Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 585

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 11
Chunk 585
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Each year, two key compensation decisions are made with respect to NEO compensation: (1) the amount of the TDC opportunity to grant, which is forward-looking, incentivizes the NEO to perform, and is determined toward the beginning of the fiscal year, and (2) the amount of TDC earned, which rewards the NEO for demonstrated performance (other than salary or LTR award) and is determined at the end of the fiscal year.  The TDC components and weightings for TDC opportunities granted to the NEOs in 2025 are summarized below and described in the sections that follow.  Since TVA is a governmental entity that issues no equity, all direct compensation is denominated and paid out in cash.

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Compensation Component(1)of Target TDCObjectiveKey FeaturesAnnual SalaryProvide fixed base  compensation to  encourage hiring and retention of qualified executives•Annual salary is the essential fixed element of pay that all employees expect.•Salary is typically determined with reference to market data (most often approximating 50th percentile) and experience in role. Executive Annual Incentive PlanIncentivize performance by providing at-risk compensation tied to attainment of pre-established performance goals for the fiscal year•Target annual incentives are determined largely based on market data and experience in role.•Annual incentive payouts are based on the results vs. pre-established enterprise goals as determined from year to year by the TVA Board.  •The TVA Board has established and can utilize a standard discretionary range to adjust the scorecard achievement by plus or minus 20 percent to account for extraordinary events or significant occurrences that impact TVA’s performance.  In addition, the Board, in its sole discretion, may reduce EAIP awards to zero or increase EAIP awards to the maximum amount set forth in the EAIP for any or all participants.Long-Term Incentive PlanProvide a targeted level of total long-term compensation comprised of at-risk and retention components•Participation is limited to key positions that have the ability to significantly impact the long-term financial and/or operational objectives critical to TVA's overall success.Long-Term Performance AwardIncentivize performance by providing at-risk compensation tied to attainment of pre-established performance goals over a three-year performance period•LTP grants will vest and pay out at the end of a three-year performance cycle with variable at-risk opportunities based on achievement against performance goals established at the beginning of the performance cycle.•Performance-based LTP grants are intended to provide the majority of an executive's total LTI opportunity, with the remaining