AMERICAN ELECTRIC POWER CO INC 8-K

What Happened
American Electric Power Company, Inc. (AEP) announced on Dec. 18, 2025 (filed Dec. 19, 2025) that its Board granted a special equity award to Chair, President and CEO William J. Fehrman as part of a retention and pay-for-performance alignment strategy. The award totals $15 million: $10 million in performance shares and $5 million in restricted stock units (RSUs). Vesting of both components is contingent on Mr. Fehrman’s continuous employment through December 31, 2030.

Key Details

• $10,000,000 in performance shares that vest only if Mr. Fehrman remains employed through Dec. 31, 2030; final payout depends on relative total shareholder return (rTSR).
• rTSR is measured annually from the last business day close of the prior year through a 20-day average closing price at year-end; performance scores range from 0% to 200% (20th to 80th percentile).
• $5,000,000 in restricted stock units that vest on Dec. 31, 2030, subject to continuous employment.
• Filing made under Item 5.02 (departure/election of directors or certain officers); signed by David C. House, Assistant Secretary (filed Dec. 19, 2025).

Why It Matters
This award is designed to retain AEP’s CEO through 2030 and align his compensation with long-term shareholder returns by tying a large portion of pay to rTSR performance. For investors, the grant signals management’s focus on long-term performance and could affect future compensation expense and potential share dilution if performance shares are settled in stock; the filing does not disclose exact share counts. The award is a material executive compensation action and relevant to governance and investor assessments of management incentives.