Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 321

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 1
Chunk 321
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ESP.  The ESP was amended to provide that the cash separation payment for the CEO will be calculated by multiplying the severance multiple by (a) the sum of annual salary and target EAIP rather than (b) annual salary.  

These changes are designed to align the scorecard achievement ranges and maximum awards for the CEO under the EAIP and LTIP, as well as the formula for calculating cash severance payments, with those applicable to other executives. 

Departure of NEOs.  During 2025, Mr. Lyash and Mr. Thomas both retired, Mr. Fountain's tenure ended, and Mr. Rausch announced his intention to separate from service in 2026.  See Potential Payments on Account of Resignation, Retirement, Termination without Cause, Termination with Cause, Death, or Disability for information regarding amounts that these individuals received or will receive in connection with their separation from service.

TVA's Executive Compensation Philosophy

TVA has a public mission — one that is uniquely focused on serving the people of the Tennessee Valley and making their lives better.  TVA's pay philosophy aims to strike a balance by competing with investor-owned utilities ("IOUs") to attract, retain, and motivate highly qualified and committed executives while also fulfilling its commitments to the public power mission. 

TVA’s Compensation Plan as adopted by the TVA Board is designed to:

•Align compensation with TVA performance and productivity improvement.

•Set performance goals that are aligned with TVA's strategic priorities.  

•Provide market-based, competitive compensation levels so TVA can attract, retain, and motivate highly competent employees.  Total direct compensation ("TDC"), which includes annual cash and short-term and long-term incentives, generally is set by considering several factors, including reference to the median (50th percentile) of the relevant labor market, as well as factors such as individual performance, experience, and internal equity.  Executives may be positioned above or below the median based on labor market conditions and other factors such as tenure in the role.  See Establishing Competitive Compensation for a discussion of benchmarking practices and competitive compensation decisions at TVA.

•Motivate and reward short-term and long-term performance by providing a mix of short-term and long-term incentives and placing a greater emphasis on long-term incentives for executives in the form of at-risk, performance-based compensation. 

The TVA Board follows the requirements of the TVA Act, which include the approval of a compensation plan and other notable considerations:

•Compensation will be