1) The amount set forth in the “Executive Contributions in Last FY” column for Mr. Strah includes the deferral of 2021 base salary in the amount of $97,698. The amount for Mr. Taylor includes the deferral of: (a) 2021 base salary in the amount of $68,026; (b) 2021 STIP earned in 2021 and deferred in 2022 in the amount of $183,175; and (c) 2019-2021 stock-based RSUs deferred in the amount of $416,116. The amount for Mr. Somerhalder includes the deferral of 2021 STIP earned in 2021 and deferred in 2022 in the amount of $855,554. The amount for Mr. Belcher includes the deferral of 2019-2021 stock-based RSUs deferred in the amount of $1,197,258. The base salary amounts are also included in the Salary column of the current year Summary Compensation Table, and the 2021 STIP amounts are also included in the “Non-Equity Incentive Plan Compensation” column of the current year Summary Compensation Table.

(1)

The amount set forth in the Executive Contributions in Last FY column for Mr. Strah includes the deferral of (a) 2019 base salary in the amount of $76,873 and (b) 2017-2019 stock-based RSUs deferred in the amount of $2,029,528. Mr. Belcher includes the deferral of 2017-2019 stock-based RSUs deferred in the amount of $939,356. The amount for Mr. Reffner includes the deferral of 2019 base salary in the amount of $55,505. The amount for Mr. Pearson includes the deferral of 2019 base salary in the amount of $170,872. The base salary amount is also included in the Salary column of the current year Summary Compensation Table.

(2)

The amounts set forth in the Aggregate Earnings in Last FY column include above-market earnings which have been reported in the Summary Compensation Table for 2019 as follows: Mr. Jones: $5,567; Mr. Strah: $14,617; Mr. Belcher: $5,223; Mr. Reffner $3,754; Mr. Gaines: $0; Ms. Vespoli: $47,485; and Mr. Pearson: $76,465. The compounded annual rate of return onpre-2013 retirement accounts was 7.20%, and 5.20% on the retirement accounts in 2013 and thereafter. The compounded annual rate of return on stock accounts was 33.7%, which includes dividends.

(3)

The amounts set forth in the Aggregate Withdrawals/Distributions column include amounts distributed to Mr. Belcher, Ms. Vespoli and Mr. Pearson in accordance with their specified distribution elections. Ms. Vespoli and Mr. Pearson retired effective April 1, 2019.

(4)

The amounts set forth in the Aggregate Balance at Last FYE column include amounts reported in the Summary Compensation Tables in prior years as follows: Mr. Jones: $53,112; Mr. Strah: $29,913; Mr. Belcher: $4,787; Ms. Vespoli: $598,290; and Mr. Pearson: $216,797. Mr. Reffner and Mr. Gaines did not have any amounts reported in the Summary Compensation Tables in prior years.

(2) The compounded annual rate of return was 6.11% on pre-2013 retirement accounts, and 4.11% on the retirement accounts in 2013 and thereafter. The compounded annual rate of return on stock accounts was 41.4%, which includes dividends. The amounts set forth in the Aggregate Earnings in Last FY column include above-market earnings which have been reported in the Summary Compensation Table for 2021 as follows: Mr. Strah: $6,662; Mr. Taylor: $6,473; and Mr. Belcher: $3,214.

(3) The amounts set forth in the “Aggregate Balance at Last FYE” column include amounts reported in the Summary Compensation Tables in prior years as follows: Mr. Strah: $59,963; Mr. Taylor: $7,226; and Mr. Belcher: $15,102. Mr. Park and Mr. Somerhalder did not have any amounts reported in the Summary Compensation Tables in prior years.

EDCP

The EDCP is a nonqualified deferred compensation plan which provides for the voluntary deferral of compensation. Our NEOs (other than Mr. Somerhalder) may defer up to 50% of base salary, up to 100%85% of STIP awards and up to 100%85% of LTIP awards. Mr. Somerhalder may defer up to 50% of base salary and up to 85% of STIP awards.

Two investment options are available under the EDCP. NEOs may direct deferrals of base salary and STIP awards to an annual cash retirement account, which accrues interest. The interest rate changes annually and is based upon the Moody’s Corporate Long-Term Bond Yield Index rate (later referred to as Moody’s). In 2019,2021, the interest rate was based on the Moody’s rate plus one percentage point (5.20%(4.11%) for amounts credited to accounts in 2013 or later and Moody’s plus three percentage points (7.20%(6.11%) for amounts credited to accounts prior to 2013. NEOs may direct deferrals of STIP awards and performance-adjusted RSU LTIP

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awards to an annual stock account. The stock accounts are tracked in stock units and accrue additional stock units based upon the payment of dividends. The stock accounts are valued at the fair market value of our common stock. Payments made with respect to any dividend equivalent units that accrue after May 17, 2014, will beare paid in cash.

Payments made with respect to performance shares (a component of the LTIP from 2006-2014) that are deferred into a participant’s stock account on or after February 23, 2015, will be paid in cash instead of shares of common stock. In addition, with respect to future deferrals, if a participant has elected to receive a distribution of his or her stock account following a three-year deferral period and the participant terminates employment prior to the end of the three-year period, then the stock account distribution will be paid in cash in accordance with the payment terms of the participant’s retirement account.

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Effective for deferral elections made on or after November 1, 2015:

 

 

Participants may elect to defer RSUs only to the stock account, rather than to a separate RSU account; and

 

 

Participants may no longer elect to receive a distribution after three years (or any later date specified by the participant, in the case of RSUs), as all amounts deferred to the stock account, including deferred RSUs, will be held in that account until separation from service, death, or disability, at which point it will be transferred to a participant’s retirement account and paid only in cash based on his/hertheir distribution elections for the retirement account.

In 2018, the Compensation Committee approved an amendment to the EDCP in order to comply with Department of Labor regulations under the Employee Retirement Income Security Act of 1974, which amendment modified the claims procedures for disability benefits.

In 2019, the Compensation Committee approved an amendment to the EDCP for deferrals beginning in 2020, to reduce the maximum deferral for STIP and LTIP awards from 100% to 85% to account for the local and FICA taxation required to be withheld upon deferral and to simplify the communications for participants as well as the plan administration.

NEOs may elect to receive distributions from the cash retirement accounts in any combination of lump sum payment and/or monthly installment payments for up to 25 years. Differing distribution elections may be made for retirement, disability, andpre-retirement death. In the event of involuntary separation prior to retirement eligibility, the accounts accrued and vested as of December 31, 2004, may be paid in a single lump sum payment or in three annual installments. In the event of a participant’s separation from service for reasons for reasons other than retirement, death or disability, accounts accrued after January 1, 2005, are paid in a single lump sum payment. Payments may not commence until separation from service. Amounts that were vested as of December 31, 2004, are available for anin-service withdrawal of the full account, subject to a 10% penalty. There is noin-service withdrawal option for retirement accounts accrued after January 1, 2005, other than as permitted for hardships under the EDCP.

For deferrals to the stock account prior to November 1, 2015, generally, stock account distributions were made in a lump sum payment in the form of our common stock at the end of the three-year period following the initial deferral, unless further deferred. If further deferred until termination or retirement (or for future deferrals, if termination occurred prior to the end of the initial three-year period, regardless of age at termination), the account was converted to cash, based upon the fair market value of the account at termination, and the balance was rolled over to the corresponding annual retirement account for distribution in lump sum or monthly installments as elected under the retirement account.

 

88  |  FirstEnergy Corp.2020 Proxy Statement

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Potential Post-Employment Payments

20192021 Post-Termination Compensation and Benefits

The following table summarizes the compensation and benefits that would be payable to our continuing NEOs in the event of a termination or following a CIC absent a termination as of December 31, 2019,2021, which is the last business day of the year:

 

   Retirement(1) 

Involuntary

Separation

(Other Than

For Cause)

 

Termination

Without Cause

Following a

CIC

 

Following a

CIC Absent

a Termination

Voluntary

Termination

(Pre-retirement

Eligible)(1)

 

Involuntary

Termination

(For Cause)(1)

Death(1) Disability(1)

Base Salary

 Accrued
through
date of
retirement
 Accrued
through
date of
termination
 Accrued
through date
of change in
control
termination
 Accrued
through
date of
change in
control
Accrued
through
date of
termination
 Accrued
through
date of
termination
Accrued through date of qualifying
event
 Accrued
through
date of
qualifying
event

Severance Pay(2)

 N/A 3 weeks of
pay for
every
full year of
service
(capped (capped at a
maximum of
104 weeks),
including the
current year,
calculated
using base
salary at the
time of
severance
 2 times the
sum of base
salary plus
target annual
STIP of
which a
portion is
payable in
consideration
for the non-
competition
clause
 N/A N/A N/A N/A

  Banked Vacation

Paid in a
lump sum
and valued
based on
12/31/2008
base salary
Paid in a
lump sum
and valued
based on
12/31/2008
base salary
Paid in a
lump sum
and valued
based on
12/31/2008
base salary
Eligible for a
lump sum
payment at
termination
based on
12/31/2008
base salary
Paid in a
lump sum
and valued
based on
12/31/2008
base
salary
Paid in a
lump sum
and valued
based on
12/31/2008
base salary
Paid in a
lump sum
and valued
based on
12/31/2008
base salary

  Health and

  Wellness Benefits

May continue
either
through
unsubsidized
COBRA or in
the FE
Access Plan
Provided at
active
employee
rates for
severance
period(3)
Based on the
terms of the
CIC Plan(4)
Provided at
active
employee
rates for the
length of
employment
ForfeitedSurvivor
health and
wellness
provided as
eligible
Health and
wellness
provided as
eligible

  FE STIP Award

Issued a
prorated
award based
on elapsed
days of
service and
based on
actual
performance
Issued a
prorated
award
based
on elapsed
days of
service and
based on
actual
performance
Issued a
prorated
award at
target based
on elapsed
days of
service
Eligible for a
full or
prorated
award
based on
elapsed
days of
service
ForfeitedIssued a
prorated
award
based
on elapsed
days of
service and
based on
actual
performance
Issued a
prorated
award based
on elapsed
days of
service and
based on
actual
performance

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Banked Vacation

Paid in a lump sum and valued based on 12/31/2008 base salaryPaid in a lump sum and valued based on 12/31/2008 base salaryPaid in a lump sum and valued based on 12/31/2008 base salaryPaid in a lump sum and valued based on 12/31/2008 base salaryPaid in a lump sum and valued based on 12/31/2008 base salaryPaid in a lump sum and valued based on 12/31/2008 base salaryPaid in a lump sum and valued based on 12/31/2008 base salary
Retirement(1)

Involuntary

Separation

(Other Than

For Cause)Health and Wellness Benefits

 

Termination

Without Cause

Following a

CIC

May continue either through unsubsidized COBRA or in the FE Access Plan
 

Following a

CIC Absent

a Termination

Provided at active employee rates for severance period(3)
 

Voluntary

Termination

(Pre-retirement

Eligible)Based on the terms of the CIC Plan(1)(4)

 Death(1)Forfeited Disability(1)ForfeitedSurvivor health and wellness provided as eligibleHealth and wellness provided as eligible

Performance-Adjusted RSUs (Stock-Based and Cash-Based)Granted in 2017 and Subsequent YearsSTIP Award

 Issued a
prorated
award
based on
full months
elapsed days of
service and
based on
actual
performance
 Issued a
prorated
award
based on
full months
elapsed days of service
and based
on actual
performance
 Issued a prorated
award at target based
on full months
elapsed days of service at
100% of target
opportunity
and
all dividends
earned
 Eligible for
an
award
based
on future
employment
through the
vesting dateForfeited
 Forfeited Issued a
prorated
award at
target value
based on
full
months elapsed days of
service and based on actual performance
 Issued a
prorated
award
based on
full months
elapsed days of service
and based
on actual
performance

Performance-
Adjusted RSUs
(Stock-Based and
Cash-Based)

Issued a prorated award based on full months of service and based on actual performanceIssued a prorated award based on full months of service and based on actual performanceIssued prorated award based on full months of service at 100% of target opportunity and all dividends accruedForfeitedForfeitedIssued a prorated award based on full months of service at target valueIssued a prorated award based on full months of service and based on actual performance

Restricted

Stock

 Forfeited Prorated or issued 100% of shares and all dividends accrued(5) Issued 100% of
shares and all
dividends
earned accrued
 Eligible for
an
award
based
on future
employment
through the
vesting dateForfeited
 Forfeited Issued 100%
of shares
and all
dividends
earned accrued
 Issued
100% of
shares and
all dividends
earned accrued

Cash Retention
Award

ForfeitedProratedIssued 100% of cash awardForfeitedForfeitedIssued 100% of cash awardIssued 100% of cash award

EDCP (Elective
Deferrals)

 Payable as
elected
 Payable as

elected if

retirement

eligible;

otherwise

payable in a

lump sum

upon

termination

 Payable as

elected if

retirement

eligible;

otherwise

payable in a

lump sum upon

termination

Payable in a lump sum upon termination Payable as

elected upon

termination if

retirement

eligible;

otherwise

payable in a

lump sum

upon

termination

Payable in

a lump
sum

upon

termination

 Payable to

survivor as

elected

 Payable as

elected

Excise Tax Gross Up under Section 280G

 No No No No No No No

 

(1)
922022 PROXY STATEMENT


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Benefits provided in these scenarios are providedCorporate
Governance & Board of Directors

Items to all employees on the same terms, if applicable.Be
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Other

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(2)

In the event of an involuntary separation (other than for cause or following a change in control), Mr. Jones’ severance benefits, if any, would be determined by Compensation Committee as discussed further under “Severance Benefits upon an Involuntary Separation” on page 64 above. In addition, only CIC Executives are eligible to receive severance pay benefits in the event of a termination without cause following a change in control.

(3)

(1) Benefits provided in these scenarios are provided to all employees on the same terms, if applicable.

(2) Mr. Taylor, Mr. Park, Mr. Somerhalder and Mr. Belcher are eligible to receive severance pay benefits in the event of an involuntary separation (other than for cause) based on the formula set forth in the chart. In addition, each of the NEOs are eligible to receive severance pay benefits in the event of a termination without cause following a change in control based on the formula set forth in the chart.

(3) Active employee health and wellness benefits are provided under the Severance Plan for the severance period, which is equal to three weeks for every year of service, including the current year (52 week minimum and 104 week maximum).

(4) Mr. Strah is the only NEO eligible for retirement and would receive retiree health and wellness benefits irrespective of a CIC.

(5) Restricted stock award for Mr. Belcher is paid at target in the event of an involuntary separation (other than for cause), provided that Mr. Belcher executes a release agreement. Restricted stock award for Mr. Somerhalder forfeits in the event of an involuntary separation (other than for cause).

(4)

All NEOs, except Mr. Belcher, are eligible for retirement and would receive retiree health and wellness benefits irrespective of a CIC.

(5)

The restricted stock award granted to Mr. Pearson in 2015 was forfeited pursuant to the terms of the award agreement due to his retirement on April 1, 2019. Mr. Belcher’s restricted stock award is paid at target for an involuntary separation and he qualifies for and receives severance, and he executes a release agreement.

The potential post-employment payments discussed below disclose the estimated payments and benefits payable to the continuing NEOs upon certain triggering events representing the enhanced or accelerated value of payments and benefits and do not include previously-earnedpreviously earned and vested amounts payable to such continuing NEOs regardless of the applicable triggering event that have been accrued but not yet paid. The post-termination benefit calculations are based on the following assumptions:

 

 

The amounts disclosed are estimates of the amounts which would be paid out to the continuing NEOs based on the triggering event. The actual amounts can be determined only at the time of payment.

 

 

The amounts disclosed do not include benefits provided under the qualified plan, nonqualified supplemental plan and SERPnonqualified cash balance restoration plan as described in the Pension Benefits section and shown in the Pension Benefits table (at the earliest commencement date without reduction) earlier in this proxy statement, unless expressly noted.

 

 

The amounts disclosed do not include compensation previously earned and deferred into the EDCP. Theyear-end account balances of the continuing NEOs in the EDCP are set forth in the

90  |  FirstEnergy Corp.2020 Proxy Statement


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Nonqualified Deferred Compensation table earlier in this proxy statement. These amounts are payable to the continuing NEO based on the distribution elections made by the continuing NEO at the time the deferral was elected.

 

 

December 31, 20192021, is the last day of employment.

 

 

All employees, including the continuing NEOs, are eligible for a full year payout based on actual performance under the FE STIP if they are employed on December 31, 2019.2021. The 20192021 STIP amounts are provided in theNon-Equity Incentive Plan Compensation column of the Summary Compensation Table.

 

 

The LTIP and Other Equity Awards table below includes stock options, performance-adjusted RSUs and restricted stock.

 

 

The closing common stock price on December 31, 2019,2021, the last trading day of the year $48.60,($41.59), is applied to value stock options, performance-adjusted RSUs and restricted stock.

 

 

Actual performance is utilized for the 2017-20192019-2021 performance-adjusted RSUs. Target payout is assumed for the 2018-20202020-2022 and 2019-20212021-2023 performance-adjusted RSUs.

 

 

Health care amounts are not provided in most cases since they are available to all employees under the same circumstances.

Retirement/Voluntary Termination

In the event of a continuing NEO’sMr. Strah’s retirement or voluntary termination, other than Mr. Belcher who is not yet retirement eligible, as of December 31, 2019, the continuing NEOshis outstanding equity awards would be prorated and vest based on actual performance as described in the 20192021 Post-Termination Compensation and Benefits table above and quantified in the LTIP and Other Equity Awards table below. Messrs. Taylor, Belcher, Park and Somerhalder are not yet retirement eligible as of December 31, 2021, and their outstanding equity awards would be forfeited in the event of a voluntary termination.

The present value of the Qualifiedqualified plan, nonqualified supplemental plan, and the Cash Balance Restoration Plan Nonqualified Supplemental Plan, and SERP benefits as shown in the Pension Benefits table reflects commencement of retirement benefits at the NEOs’ earliest age necessary to receive pension benefits without reduction. Messrs. Jones, Reffner, and Gaines have reached the age and service requirements neededMr. Strah is currently eligible to receivecommence pension benefits without reduction. If Mr. Jones commenced his pension benefits immediately, then his SERP would bein a reduced amount, as described on page 85.87. Messrs. StrahTaylor and Belcher do not meet the age requirement needed to receive Qualified Plan and Nonqualified Supplemental Plan pension benefits without reduction; however, they are entitled to accrued and vested Qualified Planqualified plan and Nonqualified Supplemental Plannonqualified supplemental plan benefits as shown in the Pension Benefits table. Mr. Belcher wastable, which cannot be commenced until they meet the age requirement. Messrs. Park and Somerhalder were not yet retirement eligiblevested in the qualified plan and Cash Balance Restoration Plan as of December 31, 2019.2021.

Involuntary Separation

In the event of an involuntary separation, the CEO’s severance benefits, if any, would be determined by the Compensation Committee and approved by the independent members of your Board. The other continuing NEOs are covered under the Severance Plan. Under the Severance Plan, executives are offered severance benefits if involuntarily separated when business conditions require

FIRSTENERGY CORP.

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Important

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the closing or sale of a facility, corporate restructuring, merger, acquisition, a reduction in workforce, or job elimination. Severance is also offered if an executive turns down a job assignment thatthat: would result in a reduction of at least 15% in current base salary; contains a requirement that the executive must relocate from his or her current residence for reasons related to the new job; or would result in the distance from the executive’s current residence to his or her new reporting location being at least 50 miles farther than his or her current residence to his or her previous reporting location. The Severance Plan provides three weeks of base pay for each full year of service with a minimum of 52 weeks and a maximum severance benefit of 104 weeks of base pay. In the event of a December 31, 20192021, involuntary separation, lump sum severance pay would be provided as follows: Mr. Jones — $2,266,000Strah – $2,200,000 (assuming the independent members of the Board approves the same level of benefits as the other continuing NEOs)NEOs would receive); Mr. StrahTaylor$1,300,000;$725,000; Mr. Park – $650,000; Mr. Somerhalder – $750,000; and Mr. Belcher — $610,000; Mr. Reffner $550,000; and Mr. Gaines – $465,000.$700,000. Each of the continuing NEOs would also be provided prorated vesting for certain outstanding equity as described in the 20192021 Post-Termination Compensation and Benefits table and quantified in the LTIP and Other Equity Awards table.

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Termination Following a CIC

As described above, the CIC ExecutivesNEOs were participants in the CIC Plan in 2019.2021. Under the CIC Plan, certain enhanced benefits would be provided in the event of a termination without cause or for good reason within two years following a CIC. Under the Incentive Compensation Plans, it is our customary practice to require a qualifying termination of employment for acceleration of the vesting of equity awards in the event of a change ofin control rather than providing for accelerated vesting solely upon a change ofin control. In the event a continuing CIC ExecutiveNEO accepts benefits under the CIC Plan, (and with respect to Mr. Jones, pursuant to hisNon-Competition andNon-Disparagement Agreement, dated September 15, 2015), the continuing NEO would be prohibited for two years from working for or with competing entities after receiving severance benefits pursuant to the CIC Plan, and would be prohibited from disclosing trade secrets or other confidential information indefinitely. Mr. Jones entered into a separateNon-Competition andNon-Disparagement Agreement, dated September 15, 2015, providing comparable benefits to the Company.

Generally, pursuant to the CIC Plan and the Incentive Compensation Plans, a CIC is deemed to occur:

 

 (1)

If any person acquires 25% or more of our voting securities (excluding acquisitions (a) directly from us, (b) by us, (c) by certain employee benefit plans, or (d) pursuant to a transaction meeting the requirements of item (3) below); or

 

 (2)

If a majority of our directors as of the date of the agreement are replaced (other than in specified circumstances); or

 

 (3)

TheUpon the consummation of a major corporate event (defined to include reorganizations and certain asset sales) unless, following such transaction:

 

 (a)

The same person or persons who owned our voting securities prior to the transaction own more than 60% of our voting securities prior toafter the transaction;

 

 (b)

No person or entity (with certain exceptions) owns 25% or more of our voting securities; and

 

 (c)

At least a majority of the directors resulting from the transaction were directors at the time of the execution of the agreement providing for such transaction; or

 

 (4)

If our shareholders approve a complete liquidation or dissolution.

For a complete CIC definition explanation, see the CIC Plan, and the Incentive Compensation Plans, and Mr. Jones’Non-Competition andNon-Disparagement Agreement.Plans. The CIC severance benefits are triggered only if the CIC ExecutiveNEO is terminated without cause or resigns for good reason within two years following a CIC. Good reason is generally defined as a material change, following a CIC, inconsistent with the individual’s previous job duties or compensation. The Incentive Compensation Plans only provide a termination without cause provision and do not have a good reason definition for the accelerated vesting of the equity awards. We do not gross up equity or cash awards to cover the tax obligations for executives.

In the event of a December 31, 20192021 qualifying termination following a CIC, compensation in an amount equal to two times the sum of the amount of annual base salary plus the target annual FE STIP amount as applicable, in the year during which the date of termination occurs, whether or not fully paid, will be provided as follows: Mr. Strah – $2,340,000;$4,730,000; Mr. Taylor – $2,682,500; Mr. Park – $2,275,000; Mr. Somerhalder – $3,000,000; and Mr. Belcher — $2,135,000; Mr. Reffner — $1,870,000; Mr. Gaines — $1,534,500;– $2,450,000. Any NEO that has an outstanding restricted stock award will be issued 100% of shares and Mr. Jones — none. Since Ms. Vespoliall dividends accrued upon a change in control and Mr. Pearson retired effective April 1, 2019, they have been excluded. Each of the continuing NEOs would also be provided additional accelerated vesting following a termination for certain outstanding equity as described in the 2019 Post-Termination Compensation and Benefits table above andvalue is quantified in the LTIP and Other Equity Awards table below. Excise tax andgross-up provisions are not provided under the CIC Plan. Finally, outplacement services are also offered for a one–year period, capped at $30,000.

942022 PROXY STATEMENT


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Corporate
Governance & Board of Directors

Items to Be
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Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Death & Disability

In the event of a continuing NEO’s death or Disability (as defined in the applicable plan documents) as of December 31, 2019,2021, each of the NEOs would also be provided additional accelerated vesting for certain outstanding equity as described in the 20192021 Post-Termination Compensation and Benefits table above and quantified in the LTIP and Other Equity Awards table below.

92  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

LTIP and Other Awards

In the event of a continuing NEO’s retirement or voluntary termination as of December 31, 2019, the continuing NEOs would be provided vested outstanding equity or performance cash awards as quantified in the Retirement/Voluntary Termination column of the LTIP and Other Awards table below. In the event of involuntary separation, termination without cause following a CIC, death, or Disability, the continuing NEOs would be provided additional accelerated vesting for certain outstanding equity or performance cash awards based specifically on the triggering event as quantified in the respective columns of the LTIP and Other Awards table below. Since 2010, awards of performance-adjusted RSUs and performance shares require a termination without cause following a CIC for accelerated vesting. For purposes of the calculations in the table below, we have assumed the equity awards would be replaced by the successor prior to a termination without cause.

LTIP and Other Awards

In the event of a NEO’s retirement or voluntary termination as of December 31, 2021, the NEOs would be provided vested outstanding equity or cash awards as quantified in the Retirement/Voluntary Termination column of the LTIP and Other Awards table below. In the event of involuntary separation, termination without cause following a CIC, death, or Disability, the NEOs would be provided additional accelerated vesting for certain outstanding equity or cash awards based specifically on the triggering event as quantified in the respective columns of the LTIP and Other Awards table below. Since 2010, awards of performance-adjusted RSUs require a termination without cause following a CIC for accelerated vesting. For purposes of the calculations in the table below, we have assumed the equity awards would be replaced by the successor prior to a termination without cause.

LTIP and Other Awards

 

       Additional Payments Due to the Termination Scenario 
    

Retirement/

Voluntary

Termination(1)

   

Involuntary

Separation

(Additive to the

Retirement/

Voluntary

Termination

Column)(2)

   

Death & Disability

(Additive to the

Retirement/

Voluntary

Termination

Column)(3)

   

Termination Without

Cause Following a CIC

(Additive to the

Retirement/Voluntary

Termination

Column)(4)

 

  Charles E. Jones

  $18,152,546   $0   $0   $0     

  Steven E. Strah

  $3,668,917   $0   $0   $0     

  Samuel L. Belcher(5)

   N/A   $3,146,695   $3,146,695   $3,146,695     

  Robert P. Reffner

  $1,426,452   $0   $0   $0     

  Bennett L. Gaines

  $1,630,299   $0   $0   $0     
      Additional Payments Due to the Termination Scenario
    

Retirement/

Voluntary

Termination(1)

  

Involuntary

Separation

(Additive to the

Retirement/

Voluntary

Termination

Column)(2)

  

Death

(Additive to the

Retirement/

Voluntary

Termination

Column)(3)

  

Disability

(Additive to the

Retirement/

Voluntary

Termination

Column)(4)

  

Termination Without

Cause Following a CIC

(Additive to the

Retirement/Voluntary

Termination

Column)(5)

Steven E. Strah

   

$

4,329,598

   

$

   

$

   

$

   

$

K. Jon Taylor(6)

   

 

N/A

   

$

1,493,335

   

$

1,493,335

   

$

1,493,335

   

$

1,493,335

Hyun Park(6)

   

 

N/A

   

$

878,012

   

$

878,012

   

$

878,012

   

$

878,012

John W. Somerhalder II(6)

   

 

N/A

   

$

2,500,806

   

$

2,766,108

   

$

2,766,108

   

$

2,766,108

Samuel L. Belcher(6)

   

 

N/A

   

$

3,500,455

   

$

3,500,455

   

$

3,500,455

   

$

3,500,455

(1) The amounts set forth in the “Retirement/Voluntary Termination” column represent the estimated amounts based on a target opportunity payout for all outstanding LTIP cycles that would be payable to the NEO as a result of retirement/voluntary termination on December 31, 2021. LTIP awards are prorated based on full months of service. At the time of payment, the LTIP awards will be adjusted for actual performance. If we applied the actual performance results for the 2019-2021 cycle, the values would be as follows: Strah $4,774,981; Taylor N/A; Park: N/A; Somerhalder: N/A; and Belcher N/A. Unvested restricted stock is forfeited. Messrs. Taylor and Belcher were not eligible to retire as of December 31, 2021, since they were only 48 and 53 years old, respectively. Messrs. Park and Somerhalder do not meet the retirement eligibility requirements under the LTIP as of December 31, 2021, since they do not have 10 years of service.

(1)

(2) The amounts set forth in the “Involuntary Separation” column represent the estimated additional amounts that would be payable to the NEO as a result of a December 31, 2021, involuntary severance without cause. LTIP awards are prorated based on full months of service. At the time of payment, the LTIP awards will be adjusted for actual performance. If we applied the actual performance results for the 2019-2021 cycle, the values (including the 2020-2022 and 2021-2023 cycles) would be as follows: Strah: $4,774,981; Taylor: $1,625,597; Park: $913,013; Somerhalder: $2,500,806; and Belcher: $3,882,854. The amounts set forth in the Retirement/Voluntary Termination column represent the estimated amounts based on a target opportunity payout for all outstanding FE LTIP cycles that would be payable to the continuing NEO as a result of retirement/voluntary termination on December 31, 2019. FE LTIP awards are prorated based on full months of service. At the time of payment, the FE LTIP awards will be adjusted for actual performance. If we applied the actual performance results for the 2017-2019 cycle, the values would be as follows: Jones $26,670,861; Strah $5,175,346; Belcher n/a; Reffner $2,009,746; and Gaines $2,390,536. Unvested stock options and restricted stock are forfeited. Mr. Belcher was not eligible to retire as of December 31, 2019 since he was only 51 years old.

(2)

The amounts set forth in the Involuntary Separation column represent the estimated additional amounts that would be payable to the continuing NEO as a result of a December 31, 2019, involuntary severance. Unvested stock options and FE LTIP awards are prorated based on full months of service. At the time of payment, the FE LTIP awards will be adjusted for actual performance. Mr. Belcher’s restricted stock award for Mr. Belcher is paid at target for an involuntary separation, provided that Mr. Belcher executes a release agreement. The restricted stock award for Mr. Somerhalder forfeits for an involuntary separation.

(3) The amounts set forth in the “Death” column represent the estimated additional amounts that would be payable to the NEO as a result of a death on December 31, 2021. In the event of a death, the LTIP awards are prorated and payable at target based on the fair market value on the date of death. All restricted stock awards fully vest, including the restricted stock awards for Mr. Somerhalder and Mr. Belcher. LTIP amounts represented in the table are prorated based on full months of service at target.

(4) The amounts set forth in the “Disability” column represent the estimated additional amounts that would be payable to the NEO as a result of termination due to Disability on December 31, 2021. LTIP awards are prorated and payable at the end of the performance period and based on actual performance. If we applied the actual performance results for the 2019-2021 cycle, the values (including the 2020-2022 and 2021-2023 cycles) would be as follows: Strah: $4,774,981; Taylor: $1,625,597; Park: $913,013; Somerhalder: $2,766,108; and Belcher: $3,882,854. All restricted stock awards fully vest, including the restricted stock awards for Mr. Somerhalder and Mr. Belcher. LTIP amounts represented in the table are prorated based on full months of service at target.

(5) The amounts set forth in the “Termination Without Cause following a CIC” column represent the estimated additional amounts that would be payable to the NEO as a result of the double trigger vesting of awards effective as of December 31, 2021. Unvested restricted stock would fully vest at target in the event of a termination without cause following a CIC. LTIP awards are prorated at target in the event of a termination without cause following a CIC.

(6) Since Mr. Taylor, Mr. Park, Mr. Somerhalder and Mr. Belcher were not eligible to retire as of December 31, 2021, the full value of the payments is paid at target for an involuntary separation and he qualifies for and receives severance, and he executes a release agreement.

(3)

The amounts set forth in the Death & Disability column represent the estimated additional amounts that would be payable to the continuing NEO as a result of a death or termination due to Disability. FE LTIP awards are prorated based on full months of service. In the event of a death, the FE LTIP awards are prorated and payable at target based on the fair market value on the date of death. In the event of a termination due to disability, the FE LTIP awards are prorated and payable at the end of the performance period and based on actual performance. Unvested stock options are prorated based on full months of service. All restricted stock awards fully vest, including Mr. Belcher’s restricted stock award.

(4)

The amounts set forth in the Termination Without Cause following a CIC represent the estimated additional amounts that would be payable to the continuing NEO as a result of the double trigger vesting of awards. Unvested restricted stock and unvested stock options would fully vest at target in the event of a termination without cause following a CIC. FE LTIP awards granted in 2017 and later vest and are prorated at target in the event of a termination without cause following a CIC.

(5)

Since Mr. Belcher was not eligible to retire as of December 31, 2019, the full value of the payments are reflected in each column and are not additive.

E-VERP Benefits

The effective date of Ms. Vespoli’s retirement was April 1, 2019. Under theE-VERP, Ms. Vespoli received the following separation pay and benefits:

 

FIRSTENERGY CORP.

95


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a lump sum paymentCorporate
Governance & Board of approximately $1,518,400, less applicable withholdings, equivalentDirectors

Items to her severance benefit under the Company’s Be
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Commitments to

Employees & ESG

Executive Severance Benefits Plan plus an amount equivalent to unused and deferred paid time off at the time of her retirement;

& Director Compensation

Other

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a lump sum payment of $99,645, less applicable withholdings, equivalent to her unused and deferred paid time off in 2019;

continuation of health care benefits for a period of up to 18 months at an estimated value of $20,012; and

a temporary monthly pension enhancement of $1,500 up to age 65.

The effective date of Mr. Pearson’s retirement was April 1, 2019. Under theE-VERP, Mr. Pearson, received the following separation pay and benefits:

a lump sum payment of approximately $1,320,800, less applicable withholdings, equivalent to his severance benefit under the Company’s Executive Severance Benefits Plan plus an amount equivalent to unused and deferred paid time off at the time of his retirement;

a lump sum payment of $8,890, less applicable withholdings, equivalent to his unused and deferred paid time off in 2019;

continuation of health care benefits for a period of up to 18 months at an estimated value of $19,901; and

a temporary monthly pension enhancement of $1,500 for 24 months following retirement.

Additionally, as is the case for executive officers who retire, Ms. Vespoli and Mr. Pearson were also eligible to receive retirement benefits described above, including benefits under the Master Pension Plan, EDCP, prorated awards under the FE STIP and FE LTIP (payable, if at all, upon the final determination of performance results thereunder), and, with respect to Ms. Vespoli, the SERP.

CEO Pay Ratio

We believe our executive compensation program must be consistent and internally equitable to motivate our employees to perform in ways that enhance shareholder value. We are committed to internal pay equity and our Compensation Committee annually reviews the internal pay ratio between Mr. Jones’our CEO’s total compensation and that for other NEOs and allnon-executive employees. For 2019, the Compensation Committee elected to use the same “median employee” that was identified in 2018 to calculate our 2019purposes of this pay ratio calculation, as there has been no change to our employee population or employee compensation arrangements indisclosure, we have calculated the last fiscal year that we believe would have a significant impact on our pay ratio disclosure. The process that we used to determine our “median employee” in 2018 is summarized below:

For 2018, the Compensation Committee compared Mr. Jones’CEO annual total compensation (the “CEO Compensation”)based on the compensation of Mr. Strah, who served as Acting CEO or CEO for 2021. Additionally, for 2021, we identified the median employee for use in comparing Mr. Strah’s annual total compensation to the median of the annual total compensation of all employees (excluding Mr. Jones) (the “Median Annual Compensation”). WeStrah) to calculate our 2021 pay ratio calculation.

The process that we used to determine our “median employee” in 2021 is summarized below:

For 2021, we identified the “median employee”median employee by calculatinganalyzing the annual compensation of approximately 12,50012,300 full-time, part-time, seasonal and temporary employees who were employed by us on October 1, 2018,December 31, 2021, and who had Form W-2 reportable earnings for 2021, other than Mr. Jones. As a result of the deconsolidation of FES, all of its subsidiaries, and FENOC in 2018, the identification and analysis of our median employee excluded all employees within CES as of October 1, 2018.

Strah. As permitted by SEC rules, to determine the “annual compensation” of our employees,median employee, we did not usecalculated and ranked the sametaxable W-2 wages (Box 5) for 2021. Using this methodology, plus the consistently applied compensation definition as required for purposes of determining total compensation in the 2018 Summary Compensation Table. Instead, we used, for the period from January 1, 2018 to September 30, 2018 the sum of:

2018 base pay, which we (1) based on a reasonable estimate of hours worked during 2018 for hourly workers and on salary levels for salaried workers and (2) annualized for employees other than seasonal and temporary employees who commenced work during 2018; plus

2018 target short-term incentive compensation awards (99% of our employees are eligible for these awards).

Using the above methodology,measure, we identified a small group of employees who had the identical amount of estimated annual compensation; we determined this group represented our “median employee” annual compensation. We selected an employee from that group and identified this person as our median employee.

94  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

employee for 2021.

We calculated the median employee’s Median Annual Compensationannual total compensation for 20192021 using the same calculation method as in the Summary Compensation Table, which was $149,550.resulted in median employee annual compensation of $124,120. As shown on the Summary Compensation Table on page 75,81, in 2019,2021, Mr. Jones’Strah’s CEO Compensation was $14,684,659.$10,714,062. As a result, we estimate that the ratio of CEO Compensationannual total compensation to Median Annual Compensationmedian employee annual total compensation for 20192021 is approximately 98:86:1. We note that, due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this pay ratio disclosure is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K using the data and assumptions described above. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.

 

95  |  FirstEnergy Corp.2020 Proxy Statement

962022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

LOGO

Director Compensation in Fiscal Year 2021

 

Name(1)

  

Fees Earned

or Paid

in Cash
($)(2)

  

Stock

Awards

($)(3)

  

Change in

Pension
Value and
Nonqualified

Deferred

Compensation

Earnings

($)(4)

  

All Other

Compensation
($)(5)

  

Total

($)

Michael J. Anderson

   $125,000   $149,906   $   $5,000   $279,906  

Steven J. Demetriou

   $115,000   $149,906   $   $   $264,906  

Lisa Winston Hicks(6)

   $85,000   $74,950   $   $   $159,950  

Julia L. Johnson

   $115,000   $149,906   $   $   $264,906  

Paul Kaleta(6)

   $92,500   $74,950   $   $   $167,450  

Jesse A. Lynn(7)

   $113,889   $118,235   $   $   $232,124  

Donald T. Misheff

   $562,500   $149,906   $   $35,908   $748,314  

Thomas N. Mitchell

   $165,000   $149,906   $457   $   $315,363  

James F. O’Neil III

   $120,000   $149,906   $   $   $269,906  

Christopher D. Pappas

   $250,000   $149,906   $   $   $399,906  

Sandra Pianalto(8)

   $38,187   $57,228   $   $5,000   $100,415  

Luis A. Reyes

   $100,000   $149,906   $   $   $249,906  

Andrew Teno(7)

   $78,889   $118,235   $   $   $197,124  

Leslie M. Turner

   $165,000   $149,906   $   $   $314,906  

Melvin D. Williams(9)

   $96,813   $92,670   $   $   $189,483  

(1) John W. Somerhalder II, Vice Chair and Executive Director, and Steven E. Strah, President and CEO, are excluded from this table. Compensation received by Messrs. Somerhalder and Strah for 2021 is shown in the “2021 Summary Compensation Table” above.

(2) The amounts set forth in the Fees Earned or Paid in Cash column consist of fees earned in cash whether paid in cash, deferred into the FirstEnergy Corp. Deferred Compensation Plan for Outside Directors (“DDCP”) or elected to be received in stock in lieu of cash. In addition, the amounts set forth in the “Fees Earned or Paid in Cash” column also include special cash payments for certain directors, which are further described in the narrative following this table.

(3) The amounts set forth in the Stock Awards column represent the equity retainer received under the FirstEnergy Corp. 2020 Incentive Compensation Plan (“2020 Incentive Plan”) in the form of shares of common stock. Each amount constitutes the aggregate grant date fair value of stock awards for fiscal 2021 calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The equity retainer is typically paid in quarterly installments. The fair value per share on the grant dates for each director listed in the table was: $34.35 on April 1, 2021; $37.48 on July 1, 2021; $35.97 on October 1, 2021; and $41.22 on January 3, 2022. Share amounts are rounded down to the nearest whole share. There were no option awards or stock awards outstanding as of December 31, 2021.

(4) The amounts set forth in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column reflect only the above-market earnings on nonqualified deferred compensation. There are no pension values for non-employee directors. The formula used to determine the above market earnings equals 2021 total interest multiplied by the difference between 120 percent of the Applicable Federal Rate for long-term rates (AFR) and the plan rate and divided by the plan rate.

(5) The amounts set forth in the “All Other Compensation” column include compensation not required to be included in any other column. Charitable matching contributions made on behalf of our directors were $5,000 for Mr. Anderson and $5,000 for Ms. Pianalto. The FirstEnergy Foundation supports the charitable matching contributions under its Matching Gifts Program. Amounts attributable to personal use of corporate aircraft was $35,908 for Mr. Misheff. The value of the personal use of corporate aircraft is calculated based on the actual invoiced costs or the aggregate variable operating costs to the Company, including fuel costs, trip-related maintenance, universal weather monitoring costs, on-board catering, landing/ramp fees, and other miscellaneous variable costs. Fixed costs which do not change based on usage, such as pilots’ salaries, the amortized costs of the aircraft, and the cost of maintenance not related to trips are excluded. Directors’ spouses and immediate family members may accompany Directors on Company aircraft using unoccupied space on flights that were already scheduled, and the Company incurs no aggregate incremental cost in connection with such use.

(6) Ms. Hicks and Mr. Kaleta were elected to your Board effective July 1, 2021.

(7) Messrs. Lynn and Teno were elected to your Board effective March 18, 2021. The amounts paid to both Messrs. Lynn and Teno for the first quarter were prorated based on their election date.

(8) Ms. Pianalto concluded service on your Board effective May 18, 2021.

(9) Mr. Williams was elected to your Board effective May 18, 2021. The amounts paid to Mr. Williams for the second quarter were prorated based on his election date.

FIRSTENERGY CORP.

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Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Compensation of Directors

We use a combination of cash and equity-based incentive compensation in order to attract and retain qualified candidates to serve on your Board. Equity compensation provides incentives to directors linking their personal interests to our long-term financial success and to increases in shareholder value. In setting director compensation, we take into consideration the significant amount of time that directors spend in fulfilling their duties to us as well as the skill level required of members of your Board. A review is performed every other year to help ensure the competitiveness of non-employee director compensation. Only non-employee directors receive the compensation described below for their service on your Board. Since Messrs. Somerhalder and Strah were employees, they were not eligible to receive additional compensation for their service on your Board in 2021.

Fee Structure

For 2021, each non-employee director received a cash retainer of $100,000 and an equity retainer valued at approximately $150,000 and paid in the form of our common stock. The Chairs of the Corporate Governance and Corporate Responsibility, Finance, and Operations and Safety Oversight Committees each received an additional $15,000 cash retainer in 2021 for serving as a committee chairperson. The Chair of the Audit Committee received an additional $25,000 cash retainer in 2021, and the Chair of the Compensation Committee received an additional $20,000. The amounts paid to directors for 2021 were prorated accordingly, if applicable, based on the duration of their service. Mr. Misheff, the non-executive Chair of the Board, received an additional $150,000 cash retainer in 2021. Ms. Turner currently directs the Company to pay her cash retainers to her wholly owned limited liability company, therefore, her cash retainers are not eligible for deferral as described below. The total annual compensation of each non-employee director shall not exceed the value of $750,000 in the aggregate of all cash compensation and the value of the applicable equity retainer.

Equity and cash retainers and chairperson retainers were paid in quarterly installments. Any equity compensation and any compensation deferred into equity was granted under the 2020 Incentive Plan. Directors are responsible for paying all taxes associated with cash and equity retainers. We do not gross up equity grants to directors to cover tax obligations.

Special Cash Stipends and Temporary Fee Structures

On February 17, 2021, the Board approved a special cash bonus of $50,000 to each of Mr. Mitchell and Ms. Turner, subject to the Company’s annual non-employee director pay limit, in recognition of the leadership and oversight provided during the transition following the termination of certain senior executives in late 2020 and early 2021.The Board previously approved a special cash stipend for Mr. Pappas equal to $75,000 per month, subject again to the Company’s annual non-employee director pay limit, which stipend ended April 1, 2021. The Board previously approved a special cash stipend for Mr. Misheff equal to $62,500 per month, subject again to the Company’s annual non-employee director pay limit, which stipend concluded at the end of June 2021. Ms. Turner receives an additional cash fee of $3,750 per quarter for her expanded role as chair of the Compliance Oversight Sub-Committee of the Audit Committee.

Beginning July 2021, the Special Litigation Committee approved an additional cash fee of $3,750 per quarter for Mr. Kaleta in his expanded role as chair of the Special Litigation Committee, and additional cash fees of $17,500 per quarter for members of the Special Litigation Committee for their expanded roles.

Share Ownership Guidelines

We believe it is critical that the interests of directors and shareholders be clearly aligned. As such, similar to the NEOs identified in the CD&A, directors are also subject to share ownership guidelines. Within 90 days of their election to your Board, a director must beneficially own a minimum of 100 shares of our common stock. Within five years of joining your Board, each director is required to own shares of our common stock with an aggregate value of at least six times the annual cash retainer (currently $600,000 in common stock). Each director has either attained the required share ownership guideline or is expected to attain the required share ownership guideline within the allotted amount of time. The share ownership guidelines are reviewed by the Compensation Committee for competitiveness on an annual basis and were last reviewed at the Compensation Committee’s July 2021 meeting.

982022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

For 2021, the following directly and indirectly held shares were included in determining whether a non-employee director met his/her ownership guidelines:

Shares directly or jointly owned in certificate form or in a stock investment plan;

Shares held individually or jointly by a broker, or, in certain circumstances, held in trust, or in an individual retirement account (“IRA”), shares held by a spouse, or other beneficially owned shares, to the extent known by the Company; and

All units held in the DDCP, discussed below, and units held in the Allegheny Energy, Inc. Non-Employee Director Stock Plan (“AYE Director’s Plan”) or the Allegheny Energy Inc. Amended and Restated Revised Plan for Deferral of Compensation of Directors (“AYE DCD”), which units are payable in shares.

Deferred Compensation Plan for Outside Directors

The DDCP is a nonqualified deferred compensation plan that provides directors the opportunity to defer compensation. Directors may defer up to 100 percent of their cash retainer into cash or stock accounts. Deferrals into the cash account can be invested in one of nine funds, similar to the investment funds available to all of our employees through the FirstEnergy Corp. Savings Plan, or in a Company-paid annually adjusted fixed income account. The Company paid interest at an annual rate of 4.11% on funds deferred into cash accounts beginning in 2013 and 6.11% on funds deferred into cash accounts prior to 2013. The interest rate received by the directors is the same rate received by all participants under the EDCP, as discussed further in the CD&A above.

For stock accounts, dividend equivalent units are accrued quarterly and applied to the directors’ accounts on each dividend payment date using the closing price of our common stock on that date. Payments made with respect to any dividend equivalent units that accrue after January 21, 2014, will be paid in cash.

Other Payments or Benefits Received by Directors

The corporate aircraft is available, when appropriate, for transportation to and from Board and committee meetings and training seminars. Mr. Misheff had the use of an office and administrative support with respect to carrying out his duties as non-executive Chair of the Board during his time serving in such role in 2021. We pay all fees associated with director and officer insurance and business travel insurance for our directors. In 2021, our directors were eligible to receive perquisites including limited personal use of corporate aircraft and matching charitable contributions, the collective value of which was less than $10,000 for each director, other than Mr. Misheff. Directors are responsible for paying all taxes associated with perquisites and personal benefits.

All directors have entered into written indemnification agreements, which are intended to secure the protection for our directors contemplated by our Amended and Restated Code of Regulations and Ohio law. Each indemnification agreement provides, among other things, that we will, subject to the agreement terms, indemnify a director if by reason of their corporate status as a director, the person incurs losses, liabilities, judgments, fines, penalties, or amounts paid in settlement in connection with any threatened, pending, or completed proceeding, whether of a civil, criminal, administrative, or investigative nature. In addition, each indemnification agreement provides for the advancement of expenses incurred by a director, subject to certain exceptions, in connection with proceedings covered by the indemnification agreement. As directors and officers, the agreements for Messrs. Somerhalder and Strah address indemnity in both roles.

FIRSTENERGY CORP.

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Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Security Ownership of Management

The following table shows shares of common stock beneficially owned (as beneficial ownership is defined in Rule13d-3 under the Exchange Act) as of March 6, 2020,18, 2022, by each director, director nominee, the NEOs, and all directors, director nominees and executive officers as a group.

 

Name

  Class of Stock  

Shares Beneficially

Owned(1)(2)

  

    Percent of    

Class(3)

Michael J. Anderson

 Common 1,000 *

Samuel L. Belcher

 Common41,60757,112 *

  Steven J. DemetriouJana T. Croom

 Common4,130 *

  Bennett L. GainesSteven J. Demetriou

 Common76,7814,130 *

  Julia L. JohnsonLisa Winston Hicks

 Common30,2562,551 *

  Charles E. JonesJulia L. Johnson

 Common693,39241,074 *

  Donald T. MisheffPaul Kaleta

 Common1002,051 *

  Thomas N. MitchellSean T. Klimczak

 Common7,665 *

  James F. O’Neil IIIJesse A. Lynn

 Common4,6043,220 *

  Christopher D. PappasDonald T. Misheff

 Common16,489100 *

  James F. PearsonThomas N. Mitchell

 Common196,8958,370 *

  Sandra PianaltoJames F. O’Neil III

 Common3,2625,028 *

  Robert P. ReffnerChristopher D. Pappas

 Common84,80616,489 *

  Luis A. ReyesHyun Park

 Common3319,399 *

  Steven E. StrahLuis A. Reyes

 Common70,391361 *

  Leslie M. TurnerJohn W. Somerhalder II

 Common4,49739,040 *

  Leila L. VespoliSteven E. Strah

 Common193,81798,085 *

K. Jon Taylor

Common24,510*

Andrew Teno

Common3,220*

Leslie M. Turner

Common4,497*

Melvin D. Williams

Common2,462*

All Directors and Executive Officers as a Group (20(23 people)

 Common1,523,865380,746 *(3)

(1) The amounts set forth in this column include any shares with respect to which the executive officer, NEO or director may directly or indirectly have sole or shared voting or investment power. The amounts also include stock options and/or shares that have been deferred as equivalent units under the AYE Director’s Plan and the AYE DCD of which the NEO or director has the right to acquire beneficial ownership within 60 days of March 18, 2022, and are as follows: Johnson: 23,451 shares. Unless otherwise noted below, each individual or member of the group has sole voting and investment power with respect to the shares beneficially owned.

(1)

The amounts set forth in this column include any shares with respect to which the executive officer, NEO or director may directly or indirectly have sole or shared voting or investment power. The amounts also include stock options and/or shares that have been deferred as equivalent units under the AYE Director’s Plan and the AYE DCD of which the NEO or director has the right to acquire beneficial ownership within 60 days of March 6, 2020, and are as follows: Johnson: 21,468 shares, Jones: 80,257 shares and all directors and executive officers as a group: 101,725 shares. Unless otherwise noted below, each individual or member of the group has sole voting and investment power with respect to the shares beneficially owned. The amount for Mr. Jones includes 10,363 shares in his wife’s FirstEnergy Corp. Savings Plan, for which he has shared voting and investment power.

(2)

Deferred shares and other amounts payable in stock under the DDCP are held as stock units and are not beneficially owned (as defined in Rule13d-3 under the Exchange Act) and are therefore not included in the table above. However, such stock units are counted for purposes ofnon-employee director share ownership guidelines. The stock unit holdings of the directors under the DDCP are as follows.

 

100Name2022 PROXY STATEMENT


Proxy
Summary

 

Director Deferred

Stock Units Payable in Stock    

  Michael J. AndersonCorporate
Governance & Board of Directors

 46,660

  Steven J. DemetriouItems to Be
Voted On

 7,295

  Julia L. JohnsonCommitments to

Employees & ESG

 42,983

  Donald T. MisheffExecutive

& Director Compensation

 29,687

  Thomas N. MitchellOther

14,163

  James F. O’Neil IIIImportant

10,123

  Christopher D. Pappas

36,579

  Sandra Pianalto

3,478

  Luis A. Reyes

24,831

  Leslie M. Turner

-

(3)

The percentage of shares beneficially owned by each director or executive officer, or by all directors and executive officers as a group, does not exceed one percent of the class.Matters / Q&A

 

96(2) Deferred shares and other amounts payable in stock under the DDCP are held as stock units and are not beneficially owned (as defined in Rule 13d-3 under the Exchange Act) and are therefore not included in the table above. However, such stock units are counted for purposes of   |  FirstEnergy Corp.2020 Proxy Statementnon-employee director share ownership guidelines. The stock unit holdings of the directors under the DDCP are as follows.

Name

Director Deferred Stock

Units Payable in Stock

Michael J. Anderson

55,167

Steven J. Demetriou

15,802

Julia L. Johnson

42,983

Donald T. Misheff

38,194

Thomas N. Mitchell

26,089

James F. O’Neil III

22,199

Christopher D. Pappas

45,086

Luis A. Reyes

33,338

Leslie M. Turner

8,507

(3) The percentage of shares beneficially owned by each director or executive officer, or by all directors and executive officers as a group, does not exceed one percent of the class.

FIRSTENERGY CORP.

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Corporate
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Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Security OwnershipofOwnership of Certain Beneficial Owners

The following table shows all persons who are known by the Company to be the beneficial owner (as beneficial ownership is defined in Rule13d-3 under the Exchange Act) of more than five percent of the outstanding shares of common stock of the Company as of March 6, 2020.18, 2022.

 

          

Voting Power

Number of Shares

 

Dispositive Power

Number of Shares

Name and

Address

of Beneficial

Owner

  

Shares

Beneficially

Owned

 

Percent of

Common

Shares

Outstanding(5)

 Sole Shared Sole Shared

The Vanguard Group (1)

100 Vanguard Blvd.

Malvern, PA 19355

  67,456,264 12.5% 947,747 270,557 66,438,661 1,017,603  

BlackRock Inc.(2)

55 East 52nd Street,

New York, NY 10055

  55,963,156 10.4% 51,673,618 0 55,963,156 0

Entities affiliated with State Street Corporation (3)

One Lincoln Street

Boston, MA 02111

  39,714,073 7.4% 0 35,372,209 0 39,640,082

Massachusetts Financial

Services Company(4)

111 Huntington Avenue,

Boston, MA 02199

  30,704,534 5.7% 29,609,120 0 30,704,534 0

Name and Address of Beneficial Owner

  

Shares

Beneficially

Owned

  

Percent of

Common

Shares

Outstanding(5)

 

Voting Power

Number of Shares

  

Dispositive Power

Number of Shares

 Sole  Shared  Sole  Shared

The Vanguard Group(1)

100 Vanguard Blvd.

Malvern, PA 19355

    63,771,524    11.71%       1,064,526    61,369,416    2,402,108

BlackRock Inc.(2)

55 East 52nd Street,

New York, NY 10055

    43,236,791    7.9%   38,020,124        43,236,791    

Entities affiliated with State Street Corporation(3)

One Lincoln Street

Boston, MA 02111

    40,509,615    7.44%       35,395,578        40,506,745

Blackstone Inc.(4)

345 Park Avenue,

New York, NY 10154

    28,832,099    5.3%   28,832,099        28,832,099    

(1)

Based solely on the most recently available Schedule 13G/A filed with the SEC on February 11, 2020.

(2)

Based solely on the most recently available Schedule 13G/A filed with the SEC on February 4, 2020.

(3)

Based solely on the most recently available Schedule 13G filed with the SEC on February 13, 2020.

(4)

Based solely on the most recently available Schedule 13G filed with the SEC on February 14, 2020.

(5)

Percentages of shares beneficially owned are as of December 31, 2019 and as reported on the applicable Schedule 13G or 13G/A

(1) Based solely on the most recently available Schedule 13G/A filed with the SEC on February 9, 2022.

97  |  FirstEnergy Corp.2020 Proxy Statement

(2) Based solely on the most recently available Schedule 13G/A filed with the SEC on February 1, 2022.


LOGO(3) Based solely on the most recently available Schedule 13G filed with the SEC on February 14, 2022.

(4) Based solely on the Schedule 13D filed with the SEC on December 23, 2021.

(5) Percentages of shares beneficially owned are as of December 31, 2021 and as reported on the applicable Schedule 13G or 13G/A.

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee during 20192021 were Steven J. Demetriou, Julia L. Johnson, James F. O’Neil III, Christopher D. Pappas, Sandra Pianalto, and Leslie M. Turner. No members of the Compensation Committee during 20192021 meet the criteria to be considered to have an interlock or insider participation relationship.

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Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Certain RelationshipsandRelationships and Related Person Transactions

Based on our size and varied business operations, we may engage in transactions with companies and other organizations in which a member of your Board, executive officer, or such person’s immediate family member also may be a board member, executive officer, or significant investor. In some of these cases, such person may have a direct or indirect material interest in the transaction with the Company. We recognize that related person transactions have the potential to create perceived or actual conflicts of interest and could create the appearance that decisions are based on considerations other than the best interests of the Company and its shareholders. Accordingly, as a general matter, it is our preference to avoid related person transactions. However, there are situations where related person transactions may be in, or may not be inconsistent with, the best interests of the Company and its shareholders. Your Board has determined that it is appropriate and necessary to have a process in place to identify and provide proper review of any related person transactions.

Based on the foregoing, your Board established a written Related Person Transactions Policy (the “Policy”) that has been implemented by the Corporate Governance and Corporate Responsibility Committee in order to effectuate the review, approval, and ratification process surrounding related person transactions. This Policy supplements the Company’s otherconflict-of-interest policies set forth in the FirstEnergyConflicts-of-Interest Policy and Code of Business Conduct, and the Board of Directors Code of Ethics and Business Conduct. Related person transactions may be entered into or continued only if a majority of the disinterested members of the Corporate Governance and Corporate Responsibility Committee or your Board approves or ratifies the transaction in accordance with the Policy. The Chair of the Corporate Governance and Corporate Responsibility Committee also has the delegated authority between meetings to review and determine whether a transaction should be approved or ratified in accordance with the Policy. In making its decisions, the Corporate Governance and Corporate Responsibility Committee, Chair of the Corporate Governance and Corporate Responsibility Committee or your Board will review current and proposed transactions by taking into consideration the Policy, which includes the definitions and terms set forth in Item 404 ofRegulation S-K.

As part of the Policy, our management established review procedures for any transaction, proposed transaction or any material amendment to a transaction, in which we are currently, or in which we may be, a participant in which the amount exceeds $120,000, and in which the related person, as defined in Item 404 ofRegulation S-K, had or will have a direct or indirect material interest. We also established proceduresIn early 2021, our directors, our new director nominee and current executive officers completed a questionnaire to allow us to identify suchassist your Company in identifying and assessing any potential related person transactions. For the three former executive officers, this review was based on their most recent questionnaire completed in early 2020. Your Company facilitates the review by examining its financial records based on responses to the questionnaires. Any known related entities of the related persons are identified as such in the applicable computer system so that necessary business units are made aware of a potential related person transaction or proposed transaction involving the Company and a related entity. As applicable, management brings transactions to the attention of the Corporate Governance and Corporate Responsibility Committee, Chair of the Corporate Governance and Corporate Responsibility Committee or your Board for its review, approval or ratification.

When reviewing a transaction, the Corporate Governance and Corporate Responsibility Committee, Chair of the Corporate Governance and Corporate Responsibility Committee or your Board reviews the material facts of the related person’s relationship to the Company, and his or her interest in the transaction, as well as the aggregate value of such transaction to the Company. Since January 1, 2019,2021, we participated in the transactions described below, in which the amount involved exceeded $120,000 and in which any Board member, Board member nominee, executive officer, beneficial owner of more than five percent of our common stock, or a member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest. Pursuant to the terms of the Policy, your Board’s Corporate Governance and Corporate Responsibility Committee and/or the Chair of the Corporate Governance and Corporate Responsibility Committee ratified and approved the transactions described below.

98  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Mr. GaryKenneth A. ChackStrah currently serves the Company as a Staff Environmental Coordinator. Mr. Gary A. Chack has been employed by the Company since 2005. Mr. Gary A. Chack is the brother of Mr.ok, Dennis M. Chack whoVice President, Customer Operations. He was an executive officer of the Company through July 16, 2019. From January 1, 2019 through March 6, 2020, Mr. Gary A. Chack was paid compensation in the aggregate amount of approximately $145,400, which consisted of base salary and the FE STIP paid in 2020 for 2019 performance. Mr. Gary A. Chack’s compensation is consistent with the terms of the Company’s compensation programs. No direct reporting relationship exists between Mr. Gary A. Chack and Mr. Dennis M. Chack.

Mr. James A. Jones serves the Company as a Distribution Technician. Mr. James A. Jones has been employed by the Company since 2005. Mr. James A. Jones is the brother of Mr. Charles E. Jones who is the Company’s CEO. From January 1, 2019 through March 6, 2020, Mr. James A. Jones was paid compensation in the aggregate amount of approximately $133,500, which consisted of base salary, overtime and the FE STIP paid in 2020 for 2019 performance. Mr. James A. Jones’ compensation is consistent with the terms of the Company’s compensation programs. No direct reporting relationship exists between Mr. James A. Jones and Mr. Charles E. Jones.

Ms. Carly M. Lange serves the Company as a Supervisor of Workforce Development Process and Systems Training. Ms. Carly M. Lange has been employed by the Company since 2014. Ms. Carly M. Lange is the daughter of Mr. Charles E. Jones who is the Company’s CEO. From January 1, 2019 through March 6, 2020, Ms. Carly M. Lange was paid compensation in the aggregate amount of approximately $139,600, which consisted of base salary, overtime and the FE STIP paid in 2020 for 2019 performance. Ms. Carly M. Lange’s compensation is consistent with the terms of the Company’s compensation programs. No direct reporting relationship exists between Ms. Carly M. Lange and Mr. Charles E. Jones.

Mr. Kenneth A. Strah serves the Company as apromoted from his prior Director of Customer Contact Centers. Mr. Kenneth A. StrahCenters position in 2021 and has been employed by the Company since 1980. Mr. Kenneth A. Strah is the brother of Mr. Steven E. Strah who is an executive officer of the Company.Company’s President and CEO, and a Director. From January 1, 20192021 through

FIRSTENERGY CORP.

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Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

March 6, 2020,18, 2022, Mr. Kenneth A. Strah received compensation in the aggregate amount of approximately $316,600,$414,000, which consisted of base salary, the FE STIP paid in 20202022 for 20192021 performance and the grant date value of performance-adjusted RSUs granted in 20182021 under the FE LTIP. Mr. Kenneth A. Strah’s compensation is consistent with the terms of the Company’s compensation programs. No direct reporting relationship exists between Mr. Kenneth A. Strah and Mr. Steven E. Strah.

During 2019,2021, two providers of services to the Company were also beneficial owners of at least 5% of our common stock: BlackRock, Inc. (“BlackRock”) and State Street Corporation (“State Street”). Their fees are unrelated to their common stock ownership, resulted fromarm’s-length negotiations, and are reasonable in amount and reflect market terms and conditions. The Company does not believe BlackRock or State Street have any direct or indirect material interest in the transactions as a result of such services. The nature and value of services provided by these 5% shareholders and their affiliates are described below.

 

Affiliates of BlackRock provided asset management services for certain assets under our FirstEnergy Corp. Pension Plan and a trust associated with certain Company employee benefit plans and received approximately $684,000 in fees from the Company from January 1, 2021 through March 18, 2022 for such services.

Affiliates of State Street provided asset management and trustee services relating to the FirstEnergy Corp. Amended and Restated Executive Deferred Compensation Plan and a trust associated with certain Company employee benefit plans and received approximately $183,000 in fees from January 1, 2021 through March 18, 2022 for such services.

Related Person Transactions involving the Icahn Group

On March 16, 2021, the Company entered into the Director Nomination Agreement with the Icahn Group. Pursuant to the Agreement, the Board agreed to, effective as of BlackRock provided asset management servicesMarch 18, 2021: (i) increase the size of the Board from 12 to 14 directors, resulting in a total of two vacancies; and (ii) appoint the Icahn Designees to serve as directors of the Company to fill such vacancies, each with a term expiring at the 2021 Annual Meeting. The Company also agreed to nominate each of the Icahn Designees for election as directors of the Company at the 2021 Annual Meeting, and to use its reasonable best efforts (including the solicitation of proxies) to obtain the election of each of the Icahn Designees at the 2021 Annual Meeting. Mr. Teno was appointed to serve as a member of the Board’s Audit Committee and its sub-committee overseeing the assessment and implementation of potential changes in FirstEnergy’s compliance program, as well as the Finance Committee. Mr. Lynn was appointed to serve as a member of the Board’s Independent Review Committee and the Demand Review Committee and the Corporate Governance Committees. Following the dissolution on June 30, 2021, of the Board’s Independent Review Committee and the Demand Review Committee, Mr. Lynn was appointed to serve on the Special Litigation Committee.

In addition, the agreement provides that until March 1, 2022, the Company and the Icahn Group shall each use all reasonable efforts (including the exhaustion of all available appeals processes) to, among other matters, obtain all Regulatory Approvals (as defined in the Director Nomination Agreement) necessary to permit the Icahn Designees (and any replacement designees) to remain a director of the Company (or to rejoin the Board, as applicable), to vote at meetings of the Board or any Board committee and to take the other actions contemplated by the Director Nomination Agreement. Until such time as all Regulatory Approvals are obtained, no Icahn Designee (or replacement designee) serving as a member of the Board will have the right to vote at any meeting of the Board or any Board committee. Messrs. Lynn and Teno remain non-voting directors of the Board, but are awaiting resolution of certain assetsproceedings before the Maryland PSC that remain ongoing as of March 23, 2022. The Company remains committed to continue all reasonable efforts to favorably resolve the Maryland proceedings.

In connection with their appointment to the Board, the Board determined that each of Mr. Teno and Mr. Lynn qualifies as an independent director under our FirstEnergy Corp. Pension Planthe listing rules of the New York Stock Exchange. The Icahn Designees will receive the same compensation as the Company’s other non-employee directors. The Company has also entered into a Director and Officer Indemnification Agreement with each of Mr. Teno and Mr. Lynn.

In the event the Icahn Designees are unable or otherwise cease to serve on the Board, the Director Nomination Agreement provides a trust associated with certainmechanism for the Icahn group to designate a substitute director acceptable to the Board to be appointed to the Board for the remainder of the term of such Icahn Designee.

If at any time the Icahn Group ceases to hold a “net long” position (as defined in the Director Nomination Agreement) in at least: (i) three percent (3%) of the total outstanding common shares of the Company, employee benefit plans and received approximately $812,000 in feesthe Icahn Group will cause one Icahn Designee to promptly resign from the Company from January 1, 2019 through March 6, 2020 for such services.Board and any committee of the Board on which he or she then sits; and (ii) one and one-half percent

 

Affiliates of State Street provided asset management and trustee services relating to the FirstEnergy Corp. Amended and Restated Executive Deferred Compensation Plan and a trust associated with certain Company employee benefit plans and received approximately $129,500 in fees from January 1, 2019 through March 6, 2020 for such services.

99  |  FirstEnergy Corp.2020 Proxy Statement

1042022 PROXY STATEMENT


LOGO

Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

Questions(1.5%) of the total outstanding common shares of the Company, the Icahn Group will cause each Icahn Designee to promptly resign from the Board and Answersaboutany committee of the Board on which he or she then sits.

Further, during the applicable term of the Director Nomination Agreement, the Company has generally agreed (i) not to create a separate executive committee of the Board or any other committee with functions similar to those customarily granted to an executive committee, (ii) not to form any new committee without offering at least one Icahn Designee the opportunity to be a member of such committee, and (iii) that, with respect to any Board consideration of appointment and employment of named executive officers, specified transactions, and certain other matters such voting with respect thereto shall take place only at the full Board level or in committees of which one of the Icahn Designees is a member.

From the date of the Director Nomination Agreement until the later of (i) 30 days before the last day of the nomination deadline for shareholders to nominate candidates for the annual meeting following the Annual Meeting and (ii) 30 days after such date as no Icahn Designee is on the Board and the Icahn Group has no right to designate a replacement designee (such period, the “Standstill Period”), the Icahn Group has agreed to vote all common shares of the Company that it or its affiliates have the right to vote in favor of the election of directors nominated and recommended by the Board for election and otherwise in accordance with the recommendations of the Board, subject to certain exceptions and early termination upon certain specified events. The Icahn Group has also agreed to certain customary standstill and mutual non-disparagement restrictions during the Standstill Period, subject to certain exceptions and early termination upon certain specified events. In addition, as long as the Icahn Group has a “net long” position, as defined in the Director Nomination Agreement, in at least one and one-half percent (1.5%) of the total outstanding common shares of the Company, the Company will not adopt a rights plan designed to increase the cost to a potential acquirer which includes a triggering threshold below 10.0% of the then-outstanding common stock through the issuance of new rights, common stock or preferred shares, unless such rights plan exempts the Icahn Group up to a beneficial ownership of 9.99%. The Director Nomination Agreement will terminate and be of no further force or effect at such time, if any, following the 2021 Annual Meeting that (i) no Icahn Designee serves on the Board and (ii) the Icahn Group is no longer entitled to designate a replacement designee for any Icahn Designee; except that the customary standstill and mutual non-disparagement restrictions will terminate at the end of the Standstill Period.

Pursuant to the Director Nomination Agreement, the Company and the Icahn Group also entered into a confidentiality agreement and agreed to negotiate in good faith and enter into a customary registration rights agreement by no later than July 1, 2021, with respect to the common shares of the Company beneficially owned by the Icahn Group. To date, the parties have not entered into a registration rights agreement.

Proxy MaterialsRelated Person Transactions involving the Blackstone Group L.P.

On November 6, 2021, the Company entered into Common Stock Purchase Agreement (the “Blackstone PSA”) with BIP Securities II-B L.P., an affiliate of Blackstone Infrastructure Partners L.P. (“Blackstone”), for the private placement of 25,588,535 shares of the Company’s common stock at a price of $39.08 per share (the “Private Placement”). Pursuant to the Blackstone PSA, and for so long as Blackstone beneficially owns at least 75% of the shares of common stock acquired by it at the closing of the Private Placement (such period, the “Nomination Period”), Blackstone will have the right to nominate one natural person for election to the Board (the “Blackstone Nominee”) and the Company will: (i) upon the occurrence of a vacancy on the Board during the Nomination Period, if the Blackstone Nominee is not then serving as a member of the Board, cause the Blackstone Nominee to be appointed to the Board; and (ii) in connection with each annual meeting of the stockholders of the Company at which directors are generally elected during the Nomination Period, (A) include the Blackstone Nominee as a nominee for election to the Board; (B) include the Blackstone Nominee in the Company’s notice of annual meeting (or any supplement thereto); (C) not nominate more nominees than the number of persons to be elected to the Board at such meeting (which amount shall include the Blackstone Nominee); and (D) use reasonable best efforts to cause the election of the Blackstone Nominee so nominated by the Company (including by (x) recommending that the Company’s stockholders vote in favor of the election of the Investor Nominee and (y) otherwise support the Investor Nominee for election in a manner no less rigorous and favorable than the manner in which the Company supports its other nominees in the aggregate). Pursuant to the Blackstone PSA and Blackstone’s recommendation, the Board has agreed to nominate Mr. Sean Klimczak for election as a director of the Company at the Annual Meeting.

In addition, the Company and Blackstone will each use reasonable best efforts (including the exhaustion of all available appeals processes) to, as promptly as practicable, among other matters, obtain all Regulatory Approvals (as defined in the Blackstone PsA) necessary to permit Mr. Klimczak to remain a director of the Company (or to rejoin the Board, as applicable), to vote at meetings of

 

FIRSTENERGY CORP.

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Q: 

Corporate
Governance & Board of Directors

 

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

the Board or any Board committee and to take the other actions contemplated by the Blackstone PSA. Until such time as all Regulatory Approvals are obtained, no Blackstone Nominee serving as a member of the Board will have the right to vote at any meeting of the Board or any Board committee.

In connection with his nomination to stand for election as a director of the Company at the Annual Meeting, the Board determined that Mr. Klimczak qualifies as an independent director under the listing rules of the New York Stock Exchange. If elected, Mr. Klimczak will receive the same compensation as the Company’s other non-employee directors. The Company will also enter into a Director and Officer Indemnification Agreement with Mr. Klimczak, if elected.

In the event the Blackstone Nominee is elected and subsequently becomes unable or otherwise ceases to serve on the Board, the Blackstone PSA provides a mechanism for Blackstone to designate a substitute director acceptable to the Board to be appointed to the Board for the remainder of term of the Blackstone Nominee.

In the event that Blackstone ceases to beneficially own at least 75% of the shares of Common Stock acquired by it at the closing of the Private Placement, if requested by the Board, Blackstone shall cause the Blackstone Nominee to immediately resign from the Board.

1062022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Audit Committee Report

The Audit Committee of your Board is charged with assisting your full Board in fulfilling its oversight responsibility with respect to the quality and integrity of the accounting, auditing, and financial reporting practices of the Company. The Audit Committee acts under a written charter that is reviewed annually, revised as necessary, and is approved by your Board. The charter specifies that the Audit Committee is directly responsible for the appointment, compensation and retention of, and the oversight of the work and pre-approval of all services provided by the Company’s independent registered public accounting firm, which was PricewaterhouseCoopers LLP during 2021. In connection with the Audit Committee’s approval of any non-audit services, the Audit Committee considers whether the independent registered public accounting firm’s performance of any non-audit services is compatible with the independent auditor’s independence.

As part of the Audit Committee’s annual auditor engagement process, the Audit Committee considers whether to rotate the independent registered public accounting firm. The Audit Committee also participates in the selection of and ensures the regular rotation of the lead audit partner and concurring partner of the Company’s independent registered public accounting firm every five years. PricewaterhouseCoopers LLP has been the Company’s independent auditor since 2002. The Audit Committee currently believes that there are benefits to having an independent auditor with an extensive history with the Company. In connection with its auditor engagement process, the Audit Committee considers the continued independence of PricewaterhouseCoopers LLP and considers the benefits including: quality audit work and accounting advice due to PricewaterhouseCoopers LLP’s institutional knowledge of our business and operations, accounting policies and financial systems, and internal control framework; knowledge of the utility industry; and operational efficiencies and a resulting lower fee structure because of PricewaterhouseCoopers LLP’s history and familiarity with our business. Using a framework developed by management, the Audit Committee also assesses the appropriateness and reasonableness of PricewaterhouseCoopers LLP’s fees relative to the Company’s business needs and as compared to fees incurred by peer companies of comparable financial statement risk, size and complexity of business and related internal control environment.

In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In performing its review, the Audit Committee discussed the propriety of the application of accounting principles by the Company, the reasonableness of significant judgments and estimates used in the preparation of the financial statements, and the clarity of disclosures in the financial statements.

The Audit Committee reviewed and discussed with the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, their opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States. This discussion covered the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC.

The Audit Committee received the written disclosures and the letter from the independent registered public accounting firm regarding their independence from the Company as required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence and discussed with the independent registered public accounting firm such firm’s independence.

The Audit Committee discussed with the Company’s internal auditors and independent registered public accounting firm the overall scope, plans, and results of their respective audits. The Audit Committee met with the internal auditors and independent registered public accounting firm, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting process.

Based on the above reviews and discussions, the Audit Committee recommended to your Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for filing with the SEC.

Audit Committee Members: Michael J. Anderson (chair), Donald T. Misheff, Andrew Teno and Leslie M. Turner.

FIRSTENERGY CORP.

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Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Matters Relating to the Independent Registered Public Accounting Firm

Audit Fees

The following is a summary of the fees paid by the Company to its independent registered public accounting firm, PricewaterhouseCoopers LLP, for services provided to the Company and its reporting subsidiaries during the years 2021 and 2020.

PricewaterhouseCoopers LLP billed the Company an aggregate of $8,189,418 in 2021 and $8,107,172 in 2020 in fees for professional services rendered for the audit of the Company’s annual financial statements and the review of the financial statements included in each of the Company’s Quarterly Reports on Form 10-Q, services that are normally provided in connection with statutory and regulatory filings or engagements, audit-related services and non-audit-related services as noted below.

    Fees for Audit Year 2021   Fees for Audit Year 2020 

Audit Fees(1)

  $7,902,423   $7,882,000 

Audit Related Fees

  $   $ 

Tax Fees

  $   $ 

All Other Fees(2)

  $286,995   $225,172 

Total

  $8,189,418   $8,107,172 

(1) Professional services rendered for the audits of FirstEnergy’s annual financial statements and reviews of unaudited financial statements included in FirstEnergy’s Quarterly Reports on Form 10-Q and for services in connection with statutory and regulatory filings or engagements, including comfort letters, agreed upon procedures and consents for financings and filings made with the SEC.

(2) All other fees primarily reflect certain costs incurred as a result of the ongoing SEC investigation, software subscription fees, and accounting research license costs in 2021 and 2020. 2021 also includes fees for ESG metric and reporting assessment, and 2020 also includes fees for system implementation quality assurance services.

The Audit Committee has considered whether any non-audit services rendered by the independent registered public accounting firm are compatible with maintaining its independence. The Audit Committee, in accordance with its charter and in compliance with all applicable legal and regulatory requirements promulgated from time to time by the NYSE and SEC, has a policy under which the independent registered public accounting firm cannot be engaged to perform non-audit services that are prohibited by these requirements. The charter further states that any engagement of the independent registered public accounting firm to perform other audit-related or any non-audit services must have approval in advance by the Chair of the Audit Committee upon the recommendation of the Vice President, Controller and Chief Accounting Officer. Such approved engagement is then presented to the Audit Committee at its next regularly scheduled meeting. All audit and non-audit services provided by PricewaterhouseCoopers LLP in 2021 and 2020 were pre-approved.

1082022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

Questions and Answers about the Annual Meeting

Proxy Materials

Q: Why did I receive these proxy materials?

 A: 

You received these proxy materials because you were a shareholder of record or beneficial owner (as defined below) of shares of common stock of FirstEnergy Corp. as of the close of business on March 20, 2020,18, 2022, the record date (the “Record Date”). The Annual Meeting will be held on Tuesday, May 19, 2020.17, 2022. We began distributing these proxy materials to shareholders on or about April 1, 2020.March 23, 2022

 

2

 

 

Q: 

 What is the difference between holding shares as a “shareholder of record” and holding shares in “street name” or as a “beneficial owner”?
 

A:

 

Shareholder of Record: If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC (“AST”), you are a shareholder of record of the shares. As the shareholder of record, you have the right to vote your shares directly or to grant a proxy to vote your shares to a representative of the Company or to another person. As a record holder you have received either a proxy card to use in voting your shares or a Notice of Internet Availability which instructs you how to vote.

  

Beneficial Owner: If your shares are held for you in a brokerage, bank or other institutional account, it is likely that you are the beneficial owner of shares, meaning that you hold shares in “street name.” You are also a beneficial owner if you own shares through the FirstEnergy Corp. Savings Plan (the “Savings Plan”).

  

As a beneficial owner of shares, you have the right to direct the registered holder to vote your shares, and you may attend the Annual Meeting (please see the “Attending the Virtual Annual Meeting” section of the “Questions and Answers about the Annual Meeting” below for instructions on how to register in advance). Your bank, broker or other institution has provided a voting instruction form for you to use in directing how your shares are to be voted. However, since a beneficial owner is not the shareholder of record, you may not vote your shares in personvirtually at the Annual Meeting unless you obtain a legal proxy from the registered holder of the shares giving you the right to do so. IfAdditionally, if you are a Savings Plan participant, because the Savings Plan’s Trustee is the only one who can vote your Savings Plan shares, you cannot vote your Savings Plan shares in personvirtually at the Annual Meeting (although you may attend the Annual Meeting by following the instructions on how to register in advance in the “Attending the Virtual Annual Meeting” section of the “Questions and Answers about the Annual Meeting” below).

 

3

 

 

Q: 

 Can I view future FirstEnergy proxy materials and annual reports on the Internet instead of receiving paper copies?
 

A:

 

Yes. If you received paper copies of this proxy statement and the annual report and you are a shareholder of record, you can elect to view future proxy statements and annual reports on the Internet by marking the designated box on your proxy card or by following the instructions when voting by Internet or by telephone. If you choose this option, prior to the next annual meeting, you will be mailed a paper copy of the proxy card along with instructions on how to access the proxy statement and annual report using the Internet unless applicable regulations require delivery of printed proxy materials. Your choice will remain in effect until you notify us that you wish to resume mail delivery of these documents.

  

If you previously elected to access your proxy materials over the Internet, you will not receive the Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) or paper copies of proxy materials in the mail unless required by law. Instead, you will receive a paper copy of the proxy card along with instructions on how to access the proxy statement and annual report using the Internet.

 

100  |  FirstEnergy Corp.2020 Proxy Statement

FIRSTENERGY CORP.

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Summary

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Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

  If you received a Notice of Internet Availability, you may not receive printed copies of proxy statements and annual reports in the future unless required by law. However, you may elect to be mailed a paper proxy card with instructions on how to access proxy statements and annual reports using the Internet for future meetings by following the instructions when voting. The Notice of Internet Availability also contains instructions on how you may request delivery of proxy materials in printed form for the Annual Meeting or on an ongoing basis, if desired.
  

If you are a beneficial owner, refer to the information provided by your broker, bank or other nominee for instructions on how to elect to view future FirstEnergy proxy statements and annual reports on the Internet instead of receiving paper copies.

 

 

 

Q: 

 

 Why did I receive aone-page notice in the mail regarding the Internet availability of proxy materials instead of receiving a full set of printed proxy materials?
 

A:

 

To reduce the environmental impact and related costs of the Annual Meeting, we are pleased to again furnish the proxy materials over the Internet. As a result, we are sending a number of our shareholders a Notice of Internet Availability instead of a printed copy of the proxy materials. All shareholders receiving the Notice of Internet Availability will have the ability to access the proxy materials and vote via the Internet and to request a printed copy of the proxy materials by mail, if desired. Instructions on how to access the proxy materials over the Internet, to vote online, and to request a printed copy may be found in the Notice of Internet Availability. The Notice of Internet Availability identifies the items to be voted on at the Annual Meeting, but shares cannot be voted by marking, writing on and/or returning the Notice of Internet Availability. Any Notice of Internet Availability that is returned will not be counted as votes. In addition, the Notice of Internet Availability contains instructions on how you may request delivery of proxy materials in printed form for this Meeting or on an ongoing basis, if desired.

 

 

 

Q: 

 

 Why did we receive just one copy of the proxy statementProxy Statement and annual report when we have more than one stock account in our household?
 

A:

 

Where possible, we follow the SEC rule that permits us to send one copy each of this proxy statementProxy Statement and the annual report to a household if shareholders provide written or implied consent. We previously mailed a notice to eligible registered shareholders stating our intent to use this rule unless a shareholder provided an objection. Using this rule reduces unnecessary publication and mailing costs. Shareholders continue to receive a separate proxy card or opportunity to vote via the Internet, as applicable, for each stock account. If you are a registered shareholder and received only one copy each of the proxy statementProxy Statement and the annual report in your household, you can request additional copies for some or all accounts for this year or in the future, either by calling Shareholder Services at1-800-736-3402 or by writing to FirstEnergy Corp., c/o American Stock Transfer Transfer��& Trust Company, LLC, P.O. Box 2016, New York, NY 10272-2016, and we will promptly deliver the requested copies. You also may contact us in the same manner if you are receiving multiple copies of this proxy statementProxy Statement and/or the annual report in your household and desire to receive one copy. If you are not a registered shareholder and your shares are held by a bank, broker, or other institution you will need to contact such bank, broker, or other institution to revoke your election and receive multiple copies of these documents.

 

 

 

Q: 

 

 Who is soliciting my vote, how are proxy cards being solicited, and what is the cost?
 

A:

 

Your Board is soliciting your vote. We have arranged for the services of Morrow Sodali LLC to solicit votes personally or by telephone, mail, or other electronic means for a fee not expected to exceed $19,250, plus reimbursement of reasonable expenses. Votes also may be solicited in a similar manner by officers and employees of the Company and members of your Board on an uncompensated basis. The Company will pay all reasonable solicitation costs and will reimburse banks, brokers or other nominees for postage and expenses incurred by them for sending proxy materials to beneficial owners.

1102022 PROXY STATEMENT


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

101  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Voting Matters

 

7

 

 

Q:

 

 What items of business will be voted on at the Annual Meeting and how does the Board recommend that I vote?
 

 

A:

 

 

ItemBrief DescriptionBoard’s
Recommendation
 
ItemBrief Description

 

Board’s
Recommendation

1

  

 

Elect the 1112 nominees named in this proxy statementProxy Statement to the Board of Directors

  

 

“FOR”

each director
nominee

 

2

  Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 20202022   “FOR”
 

3

  Approve, on an advisory basis, named executive officer compensation   “FOR”
 

4

  ApproveShareholder Proposal Requesting a Report Relating to Electric Vehicles and Charging Stations with Regards to Child Labor Outside of the FirstEnergy Corp. 2020 Incentive Compensation PlanUnited States  X “FOR” “AGAINST”
 

5

Approve a management proposal to amend the Company’s Amended and Restated Code of Regulations to authorize the Board of Directors to make certain future amendments to the Company’s Amended and Restated Code of Regulations “FOR”
6

  Shareholder Proposal Requesting Removal of Aggregation Limit for Proxy Access GroupsRegarding Special Shareholder Meetings  X “AGAINST”

 

8

 

 

Q:

 

 What is a quorum and what other voting information should I be aware of?
 

 

A:

 

 

As of the Record Date, 541,732,438570,902,656 shares of our common stock were outstanding. A majority of these shares represented at the Annual Meeting either in personvirtually or by proxy constitutes a quorum. A quorum is required to conduct business at the Annual Meeting. All shares represented at the Annual Meeting are counted for the purpose of determining a quorum. You are entitled to one vote for each share of common stock you owned on the Record Date.

 

A brokernon-vote occurs when an entity holding shares in street name, such as a bank or broker, submits a proxy for your shares but does not indicate a vote for a particular“non-routine” proposal (such as Items 1, 3, 4 and 3 – 6)5) because your broker does not have the authority to vote on that proposal and has not received specific voting instructions. If you are a beneficial owner, we encourage you to provide instructions to your bank, broker, or other institution by executing the voting form supplied to you by that entity. Pursuant to applicable rules, if your shares are held in a broker account, you must provide your broker with voting instructions for all matters to be voted on at the Annual Meeting except on Item 2. A broker will be permitted to vote your shares on Item 2 without your instructions because Item 2 is considered a “routine” matter under applicable NYSE rules; however, your broker cannot vote your shares on any other items unless you provide instructions because such other items are deemed to be“non-routine” matters under NYSE rules. Therefore, your failure to give voting instructions means that your shares will not be voted on any“non-routine” items and, as applicable, your unvoted shares will be brokernon-votes.

 

An item to be voted on may require a percentage of votes cast, rather than a percentage of shares outstanding, to determine passage or failure. Except for Item 4, votesVotes cast is defined to include both “For” and “Against” votes and excludes abstentions and brokernon-votes. For Item 4, the affirmative vote of a majority of the votes cast is required to approve the FirstEnergy Corp. 2020 Incentive Compensation Plan. Under NYSE requirements for the approval of such equity plans, abstentions will be counted and have the same effect as an “Against” vote and brokernon-votes will have no effect.

102  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

 

If you properly sign and return your proxy card but your proxy card is not completed properly, such as marking more than one box for an item, your vote for that particular item will be treated as an abstention.

 

FIRSTENERGY CORP.

111


Proxy
Summary

Corporate
Governance & Board of Directors

Items to Be
Voted On

Commitments to

Employees & ESG

Executive

& Director Compensation

Other

Important

Matters / Q&A

 

9

 

 

Q:

 

 What is the vote required for each item to be voted on at the Annual Meeting?
 

A:

 

 

ItemBrief DescriptionVote Required Brief DescriptionVote RequiredTreatment of
Abstentions
and Broker
Broker Non-Votes
   

1

 Elect the 1112 nominees named in this proxy statementProxy Statement to the Board of Directors 

Nominees receiving more “For” votes than “Against” votes (among votes properly cast in personvirtually or by proxy) will be elected.

 

As further described in Item 1 above, any nominee for director who receives a greater number of votes “Against” than votes “For” his or her election must promptly tender his or her resignation to the Corporate Governance and Corporate Responsibility Committee following certification of the shareholder vote.

 No effect.
   

2

 Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 20202022 Requires the affirmative vote of a majority of votes cast. 

Abstentions – No effect.

 

BrokerNon-votes – Not applicable.

   

3

 Approve, on an advisory basis, named executive officer compensation This advisory proposal requires the affirmative vote of a majority of the votes cast. No effect.
   

4

 ApproveShareholder Proposal Requesting a Report Relating to Electric Vehicles and Charging Stations with Regards to Child Labor Outside of the FirstEnergy Corp. 2020 Incentive Compensation PlanUnited States Requires

The non-binding shareholder proposal requires the affirmative vote of a majority of votes cast.

Notwithstanding the results of the shareholder vote, the ultimate adoption of any measures called for by the shareholder proposal is at the discretion of your Board.

 Under NYSE requirements for the approval of equity plans, abstentions will be counted and have the same effect as an “Against” vote and brokernon-votes will have noNo effect.
   

5

Approve a management proposal to amend the Company’s Amended and Restated Code of Regulations to authorize the Board of Directors to make certain future amendments to the Company’s Amended and Restated Code of RegulationsRequires the affirmative vote of a majority of the voting power of the Company (i.e., outstanding common shares).Have the same effect as an “Against” vote.
6

 Shareholder Proposal Requesting Removal of Aggregation Limit for Proxy Access GroupsRegarding Special Shareholder Meetings 

Thenon-binding shareholder proposal requires the affirmative vote of a majority of votes cast.

 

Notwithstanding the results of the shareholder vote, the ultimate adoption of any measures called for by the shareholder proposal is at the discretion of your Board.

 No effect.

 

103  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

10 

 

 

Q: 

 

  Will any other matters be voted on other than those described in this proxy statement?Proxy Statement?
 

 

A:

  

 

We do not know of any business that will be considered at the Annual Meeting other than the matters described in this proxy statement.Proxy Statement. However, if other matters are presented properly, your executed appointment of a proxy will give authority to the appointed proxies to vote on those matters at their discretion, unless you indicate otherwise in writing.

 

11 

 

 

Q: 

 

  Where can I find the voting results of the Annual Meeting?
 

 

A:

  

 

We will announce preliminary voting results at the Annual Meeting. Final voting results will be reported in a Current Report onForm 8-K, which is required to be filed with the SEC within four business days after the date of the Annual Meeting and will be posted on our website athttps://investors.firstenergycorp.com/then by selecting “SEC Filings & Reports.” You may also automatically receive the Company’s SEC filings (which include alerts for the filing ofForm 8-Ks by the Company with the SEC) viae-mail by visiting our website athttps://investors.firstenergycorp.com/EmailNotification and selecting “Enable document alerts.“Company Documents.

 

1122022 PROXY STATEMENT


Proxy

Summary

Corporate

Governance &

Board of Directors

Items to Be

Voted On

Commitments to

Employees & ESG

Executive

& Director

Compensation

Other

Important

Matters / Q&A

How You Can Vote

 

12 

 

Q: 

  Who is entitled to vote at the Annual Meeting?
 

 

A:

  

 

Shareholders of record of FirstEnergy common stock as of the Record Date are entitled to receive notice of the Annual Meeting and vote their shares. If you plan to attend the Annual Meeting, please see the “Attending the Virtual Annual Meeting” section below of these “Questions and Answers about the Annual Meeting” for instructions on how to register in advance.

 

13 

 

Q: 

  

How do I vote?

 

 

A:

  

 

As further described below, if you are voting by Internet, telephone or mail, your vote must be received by 6:00 a.m., Eastern time,EDT, on Tuesday, May 19, 2020,17, 2022, to be counted in the final tabulation, except for shares held by participants in the FirstEnergy Corp. Savings Plan. If you are a participant in the FirstEnergy Corp. Savings Plan, your vote on shares held through the FirstEnergy Corp. Savings Plan must be received by 6:00 a.m., Eastern time,EDT, on Monday, May 18, 2020,16, 2022, to be counted in the final tabulation.Beneficialtabulation.Beneficial owners (other than participants in the FirstEnergy Corp. Savings Plan) will receive instructions from the holder of record (the bank, broker, institution or other nominee that holds your shares) that you must follow for your shares to be voted.

 

LOGO

LOGO

LOGO

Do you hold shares directly with FirstEnergy or in the FirstEnergy Corp. Savings Plan?

Use theinternet at
www.cesvote.com

LOGO 

 

Call toll-free at
1-888-693-8683INTERNET

LOGO 

 

MAIL

Use the internet at www.cesvote.comMail by returning your proxy card/
voting instruction form(1)

Do you hold shares through a bank, broker or other institution (beneficial ownership)?(2)

Use theinternet at
www.proxyvote.com

LOGO 

 

Call toll-free at
1-800-454-8683TELEPHONE

LOGO 

 

MailDURING THE MEETING by returning

Call toll-free at 1-888-693-8683This year’s meeting will be virtual. For details on voting your proxy card/
voting instruction form

shares during the meeting, see “Questions and Answers about the Annual Meeting.”

(1) If your pre-addressed envelope is misplaced, send your proxy card to Corporate Election Services, Inc., the Company’s independent proxy tabulator and Inspector of Election. The address is FirstEnergy Corp., c/o Corporate Election Services, P.O. Box 1150, Pittsburgh, PA 15230.


Do you hold shares through a bank, broker or other institution (beneficial ownership)? (2)

Use the internet at
www.proxyvote.com

Call toll-free at
1-800-454-8683

Mail by returning your proxy
card/voting instruction form

(2) Not all beneficial owners may be able to vote at the web address and phone number provided above. If your control number is not recognized, please refer to your voting instruction form for specific voting instructions.

If you received a Notice of Internet Availability and would like to vote by telephone or mail, please follow the instructions on your notice to request a paper copy of the proxy materials and proxy card.

104  |If you are a participant in the FirstEnergy Corp.2020 Proxy Statement Savings Plan,


LOGO your proxy card will include the shares of common stock held for your account in the FirstEnergy Corp. Savings Plan and any other shares registered with our transfer agent, AST, as of the Record

 

If you are a participant in the FirstEnergy Corp. Savings Plan, your proxy card will include the sharesFIRSTENERGY CORP.

113


Proxy

Summary

Corporate

Governance &

Board of common stock held for your account in the FirstEnergy Corp. Savings Plan and any other shares registered with our transfer agent, AST, as of the Record Date. SubjectDirectors

Items to Be

Voted On

Commitments to

Employees & ESG

Executive

& Director

Compensation

Other

Important

Matters / Q&A

Date. Subject to the Employee Retirement Income Security Act of 1974, as amended, and pursuant to the Savings Plan provisions, the Savings Plan’s Trustee will vote all shares as directed by Savings Plan participants and shares for which the Savings Plan’s Trustee does not receive timely voting directions will be voted in the same proportion as the shares held under the Savings Plan for which the Savings Plan’s Trustee receives timely voting directions. Because the Savings Plan Trustee is the only one who can vote your FirstEnergy Corp. Savings Plan shares, you may not vote such shares at the Meeting.

Beneficial owners (other than participants in the FirstEnergy Corp. Savings Plan) will receive instructions from the holder of record (the bank, broker, institution or other nominee that holds your shares) that you must follow for your shares to be voted. Also, please note that if you wish to vote in person at the Annual Meeting.

Beneficial owners (other than participants in the FirstEnergy Corp. Savings Plan) will receive instructions from the holder of record (the bank, broker, institution or other nominee that holds your shares) that you must follow for your shares to be voted. Also, please note that if you wish to vote virtually at the Annual Meeting, you must request a legal proxy from your bank, broker, or other nominee that holds your shares and present that legal proxy identifying you as the beneficial owner of your shares of FirstEnergy common stock and authorizing you to vote those shares at the Meeting.

 

We are monitoring novel coronavirus (COVID-19) developments and we believe that alternative Annual Meeting arrangements may be advisable or required, such as utilizing a virtual meeting or a change to the date, time or location. If we take these steps, we will announce our decision in advance via a press release, post additional information atwww.FirstEnergyCorp.com/AnnualMeeting, and will also make a public filing with the Securities and Exchange Commission. As always, we encourage you to vote your shares prior to our Annual Meeting.

14

 

 

Q:

 

 How may I revoke my proxy?
 

A:

 

You may revoke your appointment of a proxy or change your related voting instructions one or more times by timely:

  Mailing a proxy card that revises your previous appointment and voting instructions;

  Voting by Internet or telephone after the date of your previous appointment and voting instructions;

  Voting in personvirtually at the Annual Meeting (other than participants in the FirstEnergy Corp. Savings Plan); or

  Notifying the Corporate Secretary of the Company in writing prior to the commencement of the Annual Meeting (other than participants in the FirstEnergy Corp. Savings Plan).

  

The proxy tabulator will treat the last instructions it receives from you as final. For example, if a proxy card is received by the proxy tabulator after the date that a telephone or Internet appointment is made, the tabulator will treat the proxy card as your final instruction. For that reason, it is important to allow sufficient time for your voting instructions on a mailed proxy card to reach the proxy tabulator before changing them by telephone or Internet. Please note that unless you are voting in personvirtually at the Annual Meeting, in order to be counted, the revocation or change must be received by the applicable dates and times, discussed above in Question 13, which also includes instructions on how to vote.

  If you are a beneficial owner of shares, you must follow the directions you receive from your bank, broker, or other institution to change your vote.

105  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Attending the Virtual Annual Meeting

 

15

 

 

Q:

 

 Do I need to register in advance to attend the virtual Annual Meeting?
 

A:

 

Yes. This year’s Annual Meeting will be held in a virtual format through a live webcast at www.cesonlineservices.com/fe22_vm. In accordance with our security procedures, if you plan to attend the virtual Annual Meeting, you will need to register in advance by following the Advance Registration Instructions below.

Attendance at the Meeting will be limited to the Company’s invited guests and to persons owning FirstEnergy Corp. shares

Shareholders as of the Record Dateclose of business on March 20, 2020, who register in advance of18, 2022, the record date, or those that hold a valid proxy for the Annual Meeting, and present:

(i)   an admission card (referpre-register are entitled to further instructions below);participate in and

(ii)   a valid form of government-issued photo identification.

The admission card admits only ask questions at the named shareholder(s) and is not transferable. If you are a beneficial owner of shares (other than a participant in the FirstEnergy Corp. Savings Plan),Annual Meeting. All shareholders wishing to attend the virtual Annual Meeting in person you will also need an original copy of a letter or legal proxy from your bank, broker, institution or other nominee or your account statement showing proof that you beneficially owned FirstEnergy shares as of the Record Date.must pre-register no later than 9:00 a.m. on May 16, 2022.

Advance Registration Instructions

If you are a shareholder of record, participant in the FirstEnergy Corp. Savings Plan or an employee who holds unvested restricted stock and you are voting by Internet, telephone or by mail: To You may register to attend the virtual Annual Meeting please indicate that you will attendby visiting the Meeting when voting by Internet or telephone, or check the appropriate registration box onwebsite www.cesonlineservices.com/fe22_vm. Please have your proxy card if voting by mail.or Notice of Internet Availability containing your 11-digit control number available and follow the instructions to complete your registration request. After registering, shareholders will receive a confirmation email with a link and instructions for accessing the virtual Annual Meeting.

All other shareholders: To Shareholders whose shares are held through a bank, broker or other institution as of the record date may register to attend the Meeting in person and, as applicable, have an admission card mailed to you, please send a request containing all of the following information by mail to: FirstEnergy Corp.virtual Annual Meeting RegistrationA-GO-15, 76 South Main Street, Akron, OH 44308-1890;by visiting the website www.cesonlineservices.com/fe22_vm. Please have your voting instruction form, Notice of Internet Availability, or by email to: Registration@FirstEnergyCorp.com or by fax:330-777-6519:other communication containing your control number available and follow the instructions to complete your registration request, including uploading a copy of one of these documents. After registering,

 

1.
1142022 PROXY STATEMENT


Proxy

Summary

Your name, mailing address and telephone number; andCorporate

Governance &

Board of Directors

Items to Be

Voted On

Commitments to

Employees & ESG

Executive

& Director

Compensation

Other

Important

Matters / Q&A

 

2.

If you are a beneficial owner (other than a participant in the FirstEnergy Corp. Savings Plan), proof that you own FirstEnergy shares (such as a photocopy of a letter or legal proxy from your bank, broker or institution that holds your shares or a photocopy of your account statement redacting certain information) as of the Record Date.

Admission Card

If you plan to attendshareholders will receive a confirmation email with a link and instructions for accessing the Meeting, you must bring your admission card with you to thevirtual Annual Meeting. If you are a beneficial shareholder of record, participant inand you wish to vote your shares online during the FirstEnergy Corp. Savings Planvirtual Annual Meeting rather than submitting your voting instructions before the Annual Meeting, you will need to contact your bank, broker or an employee who holds unvested restricted stock, the admission card portion of yourother institution to obtain a legal proxy card orone-page Notice of Internet Availabilityform that was includedyou must submit electronically with your proxy material mailing will serve as your admission card. All other shareholders must followballot during the advance registration instructions above to receive an admission card.online virtual Annual Meeting using a PDF, JPEG, GIF or PNG file format.

Other Related Matters

We encourage you to access the virtual Annual Meeting at least 15 to 30 minutes before it begins. Online check-in will start at approximately 7:30 a.m. EDT on May 17, 2022. We ask that participants follow the meeting Rules of Conduct, which will be available on the event website.

The virtual meeting platform is fully supported across browsers (Edge, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong Wi-Fi connection wherever they intend to participate in the Meeting. Participants should also give themselves plenty of time to log in and ensure that they can hear streaming audio prior to the start of the Meeting. If you desire to have one representative attendencounter technical difficulties accessing the Meeting on your behalf or one representative designated to present a shareholder proposal properly brought before theAnnual Meeting, please follow the process under “Advance Registration Instructions – All other shareholders” above and include the name, mailing address and telephone number of that representative.

For the Meeting, cameras, recording equipment, computers, large bags and items such as briefcases, backpacks and packages will not be permittedinstructions contained in the Meeting facilities and mayreminder email you will receive the evening before the meeting. Technical support will be subject to inspection. No individual may use communication devices, take photographs, or use audio or video recording equipment inavailable during the Meeting facilities without the express written permission of the Company. No unauthorized firearms or weapons are allowed in the Meeting facilities. Signage and other inappropriate items are likewise prohibited. The Company may implement additional security or related procedures to ensure the safety of the meeting attendees.

106  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

We are monitoring novel coronavirus (COVID-19) developments and we believe that alternative Annual Meeting arrangements may be advisable or required, such as utilizing a virtual meeting or a change to the date, time or location. If we take these steps, we will announce our decision in advance via a press release, post additional information atwww.FirstEnergyCorp.com/AnnualMeeting, and will also make a public filing with the Securities and Exchange Commission. As always, we encourage you to vote your shares prior to our Annual Meeting.

 

16

 

 

Q:

 

 What areHow may I ask questions at the directions to the Meeting location?

A:

John S. Knight Center, 77 E. Mill Street, Akron, Ohio

virtual Annual Meeting?
 A: 

•   From Ohio Turnpike Via Route 8: TakeWe will have a question and answer session during the Annual Meeting. To ask a question during the virtual Annual Meeting, you must be a shareholder and have I-80pre-registered East to Exit 180 (Route 8 South). Follow Route 8 Southfor the Annual Meeting as discussed above under “Attending the Virtual Annual Meeting.”

Questions pertinent to the Perkins Street exit. Exit right onto Perkins Street. Proceed on Perkins Street until reaching High Street. Turn left onto High Street. Proceed on High Street, passing over East Market Street. The John S. Knight Center is locatedAnnual Meeting and related to our business will be answered during the webcast, subject to time constraints. Substantially similar questions will be answered once to avoid repetition and to also allow time for any other questions. Such questions that cannot be answered live due to time constraints will be posted and answered at www.FirstEnergyCorp.com/annualmeeting as soon as practical after the Annual Meeting. We ask that participants to follow the meeting Rules of Conduct, which will be available on the left at the corner of High & Mill Streets.event website.

•   From North ViaI-77 & West ViaI-76: TakeI-77/I-76 (they run concurrently briefly) to Exit 22A. Merge with aone-way side street (South Street). Follow South Street to the 2nd light - at that point all traffic must turn left onto Broadway. Follow Broadway to Mill Street. The John S. Knight Center is located at the corner of Broadway & Mill Streets.

•   From North and South viaI-71: TakeI-71 toI-76 East to Exit 22A (Main/Broadway/Downtown) then follow directions above.

•   From South: TakeI-77 to Exit 22A. Take Broadway and follow Broadway to Mill Street. The John S. Knight Center is located on the left at the corner of Broadway & Mill Streets.

Parking is available next to and near the John S. Knight Center.
We are monitoring novel coronavirus (COVID-19) developments and we believe that alternative Annual Meeting arrangements may be advisable or required, such as utilizing a virtual meeting or a change to the date, time or location. If we take these steps, we will announce our decision in advance via a press release, post additional information atwww.FirstEnergyCorp.com/AnnualMeeting, and will also make a public filing with the Securities and Exchange Commission. As always, we encourage you to vote your shares prior to our Annual Meeting.

Proposals and Business by Shareholders

 

17

 

 

Q:

 

 When are shareholder proposals and nominations due for the 20212023 Annual Meeting?

A:

 

Shareholder Proposals under the Rules of the SEC

 

Under the rules of the SEC, a shareholder who wishes to offer a proposal for inclusion in the Company’s proxy statement and proxy card for the 20212023 annual meeting of shareholders must submit the proposal and any supporting statement by December 2, 2020,November 23, 2022, to the Corporate Secretary, FirstEnergy Corp., 76 South Main Street, Akron, OH 44308-1890. Any proposal received after that date will not be eligible for inclusion in the proxy statement and proxy card for the 20212023 annual meeting of shareholders.

 

107  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

  

 

Shareholder Proposals and Nominations under the Company’s Amended and Restated Code of Regulations

 

Under our Amended and Restated Code of Regulations, a shareholder who wishes to properly introduce an item of business before an annual meeting of shareholders must follow the applicable requirements and procedures as set forth in our Amended and Restated Code of Regulations.

FIRSTENERGY CORP.

115


Proxy

Summary

Corporate

Governance &

Board of Directors

Items to Be

Voted On

Commitments to

Employees & ESG

Executive

& Director

Compensation

Other

Important

Matters / Q&A

 

The Amended and Restated Code of Regulations provide that we must receive the notice of intention to introduce an item of business, including nominations of director candidates for election to your Board, at an annual meeting not less than 30 nor more than 60 calendar days prior to the annual meeting. In the event public announcement of the date of the annual meeting is not made at least 70 calendar days prior to the date of the meeting, notice must be received not later than the close of business on the 10th calendar day following the day on which the public announcement is first made. Accordingly, if a public announcement of the date of the 20212023 annual meeting of shareholders is made at least 70 calendar days prior to the date of the meeting and assuming that our 20212023 annual meeting of shareholders is held on the third Tuesday of May, we must receive any notice of intention to introduce an item of business at that meeting no earlier than March 19, 202117, 2023 and no later than April 18, 2021;17, 2023; otherwise, we must receive any notice of intention to introduce an item of business at that meeting no later than the close of business on the 10th calendar day following the day on which the public announcement is first made. If we do not receive notice as set forth above or if certain other requirements of applicable law are met, the persons named as proxies in the proxy materials relating to that meeting will use their discretion in voting the proxies when these matters are raised at the meeting.

 

In addition, we have adopted a proxy access right to permit, under certain circumstances, a shareholder or a group of shareholders to include in our annual meeting proxy statement director candidates whom they have nominated. These proxy access provisions in our Amended and Restated Code of Regulations provide, among other things, that a shareholder or group of up to 20 shareholders seeking to include director candidates in our annual meeting proxy statement must own, in the aggregate, 3% or more of the Company’s issued and outstanding Common Stock continuously for at least three years. The number of shareholder-nominated candidates appearing in any annual meeting proxy statement cannot exceed 20% of the number of directors in office as of the last day on which the applicable notice may be delivered or received or, if such amount is not a whole number, the closest whole number below 20%, and in any event, not less than two shareholder-nominated candidates. Such nomination must conform to the applicable requirements in our Amended and Restated Code of Regulations and must be received by our Corporate Secretary no earlier than November 2, 2020October 24, 2022 and no later than December 2, 2020,November 23, 2022, assuming the 20212023 annual meeting of shareholders is not advanced more than 30 calendar days and not delayed by more than 60 calendar days of the date of the anniversary of the 20202022 annual meeting of shareholders.

 

Please refer to our Amended and Restated Code of Regulations for the complete requirements and procedures. Our Amended and Restated Code of Regulations is available on the SEC website and upon written request to the Corporate Secretary, FirstEnergy Corp., 76 South Main Street, Akron, OH 44308-1890.

In addition to satisfying the requirements under our Amended and Restated Code of Regulations, to comply with the universal proxy rules (once effective), shareholders who intend to solicit proxies in support of director nominees for election at the 2023 annual meeting of shareholders other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act. Such notice must be postmarked or transmitted electronically to the Corporate Secretary, FirstEnergy Corp., 76 South Main Street, Akron, OH 44308-1890, no later than 60 calendar days prior to the anniversary date of the 2022 annual meeting of shareholders (for the 2023 annual meeting of shareholders, no later than March 17, 2023), assuming the 2023 annual meeting of shareholders is not advanced more than 30 calendar days of the date of the anniversary of the 2022 annual meeting of shareholders.

1162022 PROXY STATEMENT


Proxy

Summary

Corporate

Governance &

Board of Directors

Items to Be

Voted On

Commitments to

Employees & ESG

Executive

& Director

Compensation

Other

Important

Matters / Q&A

 

108  |  FirstEnergy Corp.2020 Proxy Statement


LOGO

Obtaining Additional Information

 

18 

 

Q:

  Where can I find additional information?
 

A:

  

If you received a paper copy of this proxy statement,Proxy Statement, you can learn more about our operations by reviewing the annual report to shareholders for the year ended December 31, 2019,2021, that is included with the mailing of this proxy statement.Proxy Statement. If you did not receive a paper copy of this proxy statement,Proxy Statement, you can view the annual report and other information by visitingwww.FirstEnergyCorp.com/AnnualMeeting.

   A copy of our latest Annual Report on Form10-K for the year ended December 31, 20192021 filed with the SEC, including the financial statements and the financial statement schedules, will be sent to you, without charge, upon written request to the Corporate Secretary, FirstEnergy Corp., 76 South Main Street, Akron, Ohio 44308-1890. You also can view the Form 10-K by visiting the Company’s website atwww.firstenergycorp.comunder the tab “Investors,” then by selecting “SEC Filings & Reports.” Information contained on any of the Company or third-party websites referenced above or later in this proxy statementProxy Statement is not deemed to be part of this proxy statement.

109  |  FirstEnergy Corp.2020 Proxy Statement


Appendix A

FirstEnergy Corp. 2020 Incentive Compensation Plan

FIRSTENERGY CORP.

2020 INCENTIVE COMPENSATION PLAN

Article 1.                Establishment, Purpose, and Duration

1.1        Establishment. FirstEnergy Corp., an Ohio corporation (the “Company”), hereby establishes the FirstEnergy Corp. 2020 Incentive Compensation Plan (the “Plan”), as set forth in this document. The Plan was adopted by the Company’s Board on February 7, 2020, contingent on shareholder approval. This Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Cash-Based Awards and Other Stock-Based Awards.

1.2    Purpose of This Plan. The purpose of the Plan is to promote the success of the Company and its Subsidiaries by providing incentives to certain employees and Directors that are expected to help link their personal interests to the long-term financial success of the Company and its Subsidiaries, and to help increase shareholder value. The Plan is designed to provide flexibility to the Company and its Subsidiaries in their ability to attract, motivate and retain the services of employees and Directors whose judgment, interest, efforts and special skills will help enable the Company to succeed.

1.3Duration of This Plan. This Plan shall become effective upon the date it receives shareholder approval (the “Effective Date”) and terminate on the tenth (10th) anniversary of the Effective Date, unless terminated earlier pursuant toArticle 17 of the Plan. After this Plan is terminated, no Awards may be granted but Awards previously granted shall remain outstanding subject to this Plan’s terms and conditions.

Article 2.                Definitions

As used in this Plan, the following capitalized terms shall have the following meanings:

2.1        “Aggregate Share Limit” shall have the meaning set forth inSection 4.1.

2.2        “Award” means, individually or collectively, a grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Cash-Based Awards, Other Stock-Based Awards and any dividends or dividend equivalents credited thereto, in each case, under and subject to the terms of this Plan.

2.3        “Award Agreement” means an agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee or Board (as applicable) that sets forth the terms and conditions of the Awards granted under this Plan. An Award Agreement may be in an electronic medium, may be limited to notation on the books and records of the Company and, unless otherwise determined by the Committee or Board (as applicable), need not be signed by a representative of the Company or a Participant.

2.4        “Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term inRule 13d-3 of the General Rules and Regulations under the Exchange Act.

2.5        “Board” or “Board of Directors” means the Board of Directors of the Company.

2.6        “Cash-Based Award” means an Award, denominated in cash, granted to a Participant as described inArticle 11.

2.7        “Cause” means, except as may be otherwise prescribed by the Committee or Board (as applicable) in an Award Agreement established under this Plan, with respect to a Participant, the occurrence of any of the following:

(a)

the willful and continued failure by a Participant to substantially perform his/her duties (other than any such failure resulting from the Participant’s Disability), after a written demand for substantial performance is delivered to the Participant that specifically identifies the manner in which the Company or any of its Subsidiaries, as the case may be, believes that the Participant has not substantially performed his/her duties, and the Participant has failed to remedy the situation within ten (10) business days of receiving such notice;

Proxy Statement.

 

(b)

FIRSTENERGY CORP.

 

the Participant’s conviction for committing a felony or a crime involving an act of moral turpitude, dishonesty or misfeasance;

(c)117 

the willful engaging by the Participant in gross misconduct materially and demonstrably injurious to the Company or any of its Subsidiaries. However, no act, or failure to act, on the Participant’s part shall be considered “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that his/her action or omission was in the best interest of the Company or any of its Subsidiaries; or

(d)

a material breach by a Participant of any agreement between the Participant and the Company.

Notwithstanding the foregoing, following a Change in Control, “Cause” will mean, except as may be otherwise prescribed by the Committee or Board (as applicable) in an Award Agreement established under this Plan, with respect to any Participant who is also a participant in the Severance Plan as of the date of the Change in Control, the definition of “Cause” provided in the Severance Plan.

2.8        “Change in Control” shall mean, except as may be otherwise prescribed by the Committee or Board (as applicable) in an Award Agreement established under this Plan:

(a)

An acquisition by any Person, directly or indirectly, of Beneficial Ownership immediately after which such Person has beneficial ownership of twenty-five percent (25%) or more of either: (i) the Outstanding Company Common Stock, or (ii) the Outstanding Company Voting Securities;provided,however, that the following acquisitions of beneficial ownership of Outstanding Company Common Stock or Outstanding Company Voting Securities shall not constitute Change in Control:

(i)

Any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege, unless the security being so converted was itself acquired directly from the Company);

(ii)

Any acquisition by the Company;

(iii)

Any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or

(iv)

Any acquisition pursuant to a reorganization, merger, or consolidation involving the Company or any direct or indirect wholly-owned subsidiary of the Company, whether or not the Company is the surviving corporation in such transaction (any of the foregoing, a ‘Reorganization’ for purposes of thisSection 2.9), if, following such Reorganization, the conditions described in paragraph (c) below are satisfied;

(b)

Individuals who, as of January 1, 2020, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board;provided,however, that any individual becoming a Director subsequent to January 1, 2020 whose election, or

nomination for election by the Company’s shareholders, is approved by a vote of at least a majority of the Directors then comprising the Incumbent Board shall be considered as a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (within the meaning of solicitations subject toRule 14a-12(c) of Regulation 14A promulgated under the Exchange Act or any successor rule) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(c)

Consummation of a (x) Reorganization or (y) sale or disposition of all or substantially all of the assets of the Company in one transaction or a series of related transactions (determined on a consolidated basis), other than in connection with a sale-leaseback or other arrangement resulting in the continued utilization of such assets by the Company (a “Major Asset Disposition”), unless in each case following such Reorganization or Major Asset Disposition (either, a “Major Corporate Event”) each of the following conditions is met:

(i)

The Outstanding Company Voting Securities immediately prior to such Major Corporate Event represent (either by remaining outstanding or by converting into or being exchanged for voting securities of the surviving corporation) at least sixty percent (60%) of the combined voting power of the surviving corporation (including a corporation which, as a result of such Major Corporate Event, owns the Company or all or substantially all of the assets of the Company) outstanding immediately after such Major Corporate Event;

(ii)

No Person (excluding the Company, any employee benefit plan (or related trust) of the Company or the resulting or acquiring corporation resulting from such Major Corporate Event, and any Person beneficially owning, immediately prior to such Major Corporate Event, directly or indirectly, twenty-five percent (25%) or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, immediately after consummation of such Major Corporate Event, twenty-five percent (25%) or more of, respectively, the then-outstanding shares of common stock of the resulting or acquiring corporation in such Major Corporate Event, or the combined voting power of thethen-outstanding voting securities of such resulting or acquiring corporation that are entitled to vote generally in the election of directors; and

(iii)

At least a majority of the members of the board of directors of the corporation resulting from such Major Corporate Event were members of the Incumbent Board at the time of the execution of the initial agreement providing for such Major Corporate Event; or

(d)

Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company;

However, in no event will a Change in Control be deemed to have occurred, with respect to a Participant, if the Participant is part of a purchasing group which consummates the Change in Control transaction. The Participant shall be deemed ‘part of a purchasing group’ for purposes of the preceding sentence if the Participant is an equity participant or has agreed to become an equity participant in the purchasing company or group (excluding passive ownership of less than five percent (5%) of the voting securities of the purchasing company or ownership of equity participation in the purchasing company or group which is otherwise not deemed to be significant, as determined prior to the Change in Control by a majority of the nonemployee continuing members of the Board of Directors).

2.9        “Code” means the Internal Revenue Code of 1986, as amended from time to time. References to Code Sections shall be deemed to include references to any applicable regulations thereunder and any successor provision with the same or similar purpose.

2.10        “Committee” means the Compensation Committee of the Board or a subcommittee thereof, or any other committee designated by the Board to administer this Plan.

2.11        “Company” means FirstEnergy Corp., an Ohio corporation, and any successor thereto as provided inArticle 19.

2.12        “Director” means a member of the Board.

2.13        “Disability” means, except as may be otherwise prescribed by the Committee or Board (as applicable) in an Award Agreement established under this Plan, as of any date, a Participant’s qualification for, and receipt of, benefits under the Company’s then-existing long-term disability plan or program.

2.14        “Effective Date” has the meaning set forth inSection 1.3.

2.15        “Employee” means any individual performing services for the Company, or a Subsidiary and designated as an employee of the Company, or its Subsidiaries on the payroll records thereof. Without limiting the foregoing, an Employee shall not include any individual during any period he or she is classified or treated by the Company or Subsidiary as an independent contractor, a consultant or an employee of an employment, consulting, or temporary agency or any entity other than the Company or a Subsidiary, without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified as, a common law employee of the Company or Subsidiary during such period by a court, agency or otherwise.

2.16        “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor thereto.

2.17        “Exercise Price” means the price at which a Share may be purchased by a Participant pursuant to an Option or the price established at the time of grant of an SAR pursuant toArticle 7 which is used to determine the amount of any payment due upon exercise of the Option or SAR, as the case may be.

2.18        “Fair Market Value” or “FMV” means an amount, unless the Committee determines otherwise, with respect to publicly traded Shares equal to the average of the high and low sales prices of the common stock as reported on the composite tape of the NYSE for the date in which the determination of the fair market value is made or, if there are no sales of common stock on that date, then on the preceding date on which there were sales of common stock. If Shares are not publicly traded, Fair Market Value shall be determined by the Committee in such manner as it deems appropriate. The Committee may determine Fair Market Value on other reasonable bases including a price based on the opening, closing, actual, high, low or average selling prices of a Share reported on the NYSE or other established stock exchange (or exchanges) on the applicable date, the preceding trading day, the next succeeding trading day or an average of trading days, as determined by the Committee in its sole discretion. Such definition(s) of FMV shall be specified in the applicable Award Agreement and may differ depending on whether FMV is in reference to the grant, exercise, vesting, settlement or payout of an Award. Notwithstanding anything in this Plan to the contrary, “Fair Market Value” shall be determined in a manner consistent with exemption from, and avoidance of adverse tax consequences under, Code Section 409A and, with respect to ISOs, also in a manner consistent with Code Section 422.

2.19        “Grant Date” means the date an Award is granted to a Participant pursuant to the Plan.

2.20        “Incentive Stock Option” or “ISO” means an Option to purchase Shares granted underArticle 6 to an Employee that is designated as an Incentive Stock Option and that is intended to meet the requirements of Code Section 422.

2.21        “NYSE” means New York Stock Exchange.

2.22        “Nonemployee Director” means a Director who is not an Employee.

2.23        “Nonqualified Stock Option” or “NSO” means an Option that is not intended to meet the requirements of Code Section 422, or that otherwise does not meet such requirements.

2.24        “Option” means an Incentive Stock Option or a Nonqualified Stock Option, as described inArticle 6.

2.25        “Other Stock-Based Award” means an equity-based or equity-related Award not otherwise described in this Plan, granted pursuant toArticle 11.

2.26        “Participant” means any eligible individual as set forth inArticle 5 to whom an Award is granted.

2.27        “Performance Measures” means the measurable performance objective or objectives established pursuant to this Plan for Participants who have received grants of Performance Shares or Cash-Based Awards or, when so determined by the Committee, Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, dividends or dividend equivalents or Other Stock-Based Awards pursuant to this Plan. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Performance Measures unsuitable, the Committee may in its discretion modify such Performance Measures or the goals or actual levels of achievement regarding the Performance Measures, in whole or in part, as the Committee deems appropriate and equitable.

2.28        “Performance Period” means the period of time during which the performance goals must be met in order to determine the degree of payout and/or vesting with respect to an Award.

2.29        “Performance Share” means an Award underArticle 10 and subject to the terms of this Plan, denominated in Shares, the value of which at the time it is payable is a function of the extent to which, or whether, corresponding performance criteria have been achieved.

2.30        “Period of Restriction” means the period when Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture (based upon the passage of time or the achievement of performance goals), as provided inArticles 8 and9.

2.31        “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.

2.32        “Plan” means this FirstEnergy Corp. 2020 Incentive Compensation Plan, as it may be amended or amended and restated from time to time.

2.33        “Plan Year” means the calendar year.

2.34        “Restricted Stock” means an Award granted to a Participant pursuant toArticle 8, which is not a Restricted Stock Unit.

2.35        “Restricted Stock Unit” means an Award granted to a Participant pursuant toArticle 9 and represents the right of the Participant to receive one Share per Restricted Stock Unit (or its cash equivalent) after the end of its applicable Period of Restriction or Performance Period.

2.36        “Severance Plan” means the FirstEnergy Corp. Change in Control Severance Plan, as may be amended from time to time, or its successor plan(s) or arrangement(s).

2.37        “Share” means a share of common stock of the Company, $.10 par value per share, or any security into which such common stock may be changed by reason of any transaction or event of the type referred to inSection 4.5 of this Plan.

2.38        “Stock Appreciation Right” or “SAR” means an Award designated as a stock appreciation right, granted pursuant toArticle 7.

2.39        “Subsidiary” means any corporation or other entity in which the Company has or obtains, directly or indirectly, a proprietary interest of more than fifty percent (50%) by reason of stock ownership or otherwise.

Article 3.                Administration

3.1General. The Committee is responsible for administering this Plan, subject to this Article and the other provisions of this Plan. The Committee may employ attorneys, consultants, accountants, agents, and other individuals, any of whom may be an Employee, and the Committee, the Company, and its officers, administrators and Directors shall be entitled to rely upon the advice, opinions or valuations of any such individuals. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Participants, the Company and all other individuals.

3.2        Authority of the Committee and the Board. With respect to Awards granted to Employees and application of the Plan to such Awards, the Committee has full and exclusive discretionary power to interpret the terms of this Plan and any Award Agreement or other agreement or document ancillary or related to this Plan, to determine eligibility for Awards and to adopt such rules, regulations, forms, instruments and guidelines for administering this Plan as the Committee may deem necessary or proper. Such authority, with respect to Awards granted to Employees and the application of the Plan to such Awards, shall include selecting Award recipients, establishing all Award terms and conditions, including the terms and conditions set forth in Award Agreements, resolving or reconciling any ambiguity or inconsistency of or among provisions of the Plan, any Award Agreement or related documents, correcting any defect (including scrivener’s errors), supplying any omission and, subject toArticle 17, adopting modifications and amendments to this Plan or any Award Agreement. In addition, the Committee is authorized to take any action it determines in its sole discretion to be appropriate subject only to the express limitations contained in this Plan, and no authorization in any Plan section or other provision of this Plan is intended or may be deemed to constitute a limitation on the authority of the Committee. Notwithstanding anything herein to the contrary, with respect to Awards granted to Nonemployee Directors and the application of the Plan to such Awards, the full Board or the Committee shall have the authoritative powers set forth in thisSection 3.2.

Subject toSection 4.5, in no event shall the Committee or the Board, without first obtaining the approval of the Company’s shareholders, have the right to: (i) cancel outstanding Options or SARs for the purpose of replacing or regranting such Options or SARs with an Exercise Price that is less than the original Exercise Price of the Option or SAR, or (ii) change the Exercise Price of an Option or SAR to an Exercise Price that is less than the original Option or SAR Exercise Price, or (iii) cancel outstanding Options or SARs with an Exercise Price that is more than the Fair Market Value of a Share on the date of cancellation in exchange for cash or another Award. Also notwithstanding the foregoing, no action of the Committee or the Board (other than pursuant toSection 4.5) may be taken with respect to an outstanding Award except in accordance withSection 17.3.

3.3Delegation. To the extent permitted under applicable laws, regulations or NYSE listing standards, the Committee may delegate to one or more of its members or to one or more officers or employees of the Company and its Subsidiaries or to one or more agents or advisors, such administrative duties or powers as it may deem advisable, and the Committee or any individuals to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with respect to any responsibility the Committee or such individuals may have under this Plan. The Committee may authorize one or more officers of the Company to do one or both of the following on the same basis as can the Committee: (a) designate Employees to be recipients of Awards; and (b) determine the size of any such Awards;provided,however, (i) the Committee shall not delegate such responsibilities to any such officer for Awards granted to an Employee or a Nonemployee Director who is considered an insider (as determined by the Board applying Section 16 of the Exchange Act and related guidance); (ii) the Committee action providing such authorization sets forth the total number of Shares that may be issued with respect to Awards granted by such officer; and (iii) the officer(s) shall report periodically to the Committee regarding the nature and scope of the Awards granted pursuant to the authority delegated.

Article 4.                Shares Available Under This Plan

4.1        Number of Shares Available for Awards.

(a)

Subject to adjustment as provided inSection 4.5 and the share counting rules set forth inArticle 4 of this Plan, the maximum number of Shares available for Awards granted under this Plan (including any dividends or dividend equivalents payable in Shares) (the “Aggregate Share Limit”) shall be:

(i)

10,000,000 Shares; plus

(ii)

the total number of Shares remaining available for grant under the FirstEnergy Corp. 2015 Incentive Compensation Plan, as amended, as of the Effective Date; plus

(iii)

the total number of Shares that are subject to awards granted under the FirstEnergy Corp. 2015 Incentive Compensation Plan, including as amended (the “Predecessor Plan”), that are not used due to the forfeiture, cancellation or expiration of awards granted thereunder.

(b)

10,000,000 Shares from the Aggregate Share Limit may be issued pursuant to the exercise of ISOs under this Plan.

(c)

The Shares available for issuance under this Plan may be authorized and unissued Shares, treasury Shares or Shares obtained on the open market.

4.2        Share Usage. The Committee shall determine the appropriate method for determining the number of Shares available for issuance under the Plan, subject to the following:

(a)

except as provided inSection 4.5(a) or(b) of this Plan, if any Award granted under this Plan (in whole or in part) is cancelled or forfeited, expires, is settled for cash, or is unearned, the Shares subject to such Award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, again be available under the Aggregate Share Limit;

(b)

if, after December 31, 2019, any Shares subject to an award granted under the Predecessor Plan are forfeited, or an award granted under the Predecessor Plan (in whole or in part) is cancelled or forfeited, expires, is settled for cash, or is unearned, the Shares subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement, or unearned amount, be available for Awards under this Plan.

(c)

the maximum number of Shares that may be issued under an Award shall be counted against the Aggregate Share Limit at the time of grant and reserved for issuance, unless the Award Agreement provides that the Award will be paid in cash;

(d)

any Award that is to be paid in cash pursuant to the applicable Award Agreement, whether or not such Award is denominated in Shares, shall not result in any Shares being counted against the Aggregate Share Limit and reserved for issuance;

(e)

any Shares underlying dividend equivalents that are payable in Shares shall be counted against the Aggregate Share Limit when issued or credited,provided that any Shares underlying dividend equivalents that are forfeited or cancelled, expire, are paid in cash or are unearned, shall be available again under this Plan; and

(f)

any dividends or dividend equivalents that are payable in cash under the applicable Award Agreement, whether or not such dividends or dividend equivalents are denominated in Shares, shall not result in any Shares being counted against the Aggregate Share Limit.

4.3        Certain Limitations on Share Usage. Notwithstanding anything herein to the contrary:

(a)

any Shares withheld by the Company or otherwise used (i) to pay the Exercise Price of an Option granted under this Plan or (ii) to satisfy tax withholding obligations associated with an Award granted under this Plan, shall, in each case, count against the Aggregate Share Limit;

(b)

any Shares that were subject to an SAR granted under this Plan that were not issued in connection with a settlement of the SAR in Shares upon the exercise of such SAR shall count against the Aggregate Share Limit;

(c)

any Shares that were purchased by the Company on the open market with the proceeds from the exercise of an Option shall not be added to the Aggregate Share Limit; and

(d)

if, under this Plan, a Participant has elected to give up the right to receive compensation in exchange for Shares based on fair market value, such Shares will not count against the Aggregate Share Limit.

4.4Nonemployee Director Compensation Limit. Notwithstanding anything to the contrary contained in this Plan, in no event will any Nonemployee Director in any one calendar year be granted compensation for such service having an aggregate maximum value (measured at the date of grant as applicable, and calculating the value of any Awards based on the grant date fair value for financial reporting purposes) in excess of $750,000.

4.5Adjustments in Authorized Shares. In the event of any corporate event or transaction (including a change in the Shares of the Company or the capitalization of the Company) such as a merger, consolidation, reorganization, recapitalization, separation, partial or complete liquidation, stock dividend, stock split, reverse stock split, split up or split off, spinoff or spinout, or other distribution of stock or property of the Company, combination of Shares, exchange of Shares, dividendin-kind, or other like change in capital structure, number of outstanding Shares or distribution (other than normal cash dividends) to shareholders of the Company, issuance of rights or warrants, or any similar corporate event or transaction, the Committee, in order to prevent dilution or enlargement of Participants’ rights under this Plan, shall substitute or adjust, as applicable, the number and kind of Shares that may be issued under this Plan or under particular forms of Awards, the number and kind of Shares subject to outstanding Awards, the Exercise Price applicable to outstanding Awards, other Award terms, and other value determinations applicable to outstanding Awards.

The Committee, in its sole discretion, may also make appropriate adjustments in the terms of any Awards under this Plan to reflect, or related to, such changes or distributions and to modify any other terms of outstanding Awards, including modifications of performance goals and changes in the length of Performance Periods.

Notwithstanding anything in this Plan to the contrary:

(a)

Awards may be granted under this Plan in substitution for or in conversion of, or in connection with an assumption of, stock options, stock appreciation rights, restricted stock, restricted stock units or other stock or stock-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with the Company or any Subsidiary. Any conversion, substitution or assumption will be effective as of the close of the merger or acquisition, and, to the extent applicable, will be conducted in a manner that complies with Section 409A of the Code. The Awards so granted may reflect the original terms of the awards being assumed or substituted or converted for and need not comply with other specific terms of this Plan, and may account for Shares substituted for the securities covered by the original awards and the number of shares subject to the original awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account for differences in stock prices in connection with the transaction.

(b)

In the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary merges has shares available under apre-existing plan previously approved by shareholders and not adopted in contemplation of such acquisition or merger, the shares available for grant pursuant to the terms of such plan (as adjusted, to the extent appropriate, to reflect such acquisition or merger) may be used for Awards made after such acquisition or merger under this Plan;provided,however, that Awards using such available shares may not be made after the date awards or grants could have been made under the terms of thepre-existing plan absent the acquisition or merger, and may only be made to individuals who were not employees or directors of the Company or any Subsidiary prior to such acquisition or merger.

(c)

Any Shares that are issued or transferred by, or that are subject to any Awards that are granted by, or become obligations of, the Company underSection 4.5(a) or(b) of this Plan will not reduce the Shares available under this Plan or otherwise count against the limits contained inArticle 4 of this Plan. In addition, no Shares subject to an Award that is granted by, or becomes an obligation of, the Company underSection 4.5(a) or(b) of this Plan, will be added to the Aggregate Share Limit.

The determination of the Committee as to the adjustments and substitutions described above, if any, shall be conclusive and binding on Participants and beneficiaries under this Plan. The adjustments and substitutions described in this Section shall be made in compliance with: (i) Code Sections 422 and 424 with respect to ISOs; (ii) Treasury Department RegulationSection 1.424-1 (and any successor) with respect to NSOs, applied as if the NSOs were ISOs; and (iii) Code Section 409A, to the extent necessary for exemption therefrom, and to avoid adverse tax consequences thereunder.

Article 5.                Eligibility and Participation

5.1Eligibility. Individuals eligible to participate in this Plan include all Employees and Directors.

5.2Actual Participation. Subject to the provisions of this Plan, the Committee may, from time to time, select from all eligible individuals, those individuals (or classes or categories of individuals) to whom Awards shall be granted and shall determine, in its sole discretion, the nature and terms of each Award.

Article 6.                Stock Options

6.1Grant of Options. Subject to the terms of this Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time, as shall be determined by the Committee, in its sole discretion;provided,however, that ISOs may be granted only to eligible Employees of the Company or any Subsidiary (as permitted under Code Sections 422 and 424) and only prior to the tenth anniversary of the Effective Date. An Employee who is employed by a Subsidiary may only be granted Options to the extent the Subsidiary is part of: (a) the Company’s controlled group of corporations, or (b) a trade or business under common control; as of the Date of Grant, each as determined under the rules of Code Section 414, but substituting for this purpose ownership of at least fifty percent (50%) of the Subsidiary to determine the members of the controlled group of corporations and the entities under common control. No Award of an Option may entitle a Participant to dividends or dividend equivalents with respect to the Shares covered by the Option.

6.2Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shall specify the Exercise Price, the maximum duration of the Option, the number of Shares to which the Option pertains, the conditions upon which the Option shall become vested and exercisable, and such other provisions as the Committee shall determine which are not inconsistent with the terms of this Plan. The Award Agreement shall also specify whether the Option is intended to be an ISO or an NSO.

6.3Exercise Price. The Exercise Price for each grant of an Option under this Plan shall be determined by the Committee in its sole discretion and shall be specified in the Award Agreement;provided,however, except with respect to Awards granted underSection 4.5(a) or(b) of this Plan, the Exercise Price must be at least equal to one hundred percent (100%) of the FMV of the underlying Shares on the Grant Date. With respect to a Participant who owns, directly or indirectly, more than ten percent (10%) of the total

combined voting power of all classes of the stock of the Company, any Subsidiary or any Affiliate, the Exercise Price of Shares subject to an ISO shall be at least equal to one hundred ten percent (110%) of the FMV of such Shares on the Grant Date.

6.4Term of Options. Each Option granted to a Participant shall expire at such time as the Committee shall determine at the time of grant;provided,however, no Option shall be exercisable on or after the tenth (10th) anniversary of its Date of Grant.

6.5Exercise of Options. Options shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which terms and restrictions need not be the same for each grant or for each Participant. Options, or a portion thereof, may become exercisable upon certain events, such as the Participant’s death, disability, or termination of employment under certain circumstances. The aggregate FMV of Shares with respect to which ISOs are exercisable for the first time by a grantee during any calendar year (under this Plan or any other plan adopted by the Company or its parent or subsidiary) shall not exceed one hundred thousand dollars ($100,000). If such aggregate FMV (determined with respect to each ISO at the time of grant) exceeds such amount, such number of ISOs as have an aggregate FMV equal to the amount in excess of such amount shall be treated as NSOs.

6.6Payment. Options shall be exercised by the delivery of a written notice of exercise to the Company or an agent designated by the Company in a form specified or accepted by the Committee, or by complying with any alternative procedures which may be authorized by the Committee, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares.

Payment of the Exercise Price is a condition precedent to the issuance of the Shares as to which an Option is exercised. The Exercise Price shall be payable to the Company in full by, to the extent permitted by law: (a) paying cash or its equivalent; (b) tendering (either by actual delivery or attestation) previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the Exercise Price; (c) cashless (broker-assisted or otherwise) exercise; (d) any combination of (a), (b), and (c); or (e) any other method or methods approved or accepted by the Committee in its sole discretion.

Subject to any governing rules or regulations, as soon as practicable after receipt of written notification of exercise and full payment (including, without limitation, satisfaction of any applicable tax withholding), the Company shall deliver to the Participant evidence of book entry Shares or, if requested by the Participant, certificated Shares in an appropriate amount based upon the number of Shares purchased under the Option(s). Alternatively, if the relevant Award Agreement requires payment of cash or its equivalent at that time, the Company shall pay to the Participant the appropriate amount of cash or its equivalent.

6.7Restrictions on Share Transferability. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option granted under this Article as it may deem advisable including minimum holding period requirements and restrictions under applicable federal securities laws or regulations, the rules of any stock exchange or market upon which such Shares are then listed or traded or any blue sky or state securities laws applicable to such Shares.

6.8Prohibition on Repricing. Subject toSection 4.5, in no event shall the Committee or the Board, without first obtaining the approval of the Company’s shareholders, have the right to: (i) cancel outstanding Options for the purpose of replacing or regranting such Options with an Exercise Price that is less than the original Exercise Price of the Option, or (ii) change the Exercise Price of an Option to an Exercise Price that is less than the original Option Exercise Price, or (iii) cancel outstanding Options with an Exercise Price that is more than the Fair Market Value of a Share on the date of cancellation in exchange for cash or another Award.

Article 7.                Stock Appreciation Rights

(a)          Grant of SARs. Subject to the terms of this Plan, SARs may be granted to Participants at any time, and from time to time, as shall be determined by the Committee in its sole discretion. However, an Employee of a Subsidiary may only be granted SARs to the extent the Subsidiary is: (a) part of the

Company’s controlled group of corporations, or (b) a trade or business under common control with the Company, as of the date of grant, each determined under the rules of Code Section 414, but substituting for this purpose ownership of at least fifty percent (50%) of the Subsidiary to determine the members of the controlled group of corporations and the entities under common control.

Subject to the terms of this Plan, the Committee shall have complete discretion in determining the number of SARs granted to each Participant and the terms and conditions pertaining to such SARs.

The Exercise Price for each SAR shall be determined by the Committee and shall be specified in the Award Agreement;provided,however, except with respect to Awards granted underSection 4.5(a) or(b) of this Plan, that the Exercise Price must be at least equal to one hundred percent (100%) of the FMV of the underlying Shares on the Grant Date.

No Award of an SAR may entitle a Participant to dividends or dividend equivalents with respect to the Shares covered by the SAR.

7.2        SARs Agreement. Each SAR Award shall be evidenced by an Award Agreement that shall specify the Exercise Price, the term of the SAR and such other provisions as the Committee shall determine.

7.3Term of SARs. The term of an SAR granted under this Plan shall be determined by the Committee, in its sole discretion, and except as determined otherwise by the Committee and specified in the SAR Award Agreement, no SAR shall be exercisable on or after the tenth (10th) anniversary of its grant.

7.4Exercise of SARs. SARs may be exercised upon the terms and conditions imposed by the Committee in its sole discretion. SARs, or a portion thereof, may become exercisable upon certain events, such as the Participant’s death, disability, or termination of employment under certain circumstances.

7.5Settlement of SARs. Upon the exercise of an SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying:

(a)

The excess of the Fair Market Value of a Share on the date of exercise over the Exercise Price; by

(b)

The number of Shares with respect to which the SAR is exercised.

At the discretion of the Committee, payment upon the exercise of an SAR may be in cash, Shares or a combination thereof, or in any other manner approved by the Committee. The Committee’s determination regarding the form of SAR payout shall be set forth in the Award Agreement pertaining to the grant of the SAR.

7.6Other Restrictions. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of a SAR granted under this Article as it may deem advisable including minimum holding period requirements and restrictions under applicable federal securities laws or regulations, the rules of any stock exchange or market upon which such Shares are then listed or traded or any blue sky or state securities laws applicable to such Shares.

7.7Prohibition on Repricing. Subject toSection 4.5, in no event shall the Committee or the Board, without first obtaining the approval of the Company’s shareholders, have the right to: (i) cancel outstanding SARs for the purpose of replacing or regranting such SARs with an Exercise Price that is less than the original Exercise Price of the SAR, or (ii) change the Exercise Price of a SAR to an Exercise Price that is less than the original SAR Exercise Price, or (iii) cancel outstanding SARs with an Exercise Price that is more than the Fair Market Value of a Share on the date of cancellation in exchange for cash or another Award.

Article 8.                Restricted Stock

(a)         Grant of Restricted Stock. Subject to the terms of this Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock to Participants in such amounts as the Committee shall determine.

8.2Restricted Stock Agreement. Each Award of Restricted Stock shall be evidenced by an Award Agreement that shall specify the Period of Restriction or Performance Period, the number of Shares of Restricted Stock issued and such other provisions as the Committee shall determine.

8.3Other Restrictions. The Committee shall impose such other conditions and/or restrictions on any Shares of Restricted Stock as it may deem advisable including requirements that Participants pay stipulated purchase prices for each Share of Restricted Stock, restrictions based upon the achievement of specific performance goals, time-based restrictions on vesting following the attainment of the performance goals, time-based restrictions and/or restrictions under applicable laws or under the requirements of any stock exchange or market upon which such Shares are listed or traded, or holding requirements or sale restrictions placed on the Shares by the Company upon vesting of such Restricted Stock. Restricted Stock, or a portion thereof, may become nonforfeitable or vest upon certain events, such as the Participant’s death, disability, or termination of employment under certain circumstances.

Except as otherwise provided in this Article, Shares of Restricted Stock covered by each Restricted Stock Award shall become freely transferable by the Participant after all conditions and restrictions applicable to such Shares have been satisfied or lapse (including satisfaction of any applicable tax withholding obligations).

If share certificates are required by law to be issued and to the extent deemed appropriate by the Committee, the Company may retain any certificates representing Shares of Restricted Stock in the Company’s possession until such time as all conditions and/or restrictions applicable to such Shares have been satisfied or lapse.

8.4Voting Rights. Unless otherwise determined by the Committee and set forth in a Participant’s Award Agreement, to the extent permitted or required by law, as determined by the Committee, Participants holding Shares of Restricted Stock granted hereunder may be granted the right to exercise full voting rights with respect to those Shares during the Period of Restriction.

8.5Dividends. Any Award of Restricted Stock may require that any or all dividends or other distributions paid thereon during the applicable Period of Restriction be paid in cash or in additional Shares of Restricted Stock on a current, deferred or contingent basis subject to the same restrictions as the underlying Award;provided,however, that dividends or other distributions on Restricted Stock will be deferred until, and paid contingent upon, the vesting of such Restricted Stock.

Article 9.                Restricted Stock Units

9.1Grant of Restricted Stock Units. Subject to the terms of this Plan, the Committee, at any time and from time to time, may grant Awards of Restricted Stock Units to Participants in such amounts as the Committee shall determine.

9.2Restricted Stock Unit Agreement. Each Award of Restricted Stock Units shall be evidenced by an Award Agreement that shall specify the Period of Restriction or Performance Period, the number Restricted Stock Units granted and such other provisions as the Committee shall determine.

9.3Other Restrictions. The Committee shall impose such other conditions and/or restrictions on any Restricted Stock Units as it may deem advisable including requirements that Participants pay stipulated purchase prices for each Share subject to a Restricted Stock Unit, restrictions based upon the achievement of specific performance goals, time-based restrictions on vesting following the attainment of the performance goals, time-based restrictions and/or restrictions under applicable laws or under the requirements of any stock exchange or market upon which the Shares are listed or traded, or holding requirements or sale restrictions placed by the Company on the Shares delivered to a Participant upon the

vesting of the Restricted Stock Units. Restricted Stock Units, or a portion thereof, may become nonforfeitable or vest upon certain events, such as the Participant’s death, disability, or termination of employment under certain circumstances.

Restricted Stock Units shall be settled in cash, Shares or a combination of cash and Shares as the Committee, in its sole discretion, shall determine.

9.4Ownership. During the Period of Restriction or Performance Period, the Participant will have no rights of ownership in the Shares subject to the Restricted Stock Units and shall have no right to vote such Shares.

9.5        Dividends Equivalents. The Committee may provide for the payment of dividend equivalents to the Participant either in cash or in additional Restricted Stock Units on a current, deferred or contingent basis;provided,however, that dividend equivalents or other distributions on Restricted Stock Units will be deferred until, and paid contingent upon, the vesting of such Restricted Stock Units.

Article 10.                Performance Shares

10.1Grant of Performance Shares. Subject to the terms of this Plan, the Committee, at any time and from time to time, may grant Awards of Performance Shares to Participants in such amounts and upon such terms as the Committee shall determine.

10.2        Value of Performance Shares. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the Grant Date. The Committee shall set performance goals in its sole discretion which, depending on the extent to which they are met, will determine the value and number of Performance Shares upon which payout will be based.

10.3Earning of Performance Shares. Subject to the terms of this Plan, including after the applicable Performance Period has ended, the holder of Performance Shares shall be entitled to receive payout based upon the value and number of Performance Shares earned by the Participant over the Performance Period determined as a function of the extent to which, or whether, the corresponding performance goals have been achieved. Performance Shares, or a portion thereof, may vest upon certain events, such as the Participant’s death, disability, or termination of employment under certain circumstances.

10.4Payment of Performance Shares. Payment of earned Performance Shares shall be in such form and at such time as determined by the Committee and as evidenced in the Award Agreement. Subject to the terms of this Plan, the Committee, in its sole discretion, may pay earned Performance Shares in the form of cash or Shares (or in a combination thereof) equal to the value of the earned Performance Shares. Any Shares delivered to a Participant upon the vesting and settlement of Performance Shares may be subject to any restrictions deemed appropriate by the Committee.

10.5Dividends Equivalents. The Committee may provide for the payment of dividend equivalents to the Participant either in cash or in additional Performance Shares on a deferred or contingent basis;provided,however, that dividend equivalents or other distributions on Performance Shares will be deferred until, and paid contingent upon, the achievement of the applicable performance goals.

Article 11.                Cash-Based Awards and Other Stock-Based Awards

11.1Grant of Cash-Based Awards. Subject to the terms of the Plan, the Committee may, at any time and from time to time, grant Cash-Based Awards to Participants in such amounts and upon such terms as the Committee may determine.

11.2Other Stock-Based Awards. The Committee may grant other types of equity-based or equity-related Awards not otherwise described in this Plan (including the grant or offer for sale of unrestricted Shares) in such amounts and subject to such terms and conditions as the Committee shall determine. Such Awards may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares.

11.3Value of Cash-Based and Other Stock-Based Awards. Each Cash-Based Award shall specify a payment amount or payment range as determined by the Committee. Each Other Stock-Based Award shall be expressed in terms of Shares or units denominated in Shares, as determined by the Committee. The Committee may establish performance goals in its sole discretion. If the Committee exercises its discretion to establish performance goals, the number and/or value of Cash-Based Awards or Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which, or whether, the performance goals are met.

11.4Payment of Cash-Based Awards and Other Stock-Based Awards. Any payment with respect to a Cash-Based Award or an Other Stock-Based Award shall be made in accordance with the terms of the Award, in cash or Shares, as the Committee determines. Cash-Based Awards or Other Stock-Based Awards may become nonforfeitable or vest upon certain events, such as the Participant’s death, disability, or termination of employment under certain circumstances.

Article 12.                Transferability of Awards

Except as otherwise provided in a Participant’s Award Agreement or otherwise determined at any time by the Committee, no Award granted under this Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. In no event may an Award be transferred for value. Further, except as otherwise provided in a Participant’s Award Agreement or otherwise determined at any time by the Committee, all Awards granted to a Participant under this Plan shall be exercisable during his or her lifetime only by the Participant.

Article 13.                Performance Measures

13.1Performance Measures. Anon-exhaustive list of Performance Measures that could be used for performance-based Awards under this Plan includes the following: (a) Net earnings or net income (before or after taxes); (b) Income; (c) Retained earnings; (d) Earnings per share; (e) Net sales or revenue growth; (f) Net operating profit or income; (g) Operating earnings; (h) Return measures (including return on assets, capital, invested capital, equity, sales or revenue); (i) Cash flow (including operating cash flow, free cash flow, cash flow return on equity and cash flow return on investment); (j) Earnings before taxes, interest, depreciation and/or amortization (“EBITDA”); (k) Adjusted EBITDA; (l) Gross or operating margins; (m) Productivity ratios; (n) Share price (including growth measures and total shareholder return); (o) Costs or cost control; (p) Margins; (q) Operating efficiency; (r) Operating and maintenance cost management; (s) Demand-side management (including conservation and load management); (t) Market share; (u) Service reliability; (v) Energy production availability performance; (w) Results of customer satisfaction or employee satisfaction surveys; (x) Aggregate product price and other product price measures; (y) Working capital; (z) Economic value added or EVA® (net operating profit after tax minus the sum of capital multiplied by the cost of capital); (aa) Management development; (bb) Succession planning; (cc) Shaping legislative and regulatory initiatives and outcomes; (dd) Taxes; (ee) Safety record; (ff) Depreciation and amortization; (gg) Total shareholder return; (hh) Workforce hiring plan measures; (ii) Air quality control project management; (jj) Environmental; (kk) Risk management; (ll) Technology upgrade measures; (mm) Financial contribution to earnings from special projects or initiatives; (nn) Capital expenditures; (oo) Generation output; (pp) Power supply sourcing adequacy; (qq) Results of asset acquisitions; (rr) Results of asset divestitures; (ss) Capitalization; (tt) Credit metrics; (uu) Credit ratings; (vv) Compound growth rates (earnings, revenue, income from continuing operations, cash generation, etc.); (ww) Generation outage duration; (xx) Transmission outage duration; (yy) Distribution outage duration; (zz) Value creation; (aaa) Effective tax rate; (bbb) Financing flexibility; (ccc) Financing capability; and (ddd) Value returned to shareholders.

Any Performance Measure(s) may be used to measure the performance of the Company, Subsidiary or Subsidiaries as a whole or any business unit or business or reporting segment of the Company and/or a Subsidiary or Subsidiaries or any combination thereof, as the Committee may deem appropriate, or any of the above Performance Measures as compared to the performance of a group of peer companies, or published or special index that the Committee, in its sole discretion, deems appropriate, or the Company may select a share price performance measure as compared to various stock market indices. The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of performance goals pursuant to the Performance Measures specified in this Article. In establishing Performance Measures, the Committee may provide that any financial factor that in whole or in part

comprises any Performance Measure will be determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) or that any such financial factor may benon-GAAP or that such financial factor may be adjusted to exclude any or all GAAP ornon-GAAP items.

Article 14.                Nonemployee Director Awards

The Board or the Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting of any type of Award to Nonemployee Directors. Each grant of an award to a Nonemployee Director will be upon such terms and conditions as approved by the Board or the Committee and will be evidenced by an Award Agreement in such form as will be approved by the Board or the Committee. Each Award Agreement will specify in the case of an Option and free-standing SAR, an Exercise Price per Share, which, except with respect to Awards granted underSection 4.5(a) or(b) of this Plan, will not be less than the Fair Market Value per Share on the Grant Date. Each Option and SAR granted under the Plan to a Nonemployee Director will expire not more than 10 years from the Grant Date and may be subject to earlier termination as may be provided in the Award Agreement. If a Nonemployee Director subsequently becomes an employee of the Company or a Subsidiary while remaining a member of the Board, any Award held under this Plan by such individual at the time of such commencement of employment will not be affected thereby. Nonemployee Directors, pursuant to thisArticle 14, may be granted, or may be permitted to elect to receive, pursuant to procedures established by the Board, all or any portion of their annual retainers, meeting fees or other fees in Shares or Restricted Shares (or other Awards) in lieu of cash.

Article 15.                Rights of Participants

15.1        Employment. Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the right of the Company and its Subsidiaries to terminate any Participant’s employment or service, at any time or for any reason, nor confer upon any Participant any right to continue employment or service as a Director for any specified period of time.

Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company or its Subsidiaries and, accordingly, subject toArticles 3 and17, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Committee without giving rise to any liability on the part of the Company and its Subsidiaries.

15.2        Participation. No individual shall have the right to be selected to receive an Award under this Plan or, having been so selected, to be selected to receive a future Award.

15.3        Rights as a Shareholder. Except as otherwise provided herein, a Participant shall have none of the rights of a shareholder (or beneficial owner, as the case may be) with respect to Shares covered by any Award until the Participant becomes the record holder (or beneficial owner) of such Shares.

Article 16.                Change in Control

16.1Change in Control of the Company. Notwithstanding any other provision of this Plan to the contrary, the provisions of this Article shall apply in the event of a Change in Control unless otherwise determined by the Committee regarding an Award as reflected in the applicable Award Agreement.

Upon a Change in Control, except to the extent that an Award meeting the requirements ofSection 16.2 (a “Replacement Award”) is retained by or provided to the Participant to replace or continue such Award (the “Replaced Award”), all then-outstanding Stock Options and Stock Appreciation Rights shall immediately become fully vested and exercisable, and each otherthen-outstanding Award whose lapse of restrictions depends solely on the satisfaction of a service obligation by a Participant to the Company or Subsidiary shall vest in full and be free of restrictions related to the vesting of such Awards. The treatment of any other Awards shall be as determined by the Committee, as reflected in the applicable Award Agreement.

Except to the extent that a Replacement Award is retained by or provided to the Participant, the Committee may, in its sole discretion: (a) determine that any or all outstanding Awards granted under the Plan, whether or not exercisable, will be canceled and terminated and that in connection with such cancellation and termination the holder of such Award may receive for each Share of Common Stock subject to such Awards

a cash payment (or the delivery of shares of stock, other securities or a combination of cash, stock and securities equivalent to such cash payment) equal to the difference, if any, between the consideration received by shareholders of the Company in respect of a Share of Common Stock in connection with such transaction and the purchase price per share, if any, under the Award multiplied by the number of Shares of Common Stock subject to such Award;provided that if such product is zero or less, or to the extent that the Award is not then exercisable, the Awards will be canceled and terminated without payment therefor, or (b) provide that the period to exercise Options or Stock Appreciation Rights granted under the Plan shall be extended (but not beyond the expiration of such Options or Stock Appreciation Rights).

16.2Replacement Awards. An Award shall meet the conditions of this Section (and hence qualify as a Replacement Award) if: (a) it has a value at least equal to the value of the Replaced Award as determined by the Committee in its sole discretion; (b) it relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control; and (c) its other terms and conditions are not less favorable to the Participant than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section are satisfied shall be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.

16.3Replacement Awards and Termination of Employment. Upon a termination of employment or termination of directorship of a Participant by the Company other than for Cause occurring in connection with or during the period of two (2) years after a Change in Control: (a) all Replacement Awards held by the Participant shall become fully vested and (if applicable) exercisable and free of restrictions, and (b) all Stock Options and Stock Appreciation Rights held by the Participant immediately before the termination of employment or termination of directorship that the Participant held as of the date of the Change in Control or that constitute Replacement Awards shall remain exercisable until the earlier of one (1) year following such termination and expiration of the stated term of such Stock Option or SAR;provided that if the applicable Award Agreement provides for a longer period of exercisability, that provision shall control.

16.4Awards Subject to Code Section 409A. Notwithstanding anything to the contrary in this Plan, if the payment or settlement with respect to an Award constitutes a deferral of compensation under Code Section 409A, then to the extent necessary to comply with Code Section 409A, payment or delivery with respect to such Award following a Change in Control shall be made on the date for which payment or delivery was originally scheduled in the Award Agreement.

Article 17.                Amendment, Modification, Suspension and Termination

17.1Amendment, Modification, Suspension and Termination. Subject toSection 17.3, the Committee may, at any time and from time to time, alter, amend, modify, suspend or terminate this Plan and any Award Agreement in whole or in part;provided,however, that, without the prior approval of the Company’s shareholders and except as provided inSection 4.5, Options or SARs issued under this Plan will not be repriced, replaced (with any other Awards), regranted through cancellation or regranted by lowering the Exercise Price of a previously granted Option or SAR, nor will any outstanding underwater Options or SARs under this Plan be purchased for cash.

17.2Adjustment of Awards. If permitted by Section 409A of the Code, the Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards, including in recognition of unusual or nonrecurring events (including the events described inSection 4.5) affecting one or more Participants, the Company or the financial statements of the Company or of changes in applicable laws, regulations or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on Participants under this Plan.

17.3Awards Previously Granted. Notwithstanding any other provision of this Plan to the contrary (other thanSection 17.4), no termination, amendment, suspension or modification of this Plan or an Award Agreement (except as may be permitted or contemplated under the definition of “Performance Measures” or as permitted or contemplated bySection 17.2 with respect to the modification of Performance Measures) shall materially and adversely affect any Award previously granted under this Plan without the written consent of the Participant who received such Award.

17.4Amendment to Conform to Law. Notwithstanding any other provision of this Plan to the contrary, the Board of Directors may amend the Plan or an Award Agreement (and, with respect to Awards to Participants, the Committee may amend an Award Agreement) prospectively or retroactively as it deems advisable to conform the Plan or such Award Agreement to any present or future law relating to plans of this or similar nature, to the administrative regulations and rulings promulgated thereunder or to Internal Revenue Service or Securities and Exchange Commission rules or requirements or NYSE listing standards.

By accepting an Award under this Plan, a Participant agrees to any amendment made pursuant to this Section to any Award granted under the Plan without further consideration or action.

Article 18.                Withholding

18.1        Tax Withholding. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount necessary to satisfy federal, state, local or other taxes required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan or Awards hereunder.

18.2        Share Withholding. With respect to withholding required upon the lapse of restrictions, settlement or any other taxable event arising as a result of an Award that is payable through the issuance and delivery of Shares to the Participant, unless the Committee determines otherwise, each Participant shall satisfy his or her withholding requirement by having the Company withhold a number of Shares having a Fair Market Value on the date the withholding amount is to be determined in an amount not to exceed the maximum rate for the Participant in the applicable jurisdiction.

Article 19.                Successors

All obligations of the Company under this Plan with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.

Article 20.                Recoupment

This Plan and any Award granted thereunder will be subject to and administered in compliance with Section 10D of the Exchange Act, any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Shares may be traded, and the Company’s Executive Compensation Recoupment Policy, as amended from time to time, or its successor(s). This Plan and any Award Agreement may be amended to further such purpose without the consent of the Participant.

Article 21.                Insider Trading Policy

This Plan, any Award and any Shares issued pursuant to the exercise or settlement of any Award shall be subject to the Company’s Insider Trading Policy, as amended from time to time, or its successor(s).

Article 22.                Duration of the Plan and Shareholder Approval

The Plan shall become effective on the Effective Date and shall terminate automatically ten years thereafter, unless terminated pursuant to its terms before that time. Notwithstanding the preceding sentence, termination of the Plan shall not affect any Award granted before the date of termination, unless expressly provided in the applicable Award Agreement.

Article 23.                General Provisions

23.1        Legend. The certificates for Shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer of such Shares.

23.2        Interpretation. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular and the singular shall include the plural. The word “including” or any variation thereof, means “including, without limitation,” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

23.3        Severability. In the event any provision of this Plan shall be found illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

23.4        Requirements of Law. The granting of Awards and the issuance of Shares under this Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

23.5        Delivery of Title. The Company shall have no obligation to issue or deliver evidence of title for Shares issued under this Plan prior to:

(a)

obtaining any approvals from governmental agencies that the Company determines are advisable; and

(b)

completion of any registration or other qualification of the Shares under any applicable ruling of any governmental body that the Company determines are advisable.

23.6        Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such authority is not obtained.

23.7        Investment Representations. The Committee may require any individual receiving Shares pursuant to an Award under this Plan to represent and warrant in writing that the individual is acquiring the Shares for investment purposes and without any intention to sell or distribute the Shares.

23.8        Uncertificated Shares. The issuance or transfer of Shares to Participants may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.

23.9        Unfunded Plan. Participants shall have no right, title or interest whatsoever in or to any investments that the Company and its Subsidiaries may make to aid it in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative or any other individual. To the extent that any individual acquires a right to receive payments from the Company or its Subsidiaries under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company or Subsidiary, as the case may be. All payments to be made hereunder shall be paid from the general funds of the Company or a Subsidiary, as the case may be, and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in this Plan.

23.10No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to this Plan or any Award. The Committee shall determine whether cash, Awards or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.

23.11Nonexclusivity of this Plan. The adoption of this Plan shall not be construed as creating any limitations on the power of the Board or Committee to adopt such other compensation arrangements as it may deem desirable for any Participant.

23.12No Constraint on Corporate Action. Nothing in this Plan shall be construed to: (a) limit, impair, or otherwise affect the Company’s or a Subsidiary’s right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell or transfer all or any part of its business or assets; or (b) limit the right or power of the Company or a Subsidiary to take any action which such entity deems to be necessary or appropriate.

23.13Governing Law and Venue. The Plan and each Award Agreement shall be governed by the laws of the State of Ohio, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan to the substantive law of another jurisdiction. Unless otherwise provided in the Award Agreement, recipients of an Award and their beneficiaries, estates, successors and assignees are deemed to submit to the exclusive jurisdiction and venue of the U.S. District Court for the Northern District of Ohio or the Summit County (Ohio) Court of Common Pleas, to resolve any and all issues that may arise out of or relate to this Plan or any related Award Agreement.

23.14Action Required. If a Participant or beneficiary is required to take any action under this Plan within a certain number of days, and the final day of such period ends on Saturday, Sunday or a federal holiday, the Participant or beneficiary must take such action no later than the last business day preceding such day.

23.15Compliance with Code Section 409A.

(a)

To the extent applicable, it is intended that the Plan and any Awards made hereunder comply with (or be exempt from) the provisions of Code Section 409A, so that the income inclusion provisions of Code Section 409A(a)(1) do not apply to the Participants. This Plan and any Awards granted hereunder will be administered in a manner consistent with this intent. Any reference in this Plan to Code Section 409A will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

(b)

Neither a Participant nor any of a Participant’s creditors or beneficiaries will have the right to subject any deferred compensation (within the meaning of Code Section 409A) payable under this Plan and Awards granted hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment. Except as permitted under Code Section 409A, any deferred compensation (within the meaning of Code Section 409A) payable to a Participant or for a Participant’s benefit under this Plan and Awards granted hereunder may not be reduced by, or offset against, any amount owing by a Participant to the Company or any of its Affiliates or Subsidiaries.

(c)

If, at the time of a Participant’s separation from service (within the meaning of Code Section 409A), (i) the Participant is a specified employee (within the meaning of Code Section 409A and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Code Section 409A) the payment of which is required to be delayed pursuant to thesix-month delay rule set forth in Code Section 409A in order to avoid taxes or penalties under Code Section 409A, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it on the first business day of the seventh month after such separation from service.

(d)

Solely with respect to any Award that constitutes nonqualified deferred compensation subject to Section 409A of the Code and that is payable on account of a Change in Control (including any installments or stream of payments that are accelerated on account of a Change in Control), a Change in Control shall occur only if such event also constitutes a “change in the ownership,” “change in effective control,” and/or a “change in the ownership of a substantial portion of assets” of the Company as those terms are defined under Treasury Regulation§1.409A-3(i)(5), but only to the extent necessary to establish a time and form of payment that complies with Section 409A of the Code, without altering the definition of Change in Control for any purpose in respect of such Award.

(e)

Notwithstanding any provision of the Plan and Awards granted hereunder to the contrary, in light of the uncertainty with respect to the proper application of Code Section 409A, the Company reserves the right to make amendments to this Plan and grants hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Code Section 409A. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a Participant’s account in connection with this Plan and Awards granted hereunder (including any taxes and penalties under Code Section 409A), and neither the Company nor any of its affiliates will have any obligation to provide the Participant with any taxgross-up or indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.

Appendix B

Proposed Amendments to the Amended and Restated Code of Regulations to Authorize the Board of Directors to Make Certain Future Amendments to the Company’s Amended and Restated Code of Regulations

Proposed Amendments to the Amended and Restated Code of Regulations

***

36.     Amendments. Except as otherwise provided by law or by the Articles of Incorporation or this Code of Regulations, these Regulations or any of them may be amended (i) in any respect or repealed at any time at any meeting of shareholders or otherwise by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the Corporation voting together as a single class, provided that any amendment or supplement proposed to be acted upon at any such meeting has been described or referred to in the notice of such meetingor (ii) to the extent permitted by Chapter 1701 of the Ohio Revised Code, by the Board of Directors. Notwithstanding the foregoing provisions of this Regulation 36, no amendment to Regulations 31, 32, or 33 will be effective to eliminate or diminish the rights of persons specified in those Regulations existing at the time immediately preceding such amendment.


LOGO

76 South Main Street

Akron, Ohio 44308

 

 

Ebony L. Yeboah-AmankwahMary M. Swann

Vice President, DeputyCorporate Secretary and Associate General Counsel Corporate Secretary & Chief Ethics Officer

April 1, 2020March 23, 2022

Dear Shareholder:

You are cordially invited to attend the 2020virtual 2022 FirstEnergy Corp. Annual Meeting of Shareholders on Tuesday, May 19, 2020,17, 2022, at 8:00 a.m. EST at the John S. Knight Center, 77 E. Mill Street, Akron, Ohio*.EDT. If you plan to attend this virtual meeting, you must register in advance. For information on how to register, see “Attending the Virtual Annual Meeting” section of the “Questions and Answers about the Annual Meeting” of the proxy statement.

As you may recall, you previously consented to accessing FirstEnergy’s annual reports and proxy statements on the Internet instead of receiving paper copies.The annual report, proxy statement and all other proxy material related to the 20202022 FirstEnergy Corp. Annual Meeting of Shareholders may be accessed and viewed atwww.FirstEnergyCorp.com/AnnualMeeting.

The Notice of Annual Meeting of Shareholders is printed on the back of this letter. The notice and proxy statement contain important information about proxy voting and the business to be conducted at the meeting.Annual Meeting. We encourage you to read it carefully before voting.Your Board of Directors recommends that you vote “FOR” the election of all of the nominees in Item 1, “FOR” Items 2 through 5and 3, and “AGAINST” the shareholder proposal, which is Item 6.Items 4 and 5.

Enclosed is your proxy card, which provides instructions to appoint your proxy and vote your shares. We encourage you to take advantage of the Internet or telephone voting options. Instructions regarding Internet and telephone voting are provided on the enclosed proxy card and are available atwww.FirstEnergyCorp.com/AnnualMeeting. Please note that since you already have consented to accessing FirstEnergy’s annual reports and proxy statements on the Internet, it is not necessary when voting your shares to again provide consent.consent again.

If you wish to receive a paper copy of the annual report and proxy statement with your proxy card in the future, or if you would like a paper copy of this year’s materials, please call Shareholder Services at (800)736-3402, or call Corporate Election Services at (800)516-1564 or access the websitewww.SendMaterial.com and follow the instructions provided, or send an email to papercopy@SendMaterial.com with your11-digit control number in the email’s subject line.

This notice isNotice and the Proxy Statement are being mailed or made available to shareholders on or about April 1, 2020.March 23, 2022.

Your vote and support are important to us.Thank you in advance for voting promptly.

Sincerely,

 

LOGO

* We are monitoring novel coronavirus (COVID-19) developments and we believe that alternative Annual Meeting arrangements may be advisable or required, such as utilizing a virtual meeting or a change to the date, time or location. If we take these steps, we will announce our decision in advance via a press release, post additional information atwww.FirstEnergyCorp.com/AnnualMeeting, and will also make a public filing with the Securities and Exchange Commission. As always, we encourage you to vote your shares prior to our Annual Meeting.LOGO


Notice of Annual Meeting of Shareholders

Please carefully review this Notice, the Company’s Annual Report to Shareholders for the year ended December 31, 20192021 (the “2019“2021 Annual Report”), and the proxy statementProxy Statement and vote your shares by following the instructions on your proxy card/voting instruction form or Notice of Internet Availability of Proxy Materials to ensure your representationvote is cast at the 2022 Annual Meeting.Meeting of Shareholders (the “Annual Meeting”).

 

  

Date and TimeDATE AND TIME

 

Tuesday, May 17, 2022 8:00 a.m. EDT

RECORD DATE

March 18, 2022

 

Tuesday, May 19, 2020 8:00 a.m. ESTLOCATION

 

Location

John S. Knight Center

77 E. Mill Street

Akron, OH 44308To protect the health and safety of shareholders, employees, and the broader community, during the COVID-19 pandemic, your Board has decided that the Annual Meeting will be a virtual meeting of shareholders, conducted via live webcast, and will take place at: www.cesonlineservices.com/fe22_vm. Online access will begin at 7:30 a.m. EDT on May 17, 2022. There will be no physical location for in-person attendance at the Annual Meeting.

 

If you plan to attend the virtual Annual Meeting, you must register in advance. See the “Attending the Virtual Annual Meeting” section of the “Questions and Answers about the Annual Meeting” in the proxy statementProxy Statement for instructions on how to register.

We are monitoring novel coronavirus (COVID-19) developments Shareholders may only participate online and we believe that alternative Annual Meeting arrangements may be advisable or required, such as utilizing a virtual meeting or a change to the date, time or location. If we take these steps, we will announce our decision in advance via a press release, post additional information atwww.FirstEnergyCorp.com/AnnualMeeting, and will also make a public filing with the Securities and Exchange Commission. As always, we encourage youmust pre-register to vote your shares prior to ourand ask questions at the virtual Annual Meeting.

Agenda

•  Elect the 11 nominees named in the proxy statement to the Board of Directors to hold office until the 2021 Annual Meeting of Shareholders and until their successors shall have been elected;

•  Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2020;

•  Approve, on an advisory basis, named executive officer compensation;

•  Approve the FirstEnergy Corp. 2020 Incentive Compensation Plan;

•  Approve a management proposal to amend the Company’s Amended and Restated Code of Regulations to authorize the Board of Directors to make certain future amendments to the Company’s Amended and Restated Code of Regulations;

•  Vote on one shareholder proposal, if properly presented at the Annual Meeting; and

•  Take action on other business that may come properly before the Annual Meeting and any adjournment or postponement thereof

Record Date

March 20, 2020

Only shareholders of record as of the close of business on March 20, 2020,18, 2022, or their proxy holders, may vote at the Annual Meeting.

 

AGENDA

LOGO

 

1

  

 

Election of the Board of Directors

 

Elect the 12 nominees named in the Proxy Statement to the Board of Directors to hold office until the 2023 Annual Meeting of Shareholders and until their successors shall have been elected;

   

 

2

  

 

Ratify appointment of the independent registered public accounting firm

 

Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022;

  

 

4

  

 

Vote on shareholder

Proposals

 

Vote on two shareholder proposals, if properly presented at the Annual Meeting; and

 

      
    

 

5

  

 

Other

Business

 

Take action on the business that may come properly before the Annual Meeting and any adjournment or postponement thereof

 

   
   
      
   

 

3

  

 

Approve named executive officer compensation

 

Approve, on an advisory basis, named executive officer compensation;

 

 

On behalf of the Board of Directors,

 

LOGO

  

LOGOMary M. Swann

Ebony L. Yeboah-Amankwah

Vice President, DeputyCorporate Secretary and Associate General Counsel

Corporate Secretary & Chief Ethics Officer

Akron, Ohio

This Notice and Proxy Statement are being mailed or made available to shareholders on or about April 1, 2020.March 23, 2022.

 

Important Notice Regarding Availability of Proxy Materials

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 19, 2020.17, 2022. The proxy statementProxy Statement and the 20192021 Annual Report are available at www.FirstEnergyCorp.com/AnnualMeeting.


LOGO

c/o Corporate Election Services

P.O. Box 3230
Pittsburgh, PA 15230

www.FirstEnergyCorp.com/AnnualMeeting.ELECTRONIC ACCESSOF FUTURE PROXY MATERIALS

 

To assist us in reducing the cost of mailing proxy materials, you can consent to access all future proxy statements, annual reports and other related materials via the Internet (no paper copies will be mailed unless applicable regulations require delivery of printed proxy materials). To consent, please follow the instructions provided when you vote by Internet or telephone.

Or, if voting by mail, check the box at the bottom of this proxy card/voting instruction form and return it in the envelope provided.

Your vote must be received by 6:00 a.m., EDT, on Tuesday, May 17, 2022, to be counted in the final tabulation, except for participants in the FirstEnergy Corp. Savings Plan. If you are a participant in the FirstEnergy Corp. Savings Plan, your vote must be received by 6:00 a.m., EDT, on Monday, May 16, 2022, to be counted in the final tabulation.


E LECTRONIC A CCESS OF F UTURE P ROXY M ATERIALS To assist us in reducing the cost of mailing proxy materials, you can consent to access all future proxy statements, annual reports and other related materials via the Internet (no paper copies will be mailed unless applicable regulations require delivery of printed proxy materials) . To consent, please follow the instructions provided when you vote by Internet or telephone . Or, if voting by mail, check the box at the bottom of this proxy card/voting instruction form and return it in the envelope provided . Your vote must be received by 6 : 00 a . m . , Eastern time, on Tuesday, May 19 , 2020 , to be counted in the final tabulation, except for participants in the FirstEnergy Corp . Savings Plan . If you are a participant in the FirstEnergy Corp . Savings Plan, your vote must be received by 6 : 00 a . m . , Eastern time, on Monday, May 18 , 2020 , to be counted in the final tabulation . Your vote is important! Even if you plan to attend our virtual annual meeting, in person, please cast your vote as soon as possible by:

Internet

 Access the Internet site and  cast your vote:

www.cesvote.com

  OR   

QR Code

LOGO

Scan with a mobile device

  OR   

Telephone

Call Toll-Free:

1-888-693-8683

  OR   

Mail

Return your proxy card/voting instruction form in the postage-paid envelope provided

If you vote by Internet or telephone, please do not return your proxy card/voting instruction form.

LOGO

ê Please sign and date the proxy card/voting instruction form below and fold and detach at the perforation before mailing. ê

When properly executed, your proxy card/voting instruction form will be voted in the manner you direct. If you do not specify your choices, your shares will be voted FOR all the nominees listed in Item 1, FOR Items 2 - 5and 3, and AGAINST Item 6. c/o Corporate Election Services P.O. Box 3230 Pittsburgh, PA 15230 Telephone Call Toll - Free: 1 - 888 - 693 - 8683 Items 4 and 5.

Your Board of Directors recommends a vote FOR all the nominees listed in Item 1. 1. Election of Directors: FOR AGAINST ABSTAIN (1) Michael J. Anderson □ □ □ (2) Steven J. Demetriou □ □ □ (3) Julia L. Johnson □ □ □ (4) Charles E. Jones □ □ □ (5) Donald T. Misheff □ □ □ (6) Thomas N. Mitchell □ □ □ (7) James F. O’Neil III □ □ □ (8) Christopher D. Pappas □ □ □ (9) Sandra Pianalto □ □ □ (10) Luis A. Reyes □ □ □ (11) Leslie M. Turner □ □ □ QR Code Scan with a mobile device Internet Access the Internet site and cast your vote: www.cesvote.com

1.Election of Directors:FOR  AGAINST  ABSTAIN
(1)Jana T. Croom
(2)Steven J. Demetriou
(3)Lisa Winston Hicks
(4)Paul Kaleta
(5)Sean T. Klimczak
(6)Jesse A. Lynn
(7)James F. O’Neil III
(8)John W. Somerhalder II
(9)Steven E. Strah
(10)Andrew Teno
(11)Leslie M. Turner
(12)Melvin Williams

Your Board of Directors recommends a vote FOR Items 2 - 5. 2. Ratify the Appointment of the Independent Registered Public Accounting Firm for 2020 □ FOR □ AGAINST □ ABSTAINand 3. Approve, on an Advisory Basis, Named Executive Officer Compensation □ FOR □ AGAINST □ ABSTAIN 4. Approve the FirstEnergy Corp. 2020 Incentive Compensation Plan □ FOR □ AGAINST □ ABSTAIN 5 . Approve a Management Proposal to Amend the Company’s Amended and Restated Code of Regulations to authorize the Board of Directors to make certain future amendments to the Company’s Amended and Restated Code of Regulations □ FOR □ AGAINST □ ABSTAIN Your Board of Directors recommends a vote AGAINST Item 6. 6. Shareholder Proposal Requesting Removal of Aggregation Limit for Proxy Access Groups □ F O R □ AGAINST □ ABSTAIN Signature Date Signature (Joint Tennant)

2.Ratify the Appointment of the Independent Registered Public Accounting Firm for 2022
  FOR      AGAINST  ABSTAIN
3.Approve, on an Advisory Basis, Named Executive Officer Compensation
  FOR  AGAINST  ABSTAIN                        
Your Board of Directors recommends a vote AGAINST Items 4 and 5.
4.Shareholder Proposal Requesting a Report Relating to Electric Vehicles and Charging Stations with Regards to Child Labor Outside of the United States
  FOR  AGAINST  ABSTAIN
5.Shareholder Proposal Regarding Special Shareholder Meetings
  FOR  AGAINST  ABSTAIN

Signature

Date                    

Signature (Joint Tenant)

Date

Sign above as name(s) appear on this proxy card/voting instruction form . form.

If signing for a corporation or partnership or as an agent, attorney or fiduciary, indicate the capacity in which you are signing

Check this box if you consent to accessing, in the future, the annual report, proxy statement and any other related material via the Internet (no paper copies will be mailed unless applicable regulations require delivery of printed proxy materials).


FirstEnergy Corp.

Notice of Annual Meeting of Shareholders

Tuesday, May 17, 2022, at 8:00 a.m. EDT

www.cesonlineservices.com/fe22_vm

Due to the public health impact of the novel coronavirus pandemic (COVID-19) and to protect the health and safety of our shareholders, employees and other stakeholders, the Annual Meeting will be mailed unless applicable regulations require delivery of printed proxy materials) .held in a virtual meeting format only, via webcast. You will not be able to attend the Annual Meeting physically in person. If you plan to attend the virtual Annual Meeting, in - personyou must register at www.cesonlineservices.com/fe22_vm no later than 9:00 a.m. EDT on May 19 , 2020 , in Akron, Ohio, check this box to register in advance . Mail Return your proxy card/voting instruction form in the postage - paid envelope provided OR OR OR

16, 2022.

YOUR VOTE IS IMPORTANT

Regardless of whether you plan to attend the Annual Meeting of Shareholders, please ensure your shares are represented at the meeting by promptly voting by telephone or Internet or by returning your proxy card/voting instruction form in the enclosed envelope . envelope.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 19 , 2020 .17, 2022. FirstEnergy Corp . Corp.’s proxy statement and 20192021 Annual Report are available at www . FirstEnergyCorp . com/AnnualMeeting . Please date, sign and mail promptly if you are not voting by telephone or Internet.www.FirstEnergyCorp.com/AnnualMeeting.

ê Please sign and date the proxy card/voting instruction form below and fold and detach at the perforation before mailing . Proxy Card/Voting Instruction Form mailing. ê

LOGOProxy Card/Voting Instruction Form

This proxy card/voting instruction form is solicited by the Board of Directors

for the Annual Meeting of Shareholders on May 19, 2020 17, 2022

The undersigned appoints Ebony L . Yeboah - AmankwahDaniel M. Dunlap and Daniel M . DunlapMary M. Swann as proxies with the power to appoint their substitutes ;substitutes; authorizes them to represent and to vote, as directed on the reverse side, all the shares of common stock of FirstEnergy Corp .Corp. which the undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders to be held on May 19 17, 2022, at 8:00 a.m., 2020 , at 8 : 00 a . m . , Eastern time,EDT, or at any adjournment or postponement thereof ; thereof; and authorizes them to vote, at their discretion, on other business that properly may come before the meeting . meeting.

If applicable, as a participant and “named fiduciary” in the FirstEnergy Corp .Corp. Savings Plan, this form also serves as voting instructions to Fidelity Management Trust Company, as Trustee for shares held in the Plan .Plan. The Trustee will vote all shares as instructed by Plan participants, and the shares for which the Trustee does not receive timely voting instructions will be voted by the Trustee in the same proportion as the shares held under the Plan for which the Trustee receives voting instructions . ADMISSION CARD If you plan to attend the Annual Meeting, you must register in advance by following the instructions included in the “Questionsinstructions.

Please date, sign and Answers about the Annual Meeting” section of the proxy statement . Also,mail promptly if you plan to attend the Annual Meeting, please follow the related instructions whenare not voting by telephone or Internet, or if voting by mail, check the box at the bottom of this proxy card/voting instruction form and return it in the envelope provided . Please bring this card if you choose to attend the Annual Meeting . FirstEnergy Corp. Annual Meeting of Shareholders Tuesday, May 19, 2020, at 8:00 a.m. Eastern time John S. Knight Center 77 E. Mill Street, Akron, OH For personal use of the named shareholder(s) – not transferable. If you registered to attend the Annual Meeting, please present this card at the reception desk upon arrival and please bring a valid form of government - issued photo identification for admission to the Annual Meeting.Internet.