FirstEnergy Corp. (FE, Financial) has announced a significant modification to its Long-term Incentive Compensation Program (LTIP), effective June 17, 2025. The Board of Directors, following a recommendation from the Compensation Committee, has approved a change in the key performance indicators (KPIs) used to assess financial performance for the years 2025 and 2026. This adjustment affects the outstanding awards under the company's LTIP for the performance periods from January 1, 2023, to December 31, 2025, and from January 1, 2024, to December 31, 2026.
The modification involves replacing the Operating Earnings Per Share (Operating EPS) KPI with the Core Earnings Per Share (Core EPS) KPI for the remaining portions of the applicable performance periods. This change applies to all eligible recipients of the 2023 and 2024 LTIP Awards, including the Board Chair, President and CEO, CFO, and other named executive officers.
Previously, the Revised LTIP Awards were based on two financial KPIs: Operating EPS, weighted at 65%, and relative total shareholder return (Relative TSR), weighted at 35%. The Relative TSR KPI remains unchanged. The strategic decision to transition from Operating EPS to Core EPS aims to provide investors with more comprehensive insights into the performance of FirstEnergy's regulated operations.
Starting with the earnings release for the year ended December 31, 2024, FirstEnergy reported its annual growth rate based on Core EPS, a non-GAAP metric that includes the company's four business segments—Distribution, Integrated, Stand-Alone Transmission, and Corporate—while excluding special items and income from non-core investments. As of the quarter ended March 31, 2025, the company no longer reports or provides guidance based on Operating EPS, focusing instead on Core EPS.
This transition aligns the incentive compensation payable to management with FirstEnergy's key business objectives post-2024. The Core EPS KPI will measure performance for the 2023 LTIP Awards from January 1, 2025, to December 31, 2025, and for the 2024 LTIP Awards from January 1, 2025, to December 31, 2026. The maximum payout for the EPS KPI is capped at 100% of the target.
This strategic shift reflects FirstEnergy's commitment to aligning its performance metrics with its long-term business goals and providing clearer insights into its operational success.
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