FirstEnergy names new president and CEO, Brian Tierney

FirstEnergy Corp. on Monday announced a new president and CEO, just over two weeks after two state officials were found guilty in the biggest public corruption case in state history, which involved the electric utility company.

The company said the board of directors unanimously agreed to appoint Brian Tierney president and CEO effective June 1, with Tierney expected to be appointed by the board after the May 2023 annual meeting to serve as a director.

Tierney succeeds interim President and CEO John Somerhalder II, who is also, and will remain, chair of FirstEnergy's board.

Background on Larry Householder, FirstEnergy and House Bill 6

The public corruption case involved $61 million in bribe money paid by FirstEnergy via dark money groups to help former Ohio House Speaker Larry Householder seize political power and, in turn, pass and defend a $1.3 billion bailout law known as House Bill 6.

A federal jury found Householder and ex-Ohio Republican Party Chairman Matt Borges guilty of racketeering conspiracy on March 9. They face up to 20 years in prison.

Borges lobbied for the House Bill 6 and worked to block a referendum to put it on the ballot in 2019. He paid a $15,000 bribe to get insider information on the referendum.

U.S. District Court Judge Timothy S. Black will sentence Householder and Borges in the coming months. Both men plan to appeal. They were not taken into custody and remain out on bond.

In July 2021, FirstEnergy admitted it bribed Householder and top utility regulator Sam Randazzo and agreed to pay a $230 million fine. To date, neither Randazzo nor executives from FirstEnergy or FirstEnergy Solutions, now called Energy Harbor, have been charged with any crime.

Householder verdict:Ex-Ohio House Speaker Larry Householder, former Ohio GOP leader Matt Borges found guilty

Who is Brian Tierney?

Tierney, 55, is currently a senior managing director and global head of infrastructure operations and asset management at asset management firm Blackstone, where he started working in 2021.

Blackstone became one of FirstEnergy's largest shareholders in late 2021, when the investment firm acquired $1 billion worth of the utility company's stock. The deal also gave Blackstone a seat on the FirstEnergy board.

Tierney previously worked for 23 years at Ohio-based American Electric Power (AEP) Co., including as executive vice president of strategy, chief financial officer, executive vice president of AEP Utilities East, and senior vice president of commercial operations.

A former Peace Corps volunteer in the Philippines, Tierney earned his bachelor's degree in history from Boston College and an MBA from the University of Chicago with concentrations in finance and accounting.

"I have dedicated my career to the energy industry, and leading FirstEnergy is a privilege that I am humbled by and a responsibility that I take seriously," Tierney said in a statement. "I believe strongly in the steps the company's board and management have taken to position the business for long-term stability and success, and I look forward to working with them to execute this strategy and build on FirstEnergy's strong operational momentum. I appreciate the board's confidence in me and will do everything I can to serve our customers and communities, keep our employees safe and move FirstEnergy into the future."

Brian Tierney compensation package

According to the company's latest 8-K filed Monday, Tierney's compensation package, approved by the board on March 22, includes an annual base salary of $1.5 million, which will be reviewed annually, and a hiring bonus equal to $1.5 million.

He's also expected to be eligible to participate in the company’s executive relocation program, executive deferred compensation plan, 401(k) plan, vacation and paid time off program, and standard health and welfare benefits.

In addition, his compensation package includes the potential for millions of dollars in cash and stock incentive awards based on the company's performance under his leadership.

The package includes an annual short-term incentive award target opportunity equal to 150% of the base salary. The award for 2023 can be earned from 0% to 200% of the target, depending on actual performance, but it will be prorated for actual service during 2023.

Starting in 2024, there will be an annual long-term incentive awards target opportunity equal to 683% of base salary (weighted one-third in cash-based performance-adjusted restricted stock units and two-thirds in stock-based performance-adjusted restricted stock units), with awards generally earned from 0% to 200% of the target, depending on actual performance.

The package also includes pro-rated awards of stock-based performance-adjusted restricted stock units for the 2021-2023 and 2022-2024 performance periods (Tierney’s target opportunity, generally equal to $10,245,000, will be pro-rated for nine out of 36 months for the 2021-2023 award and for 21 out of 36 months for the 2022-2024 award), with each award generally earned from 0% to 200% of the pro-rated target, depending on actual performance and the specific terms of the award).

It also includes a pro-rated award for the 2023-2025 performance period (weighted one-third in cash-based performance-adjusted restricted stock units and two-thirds in stock-based performance-adjusted restricted stock units), with Tierney’s target opportunity of $10,245,000 pro-rated for 31 out of 36 months and the award generally earned from 0% to 200% of the pro-rated target, depending on actual performance and the specific terms of the award.

The package includes a service-based restricted stock award equal to $5 million that will vest in equal amounts over four years. Tierney will be subject to the company’s share ownership guidelines, under which his target share ownership after five years will be 700% of his annual base salary rate.

John Somerhalder replaced Steven Strah, who replaced fired CEO Chuck Jones

Somerhalder was named interim CEO in September after the resignation of President and CEO Steven Strah. At the time, FirstEnergy said the permanent replacement would be hired from outside the company.

"Brian Tierney is a proven leader with deep experience in the energy industry, a unique blend of operational, financial and strategic skills, and a sterling record of driving growth and transformation within our sector," Somerhalder said in a statement. "Over the last several years, we have taken decisive actions to reposition FirstEnergy for the future. The board's search committee set out to identify a leader who could continue the important work underway to drive the company forward while bringing critical outside expertise and perspectives. We could not have selected a better suited candidate than Brian. We look forward to working closely with him to build on FirstEnergy's momentum and enhance value for our shareholders and other stakeholders."

The company has been making major executive leadership and board changes in the years-long aftermath of the $61 million Householder/House Bill 6 bribery scandal, in which the utility admitted to playing a major role in order to receive taxpayer subsidies for two former FirstEnergy-owned nuclear plants.

Previous CEO Chuck Jones was fired in October 2020, with Strah succeeding him as CEO, initially on an interim basis.

"We thank John for his tremendous leadership over the last six months," lead independent director Lisa Winston Hicks, speaking for the FirstEnergy board, said in a statement. "He helped keep the company on course and oversaw the continued execution of our strategy to become a more resilient and forward-looking company. Under his leadership, FirstEnergy is on stronger footing and well positioned to capitalize on the opportunities ahead."

USA TODAY Network Ohio Bureau reporters Jessie Balmert and Laura Bischoff contributed this article. Contact Beacon Journal reporter Emily Mills at emills@thebeaconjournal.com and on Twitter @EmilyMills818.

This article originally appeared on Akron Beacon Journal: FirstEnergy names new president and CEO, Brian Tierney