American Water Works announces executive severance agreement

American Water Works Company, Inc. (NYSE:AWK), a $26.5 billion market cap utility company with revenue growth of 10.6% in the last twelve months, has entered into a severance agreement with Melanie M. Kennedy, the firm’s Executive Vice President and Chief Human Resources Officer, according to an 8-K filing with the Securities and Exchange Commission on Friday.

Under the terms of the agreement, which was unanimously approved by the company’s Executive Development and Compensation Committee on Thursday, Kennedy will receive a series of benefits following her departure. These include a cash severance payment equivalent to her annual base salary of $487,953, a prorated 2025 award from the company’s Annual Performance Plan, and up to 16 weeks of company-paid COBRA healthcare continuation coverage.

Additionally, Kennedy will receive a supplemental cash payment of $300,000 and an extension of up to eight months of the COBRA coverage provided under the company’s Executive Severance Policy. The severance package is contingent upon Kennedy’s adherence to certain conditions, such as a general release and covenants regarding non-solicitation, non-disparagement, and confidentiality.

The severance agreement comes into effect following Kennedy’s separation from the company on March 1, 2025. The agreement includes mandatory review and the right to rescind periods as per applicable law.

American Water Works, headquartered in Camden, NJ, is a water and wastewater utility company incorporated in Delaware. The company’s stock is traded on the New York Stock Exchange under the ticker symbol AWK.

This executive transition and the details of the severance package are based on the latest SEC filing by American Water Works Company, Inc.

In other recent news, American Water Works Company, Inc. reported fourth-quarter earnings that exceeded analyst expectations, with an adjusted earnings per share (EPS) of $1.22, surpassing the forecasted $1.12. The company also reported revenue of $1.2 billion for the quarter, which was above the anticipated $1.11 billion. For the full year 2024, American Water Works achieved earnings of $5.39 per share, an increase from $4.90 per share in 2023. The company reaffirmed its 2025 EPS guidance range of $5.65 to $5.75 and maintained its long-term EPS and dividend growth targets of 7-9%.

In addition to the earnings announcement, American Water Works revealed plans to continue its equity financing strategy, aiming to raise $2.5 billion by 2029, with no new equity issuance expected this year. Evercore ISI adjusted its price target for the company to $139 from $150, while maintaining an "In Line" rating. The firm projected an EPS of $6.43 for American Water through 2027, reflecting updated financial models.

Moreover, American Water Works announced the upcoming departure of Executive Vice President and Chief Human Resources Officer Melanie M. Kennedy, effective March 1, 2025. The company also disclosed that CEO M. Susan Hardwick will retire on May 14, 2025, with current President John Griffith set to succeed her. These developments are being closely monitored by investors and analysts for potential impacts on the company’s strategic direction.

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