FirstEnergy Corp. (FE) Earnings Call Transcript & Summary

Good morning, and welcome to the FirstEnergy Corp.'s 2024 Annual Meeting of Shareholders. This meeting is being recorded. At this time, I'd like to turn the meeting over to the company.

Thank you, and good morning. I'm Mary Swann, Corporate Secretary and Associate General Counsel. I have a few details to review before we begin. The rules of conduct for this meeting can be found in the meeting materials area to the left of the webcast screen and are also summarized on the screen. The polls are open. Eligible shareholders who have not yet voted or are looking to change their vote may do so by clicking the Click Here to Vote link in the meeting materials areas on the screen. The polls will remain open until the conclusion of the matters to be voted on at this meeting. All links in the meeting materials area are now live and will remain live during the voting portion of the meeting. In the event of technical difficulties where we are unable to provide any immediate updates, please wait 15 minutes for resolution. If after that time, we are still unable to provide an update in this meeting, please refer to the newsroom area at the company's website, firstenergycorp.com for any related updates. There will be a session to answer questions pertinent to the meeting and related to company business after the formal part of the meeting. Pre-registered shareholders may submit questions in the Ask a Question area on the screen. At this time, I would like to turn the meeting over to John Somerhalder, Nonexecutive Board Chair, FirstEnergy.

Thank you. Good morning, everyone. I'm John Somerhalder and it's my pleasure to welcome you to our Annual Meeting of Shareholders. This webcast has 3 sections. The formal part of the meeting with a report on the voting results, followed by a presentation from Brian Tierney, President and CEO and finally, a session to answer questions that are pertinent to the meeting and related to our business. At this time, I will call the Annual Meeting of Shareholders to order. In the meeting materials area of the screen, our rules of conduct and forward-looking statements disclaimer for this meeting. To begin, I would like to acknowledge the members of our -- of your Board of Directors, all of whom are present for this meeting. I would also like to recognize our executive team and thank everyone for their engaged and ethics focused leadership as we continue executing our plan and creating long-term value for our investors, customers, communities and employees. Mr. Kevin Thomas, representing PricewaterhouseCoopers, is attending the meeting as described in the proxy statement. The Board appointed Corporate Election Services to act as Inspector of Election for this meeting. A list of shareholders entitled to vote at this meeting was delivered to Corporate Election Services and a certified copy of this list is available for examination by eligible shareholders in the meeting materials area. The polls are currently open. Eligible shareholders who have not yet voted or are looking to change their vote may do so by clicking the Click Here to Vote link in the meeting materials section. Voting will close shortly. Mary Swann, our Corporate Secretary, will now give her report.

Mr. Chair, this meeting is being held pursuant to a notice which was mailed or made available beginning March 29, 2024, to each shareholder of record as of March 25, 2024. There is a quorum present in person or by proxy.

Thank you. I refer you to the annual report located in the meeting materials area and present the financial statements from 2023. The company's amended and restated code of regulations sets forth procedures a shareholder must follow to nominate directors or present other shareholder proposals. No matters have been submitted in accordance with the company's code of regulations and the only matters properly before our shareholders today are those set forth in the proxy statement and notice of Annual Meeting. The first order of business is to vote on the items identified in the proxy. Item 1 through 3 are the following: Item 1, the election of 10 director nominees named in the proxy statement. Item 2, The Ratification of the Appointment of PricewaterhouseCoopers as the Independent Registered Public Accounting Firm for 2024. Item 3, an Advisory vote to approve named executive officers compensation. Your Board has recommended the shareholders vote for the election of each of the 10 director nominees in Item 1 and for Items 2 and 3. Items 4 through 6 are Shareholder Proposals. If properly presented by each shareholder or their representative, these will be put forth for shareholders vote. Item 4 is a proposal from the State Controller of the State of New York. We now invite the proponent to present Item 4.

On behalf of New York State Comptroller Thomas DiNapoli Trustee of the New York State Common Retirement Fund. We urge our federal FirstEnergy shareholders to vote For proposal 4 on the proxy requesting reporting on the fFeasibility of Integrating Climate-Related Measures into the Company's Compensation Plans. Proposal 4 is important for FirstEnergy's Climate Strategy and long-term performance for the following reasons: Compensation Packages are designed to reward executives for achieving company's strategic objectives. FirstEnergy has developed a climate strategy that includes achieving carbon neutrality for scope 1 emissions by 2050. Although the company highlights its climate strategy is a key component of the company's overall business strategy, FirstEnergy's compensation structure for senior executives does not explicitly include meaningful linkages between climate measures and executive compensation. This stands in contrast to most peer utility companies, including American Electric Power, Dominion Energy and Xcel Energy. These peers have not only tied executive compensation to climate measures, but have specifically incorporated quantitative climate metrics with measurable payout and long-term incentive components. Effectively managing climate strategy provides significant opportunities for FirstEnergy and should be a key metric by which executives are evaluated. By integrating climate-related measures into executive compensation, companies can reduce climate risks and increase the likelihood of achieving a timely climate transition and by incentivizing executives to meet climate objectives, FirstEnergy can achieve greater long-term value for shareholders. Therefore, we urge all FirstEnergy shareholders to vote For proposal 4 on the proxy, which calls on FirstEnergy to report to shareholders on the feasibility of integrating climate related to measures into executive compensation. Thank you for your consideration.

Thank you. Your Board has recommended that shareholders vote against Item #4. Let's move on to Item #5. Mr. John Chevedden is available to present Item 5. Operator, would you please open Mr. Chevedden's line?