Business Context and Reporting Period
This Form 8-K is a current report filed by American Electric Power Company, Inc. (AEP), Appalachian Power Company, and Ohio Power Company. The report date is December 13, 2005, covering events occurring on December 13 and December 14, 2005. The filing addresses Item 1.01 regarding the entry into a material definitive agreement concerning executive compensation.
Key Financial Metrics
The filing does not provide data on revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation adjustments effective January 1, 2006.
Material Changes and Compensation Details
The Board of Directors and the Human Resources Committee approved new compensation packages for named executive officers based on individual performance and market data from peer energy and general industry companies.
Base Salaries Effective January 1, 2006
| Executive Name | Annual Salary |
|---|---|
| M. G. Morris | $1,200,000 |
| C. L. English | $500,000 |
| S. Tomasky | $500,000 |
| R. P. Powers | $475,000 |
| T. M. Hagan | $440,000 |
| H. K. Koeppel | $440,000 |
Annual Bonus Targets (Percentage of Base Salary)
| Executive Name | Target % |
|---|---|
| M. G. Morris | 110% |
| C. L. English | 65% |
| S. Tomasky | 65% |
| R. P. Powers | 60% |
| T. M. Hagan | 60% |
| H. K. Koeppel | 60% |
Additionally, C. L. English, S. Tomasky, T. M. Hagan, and H. K. Koeppel will each receive a lump sum merit payment of $10,000 on January 1, 2006.
Guidance, Outlook, and Risks
The filing contains no financial guidance, outlook, management commentary on operational risks, or discussion of contingencies and unusual items. The scope is limited to the approval of executive compensation.
Investor Verification Checklist
- Verify the effective date of the new base salaries and bonus targets (January 1, 2006).
- Confirm the total cash impact of the $10,000 lump sum merit payments for four executives.
- Review the peer group data referenced by the Committee to assess the market competitiveness of the new compensation levels.
- Check subsequent filings for the actual payout of the 2006 annual incentive awards based on the established targets.