Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 23, 2020, the Board of Directors of DTE Energy Company (the “Company” or “DTE Energy”) elected David S. Ruud, DTE Energy’s Senior Vice President, Corporate Strategy & Development, as Senior Vice President and Chief Financial Officer, effective May 4, 2020. Current Senior Vice President and Chief Financial Officer, Peter B. Oleksiak, has resigned as Senior Vice President and Chief Financial Officer effective May 3, 2020 pursuant to a Transition and Separation Agreement (the “Separation Agreement”), the terms of which are described below, but will remain with the Company through December 31, 2020 to assist in the transition. Mr. Ruud, 53, has served as Senior Vice President, Corporate Strategy & Development of DTE Energy since 2019, prior to which Mr. Ruud served as President of DTE’s Power and Industrial business since 2008.
Chief Financial Officer Compensation Arrangement
Effective May 4, 2020, Mr. Ruud will receive a $54,000 increase in base salary, but will no longer receive a $30,000 executive benefit allowance. In addition, his Annual Incentive Plan (“AIP”) target percentage will increase from 65% to 70%. Mr. Ruud’s Long-Term Incentive Plan (“LTIP”) target percentage will remain unchanged in 2020 but will increase from 115% to 180% beginning in 2021. More information about the AIP and LTIP may be found in the Company’s 2020 Proxy Statement.
Separation Agreement with Mr. Oleksiak
In connection with his resignation, Mr. Oleksiak entered into the Separation Agreement with the Company. Under the terms of the Separation Agreement, Mr. Oleksiak will continue serving, and be compensated at his current salary, as the Company’s Senior Vice President and Chief Financial Officer until May 3, 2020 (the “Transition Date”), on which date he will resign as a director, trustee or executive officer at the Company and any Company affiliate. Following the Transition Date, Mr. Oleksiak will serve as Senior Vice President/Special Advisor to the Company’s Chief Executive Officer until December 31, 2020 (the “Separation Date”), after which date Mr. Oleksiak will no longer be employed by the Company in any capacity. From the Transition Date through the Separation Date, Mr. Oleksiak will be paid an annual base salary of $250,000 and shall remain eligible to participate in the Company’s employee benefit plans. During the transition period, Mr. Oleksiak will transition his former duties and responsibilities to Mr. Ruud and such other business matters as may be reasonably requested.
Additionally, in consideration of Mr. Oleksiak’s general release of claims, Mr. Oleksiak will be paid a lump sum of $252,600 on or before March 15, 2021. He will also receive the necessary age and service credits to qualify for retirement benefits under the Company’s Executive Supplemental Retirement Plan (“ESRP”) and be eligible to receive a Management Supplemental Benefit Plan under the ESRP. Mr. Oleksiak will remain eligible to participate in the Company’s AIP through the Transition Date, with such AIP benefit calculated with the necessary age and service credits to be eligible for an award as a retiree under the AIP, pro-rated through the Transition Date. Additionally, Mr. Oleksiak’s outstanding awards under the LTIP will become non-forfeitable and otherwise unrestricted such that he will receive a pro-rated LTIP award as a retiree.
A copy of the Company's press release announcing the changes is attached hereto as Exhibit 99.1 and incorporated herein by reference.