FirstEnergy President and CEO Steven Strah retired Friday after making the decision the day before, according to the Akron, Ohio-based utility company, which is emerging from a corruption scandal.
Strah, who has been FirstEnergy’s CEO since March 2021, will receive no severance payments or benefits, the company said in a Securities and Exchange Commission filing on Thursday. Strah is eligible to receive certain retirement benefits, the company said.
FirstEnergy expects to improve its balance sheet by selling a minority interest in a transmission or distribution asset, the company said in a Thursday press release. “It is unclear whether the Board [of Directors] will consider a full sale of the company at this time,” Morgan Stanley & Co. analysts said in a note Friday.
FirstEnergy is continuing to work through issues related to bribes it doled out in support of HB 6, energy legislation in Ohio that provided subsidies to nuclear power plants owned by a former subsidiary, now called Energy Harbor.
In a call with equity analysts last week, FirstEnergy officials offered no additional information about the board of director's review of company executives, saying the review is now complete, according to the Morgan Stanley analysts.
“There is no plan to disclose any findings and they did not indicate any evidence of wrongdoing or new discoveries,” the analysts said.
FirstEnergy officials see strong market valuations for utility assets and are confident they can sell a minority stake in part of the company, according to the analysts.
Earlier this year, FirstEnergy completed a $2.4 billion sale of part of its transmission business to Brookfield Super-Core Infrastructure Partners.
“We think a similar sale would be envisioned now,” the Morgan Stanley analysts said, adding that a sale could be announced in the next three to five months if it follows a similar timeline to the Brookfield deal.
FirstEnergy named John W. Somerhalder II, board chair, as interim president and CEO while the company looks for a permanent replacement for Strah.
Somerhalder will earn a $1.25 million base annual salary and will be eligible for incentives that could pay him more, according to FirstEnergy.
Somerhalder was president and CEO of AGL Resources, an energy services holding company, from March 2006 through December 2015.
FirstEnergy owns ten electric utilities that have a total of about 6 million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York.