FirstEnergy (NYSE:FE) announced late Thursday night that President and CEO Steven Strah would be replaced the next day by John W. Somerhalder II, chairman of the board of the directors.
The company announced the move in a filing with the Securities and Exchange Commission and a news release issued about an hour after markets closed Thursday. Strah is retiring without a severance package, though he will be accorded pension benefits. Somerhalder will serve as interim president and CEO while the board conducts a search for a permanent replacement.
The press release also noted that the company had completed its review of its top management team, as required in a proposed settlement of shareholder lawsuits.
Neither the release nor the 8-K filing contained an explanation for Strah’s “decision to retire” just 18 months since his permanent appointment in March 2021. Strah had been named acting CEO in October 2020, replacing fired CEO Charles Jones.
Federal prosecutors had identified Jones as having been involved in a company-financed bribery of former Ohio House Speaker Larry Householder, who was indicted in a federal racketeering conspiracy in connection with the passage in 2019 of H.B. 6, legislation creating a $1.3 billion bailout of two nuclear power plants in the state then owned by FirstEnergy. Lawmakers later rescinded the subsidy in the wake of the federal charges.
Jones has not been charged in the ongoing federal probe, but FirstEnergy entered a deferred prosecution plea admitting its involvement and agreeing to pay a $230 million fine. Householder’s trial is scheduled for January.
During his brief tenure as CEO, Strah has served as the face of a corporate turnaround, leaving the bribery scandal behind, making his unexpected retirement more surprising. Some local media, and a national watchdog group immediately speculated that his departure is linked to emails that recently came to light between Strah and company lobbyists during the H.B. 6 campaign.
The board’s leading independent director, Lisa Winston Hicks, praised Strah in the company’s announcement: “I would like to thank Steve for his many contributions and years of service to FirstEnergy and wish him well in his next chapter.”
The release also contained an upbeat statement from Strah.
“It has been a great honor to be part of the FirstEnergy family for more than 38 years,” he said. “I want to express my gratitude to the extremely dedicated employees, as well as our incredibly talented management team. I believe the future holds great opportunity for this organization.”
Somerhalder has been chair of the board since May and joined the company as vice chair and executive director in May 2021. Prior to that he served as interim president and CEO of CenterPoint Energy from February to July 2020.