The directors of American Electric Power Co. Inc. have recruited a former Berkshire Hathaway Energy CEO—who has been leading a utility infrastructure services firm for a mere five and a half months—to be their new leader.
Set to take the helm at Columbus-based AEP Aug. 1 is Bill Fehrman, who had led Berkshire Hathaway Energy from 2018 until late last year. Before that, the 63-year-old was president and CEO of BHE’s MidAmerican Energy Co. unit for 11 years and also led PacifiCorp Energy and the Nebraska Public Power District. Fehrman will assume the top job at AEP from Ben Fowke, who has held the interim CEO title since February, when the company’s directors pushed out Julie Sloat.
“Bill is an accomplished leader and industry veteran with a proven ability to drive operational excellence, produce strong financial results and deliver for customers and stakeholders,” AEP board Chairman Sara Martinez Tucker said in a statement. “His expertise and unique perspectives will help AEP implement new solutions as we build the energy system of the future to power our communities. His diverse background in finance, operations, regulatory matters, safety, cybersecurity and renewable energy will be instrumental to advancing our strategic vision.”
AEP is prying Ferhman loose from Centuri Holdings Inc., a roughly $2 billion (revenue) builder of electric infrastructure that Las Vegas-based Southwest Gas Holdings Inc. spun out in April via an initial public offering. Southwest’s leaders had recruited Ferhman to oversee that spinoff and set up Centuri as a stand-alone company and investors didn’t react kindly to AEP’s recruiting news: Centuri shares (Ticker: CTRI) fell more than 15% June 27.
The board of AEP, which has waived for Fehrman the company’s policy that employees retire at 65, is paying up for the services of its new CEO: In addition to an annual salary of $1.5 million and a short-term incentive that’s nearly half that amount, the company will pay Fehrman a total of $3.15 million between this summer and next March to offset the Centuri sign-on bonus and short-term incentives he is forfeiting. AEP also will give its new boss $4 million worth of restricted shares to make up for Centuri awards he is leaving behind.
In terms of longer-term incentives, Fehrman will receive $4.7 million worth of stock (also restricted or performance-based) this year and a target of $10.5 million of equity in 2025.
“I’m committed to building on the company’s legacy of success and service by strengthening relationships with our stakeholders and continuing to execute our robust capital plan,” Fehrman said in the company’s statement. “I see incredible potential in this company and I look forward to working with the best-in-class team at AEP.”
Fowke will stay on as interim CEO until the end of July and then move into a transitionary role as senior advisor while keeping his board seat. The company will continue to pay him what it is now and also grant him $1 million per month in AEP shares that he is required to hold for at least a year.
Shares of AEP (Ticker: AEP) rose 1.3% to $88.30 on word of Ferhman’s hiring. They have risen about 6% year to date, which has grown the company’s market capitalization to more than $46 billion.
