Company: AWK
Filing Date: 2025-03-27
Form Type: DEF 14A
Source: 0001193125-25-064607
Chunk: 63

Company: American Water Works Company, Inc.
Filing Date: 2025-03-27
Form: DEF 14A
Chunk 63
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 the 2017 Omnibus Plan specifically require that grants under those plans be subject to this policy. TAX AND ACCOUNTING CONSIDERATIONS Tax Considerations Under Section 162(m) of the Code, a public company is prohibited from deducting for federal income tax purposes compensation in excess of $1.0 million paid to certain of its executive officers. The ED&CC believes that the income tax impacts of compensation is only one of many other relevant considerations in setting compensation. The ED&CC also believes that the Section 162(m) tax deduction limitation should not be permitted to compromise the Company’s ability to design and maintain executive compensation arrangements that, among other things, are intended to attract, retain and motivate talented, high-performing executives, and that are designed to discourage decision-making focused solely on compensatory consequences and excessive risk-taking. Section 409A of the Code provides that amounts deferred under nonqualified deferred compensation plans are includible in an employee’s income when vested unless certain requirements are met. If these requirements are not met, employees may be subject to additional taxes, interest and penalties. Our nonqualified deferred compensation arrangements are intended to satisfy the requirements of Section 409A. During 2024, as permitted by the 2017 Omnibus Plan, the ED&CC approved modifications to each of the outstanding LTPP grants held by our Section 16 officers to permit withholding of shares of common stock to satisfy their Federal tax withholding obligations, at a rate no greater than the maximum rate permitted by U.S. generally accepted accounting principles applicable to the Company.

| 44 |     | AMERICAN WATER | 2025 PROXY STATEMENT |

Accounting Considerations RSU and PSU awards are accounted for based on their grant date fair value, as determined under ASC 718, which is recognized over the service or vesting period applicable to the grant. Forfeitures are estimated, and the compensation cost of awards will be reversed if the employee does not remain employed by us throughout the service or vesting period.

| AMERICAN WATER | 2025 PROXY STATEMENT |     | 45 |

EXECUTIVE COMPENSATION 2024 SUMMARY COMPENSATION TABLE The following table sets forth information regarding the compensation of all of our NEOs for 2024.

| Name and Principal  Position                                                 |     | Year |      |      |     | Salary ($) (1) |           |           |     | Bonus ($) |         |   |     | Stock          
 Awards ($) (2) |           |           |