Talen Energy has offered one of its top executives a $400,000 bonus to stay with the company through its conversion to a privately owned power production and marketing firm under the control of New York-based private equity firm Riverstone Holdings, a government filing shows.
Talen revealed the agreement with James E. Schinski, its senior vice president and chief administrative officer in documents filed Friday with the Securities and Exchange Commission.
Schinski is essentially a computer expert the company can't do without, said spokesman Todd Martin.
"Talen Energy is in the midst of several critical information technology projects to roll out new business systems and complete the separation from PPL IT systems so that Talen Energy can operate with complete independence," Martin said. "Jim Schinski is the executive officer who leads Talen Energy's Information Technology function."
Talen Energy was spun off from PPL Corp. in 2015 and is in the process of weaning itself off PPL's computer systems.
Offering a retention bonus to a key employee is common in corporate circles, said Wayne Outten, founding and managing partner of Outten & Golden LLP and an expert in executive compensation.
"How much is enough varies depending on the circumstances, including the person's role, the availability of alternative employees to fulfill that role, and the availability for that person of alternatives elsewhere," he said.
Martin said the agreement "recognizes Talen Energy's need for continuity in IT leadership while these important projects are completed and during the pendency of the merger transaction with Riverstone."
The agreement, signed by CEO Paul Farr, awards Schinski a $400,000 cash bonus payable 30 days after the Riverstone deal closes, or on Sept. 2, 2017, whichever comes first. That's equivalent to his annual salary, according to the SEC documents.
According to his Talen Energy bio, Schinski joined PPL Services in 2009 as vice president/chief information officer, serving in that role until Talen Energy was created in June 2015 by spinning off PPL's power generating business and combining it with several plants owned by Riverstone Holdings. .
The new independent power production and marketing company launched at a difficult time for power generators, with demand for electricity stagnant and low fuel prices cutting into profit margins. Talen's stock price fell more than 50 percent, as did the stock of most of its competitors.
Earlier this month Talen announced it had reached an agreement to merge with Riverstone Holdings, which owns 35 percent of its stock. The deal, in which shareholders will be paid $14 per outstanding share, will convert Talen Energy to a privately held company under Riverstone's control.
The transaction is expected to close by the end of the year, pending regulatory approvals.
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