FirstEnergy Terminates SVP Marketing, Who Had Served As President Of FirstEnergy's New Broker, For, "Violat[ing] Certain FirstEnergy Policies And Its Code Of Conduct"

FirstEnergy Also Terminates CEO & Another Exec

October 29, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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The Independent Review Committee of the Board of Directors of FirstEnergy Corp. announced a leadership transition, including the termination of the Company's Chief Executive Officer, Charles E. Jones, effective immediately.

Jones also resigned from the Board, effective October 29, 2020

FirstEnergy also announced the termination of two other executives effective immediately: Dennis M. Chack, Senior Vice President of Product Development, Marketing, and Branding; and Michael J. Dowling, Senior Vice President of External Affairs.

Chack had also served as President of Suvon, LLC, d/b/a FirstEnergy Advisors and FirstEnergy Home, FirstEnergy's recently created retail electricity broker.

The terminations resulted from an internal review related to the federal government's investigation surrounding Ohio House Bill 6 involving the now former Ohio House Speaker Larry Householder and other individuals and entities allegedly affiliated with Householder.

Yesterday, the U.S. Attorney’s Office for the Southern District of Ohio announced that Jeffrey Longstreth, who has been described as Householder's chief political aide, and Juan Cespedes, who has been described as a lobbyist who represented FirstEnergy Solutions, each pleaded guilty to participating in a racketeering conspiracy involving more than $60 million paid to a 501(c)(4) entity to pass and uphold HB 6, the nuclear subsidy law

Concerning the terminations, FirstEnergy said, "During the course of the Company's previously disclosed internal review related to the government investigations, the Independent Review Committee of the Board determined that these executives violated certain FirstEnergy policies and its code of conduct."

"Following the Committee’s determination regarding these violations of certain Company policies and its code of conduct, the Company is re-evaluating its controls framework, which could include identifying one or more material weaknesses. Further, the internal investigation remains ongoing," FirstEnergy said in an 8-K

Concurrently, Steven E. Strah, President of FirstEnergy, has been appointed Acting Chief Executive Officer, effective immediately. As part of this transition, Christopher D. Pappas, a current member of the Company's Board, has been named Executive Director. In this role, he remains an independent member of the Board and is not a part of the management team. He reports to Donald T. Misheff, who continues as Non-Executive Chairman of the Board.

Strah had been appointed President in May 2020 as part of the Company's ordinary-course succession planning process. In this role, he oversaw FirstEnergy Utilities; Corporate Services and Information Technology; Finance; Product Development, Marketing and Branding; External Affairs; Rates and Regulatory Affairs; and Strategy. He was elected senior vice president and chief financial officer in 2018. He began his career with The Illuminating Company in 1984 and served in a variety of utility leadership roles including regional president of Ohio Edison; vice president, Distribution Support; and senior vice president, FirstEnergy Utilities.

Pappas is the retired President and Chief Executive Officer of Trinseo S.A., a producer of plastics, latex and rubber. He served in this role from 2010 to 2019, and transitioned to the role of special advisor at Trinseo S.A., effective 2019. Prior to Trinseo, he served in various leadership capacities at NOVA Chemicals Corporation, Dow Chemical, and DuPont Dow Elastomers. Pappas served as a director for Allegheny Energy, Inc., from 2008 through FirstEnergy's acquisition of Allegheny Energy in February 2011. He has been a director of FirstEnergy since September 2011.

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