DEF 14A of Txnm Energy Inc, Apr 1, 2025

DEF 14A of Txnm Energy Inc

Filed Apr 1, 2025 · FY20240001108426-25-000022

Open on EDGAR

  1. 2025 Nominees for the Board of Directors

    2025 Nominees for the Board of Directors We have highly qualified, diverse, high-functioning and experienced directors that position the Board to provide effective oversight. The Board has a good mix of new and long-standing directors and the Board’s gender diversity has been recognized as having a balanced Board by 50/50 Women on Boards, a leading global education and advocacy campaign driving the movement toward gender and diversity on corporate boards. Detailed background and other skills and experience information about our director nominees can be found beginning on page 21. Board Nominee Highlights:

  2. 2025 Nominees for the Board of Directors

    | 8 of 10 Nominees Are Independent | 50% Are Female and 40% are Minority | 100% Have C-Suite Experience | 80% Have Environmental/ Sustainability Expertise |

  3. 2025 Nominees for the Board of Directors

    2025 Nominees:

  4. 2025 Nominees for the Board of Directors

    | Name | Age | Director Since | Occupation / Experience | Independent | TXNM Committees | Other Public Company Boards | | Vicky A. Bailey | 72 | 2019 | Founder and President, Anderson Stratton International, LLC | ✓ | Compensation and HC Nominating (Chair) | EQT Corporation Occidental Petroleum Corporation | | Norman P. Becker (Lead Director) | 69 | 2016 | Retired President and CEO, New Mexico Mutual Casualty Company | ✓ | Compensation and HC Finance | | | Patricia K. Collawn | 66 | 2010 | Chair and CEO, TXNM Energy | | | Cheniere Energy, Inc. | | E. Renae Conley | 67 | 2014 | CEO, ER Solutions, LLC | ✓ | Audit Compensation and HC (Chair) | Southwest Gas Holdings | | Sidney M. Gutierrez | 73 | 2015 | Chair, Vaya Space | ✓ | Audit Nominating | | | James A. Hughes | 62 | 2019 | Managing Partner, Encap Investments, L.P. | ✓ | Finance (Chair) Nominating | Alcoa Corporation TPI Composites, Inc. | | Steven C. Maestas | 61 | 2024 | CEO, Maestas Development Group | ✓ | Audit Finance | | | Lillian J. Montoya | 58 | 2024 | President and CEO, CHRISTUS St. Vincent Health System | ✓ | Compensation and HC Nominating | | | Maureen T. Mullarkey | 65 | 2014 | Former EVP and CFO, International Game Technology | ✓ | Audit (Chair) Finance | Everi Holdings, Inc. | | Joseph D. Tarry | 54 | 2024 | President and COO, TXNM Energy | | | |

  5. ADDITIONAL INFORMATION ABOUT OUR BOARD AND BOARD COMMITTEES

    ADDITIONAL INFORMATION ABOUT OUR BOARD AND BOARD COMMITTEES

  6. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  7. Elements of Director Compensation

    Elements of Director Compensation The Nominating Committee recommends non-employee director compensation levels and stock ownership guidelines for review and approval by the full Board. Ms. Collawn and Mr. Tarry are the only salaried employees serving on the Board and they receive no additional compensation for their Board service. The general policy of the Board is to provide a reasonable director compensation package that will attract and retain highly qualified non-employee directors. The Nominating Committee reviews and compares the form and amount of director compensation on an annual basis to consider trends in director compensation and to recommend a total compensation amount that approximates the median of non-employee director compensation in similarly situated utility and energy companies, such as the TXNM Peer Group described on page 39 of this proxy statement. As discussed in the 2024 proxy statement, director compensation was increased for 2024 based on a July 2023 analysis prepared by Pay Governance showing that, despite an increase in 2023 director compensation, the total compensation levels were below the median of the TXNM Peer Group and the S&P 400 MidCap Utilities Index. Following discussion and review of the Pay Governance analysis and recommendations, in August 2023, the Nominating Committee recommended and the Board approved making the following changes to director compensation for 2024: increasing the (1) annual cash retainer from $100,000 to $105,000, and (2) market value of the annual award of restricted stock rights from $130,000 to $135,000. Thus, the 2024 annual compensation for non-employee directors consisted of the following cash and stock-based compensation:

  8. Elements of Director Compensation

    | Annual Retainer (Cash and Equity): | $105,000 in cash paid in quarterly installments Restricted stock rights(1) with a market value of $135,000(2) | | Lead Director Retainer: | $30,000 paid in quarterly installments | | Audit Committee Chair Retainer: | $15,000 paid in quarterly installments | | Compensation and HC Committee Chair Retainer: | $15,000 paid in quarterly installments | | Finance Committee Chair Retainer: | $15,000 paid in quarterly installments | | Nominating Committee Chair Retainer: | $15,000 paid in quarterly installments | | Supplemental Meeting Fees: | $1,500 - payable for and after each meeting of a particular committee or the Board, as the case may be, attended by a committee member or non-employee director, in excess of eight committee or full Board meetings annually. |

  9. Elements of Director Compensation

    (1) Restricted stock rights granted under the PEP for the 2024 annual retainer vest on the first anniversary of the grant date, subject to vesting acceleration upon certain events, including disability. These awards are typically made at our annual meeting of directors which follows our Annual Meeting, unless the meeting occurs during a black-out period for trading in the Company’s securities as specified in the Company’s Insider Trading Policy. As set forth under the heading “Equity Compensation Awards Policy,” in this proxy statement, under those circumstances, the Board will either (a) schedule a special meeting after the expiration of the black-out period, (b) make awards pursuant to a unanimous written consent executed after the expiration of the black-out period, or (c) pre-approve the equity awards with an effective date after the expiration of the black-out period. The grant date of the awards is the date on which the Board approves the awards, unless (i) the approval date is a non-trading day, in which case the grant date is the immediately preceding trading date or (ii) pre-approval occurs during a black-out period, in which case the grant date is the first trading date after the expiration of the black-out period. The PEP limits the maximum amount of shares that may be granted to any non-employee director during any calendar year to no more than 15,000 shares. (2) The amount of restricted stock rights is determined by dividing $135,000 by the closing price of our stock on the NYSE on the day of the grant. Thus, 3,568 restricted stock rights were granted on June 4, 2024 to each non-employee director, based on the closing price on that date of $37.84 per share. In addition, all directors are reimbursed for any Board-related expenses, such as travel expenses incurred to attend Board and Committee meetings and director education programs sponsored by educational and other institutions. Further, directors are indemnified by TXNM to the fullest extent permitted by law pursuant to our bylaws and indemnification agreements between the Company and each director. In December 2017, we adopted a program that allows directors to defer receipt of vested restricted stock rights awards granted on and after May 2018 to the earlier of (1) the five-year anniversary of termination of service with the Board, or (2) a date certain or termination of service anniversary selected by the director. No retirement or other benefit plans are available to directors. In July 2024, Pay Governance presented the Nominating Committee an analysis of director compensation that showed, despite the increase in 2024 director compensation, current total compensation levels were slightly below the median of both the TXNM Peer Group and the S&P 400 MidCap Utilities Index. Following discussion and review of the Pay Governance analysis and recommendations, in July 2024, the Nominating Committee recommended and the Board approved the following changes to director compensation for 2025 to better align with peer median: increasing the (1) annual cash retainer from $105,000 to $115,000, (2) Audit Committee Chair retainer from $15,000 to $20,000, and (3) market value of the annual award of restricted stock rights from $135,000 to $145,000.

  10. Summary of Non-Employee Director Compensation in 2024

    Summary of Non-Employee Director Compensation in 2024 The following table summarizes the total compensation paid to or earned by each non-employee director for the year ended December 31, 2024.

  11. Summary of Non-Employee Director Compensation in 2024

    | Name(1) | Fees Earned Or Paid In Cash ($)(2) | Stock Awards ($)(3) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-qualified Deferred Compensation Earnings | All Other Compensation ($) | Total ($) | | V. A. Bailey | 123,000 | 135,000 | — | — | — | — | 258,000 | | N. P. Becker | 138,000 | 135,000 | — | — | — | — | 273,000 | | E. R. Conley | 123,000 | 135,000 | — | — | — | — | 258,000 | | A. J. Fohrer | 123,000 | 135,000 | — | — | — | — | 258,000 | | S. M. Gutierrez | 108,000 | 135,000 | — | — | — | — | 243,000 | | J. A. Hughes | 108,000 | 135,000 | — | — | — | — | 243,000 | | S. C. Maestas | 78,750 | 135,000 | — | — | — | — | 213,750 | | L. J. Montoya | 78,750 | 135,000 | — | — | — | — | 213,750 | | M. T. Mullarkey | 123,000 | 135,000 | — | — | — | — | 258,000 | | (1) As employees of the Company, Ms. Collawn and Mr. Tarry do not receive director compensation. | | | | | | | |

  12. Summary of Non-Employee Director Compensation in 2024

    | (2) The following table provides additional information about fees earned or paid in cash to non-employee directors in 2024: | | | | | | | | | Name | Annual Retainer ($) | Committee Chair Fee ($) | Board Meeting Fees ($) | Lead Independent Director Fee ($) | Total ($) | | | V. A. Bailey | 105,000 | 15,000 | 3,000 | — | 123,000 | | | N. P. Becker | 105,000 | | 3,000 | 30,000 | 138,000 | | | E. R. Conley | 105,000 | 15,000 | 3,000 | — | 123,000 | | | A. J. Fohrer | 105,000 | 15,000 | 3,000 | — | 123,000 | | | S. M. Gutierrez | 105,000 | — | 3,000 | — | 108,000 | | | J. A. Hughes | 105,000 | — | 3,000 | — | 108,000 | | | S. C. Maestas | 78,750 | — | — | — | 78,750 | | | L. J. Montoya | 78,750 | — | — | — | 78,750 | | | M. T. Mullarkey | 105,000 | 15,000 | 3,000 | — | 123,000 | | (3) Represents the grant date fair value of $37.84 per restricted stock right calculated in accordance with FASB ASC Topic 718 of the 3,568 restricted stock rights awarded under the PEP to each non-employee director on June 4, 2024. The assumptions used in determining the grant date fair value of restricted stock rights are set forth in Note 12 of the consolidated financial statements in TXNM’s Annual Report on Form 10-K for the year ended December 31, 2024. As of December 31, 2024, the non-employee directors listed on the table above had 3,568 outstanding restricted stock rights that will vest in May 2025. As discussed above, directors may elect to defer receipt of vested restricted stock awards granted on and after May 2018. The actual value that a director may realize on the payment of vested restricted stock rights will depend on the market price of our common stock at the date of settlement and ultimately, the value received by the director on the sale of stock. | | | | | | |

  13. PROPOSAL 1: ELECT AS DIRECTORS THE DIRECTOR NOMINEES NAMED IN THE PROXY STATEMENT

    PROPOSAL 1: ELECT AS DIRECTORS THE DIRECTOR NOMINEES NAMED IN THE PROXY STATEMENT

  14. General Information

    General Information The director nominees presented below were recommended by the Nominating Committee and nominated by the Board for election as directors to serve for one-year terms that expire at the annual meeting in 2026 or until their successors are elected and qualified. The ten nominees are current members of the Board, nine of whom were elected by the shareholders at the 2024 annual meeting and one, Joseph D. Tarry, who was elected at the December 3, 2024 Board meeting; all are standing for re-election. Mr. Tarry is currently the President and COO of TXNM Energy. Alan J. Fohrer will complete his current term and will not stand for re-election at the Annual Meeting on May 13, 2025. The Director Service Policy, adopted by the Board and set forth in the Corporate Governance Principles document, provides that, ordinarily, a director will not serve for more than 12 years on the Board. Mr. Fohrer has served as a director for approximately 13 years. We sincerely acknowledge Mr. Fohrer’s dedication, engagement and contributions to the Company during his tenure. Each of the nominees have consented to being nominated and to serve if elected. We do not know of any reason why any nominee would be unable to serve. However, should any nominee become unable to serve for any reason, the proxies may be voted for a substitute nominee selected by the Board upon the recommendation of the Nominating Committee, or the Board may reduce the size of the Board. All of the director nominees are independent directors, except Ms. Collawn, our Chair and CEO, and Mr. Tarry, our President and COO. As shown by the following biographies, each nominee has valuable skills and experiences that, taken together, provide us with the variety and depth of knowledge and judgment necessary to provide effective oversight of our electric utility and related businesses. Below each nominee’s biography, we have included an assessment of the skills and experience of each such nominee. We have also included a chart that covers the assessment for the full Board after the biographies below. The noted age of each director is as of March 24, 2025.

  15. Directors Nominated This Year For One-Year Terms Expiring in 2026

    Directors Nominated This Year For One-Year Terms Expiring in 2026

  16. Directors Nominated This Year For One-Year Terms Expiring in 2026

    | Vicky A. Bailey Age 72 Director since 2019 Founder and President, Anderson Stratton International, LLC Independent Director Committee Memberships: Compensation and Human Capital Nominating and Governance (Chair) | Ms. Bailey has over 30 years of national, international, executive, governmental and entrepreneurial expertise in energy and regulated industries. Ms. Bailey is the founder and President of Anderson Stratton International, LLC, a strategic consulting and governmental relations firm. Ms. Bailey is a director of EQT Corporation, following its acquisition of Equitrans Midstream Corporation, sitting on its corporate governance and public policy and corporate responsibility committees. EQT is a NYSE-listed vertically integrated American natural gas company with production and midstream operations. Ms. Bailey is also a director of Occidental Petroleum Corporation, a NYSE-listed energy company conducting oil and gas exploration and production activities in the United States and internationally, serving on the governance and nominating committee and the sustainability and shareholder engagement committee. Ms. Bailey serves as a director of Battelle Memorial Institute, a non-profit applied science and technology organization. Ms. Bailey is a member of the Board of Trustees of The Conference Board. Ms. Bailey previously served as a director of Cheniere Energy, Inc., an NYSE-listed energy company, engaged in liquified natural gas related businesses; as a director of Equitrans Midstream Corporation, prior to its acquisition by EQT Corporation; and as a director of Cleco Corporation, a NYSE-listed energy services company with regulated utility and wholesale energy businesses. Ms. Bailey has substantial regulatory and senior management experience in the energy industry. She currently sits on the Department of Energy’s Foundation for Energy Security & Innovation board of directors. She previously served as President of PSI Energy, Inc., a regulated utility; a commissioner of the Federal Energy Regulatory Commission; and commissioner of the Indiana Utility Regulatory commission. She was also a trustee of the North American Electric Reliability Corporation, an international regulatory authority whose mission is to assure the effective and efficient reduction of risks to the reliability and security of the grid. Ms. Bailey also has significant energy policy experience having been appointed as an Assistant Secretary for Domestic Policy and International Affairs at the U.S. Department of Energy. Ms. Bailey was also appointed to the Blue Ribbon Commission on America’s Nuclear Future, reviewing nuclear policies and activities. Ms. Bailey was the first female to be elected board chair of the United States Energy Association. Ms. Bailey received a B.S. in Industrial Management from Purdue University and completed the Advanced Management Program at The Wharton School, University of Pennsylvania. Ms. Bailey’s extensive knowledge of the electric utility industry and nuclear energy operations, including her significant state and federal regulatory and public policy experience are highly valued by the Board and support the Company’s strategic efforts. She brings a diverse perspective to our Board based on her experience as a strategic consultant, a former energy and electric utility executive, a director of public company energy corporations, and having significant high level public policy experience relevant to our businesses. Specific Qualifications/Attributes/Experience: | | | | •Leadership and Strategy •Finance/Capital Allocation •Financial Expertise/Literacy •Risk Management •Environmental/Sustainability •Regulated Industry | Energy and Electric Utility Cybersecurity Corporate Governance Customer and Community Labor and Human Capital |

  17. Directors Nominated This Year For One-Year Terms Expiring in 2026

    | Norman P. Becker Age 69 Director since 2016 Retired President and CEO, New Mexico Mutual Casualty Company Lead Independent Director Committee Memberships: Compensation and Human Capital Finance | Mr. Becker has more than 30 years of insurance and health care industry experience. Mr. Becker retired as President and CEO of New Mexico Mutual Casualty Company, an insurance provider, on March 31, 2021. He previously served as SVP of Manuel Lujan Agencies, an insurance agency, and as President of Lovelace Health System, a system of hospitals and medical centers in greater Albuquerque. His former roles include 20 years with Blue Cross Blue Shield plans, with the last seven of those years as President and CEO of Blue Cross Blue Shield of New Mexico. Mr. Becker currently serves as Chair of the Presbyterian Healthcare Systems Board of Directors and Past Chair of the Greater Albuquerque Chamber of Commerce. He has extensive community and public interest involvement and serves or has served in leadership roles at United Way of Central New Mexico, Blue Cross and Blue Shield Association, the First Community Bank Advisory Board, the National Hispanic Cultural Center, the Albuquerque Hispano Chamber of Commerce, the NM Hospitals and Health Systems Association, and the Bank of Albuquerque Community Board. Mr. Becker received a Master of Health Administration from the University of Colorado. Mr. Becker’s qualifications to serve as director include his extensive leadership experience within a highly regulated industry, strong record of community and business involvement, and business contacts and relationships within PNM’s service area. Mr. Becker brings valuable insight to our Board as a result of his broad range of business skills and financial expertise, as well as his expertise and exposure to an industry that has multiple stakeholders, including customers and regulators. Mr. Becker currently serves as lead director and presides over meetings of the independent directors in executive session. Specific Qualifications/Attributes/Experience: | | | | Leadership and Strategy Finance/Capital Allocation Financial Expertise/Literacy Risk Management Environmental/Sustainability Regulated Industry | Energy and Electric Utility Cybersecurity Corporate Governance Customer and Community Labor and Human Capital |

  18. Directors Nominated This Year For One-Year Terms Expiring in 2026

    | Patricia K. Collawn Age 66 Director since 2010 Chair and CEO of TXNM Energy, Inc. | Ms. Collawn has more than 30 years of leadership experience in the utility and electric industry. Ms. Collawn is Chair and CEO of TXNM Energy, becoming Chair in 2012. She served as President from 2010 to 2022. Ms. Collawn is also Chair of PNM and TNMP. Ms. Collawn previously served as COO and as Utilities President of PNM Resources. Under her leadership, PNM became the first U.S. investor-owned utility to set the earliest goal of 100% carbon-free generation by 2040. Ms. Collawn is a director of Cheniere Energy, Inc., a NYSE-listed energy and liquified natural gas company, serving on its audit and compensation committees. Ms. Collawn also serves on the board of Edison Electric Institute (past Chair), where she was awarded the EEI Distinguished Leadership Award by her peers for her significant contributions and ongoing commitments to the electric power industry, including leading on major policy issues such as tax reform, wildfire mitigation, and climate change. Ms. Collawn is currently serving as the interim President and CEO of EEI until the EEI board names a permanent replacement. Ms. Collawn is the past Chair of Nuclear Electric Insurance Limited. She previously served as a director of Equitrans Midstream Corporation, a NYSE-listed natural gas midstream company. She also served as a director of Evgo, Inc., a NASDAQ listed company, engaged in public fast charging networks for electric vehicles; and as a director for CTS Corporation, a NYSE-listed global designer and manufacturer of sensors, actuators and electronic components. She previously served as Chair of Electric Power Research Institute. Ms. Collawn also served as President and CEO of Public Service Company of Colorado, an Xcel Energy, Inc. subsidiary. Ms. Collawn currently serves as Chair of New Mexico Partnership, the official statewide economic development organization for locating businesses in New Mexico. Ms. Collawn is also on the University of New Mexico Foundation’s Board of Trustees. She is a former Chair of the Greater Albuquerque Chamber of Commerce, the Kirtland Partnership Committee, and of United Way of Central New Mexico. Ms. Collawn received a B.A. from Drake University and an M.B.A. from the Harvard Business School. Ms. Collawn’s knowledge of our business and the utility industry, her understanding of the complex regulatory structure of the utility industry and her substantial operations experience qualify her to be the Chairman of the Board and enable her to provide valuable perspectives on many issues facing the Company. Ms. Collawn’s service on the Board creates an important link between management and the Board that facilitates decisive and effective leadership. Her leadership role with EEI allows Ms. Collawn to keep the Board up to date on issues facing the entire utility industry, especially with respect to corporate governance, cybersecurity, environmental and sustainability matters, leadership, safety, strategy and technology. Specific Qualifications/Attributes/Experience: | | | | Leadership and Strategy Finance/Capital Allocation Financial Expertise/Literacy Risk Management Environmental/Sustainability Regulated Industry | Energy and Electric Utility Cybersecurity Corporate Governance Customer and Community Labor and Human Capital |

  19. Directors Nominated This Year For One-Year Terms Expiring in 2026

    | E. Renae Conley Age 67 Director since 2014 CEO, ER Solutions, LLC Independent Director Committee Memberships: Audit and Ethics Compensation and Human Capital (Chair) | Ms. Conley has over 30 years of business experience in the energy industry, including significant leadership positions in finance, operations and human resources. Ms. Conley currently serves as CEO of ER Solutions, LLC, an energy consulting firm. Ms. Conley serves as Chair of Southwest Gas Holdings, Inc., a NYSE-listed holding company with interest in natural gas operations and utility infrastructure services and serves on its audit and compensation committees. Ms. Conley also serves as a director of The Indiana Toll Road Concession LLC, a subsidiary of IFM Investors, operating and maintaining the Indiana East-West Toll Road. Ms. Conley has served as a director of US Ecology, Inc., a NASDAQ-listed integrated environmental services company, prior to its acquisition by Republic Services; as a director of Advanced Disposal Services, Inc., a NYSE-listed integrated environmental services company; and as a director of ChoicePoint Inc., an identification and credential verification company. Ms. Conley also held in several executive positions with Entergy Corporation, a NYSE-listed integrated energy company and its subsidiaries, including EVP, Human Resources & Administration and Chief Diversity Officer; and CEO of Entergy Louisiana and Entergy Gulf States Louisiana, during which time she played a key role leading utility restoration efforts in Louisiana in the wake of a number of major hurricanes. Prior to joining Entergy, Ms. Conley held a variety of executive positions for PSI Energy/Cinergy Corporation, including President of Cincinnati Gas and Electric. Ms. Conley is currently a member of Ball State University’s Board of Trustees. She is retired from the boards of directors of the New Orleans Branch of the Federal Reserve Bank of Atlanta and the National Action Council for Minorities in Engineering. Ms. Conley received a B.S. degree in accounting and an M.B.A., both from Ball State University. Ms. Conley’s qualifications to serve as a director include her extensive utility and energy industry experience, including being CEO of an energy consulting company and holding directorships and executive officer positions at public energy companies, which give her important financial and regulatory insight into our regulated utility businesses and field operations. Ms. Conley also brings valuable experience with respect to labor and human resources. Specific Qualifications/Attributes/Experience: | | | | Leadership and Strategy Finance/Capital Allocation Financial Expertise/Literacy Risk Management Environmental/Sustainability | Regulated Industry Energy and Electric Utility Corporate Governance Customer and Community Labor and Human Capital |

  20. Directors Nominated This Year For One-Year Terms Expiring in 2026

    | Sidney M. Gutierrez Age 73 Director since 2015 Chair, Vaya Space (formerly Rocket Crafters, Inc.) Independent Director Committee Memberships: Audit and Ethics Nominating and Governance | Mr. Gutierrez currently serves as Chair of Vaya Space (formerly Rocket Crafters, Inc.), a development-stage company engaged in rocket propulsion research and development, launch vehicle design-engineering and launch service logistics planning and development. He retired as CEO of Vaya Space in 2018. Mr. Gutierrez retired as a Colonel after serving as a fighter pilot and test pilot in the Air Force and as an astronaut and Space Shuttle Mission Commander with NASA. After retiring from NASA, Mr. Gutierrez spent over 20 years at Sandia National Laboratories (“Sandia”) where he served in various senior leadership positions and led many complex, high technology efforts, including research on nuclear power reactors, solar and wind energy, advanced fuel cycles and nuclear fuel waste disposal. As a director of the Environmental, Safety and Health Programs at Sandia, he was responsible for leading a lab-wide safety effort that cut the lab’s accident rate in half. Mr. Gutierrez has also served on several national advisory panels for NASA, reporting to the President and both houses of Congress. He served on the board of directors of TNMP before it was acquired by PNM Resources. Mr. Gutierrez is actively engaged in community and other non-profit entities, including the Burke Center for Youth and the Center for the Intrepid, and previously with the New Mexico Institute of Mining and Technology and the New Mexico Spaceport Authority. Mr. Gutierrez received a B.S. in Aeronautical Engineering (Distinguished Graduate) from the United States Air Force Academy and an M.A. in Management from Webster University. Mr. Gutierrez’s qualifications to serve as a director includes his expertise with respect to technology systems based on his engineering background and his significant experience with nuclear energy and operations, and renewable and sustainable energy. His experience raising capital for a start-up rocket company has given him important financial insight. Mr. Gutierrez also has an extensive background in safety improvements and reliability, and a thorough knowledge of the risk management principles related to security threats including cybersecurity and Supervisory Control and Data Acquisition. Specific Qualifications/Attributes/Experience: | | | | Leadership and Strategy Finance/Capital Allocation Financial Expertise/Literacy Risk Management Environmental/Sustainability Regulated Industry | Energy and Electric Utility •Cybersecurity Corporate Governance Customer and Community Labor and Human Capital |

  21. Directors Nominated This Year For One-Year Terms Expiring in 2026

    | James A. Hughes Age 62 Director since 2019 Managing Partner, Encap Investments, L.P. Independent Director Committee Memberships: Finance (Chair) Nominating and Governance | Mr. Hughes is currently a Managing Partner of Encap Investments L.P., providing growth capital to independent energy companies. He formerly served as CEO and Managing Director of Prisma Energy Capital LLC, a private entity focused on investments in energy storage. He is the former CEO and director of First Solar, Inc., a NASDAQ-listed provider of comprehensive photovoltaic solar energy solutions. Mr. Hughes also served as CEO and director of AEI Services LLC, a private company that owned and operated power distribution and generation (both thermal and renewable) in emerging markets worldwide. He served as President and CEO of Prisma Energy International. Mr. Hughes also held several senior executive positions with Enron corporations, including President and Chief Operating Officer of Enron Global Assets; President and Chief Operating Officer of Enron Asia, Pacific, Africa and China; and as Assistant General Counsel of Enron International. Mr. Hughes currently serves as a director of Alcoa Corporation, NYSE-listed global industry leader in the production of bauxite, alumina and aluminum, serving as a member of its audit committee and safety, sustainability and public issues committee. Mr. Hughes is also a director of TPI Composites Inc., a NASDAQ-listed manufacturer of composite wind blades for wind turbines and composite products, where he serves on its audit committee. Mr. Hughes is currently a member of the Energy Advisory Committee of the Federal Reserve Bank of Dallas. He is the former chair of the Los Angeles Branch of the Federal Reserve Bank of San Francisco. Mr. Hughes received a J.D. from the University of Texas at Austin School of Law, a Certificate of Completion in international business law from Queen Mary’s College, University of London and a B.A. from Southern Methodist University. Mr. Hughes’ qualifications to serve as a director include his extensive experience in the energy industry, particularly with respect to the renewable energy sector, which give him important financial, regulatory, sustainability and environmental insights. In addition, his previous senior leadership positions and directorships at large public energy and utility companies and service on the board of the federal reserve bank branch provide valuable business, financial, risk management, cybersecurity, regulatory, governance and operational and management expertise. Specific Qualifications/Attributes/Experience: | | | | Leadership and Strategy Finance/Capital Allocation Financial Expertise/Literacy Risk Management Environmental/Sustainability | Energy and Electric Utility Cybersecurity Corporate Governance Customer and Community Regulated Industry |

  22. Directors Nominated This Year For One-Year Terms Expiring in 2026

    | Steven C. Maestas Age 61 Director since 2024 CEO, Maestas Development Group Independent Director Committee Memberships: Audit and Ethics Finance | Mr. Maestas currently serves as the CEO of the Maestas Development Group, responsible for acquiring and developing commercial real estate projects throughout the Southwest. Previously, Mr. Maestas was the Founder, Chairman and Managing Partner of Maestas & Ward Commercial Real Estate, one of the largest commercial real estate management and brokerage firms in New Mexico, recognized as one of New Mexico’s Top 100 Private companies. Mr. Maestas currently serves as an Advisory Board Member of Enterprise Bank & Trust. He formerly served on the board of the Federal Reserve Bank of Kansas City (Chair/Deputy Chair). He also served as a former Chair of Albuquerque Economic Development, as a Trustee and Chair of the Albuquerque Community Foundation, and on the Board of CNM Ingenuity, Inc. Mr. Maestas’ visionary leadership experience and recognitions demonstrate his ability to strategize and negotiate complex business transactions, guide and influence economic strategies, identify and seize opportunities for growth and development while managing financial health, tackle social issues with sustainable financial outcomes, and a commitment to community engagement and service. His career has been characterized by his ability to engage with political entities and forge strong community relations. These experiences qualify him to serve as a director. Specific Qualifications/Attributes/Experience: | | | | •Leadership and Strategy •Finance/Capital Allocation •Risk Management | •Corporate Governance •Customer and Community |

  23. Directors Nominated This Year For One-Year Terms Expiring in 2026

    | Lillian J. Montoya Age 58 Director since 2024 President and CEO, CHRISTUS St. Vincent Health Systems Independent Director Committee Memberships: Compensation and Human Capital Nominating and Governance | Ms. Montoya currently serves as President and CEO of CHRISTUS St. Vincent Health System, a regional market of CHRISTUS Health, providing comprehensive acute care to a seven-county area and is the largest private employer in north central New Mexico. Prior to becoming President and CEO, Ms. Montoya served in multiple senior leadership positions including Chief Operating Officer, Chief Administrative Officer, and Vice President of Public Affairs, Marketing, Communications & Advocacy. Ms. Montoya has led an organizational and cultural transformation, positioning the organization to earn a Best Place to Work recognition for six consecutive years, earn among the highest Associate engagement scores in CHRISTUS Health, receiving successive recognition as a National Leapfrog Safety Grade of “A” hospital, and became part of the Mayo Clinic Care Network of hospitals for its commitment to quality, safety, associate engagement, and patient experience. Ms. Montoya currently serves as a Bank Division (NM) Board Member for NM Bank & Trust (Heartland Financial USA, Inc.) and on the board of the Federal Reserve Bank of Kansas City, Economic Council. Ms. Montoya is a board member (former Chair) of the New Mexico Hospital Association. She also serves on the board of the Santa Fe Opera, and is a member of the International Women’s Forum-NM and New Mexico Amigos. Ms. Montoya received a B.A. and M.B.A from the University of New Mexico. Ms. Montoya’s professional recognitions and extensive experience in leadership and strategy, governance, customer relations and community engagement, risk management, regulatory environments, as well as labor relations and human resources qualify her to serve as a director. With more than 30 years of extensive experience in helping corporate, government and non-profit leaders navigate strategic and organizational challenges, Montoya has demonstrated proven results in developing and implementing programs that make our communities better places to live, work, and thrive. Specific Qualifications/Attributes/Experience: | | | | •Leadership and Strategy •Finance/Capital Allocation •Risk Management •Regulated Industry | •Corporate Governance •Customer and Community •Labor and Human Capital |

  24. Directors Nominated This Year For One-Year Terms Expiring in 2026

    | Maureen T. Mullarkey Age 65 Director since 2014 Former EVP and CFO, International Game Technology Independent Director Committee Memberships: •Audit (Chair) •Finance | Ms. Mullarkey retired as EVP and CFO of International Game Technology (“IGT”), a NYSE-listed company and leading supplier of gaming equipment and technology. During her nineteen years with IGT, she held several executive management positions involving investor relations, finance, accounting, treasury management, tax, information systems and enterprise resource functions. Ms. Mullarkey is currently a director of Everi Holdings, Inc., a NASDAQ-listed company of businesses that deliver products and services to the gaming industry, where she serves on the audit, compensation, and nominating committees. She previously served as a director of NV Energy, Inc., a public utility company providing energy services and products to 1.4 million customers throughout Nevada. Ms. Mullarkey previously served on the boards of the University of Nevada Foundation, the Nevada Museum of Art, the Desert Research Institute, and Renown Health. She has also served on the boards of the Community Foundation of Western Nevada, Nevada Women’s Fund and the University of Nevada Reno College of Business advisory board. She was an Entrepreneur in Residence with the Nevada Institute for Renewable Energy Commercialization. She was also a partner in a private investment firm. Ms. Mullarkey received a B.S. from the University of Texas and an M.B.A. from the University of Nevada, Reno. Ms. Mullarkey’s qualifications to serve as a director include her extensive financial expertise and literacy gained after years of serving as a senior executive of a public technology company, and years of leadership as a director of a public energy company. Ms. Mullarkey also brings to the Board strategic and operational leadership and expertise related to technology. In addition, as a former director of a public energy company, Ms. Mullarkey brings to the Board sustainable and renewable energy experience. Specific Qualifications/Attributes/Experience: | | | | Leadership and Strategy Finance/Capital Allocation Financial Expertise/Literacy Risk Management | Environmental/Sustainability Regulated Industry Energy and Electric Utility Corporate Governance |

  25. Directors Nominated This Year For One-Year Terms Expiring in 2026

    | Joseph D. Tarry Age 54 Director since 2024 President and COO of TXNM Energy, Inc. | Mr. Tarry has more than 28 years of energy utility experience. He currently serves as President and Chief Operating Officer of TXNM Energy; President and Chief Executive Officer of PNM; and Chief Executive Officer of TNMP. Mr. Tarry previously served as Senior Vice President and Chief Financial Officer; Vice President of Customer Service and Chief Information Officer; and Vice President, Controller and Treasurer. Mr. Tarry serves on the board of directors of the New Mexico Chamber of Commerce, the Greater Albuquerque Chamber of Commerce and as Chairman of the Albuquerque Regional Economic Alliance, all dedicated to executing strategies to strengthen the economic base within New Mexico. Mr. Tarry earned his B.A. in Accountancy from New Mexico State University. Mr. Tarry's extensive expertise in our business and experience within an intricate regulatory framework make him well-suited for a position on the Board. His insights are invaluable in addressing the various challenges the Company faces. Additionally, Mr. Tarry's role on the Board maintains a crucial connection between management and the Board, promoting sound leadership. Specific Qualifications/Attributes/Experience: | | | | Leadership and Strategy Finance/Capital Allocation Financial Expertise/Literacy Risk Management Environmental/Sustainability Regulated Industry | Energy and Electric Utility Cybersecurity Corporate Governance Customer and Community Labor and Human Capital |

  26. AIP Performance for 2024

    AIP Performance for 2024 The three weighted performance measures for the 2024 AIP were: Incentive EPS (60%) and two operational goals, reliability (20%) and customer satisfaction (20%). These three AIP metrics aligned with our strategic goal of earning authorized returns on regulated businesses while delivering reliable and superior utility services to our customers. NEOs received annual cash incentive awards at 101% of target because the Company achieved: •Between target and maximum performance of 2024 Incentive EPS at $2.74 per share; •Below threshold performance of the reliability metric; •Threshold performance of the New Mexico-based customer satisfaction metric; and •Between target and maximum performance of the Texas-based customer satisfaction metric. As in previous years, the 2024 AIP specifies that no awards would be made unless the Compensation and HC Committee determined that the Company achieved the applicable threshold level of performance for Incentive EPS and annual incentive awards, if earned, are capped at the maximum opportunity. Incentive EPS is a non-GAAP performance metric designed to measure the financial performance of the Company’s core business by making certain adjustments as reflected in the definition of Incentive EPS as explained in the Glossary of Terms Used in this Proxy and as discussed on page 52 under Adjustments for Certain Items. For additional information about the AIP performance metrics and 2024 results, see NEO Incentive Goals and Results on page 45 and the Cash Compensation-Annual Incentive Awards section of Elements of Executive Compensation beginning on page 43.

  27. LTIP Performance for 2022-2024 under the 2022 LTIP

    LTIP Performance for 2022-2024 under the 2022 LTIP Long-term incentive awards under the 2022 LTIP were to be delivered 70% in PSs and 30% in RSAs. PS awards are tied to three-year performance goals and RSAs were, consistent with past practice, to be granted following the end of the 2022-2024 performance period and then vest over a three-year period to promote an appropriate focus on creating sustainable shareholder value. As described in 2025 Compensation Actions beginning on page 49, RSAs were granted in February 2025 under the 2025 LTIP (versus the 2022 LTIP) and will vest over a three-year period thereafter. The weighted performance metrics for the PS awards under the 2022 LTIP were: Earnings Growth (75%) and FFO/Debt Ratio (25%). The Earnings Growth metric encourages our executives to deliver at or above industry-average earnings for our shareholders in a sustainable manner while the FFO/Debt metric promotes maintaining solid investment grade ratings. For the 2022 LTIP, NEOs received PS awards at 71% of target because the Company achieved: •Between threshold and target performance of Earnings Growth, which was 3.8% over 2022-2024, compared to a target performance of at least 4.0% and a threshold performance of at least 2%; and •Below threshold performance of the FFO/Debt Ratio, a metric relating to investment grade ratings, which was 12.6% for 2024, compared to a target performance of at least 14% and a threshold performance of at least 13%. For additional information on the 2022 LTIP performance metrics and 2022-2024 results, see NEO Incentive Goals and Results on page 45, Equity Compensation-Long-Term Incentive Awards section of Elements of Executive Compensation beginning on page 45, and Adjustments for Certain Items on page 52.

  28. Compensation Philosophy and Objectives

    Compensation Philosophy and Objectives Our long-term success depends upon our ability to provide safe, reliable, affordable, environmentally responsible and sustainable energy and services to our customers and invest wisely for present and future shareholder returns. Achievement of these outcomes depends upon our success in attracting, motivating and retaining highly talented professionals. Our executive compensation program is designed to attract, retain and motivate our Officers to support the overall objective of enhancing shareholder value. Our compensation philosophy is designed to: •Attract and retain highly qualified, motivated and experienced executives, •Provide total compensation opportunities that are market competitive and reflect the size of our Company, •Pay our NEOs for performance based on corporate and business area measures, •Link corporate compensation goals to the interests of our shareholders, and •Recognize and reward outstanding Company and individual performance. The Company’s compensation strategy is grounded in pay for performance, which is reflected in the way we have structured base pay, short-term incentives and long-term incentives. This philosophy applies to all employees, with a more significant level of variability and compensation at risk for Officers. As illustrated below, the TDC target opportunity for NEOs primarily comprises short-term and long-term incentive compensation that is “at risk.” These charts illustrate the mix of pay opportunity for 2024 for our CEO and the weighted average opportunity for our other NEOs, in each case assuming these NEOs were paid under our incentive compensation plans at the target level for 2024. These amounts do not include the amounts paid or payable pursuant to the retention agreement entered into with Mr. Tarry or the sign-on equity award made to Mr. Iverson on September 16, 2024, as noted on the Grants of Plan Based Awards in 2024 section beginning on page 56, as they were non-recurring components of their 2024 compensation. The Compensation and HC Committee also considers other factors in determining the compensation of our NEOs, such as their respective qualifications, experience, expertise, performance and results of their business areas, as well as the market competitiveness of the compensation opportunity. The relative importance of these factors may vary from year to year and from NEO to NEO. As a result, the Compensation and HC Committee evaluates each component of pay in the context of each NEO’s total compensation.

  29. TXNM Peer Group

    TXNM Peer Group Our peer group has been consistent from year to year and adjusted as needed for changes within the peer group due to mergers and acquisitions. The TXNM Peer Group was developed to reflect similarly sized utility companies that reflect the competitive market in which we might compete for talent. Prior to setting compensation levels for 2024, the Compensation and HC Committee determined that the TXNM Peer Group continued to be an appropriate peer group, based on the following criteria:

  30. TXNM Peer Group

    | 1. | Ownership structure (publicly-traded), | | 2. | Business focus (electric or natural gas utility and multi-utility companies), | | 3. | Size (between one-third and three times the Company’s size in terms of revenues), | | 4. | Organizational complexity, | | 5. | Operational characteristics (such as nuclear generation ownership, multi-state regulated utilities), and | | 6. | Likely competition for executive talent. |

  31. TXNM Peer Group

    The following table lists the companies that comprised the TXNM Peer Group used in the 2024 Benchmark Data to set 2024 compensation levels.

  32. TXNM PEER GROUP

    TXNM PEER GROUP

  33. TXNM PEER GROUP

    | ALLETE, Inc. | IDACORP, Inc. | ONE Gas, Inc. | | Alliant Energy Corporation | MDU Resources Group, Inc. | Pinnacle West Capital Corporation | | Avista Corporation | New Jersey Resources Corporation | Portland General Electric Company | | Black Hills Corporation | NorthWestern Energy Group, Inc. | Southwest Gas Holdings, Inc. | | Hawaiian Electric Industries, Inc. | OGE Energy Corporation | |

  34. What We Do

    What We Do •Pay for Performance – TXNM’s pay for performance philosophy is emphasized through the use of variable compensation. Generally, a significant portion of executive pay is considered “at risk” and is based on actual Company performance against both short-term and long-term performance goals. TDC varies depending on the Company’s achievement of financial and non-financial objectives and long-term incentive compensation is designed to closely align with shareholders’ interests. •Independent Compensation and HC Committee – The Compensation and HC Committee is composed entirely of independent directors. Year-end results and related performance-based pay are reviewed and approved by the Compensation and HC Committee for the NEOs while the independent members of the Board review and approve the CEO’s compensation. •Independent Compensation Consultant – The Compensation and HC Committee uses an independent compensation consultant, Pay Governance, to regularly review and evaluate the Company’s compensation plans and programs. This includes a periodic review of the TXNM Peer Group and regular briefings regarding key trends and pending regulations. Pay Governance only provides services to the Board and its committees. No other services are provided to the Company by Pay Governance. •Capped Incentive Award Opportunity – Awards are capped at a maximum payout under both our AIP and LTIPs. •Reasonable Change in Control Severance Provisions (Retention Plan) – We have maintained change in control provisions for our executives that we believe are reasonable and customary. The change in control provisions provide for benefits under the Retention Plan only if a change in control actually occurs and the executive’s employment is terminated (i.e., double trigger). More discussion appears in the Payments Made Upon a Change in Control section of 2024 NEO Compensation Information. •“Double Trigger” Change in Control Equity Vesting – The PEP generally provides for double trigger vesting following a change in control. More discussion appears in the Payments Made Upon a Change in Control section of 2024 NEO Compensation Information. •Clawback Provisions – The PEP and/or related award documents provide that (1) all unvested and unpaid awards are subject to forfeiture for conduct which is demonstrably and materially injurious to the Company and (2) the LTIPs and AIPs provide that a recipient will forfeit unvested and unpaid incentive compensation awards issued under the PEP for any manipulation or attempted manipulation of the performance results for personal gain at the expense of customers, shareholders, other employees or the Company. In addition, under the Company’s Clawback Policy, amended as of December 1, 2023 and described more fully on pages 11 and 50 of this proxy statement, incentive compensation awarded to Officers is subject to recoupment in the event of certain accounting restatements or if the Officer engaged in improper conduct. •Hiring and Retention of High-Achieving Executives – The Compensation and HC Committee balances objectives of performance and retention to ensure that high-achieving, marketable executives remain motivated and committed to the Company. •Tally Sheets – The Compensation and HC Committee reviews tally sheets of compensation, which includes retirement and other benefits, for our NEOs prior to making annual executive compensation decisions. •Mitigation of Undue Risk – Management and the Compensation and HC Committee evaluate, through an annual risk assessment process, whether the Company’s compensation programs for employees, including NEOs, create risks that are reasonably likely to have a material adverse effect on the Company. Based on the risk analysis undertaken in 2024, the Compensation and HC Committee does not believe that the Company’s compensation programs, policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. Examples of the features that assist in mitigating risk include the Clawback Policy, the PEP forfeiture provisions noted above and the Company’s stock ownership holding guidelines. More discussion appears in the Board’s Role in Risk Oversight section on page 9. •Conservative Perquisites – Perquisites for our Officers are modest and serve a reasonable business purpose. •Equity Ownership Holding Guidelines – The Compensation and HC Committee believes that rewarding the NEOs with equity compensation supports retention and helps align management with the best interests of our shareholders, our customers and the Company. Therefore, the Company has stock ownership holding guidelines for all NEOs requiring that they hold from three (3) to five (5) times base salary in TXNM shares depending on the NEO’s position. See the Equity Ownership Guidelines section of Additional Information. •Minimal Dilution – As the Company’s practice is to only use shares that are acquired on the open market to satisfy awards under the PEP, our equity compensation practices result in minimal dilution. More discussion appears in the Equity Compensation section of Elements of Executive Compensation.

  35. •No employment contracts with our CEO or other NEOs.*

    •No employment contracts with our CEO or other NEOs.* •No individual change in control agreements with our CEO or other NEOs. •No discounted stock options or SARs. •No excise tax gross-ups. •No repricing of stock options or SARs without prior shareholder approval. •No share recycling of stock options or SARs. •No evergreen provisions within the PEP. •No dividends or dividend equivalents on unvested RSAs or unearned PSs. •No hedging or monetization transactions (such as zero-cost collars and forward sales contracts, which would allow for locking in much of the value of Company securities) permitted by Officers, directors or employees. •No short sales of Company securities by any Officer, director or employee. •No pledging of Company securities by our executive officers, including NEOs, or directors. * Other than special retention agreements entered into with certain NEOs as previously detailed in the 2024 proxy statement.

  36. ELEMENTS OF EXECUTIVE COMPENSATION

    ELEMENTS OF EXECUTIVE COMPENSATION Our executive compensation program is generally designed to maintain an appropriate and competitive balance between fixed pay (base salary) and variable pay or “at risk” incentives (annual and long-term incentives) under our AIP and LTIPs, respectively. The program typically consists of three core elements that comprise TDC – base salary, AIP and LTIP awards that are targeted around the median level of compensation paid to executive officers of similar companies in the 2024 Benchmark Data (as described in the Role of the Independent Compensation Consultant section of Administration and Resources). The annual and long-term incentives are structured to reward the achievement of strategic, financial and operational performance goals. As the NEO with the highest level of responsibility, the CEO generally has the greatest variability in TDC. The targeted level of each element of compensation is independently set at approximately the market median range and then appropriate adjustments are made based on each NEO’s performance, experience and strategic role to the Company. If the Compensation and HC Committee increases an NEO’s base salary, it also considers the resulting impact on annual and long-term performance-based incentive compensation levels and benefits. Following is a summary of compensation and benefits provided to our Officers.

  37. ELEMENTS OF EXECUTIVE COMPENSATION

    | Compensation Component | Key Characteristics | Purpose | | AIP | •Variable annual cash incentive based on corporate performance metrics with threshold, target and maximum opportunities for each Officer. Incentive EPS threshold must be achieved to receive any incentives and awards are capped at a maximum of two-times the target bonus amount | •Reward and motivate Officers for achieving annual financial and operating goals across the organization •Link annual pay with annual performance | | LTIP | •Awards are a combination of PSs and RSAs. PS awards represent variable compensation incentive based on long-term corporate performance metrics, typically with a three-year performance period and generally granted annually. Amounts actually earned will vary based on corporate performance and the Officer’s position | •Reward Officers for achieving long-term business objectives by tying incentives to long-term performance (PSs) •Align the interests of the Officers and the shareholders (PSs and RSAs) •Enhance retention of Officers | | Deferred Compensation and Retirement Benefits | •A broad-based 401(k) retirement plan and a non-qualified supplemental retirement savings plan •A frozen defined benefit plan for employees hired prior to January 1, 1998 | •Enhance recruitment and retention by aligning benefits with competitive market practices •Provide for future retirement of Officers | | Supplemental Benefits and Perquisites | •Generally limited to perquisites such as additional officer life insurance, long term disability, executive physicals, financial planning and the ECP. The ECP is limited to $23,000 for the CEO and President and COO, and $18,000 for SVPs | •Align with market practices to provide reasonable supplemental benefits | | Potential Severance Benefits and Change in Control | •These amounts are payable only if employment is terminated under certain conditions (i.e., double trigger) | •Support the objective assessment and execution of potential changes to the Company’s strategy and structure by our Officers •Enhance retention of management by reducing concerns about employment continuity | | Merger-Related Arrangements entered into in December 2023 | •Special RSAs designed to require continued employment for a period of time •Special cash bonuses to incentivize continued employment and/or recognize past performance | •Special retention agreements to certain NEOs to incentivize them to remain employed during the pending decision relating to the contemplated Merger and for a transition period beyond termination of the Merger | | Sign-On RSA Award made in 2024 in connection with appointment of General Counsel, SVP, Regulatory & Public Policy | •One-time sign-on equity award with 50% fully vested on the hire date and the remaining 50% vested on the first anniversary of hire date | •Special one-time sign-on RSA award to attract top talent •Reinforces the Company’s objectives to align management’s interest with the interests of the Company’s shareholders and customers |

  38. Base Salary

    Base Salary Base salary is the fixed component of compensation paid to each NEO for effectively discharging the duties and responsibilities of his or her position. An NEO’s base salary is determined by considering a variety of factors including, but not limited to: •Scope of responsibilities, •Previous experience, •Individual performance, •Base salaries for comparable NEOs within the TXNM Peer Group, •Base salaries as reported in compensation surveys, such as the WTW General Industry Executive Survey Report - United States, and •Recommendations from our independent executive compensation consultant, Pay Governance. Annually, the Compensation and HC Committee considers all of these factors in recommending the base salary of the CEO (which is approved by the independent members of the Board) and in setting the base salary of all other NEOs. Salary adjustments, if any, are based on the median of base salaries revealed by benchmarking comparable positions, described in the Role of the Independent Compensation Consultant section of Administration and Resources, as well as the Company’s performance, internal pay equity among the Officers and the Compensation and HC Committee’s evaluation of the individual NEO’s performance. Performance is primarily measured on the basis of corporate and individual performance, with applicable goals and objectives being established at the beginning of each year. At its February 2024 meeting, after reviewing the 2024 Benchmark Data, recommendations from management and Pay Governance, and considering the Company’s performance and strategic objectives, as well as each NEO’s performance in 2023, the Compensation and HC Committee approved increases in base salaries, effective March 2024, for certain of the NEOs, with the independent members of the Board approving an increase for our CEO. The following sets forth our CEO and other NEO’s base salaries in 2023 and as increased in 2024, in each case as approved by the Compensation and HC Committee.

  39. Annual Incentive Awards

    Annual Incentive Awards The AIP provides annual cash incentives to reward the NEOs for the achievement of annual financial and operating goals and to reinforce the Company’s pay for performance philosophy. Our philosophy is to set the AIP award opportunities at the approximate median for NEOs in comparable positions based on a benchmarking analysis, which for 2024 consisted of the 2024 Benchmark Data. The table below shows the 2024 AIP target award opportunity as compared to the 2023 AIP target award opportunity.

  40. NEO ANNUAL INCENTIVE AWARD OPPORTUNITY

    NEO ANNUAL INCENTIVE AWARD OPPORTUNITY

  41. NEO ANNUAL INCENTIVE AWARD OPPORTUNITY

    | Position | 2023 Target Opportunity1 | 2024 Target Opportunity1 | | Patricia K. Collawn | 115% | 115% | | Joseph D. Tarry 2 | 70% | 70% 2 | | Elisabeth A. Eden 3 | 60% | 60% 3 | | Brian G. Iverson 4 | N/A | 70% | | Patrick V. Apodaca | 55% | 55% | | Additional target bonus adjustments were made throughout the year to recognize changes in NEOs’ responsibilities. | | | | 1 As a percentage of Base Salary. The threshold opportunity is half of the target opportunity and the maximum opportunity is two times the target opportunity. | | | | 2 Effective July 1, 2024, Mr. Tarry’s target opportunity increased from 70% to 75% of his annual base salary. Effective December 3, 2024, Mr. Tarry’s target opportunity increased to 90% of his annual base salary. The increases to Mr. Tarry’s target opportunity are pro-rated based on the effective date of the increases. | | | | 3 Effective July 1, 2024, Ms. Eden’s target opportunity increased from 60% to 65% of her annual base salary, pro-rated based on the effective date of the increase. | | | | 4 Mr. Iverson’s 2024 target opportunity was pro-rated based on his date of hire, September 16, 2024. | | |

  42. NEO ANNUAL INCENTIVE AWARD OPPORTUNITY

    The Compensation and HC Committee approved the 2024 AIP for the performance period January 1, 2024 to December 31, 2024. The performance metrics are: Incentive EPS (weighted 60%) and two operational goals, reliability (weighted 20%) and customer satisfaction (weighted 20%). The reliability metric is designed to promote system reliability for customers by including a performance goal that measures the duration of interruptions on the electric system. We continue to focus on customer satisfaction by aligning operations and programs to improve the customer experience and to better serve our customers’ evolving needs in a rapidly changing energy landscape, which we believe ultimately benefits the Company and our shareholders. The objective of the 2024 AIP was to motivate the eligible NEOs to achieve certain performance goals tied to the Company’s financial and operational results in order to achieve alignment with the corporate strategy of the Company. The Compensation and HC Committee considers the target performance goals to be rigorous, but reasonably achievable. Maximum performance levels are designed to be difficult to achieve. In order to ensure that awards were funded by the Company’s earnings, no awards were to be made under the 2024 AIP unless the Company achieved Incentive EPS of at least $2.65 (even if the reliability and customer satisfaction metrics are achieved above threshold) and annual incentive awards are capped at the maximum opportunity, 200% of target. Straight-line interpolation determines the bonus payout for performance that falls between threshold and target or between target and maximum levels. For 2024, the Compensation and HC Committee did not exercise its discretion to increase or decrease awards to any NEO. Maximum awards were to be made at Incentive EPS levels of $2.80 or higher. For 2024, the Company’s Incentive EPS for the eligible NEOs was $2.74, resulting in achievement of between target and maximum performance levels. The Company achieved below threshold performance level for the reliability goal. The customer satisfaction performance goal is comprised of two measurements, the PNM Research and Polling Survey, achieved at the threshold performance level, and the TNMP REP Satisfaction Survey, achieved at between target and maximum performance levels. See the performance results noted on the corporate scorecard below. Under the 2024 AIP, NEOs were eligible to receive a target award as detailed in the table above. Based on aggregate performance results shown in the Corporate Scorecard below, each NEO received an award equal to 101% of their target AIP opportunity for the year. Awards are prorated for both changes in target opportunities and time in position.

  43. CORPORATE SCORECARD

    | Goal | Weight | Threshold 50% | Target 100% | Maximum 200% | 2024 Results | Weighted Results | | TXNM Incentive EPS | 60% of Scorecard | ≥$2.65/share | ≥$2.70/share | ≥$2.80/share | $2.74/share (140% of target award level) 1 | 84.0% | | Customer Satisfaction (measured by PNM Research and Polling Survey) (weighted average score) | 13% of Scorecard | 7.4 | 7.5 | 7.8 | 7.4 (50% of target award level) | 6.5% | | Customer Satisfaction (measured by TNMP REP Satisfaction) (weighted average score) | 7% of Scorecard | 4.0 | 4.3 | 4.7 | 4.5 (150% of target award level) | 10.5% | | Reliability (measured by PNM & TNMP SAIDI) (weighted respectively, 67% / 33%) | 20% of Scorecard | 109 | 104 | 98 | 122 (0% of target award level) | 0% | | Aggregate Performance Results | | | | | | 101% |

  44. Equity Compensation

    Equity Compensation The Company has not used newly issued shares or treasury shares to satisfy any equity awards granted under the PEP. Because the Company’s past and current practice is to only use shares acquired on the open market to satisfy awards of earned PSs and vested RSAs, the vesting of these awards does not increase the number of shares outstanding and does not have a dilutive impact on our shareholders. However, the awards are considered to be dilutive securities in the computation of earnings per share during the period from granting the award until the awards are earned or become vested. The dilutive impact of these awards on earnings per share has not been significant.

  45. Long-Term Incentive Awards

    Long-Term Incentive Awards The Compensation and HC Committee recommended and the Board approved an amendment to both the 2023 and 2024 LTIPs in February 2025 to exclude the impact of extraordinary or non-recurring events occurring after February 25, 2025, when determining the FFO/Debt Ratio goal under both plans. At the time of the amendment, the Committee was not aware of any extraordinary or unusual event that would impact the payout under either plan. 2024 LTIP Goals for the Performance Period 2024-2026 Consistent with past years and consistent with our pay for performance philosophy, for 2024, 70% of the NEO’s total 2024 long-term incentive compensation opportunities are dependent upon the Company’s achievement of three performance goals, noted below, over the 2024-2026 performance period. No PSs (shown as PS in the GPBA Table on page 56) will be earned by or paid to our NEOs if actual performance over the 2024-2026 performance period is below the threshold levels set forth in the following table. Generally, a PS award will not be paid to an Officer who separates from service in the first half of the performance period for any reason other than a qualifying change in control termination. After the first half of the performance period, a prorated PS award will be paid to an NEO who separates from service due to death, disability, impaction or retirement, which will be calculated based on actual performance and the number of full months of service completed by the Officer during the performance period. The 2024 LTIP award opportunities were benchmarked to the median of the 2024 Benchmark Data. The PSs awarded under the LTIPs are tied to three-year performance measures designed to support long-term goals. For 2024, we used the following performance metrics for the LTIP PS awards: •Earnings Growth (targets are determined by the Board based on the Company’s long-range operating plan), •Relative TSR Goal (comparing Company TSR to the EEI Utilities Index), and •FFO/Debt Ratio (targets are determined by the Board based on the Company’s long-range operating plan).

  46. 2024 LTIP PS AWARDS PERFORMANCE GOAL TABLE

    2024 LTIP PS AWARDS PERFORMANCE GOAL TABLE

  47. 2024 LTIP PS AWARDS PERFORMANCE GOAL TABLE

    | Corporate Goal | Weight | Threshold 50% | Target 100% | Maximum 200% | | Earnings Growth | 50% | ≥ 3.0% | ≥ 5.0% | ≥ 8.0% | | Relative TSR | 25% | ≥ 35th percentile | ≥ 50th percentile | ≥ 90th percentile | | FFO/Debt Ratio | 25% | ≥13% | ≥14% | ≥16% |

  48. 2024 LTIP PS AWARDS PERFORMANCE GOAL TABLE

    Collectively, these LTIP performance measures are designed to align our NEOs’ and other Officers’ interests with the long-term interests of the Company and our shareholders by tying incentives to earnings growth, stock performance, and credit metric objectives. For additional information on the calculation of the non-GAAP financial measures of Earnings Growth and FFO/Debt Ratio, please see the Glossary of Terms Used in this Proxy beginning on page 79 and Adjustments for Certain Items on page 52. In March 2024, the Board approved the 2024 LTIP for the three-year performance period of 2024-2026; incentives, if earned, are anticipated to be awarded in early 2027. The 2024 LTIP reflects a continued focus on Earnings Growth. The PS award opportunities under the 2024 LTIP are based on Earnings Growth (weighted at 50%), Relative TSR (weighted at 25%), and FFO/Debt Ratio (weighted at 25%). The 2024 LTIP target award opportunities for NEOs are shown in the table below.

  49. NEO LONG-TERM

    NEO LONG-TERM

  50. INCENTIVE AWARD OPPORTUNITY

    INCENTIVE AWARD OPPORTUNITY

  51. INCENTIVE AWARD OPPORTUNITY

    | | 2023 LTIP | | | 2024 LTIP | | | | Position | Total Target Opportunity1 | PS1 | RSA | Total Target Opportunity1 | PS1 | RSA | | Patricia K. Collawn | 290% | 203% | 87% | 290% | 203% | 87% | | Joseph D. Tarry2 | 165% | 115.5% | 49.5% | 165% | 115.5% | 49.5% | | Elisabeth A. Eden | 85% | 59.5% | 25.5% | 85% | 59.5% | 25.5% | | Brian G. Iverson3 | 135% | 94.5% | 40.5% | 135% | 94.5% | 40.5% | | Patrick V. Apodaca | 85% | 59.5% | 25.5% | 85% | 59.5% | 25.5% | | Additional LTIP adjustments were made throughout the year to recognize changes in the NEOs’ responsibilities. | | | | | | | | 1 As a percentage of base salary for the time period in which the NEO serves in the applicable position. The total target opportunity is comprised of a mix of 70% PSs and 30% RSAs. For PSs only, the threshold opportunity is half of the target opportunity and the maximum opportunity is two times the target opportunity. Such award opportunities were determined based on the NEO’s respective position and base salary. | | | | | | | | 2 Mr. Tarry’s PS award was increased to 157.5% for the period beginning January 1, 2025 and his RSA award was increased to 67.5% under both the 2023 LTIP and the 2024 LTIP. | | | | | | | | 3 Mr. Iverson’s 2023 LTIP and 2024 LTIP were pro-rated based on his hire date of September 16, 2024. | | | | | | |

  52. INCENTIVE AWARD OPPORTUNITY

    LTIP Awards Earned for the Performance Period 2022-2024 In 2022, the Compensation and HC Committee approved the 2022 LTIP for the three-year performance period of 2022-2024. Information regarding the threshold, target and maximum performance targets for the 2022-2024 performance period under the 2022 LTIP for Earnings Growth and FFO/Debt Ratio and the actual 2022-2024 performance results are set forth in the following table. The NEOs earned PS awards under the 2022 LTIP at 71% of target, based on achieving Earnings Growth at between the threshold and target level (weighted at 75%) and FFO/Debt Ratio at the below threshold level (weighted at 25%). The FFO/Debt Ratio performance metric excludes, among other things, the impact of acquisition activities. Performance results and related PSs received by the NEOs in February 2025, under the 2022 LTIP, were reviewed and approved by the Compensation and HC Committee and the independent members of the Board at its meeting in February 2025.

  53. 2022 NEO LONG-TERM INCENTIVE PS AWARD OPPORTUNITIES

    2022 NEO LONG-TERM INCENTIVE PS AWARD OPPORTUNITIES

  54. 2022 NEO LONG-TERM INCENTIVE PS AWARD OPPORTUNITIES

    | Position | Threshold PS Opportunity1 | Target PS Opportunity1 | Maximum PS Opportunity1 | | CEO | 101.5% | 203% | 406% | | President and COO2 | 57.75% | 115.5% | 231.0% | | General Counsel, SVP, Regulatory, and Public Policy3 | 47.25% | 94.5% | 189% | | SVP | 29.75% | 59.5% | 119% | | 1 As a percentage of base salary. As discussed under Overview - LTIP Performance for 2022-2024 under the 2022 LTIP on page 37, this table represents the PS portion of the 2022 LTIP award opportunities. As discussed in 2025 Compensation Actions beginning on page 49, RSAs were granted under the 2025 LTIP. Such award opportunities were determined based on the NEOs' respective positions and base salaries. | | | | | 2 Due to Mr. Tarry’s promotion to President and COO, PS award opportunity increased from 105% to 115.5% for period beginning after May 20, 2022, which increased the target opportunity to 165%. | | | | | 3 Pro-rated based on his hire date of September 16, 2024. | | | |

  55. 2022 NEO LONG-TERM INCENTIVE PS AWARD OPPORTUNITIES

    Actual PSs received by the NEOs under the 2022 LTIP are shown on the Outstanding Equity Awards table on page 58.

  56. Potential Severance Benefits

    Potential Severance Benefits The Company offers severance benefits to the NEOs to mitigate the possible difficulty they may have finding comparable employment, within a reasonable period of time, following a separation from service. Under our Severance Plan, benefits are only payable if the NEO’s position is eliminated through no fault of his or her own. The Severance Plan and related benefits are described in more detail on page 63.

  57. Potential Change in Control Benefits

    Potential Change in Control Benefits The Company also recognizes, as is the case with many publicly-held companies, the possibility of a change in control. A change in control, combined with the uncertainty and the questions that it may raise, may potentially result in the departure of key management to the detriment of the Company and our shareholders. This could also impact the Company’s ability to continue to provide efficient and reliable utility services to our customers. The Company and the Compensation and HC Committee have determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of the Company’s key management to their assigned duties and to pursuing corporate transaction activity that is in the best interests of our customers and shareholders and to facilitate recruitment of future employees in the face of potentially challenging circumstances arising from the possibility of a change in control of the Company. The Company and the Compensation and HC Committee have also concluded that it is appropriate to provide competitive and fair compensation and benefits to employees terminated under these circumstances through our Retention Plan. The Retention Plan provides the NEOs with benefits if their employment is terminated, under certain circumstances, within 24 months following a change in control of the Company. The purpose of our Retention Plan is to better align the NEOs’ interests with the interests of our shareholders and to provide the NEOs with reasonable protection from loss of employment resulting from a change in control. The provision of benefits pursuant to the Retention Plan also facilitates our recruitment and retention of talented NEOs by providing reasonable and expected protections. Our Retention Plan and change in control benefits are described in more detail beginning on page 63.

  58. Roles of the Compensation and HC Committee, Board of Directors and Executive Officers

    Roles of the Compensation and HC Committee, Board of Directors and Executive Officers Pursuant to its role as assigned by the Board, the Compensation and HC Committee is primarily responsible for the design and administration of our executive compensation program. Additionally, our Board, our NEOs and an independent compensation consultant play important roles. The Compensation and HC Committee establishes and periodically reviews all elements of our executive compensation program. The ultimate responsibility for determining the level of compensation paid to each of the NEOs, other than the CEO, resides with the Compensation and HC Committee. For the CEO, the Compensation and HC Committee makes a recommendation to our independent directors of the Board (a group that includes, but is not limited to, the members of the Compensation and HC Committee) regarding the level of the CEO’s compensation and the final decision is made by the independent directors. The Board, based on the recommendations of the Compensation and HC Committee, approves all equity compensation plans and equity awards for Officers. In setting (or recommending in the case of the CEO) specific compensation levels, the Compensation and HC Committee considers the CEO’s evaluation of the NEOs and the self-evaluation prepared by the CEO. The independent members of the Board take into consideration their evaluation of the CEO’s performance when approving or setting the CEO specific compensation levels. The CEO recommends corporate-level performance goals to the Compensation and HC Committee for approval. The CEO also provides regular input to the Compensation and HC Committee with respect to the overall structure of the executive compensation program, including how the program effectively aligns with the Company’s strategic objectives. However, the final decision related to the executive compensation program rests with the Compensation and HC Committee, with approval of the independent members of the Board, for all Officer equity plans, Officer equity awards and CEO compensation.

  59. Role of the Independent Compensation Consultant

    Role of the Independent Compensation Consultant Pursuant to its charter, the Compensation and HC Committee selects and retains an independent compensation consultant (at the Company’s expense) whose services include: providing peer group and market compensation data, providing information on trends and regulatory issues affecting executive pay, performing competitive market analysis, recommending compensation program and plan changes and recommending Officer compensation structure and levels. In May 2013, the Compensation and HC Committee selected Pay Governance to be its independent compensation consultant pursuant to the Compensation and HC Committee’s Policy Governing Fees and Services for Executive Compensation Consultants. On an annual basis, most recently at its December 2024 meeting, the Compensation and HC Committee evaluated Pay Governance’s independence as its compensation consultant by considering each of the independence factors specified by the NYSE and the SEC. Based on the evaluation, the Compensation and HC Committee determined that no conflict of interest exists that would prevent Pay Governance from independently advising the Compensation and HC Committee. On occasion, the independent compensation consultant provides information to the members of management, but all its services are provided and performed at the request of and pursuant to instructions provided by the Compensation and HC Committee or the Nominating Committee. None of the NEOs are present during the Compensation and HC Committee’s discussions with the independent consultant regarding his or her individual compensation. During 2024, no services were provided to the Company by Pay Governance, other than the services that are described in this proxy statement. The Compensation and HC Committee strives to provide target compensation opportunities that are at the median TDC of the appropriate benchmark group of companies, which reflect the market within which TXNM competes for executive talent. Information referenced in 2023 to assist in setting 2024 compensation levels was obtained and analyzed as follows: •Management engaged WTW to perform a competitive assessment of the Company’s executive compensation program, including compensation opportunity levels for the CEO and other NEOs (the “WTW study”). Pay Governance reviewed the approach and the findings of the WTW study. •The WTW study compared our NEO compensation to (1) market data for the TXNM Peer Group described on page 39 and (2) market data from the companies (listed in Appendix A) comprising the WTW 2023 General Industry Executive Survey Report - United States of general industry companies with data regressed to companies similarly sized to TXNM. •For corporate-function roles, such as those of our NEOs, talent may be recruited by or lost to companies that are similar in size to the Company, which may or may not be in the utility/energy sector. Therefore, to determine overall market compensation levels, the benchmark analysis used the 2024 Benchmark Data. •The median compensation levels of the 2024 Benchmark Data were the primary reference points used by the Compensation and HC Committee to evaluate the competitiveness of executive compensation. The Compensation and HC Committee used these figures to benchmark base salary, TCC and TDC paid to the NEOs (both individually and as a group) to similar types and elements of compensation paid to executives holding comparable positions in the marketplace.

  60. Double Trigger Vesting Following a Change in Control

    Double Trigger Vesting Following a Change in Control The PEP includes, as a general rule, double trigger vesting following a change in control. Double trigger vesting results only if an NEO is terminated without cause or is constructively terminated following a change in control. See Payments Made Upon a Change in Control section of 2024 NEO Compensation Information beginning on page 63.

  61. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE

  62. SUMMARY COMPENSATION TABLE

    | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | | | (1) | | (2) | | (3) | (4) | (5) | | | Patricia K. Collawn, Chair and CEO | 2024 | 1,146,848 | — | 2,720,925 | — | 1,352,483 | — | 405,919 | 5,626,175 | | | 2023 | 1,071,821 | 375,000 | 3,998,365 | — | 1,802,142 | — | 423,505 | 7,670,833 | | | 2022 | 1,005,880 | — | 2,460,988 | — | 1,497,107 | — | 1,632,600 | 6,596,575 | | Joseph D. Tarry, President and COO (6) | 2024 | 577,352 | — | 1,600,674 | — | 539,684 | 8 | 186,659 | 2,904,377 | | | 2023 | 532,192 | 250,000 | 833,200 | — | 544,673 | 1,553 | 166,902 | 2,328,520 | | | 2022 | 480,717 | — | 517,195 | — | 439,013 | — | 149,674 | 1,586,599 | | Elisabeth A. Eden, SVP & Chief Financial Officer (7) | 2024 | 430,475 | 70,000 | 294,022 | — | 284,125 | — | 161,199 | 1,239,821 | | | 2023 | 395,192 | 70,000 | 318,702 | — | 346,680 | — | 142,416 | 1,272,990 | | | 2022 | 354,716 | — | 201,430 | — | 260,250 | — | 118,524 | 934,920 | | Brian G. Iverson, General Counsel, SVP, Regulatory & Public Policy (8) | 2024 | 121,154 | 184,696 | 658,174 | — | 93,011 | — | 18,763 | 1,075,798 | | Patrick V. Apodaca SVP, General Counsel and Secretary (9) | 2024 | 341,716 | — | 302,620 | — | 179,267 | — | 135,442 | 959,045 | | | 2023 | 408,445 | 125,000 | 683,915 | — | 327,083 | — | 144,539 | 1,688,982 | | | 2022 | 389,826 | — | 286,165 | — | 276,895 | — | 113,630 | 1,066,516 |

  63. SUMMARY COMPENSATION TABLE

    (1) 2024 salary amounts include cash compensation earned by each NEO during 2024. This also includes any amounts earned in 2024 but contributed into the RSP and the ESP II. For amounts deferred pursuant to the ESP II, see the 2024 Non-Qualified Deferred Compensation table. (2) Represents the grant date fair value of all stock awards calculated in accordance with FASB ASC Topic 718. For 2024, the amount indicated is the aggregate grant date fair value of all grants of (A) RSAs granted on March 1, 2024 (shown as RSA in the GPBA Table) and (B) PS awards (shown as PS in the GPBA Table), based on the target level of performance, which the Company considered the probable outcome on the grant date. The assumptions used in determining the grant date fair value of stock awards are set forth in Note 12 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The actual cash value that the NEO may realize on the vesting of the RSAs or PSs will depend on the number of shares that ultimately vest, the market price of our common stock at the date of vesting, and ultimately, the value received by the employee on the sale of the stock. RSAs vest over a three-year period beginning on March 7th following the first anniversary of the grant date. The following table shows the grant date fair value of all 2024 stock awards assuming maximum performance of the 2024 LTIP PSs (shown as PS in the GPBA Table) and the actual RSA awards shown in the GPBA Table. As discussed above, the amount reflected in column (e) of the SCT assumes target performance of PS awards. Both column (e) of the SCT and the following table also include the grant date fair value of the actual RSA awards.

  64. Grants of Plan Based Awards in 2024

    Grants of Plan Based Awards in 2024 The following table discloses the 2024 grants of awards to our NEOs: (1) annual incentive plan award levels under the 2024 AIP (shown below as AIP) and (2) the following equity awards made under the LTIP: (a) RSAs awarded under the 2021 LTIP in March 2024 at the end of the three-year performance period, (b) PS award opportunity based on Earnings Growth, Relative TSR, and FFO/Debt Ratio performance measures over the 2024-2026 performance period of the 2024 LTIP, as well as the grant date fair value of all such equity awards. RSAs, granted on March 1, 2024, vest in three equal annual installments beginning on March 7, 2025. A uniform vesting date of March 7th was adopted for RSAs granted on and after 2016. The table below also discloses the 2024 grant of Mr. Tarry’s retention agreement which was converted to RSAs (shown as RET) and Mr. Iverson’s sign-on equity award (shown as SGN).

  65. GRANTS OF PLAN BASED AWARDS IN 2024

    GRANTS OF PLAN BASED AWARDS IN 2024

  66. GRANTS OF PLAN BASED AWARDS IN 2024

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | | Name | Grant Date | Thresh- old ($) | Target ($) | Maxi- mum ($) | Thresh- old (#) | Target (#) | Maxi- mum (#) | | | | | | | | | | | | | | | | | (1) | | P. K. Collawn | AIP 2/29/2024 | 669,546 | 1,339,092 | 2,678,184 | — | — | — | — | — | — | — | | | PS 3/1/2024 | — | — | — | 30,015 | 60,031 | 120,062 | — | — | — | 1,886,553 | | | RSA 3/1/2024 | — | — | — | — | — | — | 25,727 | — | — | 834,372 | | J. D. Tarry | AIP 2/29/2024 | 267,170 | 534,341 | 1,068,682 | — | — | — | — | — | — | — | | | PS 3/1/2024 | — | — | — | 10,534 | 21,070 | 42,141 | — | — | — | 662,152 | | | RET 5/3/2024 | — | — | — | — | — | — | 19,851 | — | — | 702,808 | | | RSA 3/1/2024 | — | — | — | — | — | — | 7,268 | — | — | 235,714 | | E. A. Eden | AIP 2/29/2024 | 140,656 | 281,311 | 562,623 | — | — | — | — | — | — | — | | | PS 3/1/2024 | — | — | — | 3,243 | 6,487 | 12,975 | — | — | — | 203,862 | | | RSA 3/1/2024 | — | — | — | — | — | — | 2,780 | — | — | 90,160 | | B. G. Iverson | AIP 2/29/2024 | 46,045 | 92,090 | 184,180 | — | — | — | — | — | — | — | | | PS 9/16/2024 | — | — | — | 4,333 | 8,666 | 17,333 | — | — | — | 272,340 | | | SGN 9/16/2024 | — | — | — | — | — | — | 9,300 | — | — | 385,834 |

  67. GRANTS OF PLAN BASED AWARDS IN 2024

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | | Name | Grant Date | Thresh- old ($) | Target ($) | Maxi- mum ($) | Thresh- old (#) | Target (#) | Maxi- mum (#) | | | | | | | | | | | | | | | | | (1) | | P. V. Apodaca | AIP 2/29/2024 | 118,113 | 236,226 | 472,453 | — | — | — | — | — | — | — | | | PS 3/1/2024 | — | — | — | 3,338 | 6,677 | 13,354 | — | — | — | 209,833 | | | RSA 3/1/2024 | — | — | — | — | — | — | 2,861 | — | — | 92,787 | | (1) Represents the grant date fair value of the equity awards, based on target performance for PS awards and actual amount of RSA awards, determined in accordance with FASB ASC Topic 718. The assumptions used in determining the grant date fair value of stock awards are set forth in Note 12 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. For information about the grant date fair value assuming maximum performance of PS awards, see footnote 2 to the SCT. | | | | | | | | | | | |

  68. Outstanding Equity Awards

    Outstanding Equity Awards The table below includes certain information about the following outstanding equity awards (as of December 31, 2024) made under the PEP to the NEOs: (1) RSAs that vest equally over three years from the grant date, (2) PS awards granted on March 3, 2022 under the 2022 LTIP reflecting the amount of actual below target performance achieved for the 2022-2024 performance period, (3) PS award opportunities granted on February 27, 2023 under the 2023 LTIP, assuming target performance is achieved for the 2023-2024 performance period, (4) PS award opportunities granted on March 1, 2024 under the 2024 LTIP (shown as PS in the GPBA Table above), assuming maximum performance is achieved for the 2024-2026 performance period and (5) RSAs relating to retention awards and sign-on equity awards that vest as determined by the Board and specific underlying award agreements.

  69. OUTSTANDING EQUITY AWARDS AT 2024 YEAR-END

    OUTSTANDING EQUITY AWARDS AT 2024 YEAR-END

  70. OUTSTANDING EQUITY AWARDS AT 2024 YEAR-END

    | (a) | | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | | | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexer-cised Options (#) Unexer-cisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | | | (1) | | (2) | | | (3) | (4) | (5) | (4) | | P. K. Collawn | 3/18/2022 | — | — | — | — | — | 30,263 | 1,488,032 | — | — | | | 3/1/2022 | — | — | — | — | — | 5,967 | 293,397 | — | — | | | 2/28/2023 | — | — | — | — | — | 12,038 | 591,908 | 42,032 | 2,066,713 | | | 3/1/2024 | — | — | — | — | — | 25,727 | 1,264,997 | 120,062 | 5,903,449 | | J. D. Tarry | 3/18/2022 | — | — | — | — | — | 7,336 | 360,711 | — | — | | | 3/1/2022 | — | — | — | — | — | 795 | 39,090 | — | — | | | 2/28/2023 | — | — | — | — | — | 3,401 | 167,227 | 13,313 | 654,600 | | | 3/1/2024 | — | — | — | — | — | 7,268 | 357,368 | 42,141 | 2,072,073 | | | 5/3/2024 | — | — | — | — | — | 13,234 | 650,716 | — | — | | E. A. Eden | 3/18/2022 | — | — | — | — | — | 2,756 | 135,513 | — | — | | | 3/1/2022 | — | — | — | — | — | 357 | 17,554 | — | — | | | 2/28/2023 | — | — | — | — | — | 1,301 | 63,970 | 4,542 | 223,330 | | | 3/1/2024 | — | — | — | — | — | 2,780 | 136,693 | 12,975 | 637,981 | | B. G. Iverson | 9/16/2024 | — | — | — | — | — | 545 | 26,798 | — | — | | | 9/16/2024 | — | — | — | — | — | — | — | 3,607 | 177,356 | | | 9/16/2024 | — | — | — | — | — | — | — | 17,333 | 852,264 | | | 9/16/2024 | — | — | — | — | — | 4,650 | 228,641 | — | — | | P. V. Apodaca | 3/18/2022 | — | — | — | — | — | 3,174 | 156,066 | — | — | | | 3/1/2022 | — | — | — | — | — | 720 | 35,402 | — | — | | | 2/28/2023 | — | — | — | — | — | 1,364 | 67,068 | 2,779 | 136,643 | | | 3/1/2024 | — | — | — | — | — | 2,861 | 140,675 | — | — |

  71. OUTSTANDING EQUITY AWARDS AT 2024 YEAR-END

    (1) No stock options have been granted under the PEP since 2010. (2) As of December 31, 2024, no equity incentive options have been granted under the PEP. (3) This column reflects the earned NEO PSs granted on March 1, 2022 under the 2022 LTIP and the outstanding NEO RSAs. One share of our common stock underlies each RSA and PS. RSA awards vest over a three-year period beginning on March 7th following the year of the grant. The RSA shown with a grant date of March 1, 2022 vested on March 7, 2025. One-half of the RSA shown with a grant date of February 28, 2023 vested on March 7, 2024 and the remaining one-half will vest on March 7, 2025. One-third of the RSA shown with a grant date of March 1, 2024 vested on March 7, 2025 and the remaining two-thirds will vest in equal amounts on March 7, 2026 and March 7, 2027. The RSA shown with a grant date of December 5, 2023 vested June 30, 2024. (4) Based on the closing price of $49.17 for our common stock, as quoted on the NYSE on December 31, 2024, the last trading day of fiscal year 2024. (5) Unvested and contingent PS awards listed in column (i) for the 2023-2025 performance period granted on February 28, 2023 are reflected at the target performance level because, as of December 31, 2024, actual performance to date is above threshold and below target and (ii) for the 2024-2026 performance period granted on March 1, 2024 are reflected at the maximum performance level because, as of December 31, 2024, actual performance to date is between target and maximum.

  72. Option Exercises and Stock Vested Table

    Option Exercises and Stock Vested Table The following table includes certain information with respect to the NEOs’ exercise of vested stock options during 2024, as well as the vesting during 2024 of PSs and RSAs held by the NEOs. Options and RSAs were awarded under the PEP.

  73. OPTION EXERCISES AND STOCK VESTED DURING 2024

    OPTION EXERCISES AND STOCK VESTED DURING 2024

  74. OPTION EXERCISES AND STOCK VESTED DURING 2024

    | (a) | (b) | (c) | (d) | (e) | | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | | | | | (1) | | P. K. Collawn | — | — | 88,239 | 3,396,060 | | J. D. Tarry | — | — | 17,859 | 741,257 | | E. A. Eden | — | — | 4,874 | 180,617 | | B. G. Iverson | — | — | 4,650 | 199,997 | | P. V. Apodaca | — | — | 16,187 | 641,960 | | (1) Amounts indicated are the aggregate dollar value realized upon the vesting of PS awards and RSAs based on the number of shares acquired on vesting multiplied by the closing price of our common stock on the delivery date, as quoted on the NYSE. | | | | |

  75. Pension Benefits Table

    Pension Benefits Table The table below shows the actuarial present value of accumulated benefits payable to the NEO who is a participant under the ERP using interest rate and mortality rate assumptions consistent with those used in our financial statements. See Note 11 of the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 regarding the valuation method and material assumptions applied in quantifying the present value of the ERP benefits.

  76. Pension Benefits Table

    | PENSION BENEFITS 2024 | | | | | | Name | Plan Name | Number of Years of Credited Service * | Present Value of Accumulated Benefit | Payments During Last Fiscal Year | | | | (#) | ($) | ($) | | J. D. Tarry | ERP | 2 | 16,688 | 0 | | *Credited service was frozen as of December 31, 1997. Total service is 29 years. | | | | |

  77. Non-Qualified Deferred Compensation

    Non-Qualified Deferred Compensation Non-Tax Qualified Retirement Plans The Tax Code imposes a limitation on the amount of compensation that can be considered when determining the amount of the matching contributions and age-based contributions to the RSP. The Tax Code also limits the maximum amount that can be contributed by any participant as well as employer contributions and other amounts that can be allocated to any participant’s account. Our current non-qualified deferred compensation plan, the ESP II, addresses these Tax Code limitations by providing Officers the opportunity to supplement their retirement savings and to receive the full employer contributions that would be available in the absence of the limitations imposed by the Tax Code. The ESP II runs side-by-side with the RSP. For plan years beginning on and after January 1, 2014, matching credits under the ESP II are limited only to a participant that has “excess compensation,” which is compensation in excess of the limit imposed by Section 401(a)(17) of the Tax Code ($345,000 in 2024) for the relevant plan year. The matching credit is in an amount equal to 75% of the participant’s supplemental deferrals, provided that the matching credit shall not exceed an amount equal to 75% of the first 6% of excess compensation. A participant shall be eligible to receive a matching credit under the ESP II only if such participant has met the service requirements necessary to receive RSP matching contributions for that plan year. Additionally, when a participant reaches the annual compensation limit under the Tax Code in the RSP, our age-based contribution continues to the ESP II. The ESP II also provides for supplemental target contributions that are set to achieve competitive retirement pay replacement ratios of between 40% and 55% of pre-retirement income depending on years of service and age at retirement. All NEOs have attained their targeted retirement pay replacement ratios and the Company is no longer making supplemental target contributions to the ESP II. For participants, like Mr. Tarry, Ms. Eden, and Mr. Iverson who became eligible to receive a supplemental target contribution on or after January 1, 2016, the supplemental target contribution is based on market conditions as of the date that the eligible Officer was hired or first became eligible for a supplemental target contribution. Based on current market conditions, neither Mr. Tarry, Ms. Eden, nor Mr. Iverson are eligible to receive a supplemental target contribution under the ESP II. Additionally, the Compensation and HC Committee may elect to make discretionary credits or discretionary contributions to the ESP II for a participant during a plan year in any amount, and on such terms and conditions, as the Compensation and HC Committee deems appropriate. Upon enrollment in the ESP II, participants make an election regarding the form of their distribution. They may elect to receive a lump sum payment or installment payments. For distribution elections made after December 31, 2014, the ESP II Plan distribution options no longer include annuities and installment payments are limited to five or ten years. Participants become entitled to a distribution under the ESP II upon their separation from service, death, disability or upon a specified date elected by the participant, subject to the requirements of Section 409A of the Tax Code. Effective for amounts credited to participant accounts for plan years beginning on or after January 1, 2015, the specified date distribution option is not available. Participants also may elect to have the portion of their account that is hypothetically invested in a Company stock fund distributed in shares of our common stock in lieu of cash. ESP II amounts are subject to the same vesting and investment provisions as under the RSP, with the exception of the supplemental credit account under the ESP II, which has a two-year vesting requirement that may be accelerated. Participants’ accounts in the ESP II are unfunded obligations, including the increases and decreases based on “investment” of the balances reflected as hypothetical returns equal to the actual returns of investments designated by a participant or the Company. Unless the participant elected to receive amounts credited prior to January 1, 2015 on a specified date, benefits payable under the ESP II will be paid, as a general rule, within 90 days of the participant’s separation from service, death or disability, subject to the requirements of Section 409A of the Tax Code. Participants hypothetically invest their deferrals and employer contributions in the ESP II in the same investment options as are available under the RSP. Participants may change their investment selections on a daily basis. The following table shows the funds available under the RSP and their annual rate of return for the calendar year ending December 31, 2024, as reported by the administrator of the RSP.

  78. Non-Qualified Deferred Compensation

    | Fund Name | Rate of Return - 2024 % | | Acadian All Country World exUS Equity CIT F | 13.80% | | Vanguard Cash Reserves Federal Money Market Fund Admiral | 5.24% | | Vanguard Institutional Index Fund | 24.99% | | Vanguard Institutional Target Retirement 2020 Fund | 7.79% | | Vanguard Institutional Target Retirement 2025 Fund | 9.46% | | Vanguard Institutional Target Retirement 2030 Fund | 10.63% | | Vanguard Institutional Target Retirement 2035 Fund | 11.73% | | Vanguard Institutional Target Retirement 2040 Fund | 12.81% | | Vanguard Institutional Target Retirement 2045 Fund | 13.83% | | Vanguard Institutional Target Retirement 2050 Fund | 14.66% | | Vanguard Institutional Target Retirement 2055 Fund | 14.64% | | Vanguard Institutional Target Retirement 2060 Fund | 14.63% | | Vanguard Institutional Target Retirement 2065 Fund | 14.60% | | Vanguard Institutional Target Retirement 2070 Fund | 14.62% | | Vanguard Target Retirement Income Trust II | 6.63% | | JPMorgan Large Cap Growth R6 | 34.33% | | Metropolitan West Total Return Bond Fund P Class | 1.12% | | TXNM Energy, Inc. Common Stock Fund (TXNM) * | 22.68% | | Vanguard Retirement Savings Trust III | 2.55% | | Victory Integrity Small/Mid-Cap Value Fund; Class Y | 9.64% | | Vanguard Wellington Fund Admiral Shares | 14.86% |

  79. Non-Qualified Deferred Compensation

    | Fund Name | Rate of Return - 2024 % | | Vanguard Windsor II Fund Admiral Shares | 14.29% | | PIMCO Inflation Response Multi-Asset Fund Institutional Class | 5.49% | | Allspring Discovery SMID Cap Growth CIT E1 | 18.36% | | *The PNM Resources, Inc. Common Stock Fund (PNM) was renamed the TXNM Energy, Inc. Common Stock Common Stock Fund (TXNM). | |

  80. Non-Qualified Deferred Compensation

    As a general rule, supplemental contributions to the ESP II vest after two years or the first of the following to occur: (1) the Officer attaining age 55 with two years of service, (2) the Officer’s normal retirement date, (3) the Officer’s disability or (4) the Officer’s death. All NEOs are fully vested in their supplemental target contributions to the ESP II. Any unvested supplemental target contribution is also subject to accelerated vesting and payment upon certain termination events discussed below under Potential Payments Upon Termination or Change in Control.

  81. 2024 NON-QUALIFIED DEFERRED COMPENSATION

    2024 NON-QUALIFIED DEFERRED COMPENSATION

  82. 2024 NON-QUALIFIED DEFERRED COMPENSATION

    | (a) | | (b) | (c) | (d) | (e) | (f) | | Name | | Executive Contributions in Last Fiscal Year (2024) ($) | Company Contributions in Last Fiscal Year (2024) ($) | Aggregate Earnings (Loss) in Last Fiscal Year (2024) ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal End (2024) ($) | | | | (1) | (2) | | | | | P. K. Collawn | ESP II | 68,811 | 302,590 | 1,657,097 | — | $17,472,713 | | J. D. Tarry | ESP II | 67,321 | 97,867 | 115,937 | — | $1,196,334 | | E. A. Eden | ESP II | 127,073 | 72,692 | 73,400 | — | $991,957 | | B. G. Iverson | ESP II | — | — | — | — | — | | P. V. Apodaca | ESP II | 131,392 | 52,134 | 332,270 | — | $3,707,472 |

  83. 2024 NON-QUALIFIED DEFERRED COMPENSATION

    (1) The amounts in this column are included in the “Salary” column (c) of the SCT on page 54. (2) The amounts in this column are included as a component of “All Other Compensation” in column (i) of the SCT and consist of the following 2024 Company contributions to the ESP II.

  84. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control As discussed on page 48 under Potential Change in Control Benefits, we believe that our executive officers are important for our success and it is important to align their interests with our shareholders in the event of a change in control by providing reasonable change in control benefits. The table beginning on page 65 illustrates the amounts payable to each of the NEOs in the event of a termination of his or her employment, whether voluntary or involuntary. Also included are additional payments in connection with his or her retirement, death, disability or involuntary termination following a change in control. The amounts shown: (1) assume a termination effective as of December 31, 2024, (2) are based on the closing price of our common stock on December 31, 2024, as reported on the NYSE ($49.17), and (3) are estimates of the amounts that would be paid to each NEO based upon the amounts earned through the end of 2024. The precise amount actually due to any NEO upon his or her termination can only be determined at the time of the termination.

  85. CHANGE IN CONTROL, TERMINATION, RETIREMENT, OR IMPACTION

    CHANGE IN CONTROL, TERMINATION, RETIREMENT, OR IMPACTION

  86. CHANGE IN CONTROL, TERMINATION, RETIREMENT, OR IMPACTION

    | Benefits and Payments | Voluntary Termination by Executive ($) | Termination for Cause ($) | Disability ($) | Death ($) | Constructive or without Cause Termination due to Change in Control ($) | Retirement ($) | Impaction ($) | | | | | | | | (1) | (2) | | P. K. Collawn | | | | | | | | | AIP (3) | 1,352,483 | — | 1,352,483 | 1,352,483 | 1,339,092 | 1,352,483 | 1,352,483 | | Restricted Stock Rights (4) | 2,150,302 | — | 2,150,302 | 2,150,302 | 2,150,302 | 2,150,302 | 2,150,302 | | 2022-2024 Performance Shares (5) | 1,488,032 | — | 1,488,032 | 1,488,032 | 1,488,032 | 1,488,032 | 1,488,032 | | 2023-2025 Performance Shares (6) | 454,675 | — | 454,675 | 454,675 | 681,988 | 454,675 | 454,675 | | 2024-2026 Performance Shares (7) | — | — | — | — | 3,394,451 | — | — | | Health and Welfare Benefits | — | — | — | — | 55,293 | — | 19,870 | | Life Insurance Proceeds (12) | — | — | — | 1,400,000 | — | — | — | | Cash Severance (8) (9) | — | — | — | — | 7,532,532 | — | 1,752,240 | | Legal Fees (10) and Outplacement Services (11) | — | — | — | — | 20,000 | — | 58,221 | | Total P. K. Collawn | 5,445,492 | — | 5,445,492 | 6,845,492 | 16,661,690 | 5,445,492 | 7,275,823 | | J. D. Tarry | | | | | | | | | AIP (3) | 539,684 | — | 539,684 | 539,684 | 534,341 | 539,684 | 539,684 | | Restricted Stock Rights (4) | 563,685 | — | 563,685 | 563,685 | 563,685 | 563,685 | 563,685 | | 2022-2024 Performance Shares (5) | 360,711 | — | 360,711 | 360,711 | 360,711 | 360,711 | 360,711 | | 2023-2025 Performance Shares (6) | 143,970 | — | 143,970 | 143,970 | 216,004 | 143,970 | 143,970 | | 2024-2026 Performance Shares (7) | — | — | — | — | 1,191,389 | — | — | | Retention Grant (14) | — | — | 650,716 | 650,716 | 650,716 | — | 650,716 | | Health and Welfare Benefits | — | — | — | — | 51,279 | — | 24,680 | | Life Insurance Proceeds (12) | — | — | — | 400,000 | — | — | — | | Cash Severance (8) (9) | — | — | — | — | 3,528,825 | — | 1,244,351 | | Legal Fees (10) and Outplacement Services (11) | — | — | — | — | 20,000 | — | 36,250 | | Total J. D. Tarry | 1,608,050 | — | 2,258,766 | 2,658,766 | 7,116,950 | 1,608,050 | 3,564,047 | | E. A. Eden (13) | | | | | | | | | AIP (3) | 284,125 | — | 284,125 | 284,125 | 281,311 | 284,125 | 284,125 | | Restricted Stock Rights (4) | 218,217 | — | 218,217 | 218,217 | 218,217 | 218,217 | 218,217 | | 2022-2024 Performance Shares (5) | 135,513 | — | 135,513 | 135,513 | 135,513 | 135,513 | 135,513 | | 2023-2025 Performance Shares (6) | 49,121 | — | 49,121 | 49,121 | 73,657 | 49,121 | 49,121 | | 2024-2026 Performance Shares (7) | — | — | — | — | 366,808 | — | — |

  87. CHANGE IN CONTROL, TERMINATION, RETIREMENT, OR IMPACTION

    | Benefits and Payments | Voluntary Termination by Executive ($) | Termination for Cause ($) | Disability ($) | Death ($) | Constructive or without Cause Termination due to Change in Control ($) | Retirement ($) | Impaction ($) | | | | | | | | (1) | (2) | | Retention Bonus (13) | — | — | — | — | 67,123 | — | 67,123 | | Health and Welfare Benefits | — | — | — | — | 34,126 | — | 16,103 | | Life Insurance Proceeds (12) | — | — | — | 400,000 | — | — | — | | Cash Severance (8) (9) | — | — | — | — | 2,167,157 | — | 727,644 | | Legal Fees (10) and Outplacement Services (11) | — | — | — | — | 20,000 | — | 22,500 | | Total E. A. Eden | 686,976 | — | 686,976 | 1,086,976 | 3,363,912 | 686,976 | 1,520,346 | | B. G. Iverson | | | | | | | | | AIP (3) | 93,011 | — | 93,011 | 93,011 | 92,090 | 93,011 | 93,011 | | 2022-2024 Performance Shares (5) | 26,798 | — | 26,798 | 26,798 | 26,798 | 26,798 | 26,798 | | 2023-2025 Performance Shares (6) | 38,992 | — | 38,992 | 38,992 | 58,512 | 38,992 | 38,992 | | 2024-2026 Performance Shares (7) | — | — | — | — | 489,979 | — | — | | Sign-On RSA Award (15) | — | — | — | — | — | — | — | | Health and Welfare Benefits | — | — | — | — | 39,165 | — | 18,623 | | Life Insurance Proceeds (12) | — | — | — | 400,000 | — | — | — | | Cash Severance (8) (9) | — | — | — | — | 2,295,000 | — | 527,885 | | Legal Fees (10) and Outplacement Services (11) | — | — | — | — | 20,000 | — | 22,500 | | Total B. G. Iverson | 158,801 | — | 158,801 | 558,801 | 3,021,544 | 158,801 | 727,809 | | P. V. Apodaca (16) | | | | | | | | | AIP (3) | — | — | — | — | — | 179,267 | — | | Restricted Stock Rights (4) | — | — | — | — | — | 243,145 | — | | 2022-2024 Performance Shares (5) | — | — | — | — | — | 156,066 | — | | 2023-2025 Performance Shares (6) | — | — | — | — | — | 45,089 | — | | 2024-2026 Performance Shares (7) | — | — | — | — | — | — | — | | Health and Welfare Benefits | — | — | — | — | — | — | — | | Life Insurance Proceeds (12) | — | — | — | — | — | — | — | | Cash Severance (8) (9) | — | — | — | — | — | — | — | | Legal Fees (10) and Outplacement Services (11) | — | — | — | — | — | — | — | | Total P. V. Apodaca | — | — | — | — | — | 623,567 | — |

  88. CHANGE IN CONTROL, TERMINATION, RETIREMENT, OR IMPACTION

    (1)Under the PEP, “Retirement” is defined as termination of employment and attainment of (a) age 45 and 20 years of service, (b) age 55 and 10 years of service, (c) age 59.5 or (d) any age and 30 years of service. As of December 31, 2024, all of the NEOs are eligible for retirement under the PEP. (2)“Impaction” is defined under our Severance Plan, in relevant part, as the termination of employment as a result of the Company’s elimination of an executive’s position. (3)The amount represented is the amount payable under the 2024 AIP, as set forth in column (g) of the SCT on page 54, except in the event of involuntary termination in connection with a change in control. In such circumstances, the NEOs are eligible for a pro-rata award at target. (4)The amount represented is the value of all RSAs that would vest under the PEP on an accelerated basis under certain termination events based on the closing market price of our common stock on December 31, 2024 ($49.17). (5)The amounts shown are the amounts payable to our NEOs under the 2022 LTIP for the actual above target aggregate performance results earned for 2022-2024 based on the applicable Earnings Growth and FFO/Debt Ratio performance measures. For PS awards, the number indicated assumes that the market price upon delivery of such PSs was the same as the closing price on December 31, 2024 ($49.17). (6)The amounts shown are a pro-rata portion of the amounts payable upon the Officer’s death, disability, retirement or impaction, if at all, under the 2023 LTIP assuming the current forecasted level of performance and that the market price upon delivery will be the same as the closing price on December 31, 2024 ($49.17). (7)The amounts shown are the portion of the amounts payable, if at all, under the 2024 LTIP as in effect on December 31, 2024, upon a constructive or without cause termination due to a change in control, assuming the current forecasted level of performance and that the market price upon delivery will be the same as the closing price on December 31, 2024 ($49.17). (8)For constructive or without cause termination due to a change in control, represents (i) a lump sum severance payment equal to two times current eligible compensation for the NEOs, including the CEO and (ii) payment for a restrictive covenant agreement equal to one times eligible compensation paid over a 12-month period for the NEOs. (9)For impaction, represents a lump sum severance payment equal to 14 months of base salary plus one additional week of base salary for each year of service. (10) The NEOs are eligible for reimbursement of reasonable legal expenses upon termination for change in control as of December 31, 2024. The amount shown in the table is a reasonable estimate of the amount that may be reimbursable. (11) The Company will reimburse a participant for placement assistance expenses, up to a maximum of five percent (5%) of the participant’s base salary. Reimbursements pursuant to Impaction will only be for expenses incurred within nine (9) months following the participant’s separation from service. (12) The amounts shown for life insurance proceeds consist of Officer Life and Management Life. (13) The Company executed a retention agreement with Ms. Eden effective October 20, 2020. The agreement was amended on January 20, 2022 and expired on January 15, 2025. (14) The Company executed a retention agreement with Mr. Tarry effective December 4, 2023. The agreement provides for a payment of $250,000 if Mr. Tarry remained employed by the Company through December 1, 2024 and a payment of $500,000 if Mr. Tarry remains employed by the Company through December 1, 2025. The retention agreement provided an option to convert the amounts due to Mr. Tarry to Restricted Stock Rights at any time before the vesting date upon approval of the Board. The Committee elected to convert Mr. Tarry’s retention agreement to Restricted Stock Rights on May 3, 2024. The retention bonus will vested on December 1, 2024 and will vest on December 1, 2025. The retention bonus also will vest upon termination by the Company without cause (including following a change in control), death or disability. (15) The Company executed an equity sign-on award for Mr. Iverson effective September 16, 2024. The sign-on bonus provided a total of 9,300 Restricted Stock Rights granted upon his date of hire. Half of the Restricted Stock Rights vested immediately on September 16, 2024. The remaining half will vest on September 16, 2025. The sign-on bonus is forfeited upon termination for any reason prior to September 16, 2025. (16) As Mr. Apodaca retired from the Company on October 2, 2024, the termination payments and benefits for Mr. Apodaca are shown only for that event.

  89. CEO Pay Ratio

    CEO Pay Ratio Under rules issued pursuant to the Dodd-Frank Act, which apply to most publicly-traded companies, TXNM Energy is required to disclose the ratio between our CEO’s pay and the pay of our median employee. Our CEO pay ratio is calculated in a manner consistent with SEC rules, based on our payroll records and methodologies described below. The SEC rules for identifying median compensation allow companies to use a variety of methodologies. As previously disclosed, each Officer’s compensation is based on several factors, including an annual assessment of whether our compensation programs and levels are competitive. That assessment process includes benchmarking and is described in more detail beginning on page 41 of this proxy statement. Our Officers’ compensation is also more variable, and includes more “at-risk” elements of compensation, as compared to the compensation of our median employee, because our Officers’ compensation depends more heavily on the actual performance of the Company. These variability and “at-risk” factors are especially relevant in the case of our CEO, whose compensation is significantly more dependent on the Company’s actual performance than is the compensation of our median employee. As a result, our CEO pay ratio may vary over time and will tend to be relatively higher when the Company performs at a high level. We determined our CEO pay ratio for 2024 using the following steps: 1. For purposes of calculating our CEO pay ratio for 2024, we used the same employee as the Company’s 2023 median employee. That approach is permitted under applicable SEC rules because there have been no changes in our employee population or employee compensation arrangements that the Company reasonably believes would significantly impact our CEO pay ratio disclosure. 2. For purposes of determining our CEO pay ratio for 2023, the Company defined the relevant employee population, which included all employees of TXNM Energy and its affiliates as of December 31, 2023. We then identified our median employee using a consistently applied compensation measure of actual total cash compensation, including overtime and differentials, paid in 2023 to each member of the employee population. 3. The CEO pay ratio was determined by comparing the total CEO 2024 compensation reported in the SCT on page 54 to the total compensation paid to the median employee of $143,214. For purposes of these calculations, “total compensation” consisted of, as applicable, base salary, overtime and differentials, bonuses, cash incentive awards, equity grants, benefits from applicable defined benefit plan and post-retirement medical plans, qualified and non-qualified retirement benefit contributions, executive physicals, life insurance premiums, long term disability premiums, ECP amounts, payments for personal security and other compensation payments. For further detail regarding the elements of the total CEO 2024 compensation, see the SCT on page 54. Based on the process and calculations described above, our CEO pay ratio for 2024 was 39:1, meaning that our CEO’s total compensation for 2024 was approximately 39 times the total compensation paid to our median employee in 2024.

  90. Pay Versus Performance

    Pay Versus Performance Under rules issued pursuant to the Dodd-Frank Act, TXNM Energy is providing the following information about the relationships between executive compensation actually paid and certain measures of financial performance of the Company. SEC rules prescribed the disclosure included in this section, and the information does not necessarily align with how the Company or the Compensation and HC Committee view the link between the Company’s performance and its NEOs’ pay. See Executive Compensation-Compensation Discussion and Analysis beginning on page 36 for additional information about our pay for performance and how the Company aligns executive compensation with its performance.

  91. PAY VS. PERFORMANCE

    PAY VS. PERFORMANCE

  92. PAY VS. PERFORMANCE

    | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO | Average Summary Compensation Table Total for Non-PEO Named Executive Officers | Average Compensation Actually Paid to Non-PEO Named Executive Officers | Total Shareholder Return | Peer Group Total Shareholder Return | Net Earnings (In thousands) | Incentive EPS | | | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | | (1) | (2) | (3)(4) | (2)(3) | (5) | (6) | (7) | (8) | | 2024 | 5,626,175 | 5,103,842 | 1,544,760 | 1,515,875 | 113 | 127 | 258,722 | 2.74 | | 2023 | 7,670,833 | 4,903,568 | 1,495,372 | 1,071,031 | 92 | 107 | 106,879 | 2.82 | | 2022 | 6,596,575 | 7,807,506 | 1,547,874 | 1,607,675 | 105 | 117 | 185,180 | 2.69 | | 2021 | 5,594,739 | 4,294,466 | 1,188,098 | 930,313 | 95 | 116 | 211,847 | 2.45 | | 2020 | 7,837,411 | 10,571,654 | 1,435,144 | 1,823,253 | 98 | 99 | 187,316 | 2.28 |

  93. PAY VS. PERFORMANCE

    (1)Represents the “Total” compensation for our principal executive officer (“PEO”), Ms. Collawn, as set forth in 2024 NEO Compensation Information-Summary of Executive Compensation-Summary Compensation Table on page 54. (2)Compensation actually paid to our PEO and the average of all non-PEO NEOs is calculated in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to our PEO and the other NEOs during the applicable year. In accordance with Item 402(v) of Regulation S-K, the following adjustments were made to the amounts reported in the “Stock Awards” and “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” columns in the “Summary Compensation Table” for 2024 to determine the compensation actually paid.

  94. PAY VS. PERFORMANCE

    | | Year | Reported Summary Compensation Table Total | Reported Value of Stock Awards | Stock Award Adjustments | Reported Change in the Actuarial Present Value of Pension Benefits | Pension Benefit Adjustments | Compensation Actually Paid | | | | ($) | ($) | ($) | ($) | ($) | ($) | | | | | | (a) | | (b) | | | PEO | 2024 | 5,626,175 | (2,720,925) | 2,198,592 | — | — | 5,103,842 | | Average of non-PEO NEOs | 2024 | 1,544,760 | (713,873) | 684,988 | — | — | 1,515,875 |

  95. PAY VS. PERFORMANCE

    (a) Stock award adjustments for 2024 are further detailed in the table below.

  96. PAY VS. PERFORMANCE

    | | Year | Year End Fair Value of Outstanding and Unvested Stock Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Stock Awards | Year over Year Change in Fair Value of Stock Awards Granted in Prior Years that Vested in the Year | Change in Fair Value of Stock Awards Granted in Current Year that Vested in the Year | Total Stock Award Adjustments | | | | ($) | ($) | ($) | ($) | ($) | | PEO | 2024 | 2,912,021 | (290,610) | (422,819) | — | 2,198,592 | | Average of non-PEO NEOs | 2024 | 626,979 | (34,668) | (38,463) | 131,140 | 684,988 |

  97. PAY VS. PERFORMANCE

    (b) The pension benefit adjustments consist of the average of the actuarily determined service cost for services rendered plus, to the extent applicable, the average of the prior service cost, calculated as the entire cost of benefits granted in a plan amendment or initiation attributable to services rendered during prior periods. For 2024, the pension benefit adjustments consist of $0 of average service cost for services rendered, and $0 of average prior service cost. (3)For 2024, our non-PEO NEOs were Messrs. Tarry, Iverson, and Apodaca and Ms. Eden. For 2023, our non-PEO NEOs were Messrs. Tarry, Apodaca, and Darnell and Ms. Eden. For 2022, our non-PEO NEOs were Messrs. Charles N. Eldred, Tarry, Apodaca and Darnell and Ms. Eden. For 2021, our non-PEO NEOs were Messrs. Eldred, Tarry, Chris M. Olson and Darnell. For 2020, our non-PEO NEOs were Messrs. Eldred, Tarry, Apodaca, Darnell, and Olson. (4)Represents the total average compensation for our non-PEO NEOs, derived from the “Total” column of the “Summary Compensation Table” in each year’s respective proxy statement. (5)Represents the total shareholder return (“TSR”) on our common stock assuming an investment of $100 on December 31, 2019. (6)Represents the TSR for the EEI Index, which is a peer issuer group of electric companies. For purposes of the table, an investment of $100 (with reinvestment of all dividends) is assumed to have been made in the EEI Peer Index on December 31, 2019. (7)Represents our net earnings, in thousands, as reported in our Annual Report on Form 10-K for each of the years presented. (8)Represents the company-selected financial performance measure used to link compensation actually paid to our PEO and non-PEO NEOs, for the most recently completed fiscal year, to company performance. Incentive EPS is defined as corporate diluted earnings per share, excluding certain terms that do not factor into ongoing earnings. For 2024, Incentive EPS of $2.74 equals net earnings attributable to TXNM per common stock share (as reported in the Company’s Form 10-K for the fiscal year ended December 31, 2024) of $2.67 adjusted to exclude: (1) $(0.02) per share attributable to the net change in unrealized gains and losses on investment securities; (2) $0.08 per share attributable to regulatory disallowances; (3) $0.01 per share attributable to pension expense related to previously disposed of gas distribution business; (4) $0.03 per share attributable to Merger related costs; (5) $(0.03) per share attributable to judgments entered or settlements reached in litigation or other regulatory proceedings; (6) $0.03 per share attributable to process improvement initiatives; (7) $0.02 per share attributable to income tax valuation allowance; and (8) $(0.05) per share attributable to the sale of NMRD.

  98. Descriptions of Relationships of Information Presented in the Pay Versus Performance Table

    Descriptions of Relationships of Information Presented in the Pay Versus Performance Table Compensation Actually Paid and TSR Compensation actually paid is generally aligned with the Company’s cumulative TSR over the period presented because a significant portion of the compensation actually paid comprises equity-based compensation. The following chart also sets forth a comparison of the Company’s cumulative TSR and the TSR for the EEI Index. Compensation Actually Paid and Net Earnings Although the Company does not use net earnings as a performance measure in the overall executive compensation program, net earnings is similar to Incentive EPS, which the Company uses to determine awards under the AIP. Compensation Actually Paid and Incentive EPS While the Company uses multiple financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined that Incentive EPS is the financial performance measure that represents the most important financial performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to the NEOs, for the most recently completed year, to the Company’s performance.