Good morning, and welcome to the FirstEnergy Corp's 2024 Annual Meeting of Shareholders. This meeting is being recorded. At this time, I'd like to turn the meeting over to the company.
Thank you, and good morning. I'm Mary Swann, Corporate Secretary and Associate General Counsel. I have a few details to review before we begin. The rules of conduct for this meeting can be found in the Meeting Materials area to the left of the webcast screen and are also summarized on the screen. The polls are open. Eligible shareholders who have not yet voted or are looking to change their vote may do so by clicking the Click Here to Vote link in the Meeting Materials areas on the screen. The polls will remain open until the conclusion of the matters to be voted on at this meeting. All links in the Meeting Materials area are now live and will remain live during the voting portion of the meeting. In the event of technical difficulties where we are unable to provide any immediate update, please wait 15 minutes for resolution.
If after that time, we are still unable to provide an update in this meeting, please refer to the Newsroom area at the company's website, FirstEnergyCorp.com, for any related updates. There will be a session to answer questions pertinent to the meeting and related to company business after the formal part of the meeting. Pre-registered shareholders may submit questions in the Ask a Question area on the screen. At this time, I would like to turn the meeting over to John Somerhalder, non-executive Board Chair at FirstEnergy.
Thank you. Good morning, everyone. I'm John Somerhalder, and it's my pleasure to welcome you to our annual meeting of shareholders. This webcast has three sections: the formal part of the meeting with a report on the voting results, followed by a presentation from Brian Tierney, President and CEO, and finally, a session to answer questions that are pertinent, pertinent to the meeting and related to our business. At this time, I will call the annual meeting of shareholders to order. In the Meeting Materials area of the screen, are rules of conduct and forward-looking statements disclaimer for this meeting. To begin, I would like to acknowledge the members of our, of your board of directors, all of whom are present for this meeting.
I would also like to recognize our executive team and thank everyone for their engaged and ethics-focused leadership as we continue executing our plan and creating long-term value for our investors, customers, communities, and employees. Mr. Kevin Thomas, representing PricewaterhouseCoopers, is attending the meeting as described in the proxy statement. The board appointed Corporate Election Services to act as Inspector of Election for this meeting. A list of shareholders entitled to vote at this meeting was delivered to Corporate Election Services, and a certified copy of this list is available for examination by eligible shareholders in the Meeting Materials area. The polls are currently open. Eligible shareholders who have not yet voted or are looking to change their vote may do so by clicking the Click Here to Vote link in the Meeting Materials section. Voting will close shortly. Mary Swann, our Corporate Secretary, will now give her report.
Mr. Chair, this meeting is being held pursuant to a notice which was mailed or made available beginning March 29th, 2024, to each shareholder of record as of March 25th, 2024. There is a quorum present in person or by proxy.
Thank you. I refer you to the annual report located in the Meeting Materials area and present the financial statements from 2023. The company's amended and restated Code of Regulations sets forth procedures a shareholder must follow to nominate directors or present other shareholder proposals. No matters have been submitted in accordance with the company's Code of Regulations, and the only matters properly before our shareholders today are those set forth in the proxy statement and notice of annual meeting. The first order of business is to vote on the items identified in the proxy. Items 1 through 3 are the following. Item 1, the election of 10 director nominees named in the proxy statement. Item 2, the ratification of the appointment of PricewaterhouseCoopers as the independent registered public accounting firm for 2024. Item 3, an advisory vote to approve named executive officers' compensation.
Your board has recommended the shareholders vote for the election of each of the 10 director nominees in Item 1 and for Items 2 and 3. Items 4 through 6 are shareholder proposals. If properly presented by each shareholder or their representative, these will be put forth for shareholder vote. Item 4 is a proposal from the State Comptroller of the State of New York. We now invite the proponent to present Item 4.
On behalf of New York State Comptroller Thomas DiNapoli, Trustee of the New York State Common Retirement Fund, we urge our fellow FirstEnergy shareholders to vote for Proposal 4 on the proxy, requesting reporting on the feasibility of integrating climate-related measures into the company's compensation plan. Proposal 4 is important for FirstEnergy's climate strategy and long-term performance for the following reasons. Compensation packages are designed to reward executives for achieving company's strategic objectives. FirstEnergy has developed a climate strategy that includes achieving carbon neutrality for Scope 1 emissions by 2050. Although the company highlights its climate strategy as a key component of the company's overall business strategy, FirstEnergy's compensation structure for senior executives does not explicitly include meaningful linkages between climate measures and executive compensation. This stands in contrast to most peer utility companies, including American Electric Power, Dominion Energy and Xcel Energy.
These peers have not only tied executive compensation to climate measures, but have specifically incorporated quantitative climate metrics with measurable payout and long-term incentive components. Effectively managing climate strategy provides significant opportunities for FirstEnergy and should be a key metric by which executives are evaluated. By integrating climate-related measures into executive compensation, companies can reduce climate risks and increase the likelihood of achieving a timely climate transition. By incentivizing executives to meet climate objectives, FirstEnergy can achieve greater long-term value for shareholders. Therefore, we urge all FirstEnergy shareholders to vote for Proposal Four on the proxy, which calls on FirstEnergy to report to shareholders on the feasibility of integrating climate-related measures into executive compensation. Thank you for your consideration.
Thank you. Your board has recommended that shareholders vote against item number 4. Let's move on to item number 5. Mr. John Chevedden is available to present Item 5. Operator, would you please open Mr. Chevedden's line?
Hello, this is John Chevedden. Proposal 5, improve the clawback policy for unearned executive pay. Shareholders ask the board of directors to amend the company policy on recoupment of incentive pay, to apply to each named executive officer, and to state that conduct or negligence, not merely misconduct, shall trigger mandatory application of that policy. Also, the board shall report to shareholders in each annual meeting proxy, the results of any deliberations about whether or not to cancel or seek recoupment of unearned compensation paid, granted, or awarded to named executive officers under this policy. There shall be at least the full web address of the complete clawback policy in each annual meeting proxy. This is a stronger clawback policy than the policy FirstEnergy recently adopted. Wells Fargo offers a prime example of why FirstEnergy needs a stronger policy.
After 2016 congressional hearings, Wells Fargo agreed to pay $185 million to resolve claims of fraudulent sales practices. Wells Fargo's board then moved to clawback $136 million from two top executives. Wells Fargo, unfortunately, concluded that the CEO had only turned a blind eye to the practice of opening fraudulent accounts, and that there would be no recoupment in spite of Wells Fargo paying a $185 million penalty. The Ohio Nuclear Bribery Scandal is why FirstEnergy needs a stronger policy. Speaker of the House of Representatives, Matt Borges, and three others, were accused in July 2020 of accepting $60 million in bribes from FirstEnergy in exchange for $1.3 billion worth of benefits in the form of Ohio House Bill 6, in what became known as the Ohio Nuclear Bribery Scandal.
FirstEnergy's stock price plummeted. In July of 2021, the U.S. Attorney for the Southern District of Ohio announced that FirstEnergy would be fined $230 million for its part in the scandal. Please vote yes, and improve the clawback policy for underearned executive pay. Proposal 5.
Thank you. Your board has recommended that shareholders vote against Item number five. Item 6 is a shareholder proposal requesting a report on financial statement assumptions and climate change. We now invite Mr. Ethan Peck from the National Center for Public Policy Research to present Item six.
In this proposal, we ask FirstEnergy to assure shareholders that in crafting its decarbonization commitments, it is considering the whole record of relevant evidence and research. FirstEnergy has an absolute fiduciary duty to do this. It cannot make business decisions except after application of neutral principles applied objectively to the whole relevant record without bias. FirstEnergy's response to our request that it do what it's already had a legal obligation to have done already, is that it would be neither reasonable nor practical and would not be a prudent use of your company's resources in light of the efforts already underway. Whoa! This is an astonishing statement from our directors.
If FirstEnergy has done its fiduciary duty, then it already has full reports considering all relevant evidence, including that which works against its commitments, has fully determined why its course is the right one, despite that evidence, and can simply publish it as a report that we've asked for. No muss, no fuss. If it hasn't done that work already, then it's violated its fiduciary duty and now owes an independent fiduciary duty to all of us to explain, account, and accept the appropriate consequences for this massive failure.... To avoid these clear legal mandates, the company first asserts that our proposal is micromanagement. It isn't. It's the minimum freestanding duty FirstEnergy owns. Our directors know this. They know their claim is bunk. One ground on which companies can get shareholder proposals eliminated by the SEC staff is claiming that it's micromanagement.
Despite an SEC staff so demonstrably biased against non-left ESG proposals that we're suing it, FirstEnergy didn't even try for elimination. It's that bogus. Second, our directors claim that it's worked closely with shareholders to craft this decarbonization policy. I'm guessing this is mostly or entirely false. They didn't work with outside shareholders. They worked with BlackRock, State Street, and Vanguard, the Big Three, giant custodians of other people's capital, who owe those people their own fiduciary duties. To varying degrees, each of them has demonstrably put their executives' own personal policy preferences for political scheduled decarbonization above those fiduciary duties. If FirstEnergy worked with the Big Three to craft a policy that didn't consider all of the evidence objectively and neutrally, that's a vaster breach, not a justification.
But if FirstEnergy was forced by the Big Three to breach its own fiduciary duties, that's something that it must, at law, tell us and should have told us from the start. If that's what it's trying to tell us now, then it should and must be clearer. Full honesty will ameliorate some of FirstEnergy's own ever-mounting fiduciary breaches, and it's certainly the right thing to do. BlackRock, and perhaps the others, is spending vast amounts of other people's money to hire lobbyists to shut down legitimate inquiries into its own fiduciary violations on exactly these matters. Itself, an act of such hubristic self-dealing that, like a dark sun, it can't really be looked at directly. These are not the type of actors or actions the wise directors should cover for.
Thank you. Your board has recommended that shareholders vote against item number six. That concludes the items that will be voted on today. I now declare the polls closed. Preliminary results will now be displayed on the webcast screen. Final voting results will be filed on a current report Form 8-K, which will be made available on our website and filed with the Securities and Exchange Commission. Final voting results are subject to certification by the Inspector of Election and will be included in the meeting minutes. That concludes our official business, and I declare the annual meeting of shareholders to be officially adjourned. Now, I would like to turn the program over to President and Chief Executive Officer Brian Tierney, who will introduce a video presentation. Brian?
Thank you, John. We will now play a video that reviews our progress on key initiatives and our strategies to continue building on our momentum. If you have questions relevant to the company and this meeting, please submit them in the Ask a Question area of the web screen, webcast screen. I'll respond at the conclusion of the video.
Good morning, everyone. Thank you for joining us today, and for your investment and confidence in FirstEnergy. Thank you as well to the board and to my fellow employees. Your steadfast dedication to our customers and tremendous performance has helped transform FirstEnergy. Today, we are a stronger, more resilient, and innovative company with a foundation of integrity and a very bright future. Together, we are building a great story that I'm excited to share with you today. As you probably know, I was elected to this role last spring, and my first day on the job was June first, 2023. I have a passion for the utility industry, where I've spent most of my career. FirstEnergy appealed to me because of its progress from a business and cultural perspective, and its strength and opportunities.
These include an engaged and dedicated employee base, a fantastic business model, substantially de-risked by being focused on wires, a constructive regulatory environment focused on customer affordability and reliability, and an opportunity to become one of the nation's premier electric companies. It's been a fantastic first year getting to know the people of FirstEnergy and being a part of this transformation, and above all, it's an honor to be part of this team, providing a service that is the lifeblood of modern living to our communities. The employees of FirstEnergy don't just view their work as a job, it's a vocation that they take very seriously. They recognize that the essential service of electricity powers our daily lives. Without electricity, people can't come together in a connected workplace. They can't care for their children and elderly, feed their families, or keep themselves safe.
This vocation and the service we deliver are more important than ever. Electricity demand is growing through the electrification of sectors like transportation and home heating, as well as through large users like data centers. We share a mission: to safely and effectively deliver electricity that strengthens our society and powers our economy. We also share a purpose: to help FirstEnergy become a premier electric company. I believe we can achieve this by keeping our mission foremost in front of us. To realize this goal, the board and executive management team are aligned behind a business model that has four components: investing, operating, recovering costs, and financing our regulated utility operations. This business model creates a virtuous cycle that will help improve reliability, grow rate base, engage employees, improve returns, and maintain a strong balance sheet... The model begins with investing.
We invest in our infrastructure, the wires, transformers, substations, to enhance reliability and improve the customer experience. As a result of the excellent work we've done to strengthen our balance sheet, we're in a strong position for the first time in the company's history to grow and invest in the opportunities across our businesses. In February, we introduced Energize365, a five-year, $26 billion investment program. Energize365 is focused almost entirely on enhancing our wires businesses. About 75% of those investments are in rate structures that allow for rapid cost recovery. The program targets investments that improve the customer experience, maintain our strong affordability position, and provide a fair and reasonable regulated return for our investors. It solidly supports our 6%-8% targeted annual operating earnings growth rate. About 45% of the capital program is in FERC-regulated transmission investments.
This includes enhancing and upgrading the transmission system and adding operational flexibility. It also supports projects like offshore wind in New Jersey and new data center load. On the distribution system, it includes customer-focused investments like reliability enhancements, grid modernization, smart meter deployment, distribution automation, and energy efficiency programs. We also invest in our people to have skilled, trained, talented, diverse, and engaged employees who can carry out our mission. All of the outstanding new leaders we've welcomed to the team in the past year are using their extensive experience to add value to our company. Along with the rest of the leadership team, they are committed to modeling our core values and behaviors to bring out the best in our employees and deliver the best for our customers, communities, and investors. Employees are the foundation of our company, and their engagement and energy fuel our success.
We're pleased that company pride has increased across the organization, according to our latest employee engagement survey. We'll continue to build on our strengths by helping employees feel valued, instilling a sense of belonging in our workforce, and continuing to seek and respect employee opinions and contributions, as these are all drivers of engagement. A prime example of this successful engagement is the dedicated team of employees from our operating companies, bargaining units, workforce development, and human resources who are developing FirstEnergy's new paid apprenticeship program for line and substation workers. Through their engagement, coupled with leadership support, we are creating a fresh, forward-thinking training program completely suited to our specific workforce needs. The next component of the cycle is operating. Running our business effectively and efficiently means prudently incurring expenses, serving our customers, and seeking opportunities to enhance the way we work.
To support our mission of delivering a service that is the lifeblood of our communities, we must operate in a way that understands, respects, and responds to the needs of those communities. One way we're doing this is by shifting more of our operational decision-making and accountability closer to our customers, our regulators, and the employees doing the work. We've implemented a new operating structure that includes five major businesses: Ohio, Pennsylvania, New Jersey, West Virginia, and Maryland, and our standalone transmission properties. Each business is accountable for regulatory strategy and outcomes, as well as operational and financial performance. This structure will foster better execution at the local level, where it will make a difference for our customers. Operating effectively also means coming together when things are tough.
When you look at 2023, the company was buffeted by a number of financial headwinds, including the significant effect of unseasonably mild weather. Our 12,000 employees aligned behind the things that we could control: managing costs, deploying capital to enhance the customer experience, and above all, seeking opportunities for continuous improvement in our cost structure and the way we work. Through these efforts, we not only overcame the headwinds, we increased our customer-focused investments, exceeded our guidance midpoint, and entered 2024 in a position of strength. We will continue to challenge ourselves and reward innovation, because keeping continuous improvement at the heart of our culture is foundational to operating successfully and being a premier utility company. This brings us to the third stage of our cycle, recovery.
Understanding the needs of our customers and delivering superior service builds supportive relationships with our customers, regulators, and local officials. This, together with positive engagement with all stakeholders, helps drive constructive rate outcomes that support recovery of our investments. We achieved several important regulatory milestones over the past year, including necessary increases in revenues through three base rate cases. These reasonable and constructive outcomes will fuel our investments in reliable and affordable service. This spring, we filed a rate case for our Pennsylvania operations and will file our Ohio rate case this month. Consistent with last year's filings, these address investments that benefit our customers through reliability enhancements and a smarter and cleaner electric grid while maintaining our strong affordability position.
The fourth phase in our business cycle is finance. When we execute well on the first three components of the cycle, investing, operating, and recovering, our company becomes a compelling investment. This allows us to finance the business at a lower cost of capital and restart this virtuous business cycle all over again at invest. We've completed important work over the last several years to strengthen our financial position so we can invest in our businesses. We've reduced costs through continuous improvement programs, reduced the risk associated with our pension plan, and optimized our financing plan to retain flexibility in a high interest rate environment. Most importantly, we entered into a series of strategic transactions starting in 2021, that raised a total of $7 billion in equity capital at a stock equivalent price of $87 per share.
In other words, investors recognize the value in our business. Most recently, in March, we closed on a transaction to sell 30% of our FirstEnergy Transmission, LLC subsidiary, raising $3.5 billion. This transaction was possible thanks to the FirstEnergy employees, whose hard work made FET a premier transmission business, and to the teams that had the vision and tenacity to get the deal done. Because of this transaction, in the 3 months ended March 31, the total equity on our balance sheet increased 25%. That is truly remarkable for a company of our size. Recognizing the significant impact to the company, both Moody's and S&P upgraded FirstEnergy Corp.'s senior unsecured rating to investment grade.
For the first time in the company's history, we have a strong balance sheet that enables organic investment in our regulated properties to improve reliability and the customer experience. Our stronger financial foundation supports our plan to fund our Energize365 investments through organic internal cash flow and utility debt, not incremental equity. This represents an important differentiation from many of our utility peers. This healthier financial position also enabled us to enhance our dividend payout to investors. In September of last year, our board approved an increase in our quarterly dividend for the first time in more than three years, and in April, we announced a second increase. Subject to continued board approval, these increases represent an annual rate of $1.70 per share in 2024, a 6.25% increase compared to dividends declared in 2023.
We recognize the importance of a strong dividend for our investors, and it's our goal to increase our dividend in line with operating earnings growth over time. Our goal is to continue impacting each phase of the cycle in a positive way, to build on our momentum and benefit all of our stakeholders, serve our customers and communities, grow our business, and provide rewarding careers for our great employees, make our regulators happy, and deliver strong results and returns to our shareholders. Together with our unwavering commitment to ethics and integrity, performance, excellence, and continuous improvement, we are confident that strong execution of the virtuous business cycle model will help us achieve our strategic objectives and deliver value. Finally, at the heart of our business model, and woven through each step of our virtuous cycle, is our commitment to responsible business, grounded in strong governance.
We're committed to supporting our customers and employees and demonstrating strong stewardship of the environment and our communities. Every day, I feel a deep sense of gratitude to be part of a team of employees who recognize our core values and embody them in everything we do, from how we work with each other, to our interactions with customers, and our outreach within the communities where we live and work. FirstEnergy employees go above and beyond to help make our customers' lives brighter and our communities stronger. The recent United Way employee giving campaign exemplified our core value of stewardship. In an impressive bottom of the ninth rally, FirstEnergy employees helped the company exceed our $1 million goal. Meeting this goal is a testament to the commitment, compassion, and ownership they feel as vital members of our communities to make a positive impact on those around them.
This is further demonstrated by the nearly 28,000 hours employees spent volunteering in 2023. 2023 was also a strong year for charitable giving, as FirstEnergy and the FirstEnergy Foundation contributed more than $10 million to help strengthen communities throughout our service territory. The foundation allocated nearly $2 million to over 300 organizations, supporting programming for veterans, women and girls, people with disabilities, and minority communities. Investment in diverse organizations has grown from approximately 10% in 2018 to over 30% in five years, including funding provided through the successful Investing with Purpose initiative. Our company and employees are committed to achieving our goal of carbon neutrality by 2050, and we're taking key steps to reduce greenhouse gas emissions within our operational control.
In 2023, we partnered with the Electric Power Research Institute on a first of its kind pilot, testing a new mitigation measure for reducing sulfur hexafluoride leaks from utility infrastructure. This innovative tactic can help FirstEnergy, and potentially our peer utilities, reduce these emissions in the field going forward. Our commitment to sustainability extends beyond our operational activities. It's deeply ingrained in our culture. Since its inception in 2020, our employee-led Green Teams have planted more than 67,000 trees, focusing on economically depressed neighborhoods within our company's footprint. Responsible business is good business that helps us refine and execute our strategies, and it's a hallmark of excellent companies. We have a strong foundation, clear focus, and robust strategy to deliver long-term value to our shareholders, customers, communities, and employees. We're excited about our future. Thank you for being part of it.
It appears that I have addressed the items of interest, and there are no questions at this time. This concludes our meeting. Thank you for your interest in FirstEnergy.
This concludes today's meeting. You may now all disconnect.