DEF 14A of Txnm Energy Inc
Filed Apr 28, 2026 · FY20250001108426-26-000020
2026 Nominees for the Board of Directors
2026 Nominees for the Board of Directors We have a highly qualified, diverse, and high‑functioning Board, with 50% of directors being women, bringing deep industry experience, balanced perspectives, and strong oversight. Detailed background and other skills and experience information about our director nominees can be found beginning on page 23. 2026 Nominees:
2026 Nominees for the Board of Directors
| Name | Age | Director Since | Occupation / Experience | Independent | TXNM Committees | Other Public Company Boards | | Vicky A. Bailey | 73 | 2019 | Founder and President, Anderson Stratton International, LLC | ✓ | Compensation and HC Nominating (Chair) | EQT Corporation Occidental Petroleum Corporation | | Norman P. Becker (Lead Director) | 70 | 2016 | Retired President and CEO, New Mexico Mutual Casualty Company | ✓ | Compensation and HC Finance | | | Patricia K. Collawn | 67 | 2010 | Executive Chairman, TXNM Energy | | | Cheniere Energy, Inc. Karbon Capital Partners | | E. Renae Conley | 68 | 2014 | CEO, ER Solutions, LLC | ✓ | Audit Compensation and HC (Chair) | Southwest Gas Holdings | | Sidney M. Gutierrez | 74 | 2015 | Chair, Vaya Space | ✓ | Audit Nominating | | | James A. Hughes | 63 | 2019 | Managing Partner, Encap Investments, L.P. | ✓ | Finance (Chair) Nominating | Alcoa Corporation TPI Composites, Inc. | | Steven C. Maestas | 62 | 2024 | CEO, Maestas Development Group | ✓ | Audit Finance | Enterprise Bank & Trust | | Lillian J. Montoya | 59 | 2024 | President and CEO, CHRISTUS St. Vincent Health System | ✓ | Compensation and HC Nominating | UMB Financial Corp | | Maureen T. Mullarkey | 66 | 2014 | Retired EVP and CFO, International Game Technology | ✓ | Audit (Chair) Finance | Everi Holdings, Inc. (2018 - 2025) | | Joseph D. Tarry | 55 | 2024 | President and CEO, TXNM Energy | | | |
ADDITIONAL INFORMATION ABOUT OUR BOARD AND BOARD COMMITTEES
ADDITIONAL INFORMATION ABOUT OUR BOARD AND BOARD COMMITTEES
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
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 42 of this proxy statement. As discussed in the 2025 proxy statement, 2025 director compensation was increased, based on a July 2024 analysis prepared by Pay Governance. The 2025 director compensation changes were (1) the annual cash retainer increased from $105,000 to $115,000, (2) the market value of the annual award of restricted stock rights increased from $135,000 to $145,000, and (3) the Audit Committee Chair Retainer increased from $15,000 to $20,000. Thus, the 2025 annual compensation for non-employee directors consisted of the following cash and stock-based compensation:
Elements of Director Compensation
| Annual Retainer (Cash and Equity): | $115,000 in cash paid in quarterly installments restricted stock rights(1) with a market value of $145,000(2) | | Lead Director Retainer: | $30,000 paid in quarterly installments | | Audit Committee Chair Retainer: | $20,000 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. |
Elements of Director Compensation
(1) Restricted stock rights granted under the PEP for the 2025 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 $145,000 by the closing price of our stock on the NYSE on the day of the grant. Thus, 2,726 restricted stock rights were granted on May 13, 2025 to each non-employee director, based on the closing price on that date of $53.20 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 2025, Pay Governance presented the Nominating Committee an analysis of director compensation for 2026, that showed director compensation is in line with the Company’s utility peer group and the S&P 400 MidCap Utilities Index. Following discussion and review of the Pay Governance analysis and recommendations in July 2025, the Nominating Committee recommended, and the Board approved, the following change to director compensation for 2026 to better align with peer median by increasing the market value of the annual award of restricted stock rights from $145,000 to $155,000.
Summary of Non-Employee Director Compensation in 2025
Summary of Non-Employee Director Compensation in 2025 The following table summarizes the total compensation paid to or earned by each non-employee director for the year ended December 31, 2025.
Summary of Non-Employee Director Compensation in 2025
| Name(1) | Fees Earned Or Paid In Cash ($)(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 ($) | | V. A. Bailey | 137,500 | 145,000 | — | — | — | — | 282,500 | | N. P. Becker | 164,500 | 145,000 | — | — | — | — | 309,500 | | E. R. Conley | 137,500 | 145,000 | — | — | — | — | 282,500 | | A. J. Fohrer | 62,500 | 145,000 | — | — | — | — | 207,500 | | S. M. Gutierrez | 122,500 | 145,000 | — | — | — | — | 267,500 | | J. A. Hughes | 149,500 | 145,000 | — | — | — | — | 294,500 | | S. C. Maestas | 122,500 | 145,000 | — | — | — | — | 267,500 | | L. J. Montoya | 122,500 | 145,000 | — | — | — | — | 267,500 | | M. T. Mullarkey | 154,500 | 145,000 | — | — | — | — | 299,500 | | (1) As employees of the Company, Ms. Collawn and Mr. Tarry do not receive director compensation. | | | | | | | |
Summary of Non-Employee Director Compensation in 2025
| (2) The following table provides additional information about fees earned or paid in cash to non-employee directors in 2025: | | | | | | | | | Name | Annual Retainer ($) | Committee Chair Fee ($) | Board Meeting Fees ($) | Lead Independent Director Fee ($) | Total ($) | | | V. A. Bailey | 115,000 | 15,000 | 7,500 | — | 137,500 | | | N. P. Becker | 115,000 | — | 19,500 | 30,000 | 164,500 | | | E. R. Conley | 115,000 | 15,000 | 7,500 | — | 137,500 | | | A. J. Fohrer | 57,500 | 5,000 | — | — | 62,500 | | | S. M. Gutierrez | 115,000 | — | 7,500 | — | 122,500 | | | J. A. Hughes | 115,000 | 15,000 | 19,500 | — | 149,500 | | | S. C. Maestas | 115,000 | — | 7,500 | — | 122,500 | | | L. J. Montoya | 115,000 | — | 7,500 | — | 122,500 | | | M. T. Mullarkey | 115,000 | 20,000 | 19,500 | — | 154,500 | | (3) Represents the grant date fair value of $51.59 per restricted stock right calculated in accordance with FASB ASC Topic 718 of the 2,726 restricted stock rights awarded under the PEP to each non-employee director on May 13, 2025. 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, 2025. As of December 31, 2025, the non-employee directors listed on the table above had 2,726 outstanding restricted stock rights that will vest in May 2026. 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. | | | | | | |
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
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 2027 or until their successors are elected and qualified. The ten nominees are current members of the Board and are standing for re-election. 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 Executive Chairman, and Mr. Tarry, our President and CEO. 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 April 21, 2026.
Directors Nominated This Year For One-Year Terms Expiring in 2027
Directors Nominated This Year For One-Year Terms Expiring in 2027
Directors Nominated This Year For One-Year Terms Expiring in 2027
| Vicky A. Bailey Age 73 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 management and compensation, 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 is a former 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 |
Directors Nominated This Year For One-Year Terms Expiring in 2027
| Norman P. Becker Age 70 Director since 2016 Retired President and CEO, New Mexico Mutual Casualty Company Lead 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 President of Lovelace Health System, a system of hospitals and medical centers in greater Albuquerque. His prior role includes 20 years with Blue Cross Blue Shield, 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 |
Directors Nominated This Year For One-Year Terms Expiring in 2027
| Patricia K. Collawn Age 67 Director since 2010 Board Chair and Executive Chairman of TXNM Energy, Inc. | Ms. Collawn has more than 30 years of leadership experience in the utility industry. Ms. Collawn joined the Company in 2007. She was named Executive Chairman of TXNM Energy in July 2025. She served as Chairman and CEO from 2022 to 2025 and Chairman, President and CEO from 2012 to 2022. Ms. Collawn is also Chair of PNM and TNMP. 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 compensation and nominating and governance committees. Ms. Collawn is a Director of Karbon Capital Partners Corporation, a NASDAQ-listed special purpose acquisition company. Ms. Collawn also serves on the board of Edison Electric Institute (past Chair), where she was awarded the EEI Thomas A. Edison Legacy Award in recognition of decades of leadership shaping industry strategy and policy and the Distinguished Leadership Award 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 previously served as the interim President and CEO of EEI. 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 |
Directors Nominated This Year For One-Year Terms Expiring in 2027
| E. Renae Conley Age 68 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 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 previously served on the Ball State University’s Board of Trustees, 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 |
Directors Nominated This Year For One-Year Terms Expiring in 2027
| Sidney M. Gutierrez Age 74 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 TXNM Energy. 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 |
Directors Nominated This Year For One-Year Terms Expiring in 2027
| James A. Hughes Age 63 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 a former 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 |
Directors Nominated This Year For One-Year Terms Expiring in 2027
| Steven C. Maestas Age 62 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 (NASDAQ: EFSC). 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 •Financial Expertise/Literacy | •Risk Management •Corporate Governance •Customer and Community |
Directors Nominated This Year For One-Year Terms Expiring in 2027
| Lillian J. Montoya Age 59 Director since 2024 President and CEO, CHRISTUS St. Vincent Health Systems Independent Director Committee Memberships: Compensation and Human Capital Nominating and Governance | Ms. Montoya serves concurrently as Senior Vice President for Market Operations for CHRISTUS Health in New Mexico and as President and Chief Executive Officer of CHRISTUS St. Vincent Health System in Santa Fe, New Mexico. In these roles, she provides strategic and operational leadership across CHRISTUS Health’s New Mexico ministries while leading a regional health system that serves North Central New Mexico. With more than 30 years of executive leadership experience across healthcare, public, private, and nonprofit sectors, Ms. Montoya is recognized for leading organizational transformation, strengthening culture, and delivering measurable results in quality, safety, and workforce engagement. Prior to becoming President and CEO, Ms. Montoya held multiple senior leadership roles at CHRISTUS St Vincent Health System, including Chief Operating Officer, Chief Administrative Officer, and Vice President of Public Affairs, Marketing, Communications, and Advocacy. Her background includes strategic planning, regulatory and risk management, labor relations, capital planning, and community engagement within highly regulated environments. Ms. Montoya serves on the New Mexico bank board of UMB Financial Corporation (NASDAQ: UMBF). She is a former Chair and current board member of the New Mexico Hospital Association and serves on the board of the Santa Fe Opera. She is also a member of the International Women’s Forum – New Mexico and New Mexico Amigos. Ms. Montoya holds both a Bachelor of Arts and a Master of Business Administration from the University of New Mexico. She is widely respected for her ability to guide organizations through complexity, build trust with stakeholders, and create environments where people feel valued, connected to purpose, and inspired to do their best work. Specific Qualifications/Attributes/Experience: | | | | •Leadership and Strategy •Finance/Capital Allocation •Financial Expertise/Literacy •Risk Management | •Regulated Industry •Corporate Governance •Customer and Community •Labor and Human Capital |
Directors Nominated This Year For One-Year Terms Expiring in 2027
| Maureen T. Mullarkey Age 66 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 a former director of Everi Holdings, Inc., a NASDAQ-listed company of businesses that deliver products and services to the gaming industry, and she served 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 |
Directors Nominated This Year For One-Year Terms Expiring in 2027
| Joseph D. Tarry Age 55 Director since 2024 President and CEO of TXNM Energy, Inc. | Mr. Tarry has more than 30 years of energy utility experience. He currently serves as President and Chief Executive 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 Greater Albuquerque Chamber of Commerce and the Albuquerque Regional Economic Alliance (past chairman), 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 |
The Blackstone Infrastructure Merger
The Blackstone Infrastructure Merger On May 19, 2025, we announced the Blackstone Infrastructure Merger, pursuant to which we will merge with an affiliate of Blackstone Infrastructure in an all-cash transaction in which our shareholders will receive $61.25 per share. Consummation of the Blackstone Infrastructure Merger is subject to certain closing conditions. The Blackstone Infrastructure Merger is anticipated to provide significant long-term capital to support our continued build-out of PNM and TNMP in a rapidly changing energy environment, facilitating economic development during New Mexico’s transition to clean energy and continued growth in Texas. The Blackstone Infrastructure Merger consideration represented a premium to our recent and historic share trading price (a 23.0% premium to our unaffected 30-day volume weighted average price of our common stock as of March 5, 2025, the day prior to an article reporting a developing acquisition for the Company, and a 15.8% premium to the May 16, 2025 closing share price of our common stock, the business day prior to the announcement of the Blackstone Infrastructure Merger). Our NEOs and other executives have demonstrated outstanding leadership throughout 2025 and into 2026. This leadership has ensured shared accountability for safety across all levels of the organization, supported strategic efforts to improve customer satisfaction scores and managed spending while focusing on providing the highest value for our customers. These efforts were in addition to negotiating the Blackstone Infrastructure Merger Agreement, obtaining shareholder approval, planning for integration and seeking regulatory approval, which have required substantial additional time and effort of our executives while they have continued to perform their ordinary responsibilities. We continue to work diligently to prepare for the consummation of this transaction and to achieve a successful completion of the Blackstone Infrastructure Merger. In order to mitigate potential excise tax exposure under Sections 280G and 4999 of the Tax Code, the Compensation and HC Committee (and for the CEO and Executive Chairman, the independent members of the Board) approved the acceleration of the timing of payment for certain cash incentives otherwise scheduled to be paid or settled in early 2026. The Board also approved the vesting and settlement of certain outstanding equity awards that had otherwise been scheduled to vest and settle in early 2026. The accelerations do not increase the amount of compensation payable to any NEO, they affect only timing.
AIP Performance for 2025
AIP Performance for 2025 The three weighted performance measures for the 2025 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. The Company achieved: •Between threshold and target performance of 2025 Incentive EPS at $2.77 per share (or at threshold performance for purposes of the 2025 AIP payments to the NEOs as described below), compared to a threshold of $2.74 and a target of $2.79; •Between target and maximum performance of the reliability metric, which was 103, compared to a target of 107 and a maximum of 95; •Threshold performance of the New Mexico-based customer satisfaction metric, which was 7.4; and •Between target and maximum performance of the Texas-based customer satisfaction metric, which was 4.6, compared to a target of 4.4 and a maximum of 4.7. The 2025 AIP specifies that no awards would be made unless the Compensation and HC Committee has 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 56 under Adjustments for Certain Items. In light of the Blackstone Infrastructure Merger and in order to mitigate tax exposure to the Company and the NEOs, in December 2025, the Compensation and HC Committee (and, for the CEO and Executive Chairman, the independent members of the Board) approved accelerated payments under the 2025 AIP to each of the NEOs employed at that time. These AIP payments were calculated based on estimated Incentive EPS results then available, which reflected achievement at the threshold (50% of target) Incentive EPS level. The Compensation and HC Committee retains discretionary authority under the 2025 AIP to adjust awards, including discretion to reduce awards. In February 2026, the Compensation and HC Committee exercised this discretion with respect to Ms. Eden, who was not an active NEO when the accelerated payments were made to the other NEOs in December 2025. In February 2026, the Compensation and HC Committee approved a reduction in her 2025 AIP payout at the threshold (50% of target) Incentive EPS level, which is consistent with the accelerated payments made to the other NEOs in December 2025. For additional information about the AIP performance metrics and 2025 results, see NEO Incentive Goals and Results on page 48 and the Cash Compensation-Annual Incentive Awards section of Elements of Executive Compensation beginning on page 46.
LTIP Performance for 2023-2025 under the 2023 LTIP
LTIP Performance for 2023-2025 under the 2023 LTIP Under the 2023 LTIP, long-term incentive awards were to be delivered 70% in PSs and 30% in RSAs. PS awards were tied to three-year performance goals. Previously, RSAs associated with the 2023 LTIP were scheduled to be granted following the end of the 2023-2025 performance period. Beginning in 2025, however, the Company shifted to granting RSAs under the LTIP for the current year rather than the LTIP being tied to the performance period that just concluded. As described in the 2026 Compensation Actions section beginning on page 53, RSAs were granted in February 2026 under the 2026 LTIP (rather than the 2023 LTIP) and will vest over a three-year period thereafter. The weighted performance metrics for the PS awards under the 2023 LTIP were: Earnings Growth (50%) and FFO/Debt Ratio (50%). 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 2023 LTIP, the Company achieved: •Below threshold performance of Earnings Growth, which was 1.0% over 2023-2025, compared to a threshold performance of at least 2.0%; and •Between target and maximum performance of the FFO/Debt Ratio, which was 14.5% for 2025, compared to a target performance of at least 14.0% and a maximum performance of at least 16.0%. In December 2025, the Committee and Board approved the accelerated settlement of PSs under the 2023 LTIP to each of the NEOs employed at that time. The awards were calculated based on the estimated performance results available at the time of settlement, reflecting an estimated FFO/Debt Ratio of 14.6%, resulting in achievement at 65% of target. Following the close of the 2023-2025 performance period, final certified FFO/Debt Ratio results came in at 14.5%, resulting in overall achievement at 63% of target. The Committee and Board determined not to seek recovery of the difference between the shares delivered pursuant to the accelerated settlement and the shares that would have been delivered based on final certified results. In addition, the Committee exercised its authority to settle the PSs for Ms. Eden, who was not an active officer at the time of the accelerated settlement, at the same 65% achievement level, consistent with the treatment of the other NEOs in December 2025. The Committee believes these decisions were appropriate because, when considering total incentive compensation under both the 2025 AIP and the 2023 LTIP in the aggregate, each NEO received less in the aggregate for these two awards than they would have received had the awards been paid based on the final certified full-year actual performance. Specifically, the threshold Incentive EPS level payout under the 2025 AIP, combined with the 2023 LTIP payout, resulted in aggregate incentive compensation for each NEO below what would have been earned based on final certified results for both programs. For additional information on the 2023 LTIP performance metrics and 2023-2025 results, see NEO Incentive Goals and Results on page 48, Equity Compensation-Long-Term Incentive Awards section of Elements of Executive Compensation beginning on page 48, and Additional Information-Adjustments for Certain Items on page 56.
TXNM Peer Group
TXNM Peer Group Our peer group is evaluated on an annual basis and adjusted as needed. The TXNM Peer Group reflected similarly sized utility companies that TXNM may compete with for talent. Prior to setting compensation levels for 2025, the Compensation and HC Committee determined that the TXNM Peer Group continued to be an appropriate peer group, based on the following criteria:
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. |
TXNM Peer Group
The following table lists the companies that comprised the TXNM Peer Group used in the 2025 Benchmark Data (as described in the Glossary of Terms Used in this Proxy) to set 2025 compensation levels.
TXNM PEER GROUP
TXNM PEER GROUP
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 | |
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 and Executive Chairman’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 maintain 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 (for example, upon the closing of the Blackstone Infrastructure Merger) 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 2025 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 2025 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, effective as of December 1, 2023 and described more fully on pages 12 and 54 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, executives remain motivated and committed to the Company. •Tally Sheets – The Compensation and HC Committee reviews tally sheets of compensation, which include 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 2025, 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 guidelines. More discussion appears in the Information About Our Corporate Governance-Board’s Role in Risk Oversight section on page 10. •Conservative Perquisites – Perquisites for our Officers are modest and serve a reasonable business purpose. •Equity Ownership Guidelines – The Compensation and HC Committee believes that rewarding the NEOs with equity compensation supports retention and aligns management with the interests of our shareholders, our customers and the Company. In addition, the Company has stock ownership holding guidelines for all NEOs requiring that they hold from three to five 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 equity 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.
•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 in connection with the Avangrid Merger, as previously disclosed.
ELEMENTS OF EXECUTIVE COMPENSATION
ELEMENTS OF EXECUTIVE COMPENSATION Our executive compensation program is designed to maintain an appropriate and competitive balance between fixed pay (base salary) and variable pay or “at risk” 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 2025 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.
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 Ms. Collawn and Mr. Tarry, and $18,000 for SVPs | •Align with market practices to provide reasonable, competitive 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 |
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, •Internal pay equity between Officers, •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, •Recommendations from management, and •Recommendations from our independent executive compensation consultant, Pay Governance. 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. 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 2025 meeting, after reviewing the 2025 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 2024, the Compensation and HC Committee approved increases in base salaries, effective March 2025, for certain of the NEOs, with the independent members of the Board approving the increase for Ms. Collawn. Upon Mr. Tarry’s promotion to CEO effective July 1, 2025, the independent members of the Board also approved his salary increase. The following sets forth base salaries for Ms. Collawn, Mr. Tarry, and the other NEOs in 2024 and as increased in 2025, in each case as approved by the Compensation and HC Committee and, with respect to Ms. Collawn and Mr. Tarry (following his promotion to CEO), by the independent members of the Board.
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 consisted of the 2025 Benchmark Data. The table below shows the 2025 AIP target award opportunity as compared to the 2024 AIP target award opportunity. With respect to Mr. Tarry, following his promotion to CEO effective July 1, 2025, his 2025 target award opportunity was increased from 90% to 115%, on a pro-rata basis, as approved by the Compensation and HC Committee and the independent members of the Board.
NEO ANNUAL INCENTIVE AWARD OPPORTUNITY
NEO ANNUAL INCENTIVE AWARD OPPORTUNITY
NEO ANNUAL INCENTIVE AWARD OPPORTUNITY
| Position | 2024 Target Opportunity1 | 2025 Target Opportunity1 | | Patricia K. Collawn | 115% | 115% | | Joseph D. Tarry 2 | 90% | 115% | | Brian G. Iverson | 70% | 70% | | Elisabeth A. Eden 3 | 65% | 65% | | Henry E. Monroy 4 | 30% | 65% | | Monique Jacobson 5 | — | 65% | | Additional target bonus adjustments were made for certain NEOs throughout the year to recognize changes in 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, 2025, Mr. Tarry was promoted to President and CEO. At the time, his target opportunity increased to 115% of his annual base salary. His target opportunity was pro-rated based on the effective date. | | | | 3 Ms. Eden retired from the Company effective September 8, 2025. Her target opportunity was pro-rated based on her retirement date. | | | | 4 In 2024, Mr. Monroy participated in the Subsidiary Officer Incentive Plan, with a target opportunity of 30%. Effective May 19, 2025, Mr. Monroy was promoted to SVP and CFO. At that time, his target opportunity was increased from 30% to 65%. His target opportunity was pro-rated based on the effective date. | | | | 5 Ms. Jacobson joined the Company as SVP, Corporate Services effective April 14, 2025. Her target opportunity was pro-rated based on her hire date. | | |
NEO ANNUAL INCENTIVE AWARD OPPORTUNITY
The Compensation and HC Committee approved the 2025 AIP for the performance period January 1, 2025 to December 31, 2025. The objective of the 2025 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 performance metrics were: 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 benefits the Company, our customers and our shareholders. The Compensation and HC Committee considers the target performance goals to be rigorous, but reasonably achievable, and maximum performance levels 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 2025 AIP unless the Company achieved Incentive EPS of at least $2.74 (even if the reliability and customer satisfaction metrics are achieved at or above threshold). Annual incentive awards are capped at the maximum opportunity, 200% of target. Straight-line interpolation determines the payout for performance that falls between threshold and target or between target and maximum levels. For 2025, the Company’s Incentive EPS was $2.77, resulting in achievement of between threshold and target performance levels. The reliability goal, SAIDI, was achieved at between the target and maximum performance levels. See the performance results noted on the corporate scorecard below. 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 between target and maximum performance levels. Under the 2025 AIP, payment to NEOs is limited to the lesser of Incentive EPS results or performance award results. The corporate scorecard shown below represents the aggregate performance award results of 93% of target and the Incentive EPS results of 80% of target. NEOs would have been eligible to receive an award at 80% of target, based on the Incentive EPS result. Awards are pro-rated for both changes in target opportunities and time in position. In December 2025, the Compensation and HC Committee (and, for the Executive Chairman and the CEO, the independent members of the Board) approved accelerated payments under the 2025 AIP to NEOs employed at that time to mitigate potentially adverse tax impacts to the Company and the NEOs in connection with the anticipated closing of the Blackstone Infrastructure Merger. The accelerated 2025 AIP awards were calculated based on estimated Incentive EPS results then available, which reflected achievement at the threshold (50% of target) Incentive EPS level. The Compensation and HC Committee reviewed and certified the final AIP corporate performance results at its February 2026 meeting, confirming the corporate scorecard aggregate result at 93% of target and Incentive EPS achievement of 80% of target. The Compensation and HC Committee retains discretionary authority under the 2025 AIP, including discretion to reduce awards. In February 2026, the Compensation and HC Committee exercised negative discretion to reduce the amount paid to Ms. Eden to reflect a threshold (50% of target) level of achievement, which is consistent with the accelerated payments made to the other NEOs in December 2025. No additional payments were made to the NEOs who received the accelerated payment in December 2025 to reflect the higher certified actual results.
CORPORATE SCORECARD
| Goal | Weight | Threshold 50% | Target 100% | Maximum 200% | 2025 Results | Weighted Results | | TXNM Incentive EPS | 60% of Scorecard | ≥$2.74/share | ≥$2.79/share | ≥$2.86/share | $2.77/share (80% of target award level) | 48.0% | | Reliability (measured by PNM & TNMP SAIDI) (weighted respectively, 67% / 33%) | 20% of Scorecard | 112 | 107 | 95 | 103 (133% of target award level) | 26.7% | | Customer Satisfaction (measured by PNM Research and Polling Survey) (weighted average score) | 13% of Scorecard | 7.4 | 7.5 | 7.7 | 7.4 (50% of target award level) | 6.5% | | Customer Satisfaction (measured by TNMP REP Satisfaction) (weighted average score) | 7% of Scorecard | 4.2 | 4.4 | 4.7 | 4.6 (167% of target award level) | 12.0% | | Aggregate Performance Results | | | | | | 93% |
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.
Long-Term Incentive Awards
Long-Term Incentive Awards 2025 LTIP Goals for the Performance Period 2025-2027 Consistent with past years and consistent with our pay for performance philosophy, for 2025, 70% of each NEO’s total 2025 long-term incentive compensation opportunity is dependent upon the Company’s achievement of three performance goals, noted below, over the 2025-2027 performance period. No PSs (shown as PS in the GPBA Table on page 60) will be earned by or paid to our NEOs if actual performance over the 2025-2027 performance period is below the threshold levels set forth in the 2025 LTIP PS Awards Performance Goal Table below. 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 pro-rated 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 through the end of the performance period and pro-rated based on the number of full months of service completed by the Officer during the performance period. The 2025 LTIP award opportunities were benchmarked to the median of the 2025 Benchmark Data. The Compensation and HC Committee recommended and the Board approved amendments to the 2023, 2024 and 2025 LTIPs in May 2025 to adjust certain award opportunities to recognize changes in the NEOs’ responsibilities. The 2025 LTIP target award opportunities for NEOs are shown in the table on the following page. The PSs awarded under the 2025 LTIP are tied to three-year performance measures designed to support long-term goals and include the following: •Earnings Growth (targets are approved by the Board based on the Company’s long-range operating plan), •Relative TSR Goal (comparing Company TSR to the EEI Index), and •FFO/Debt Ratio (targets are approved by the Board based on the Company’s long-range operating plan).
2025 LTIP PS AWARDS PERFORMANCE GOAL TABLE
2025 LTIP PS AWARDS PERFORMANCE GOAL TABLE
2025 LTIP PS AWARDS PERFORMANCE GOAL TABLE
| Corporate Goal | Weight | Threshold 50% | Target 100% | Maximum 200% | | Earnings Growth | 40% | ≥ 4.0% | ≥ 8.0% | ≥ 12.0% | | Relative TSR | 40% | ≥ 35th percentile | ≥ 50th percentile | ≥ 90th percentile | | FFO/Debt Ratio | 20% | ≥13% | ≥14% | ≥16% |
2025 LTIP PS AWARDS PERFORMANCE GOAL TABLE
Collectively, these PS 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 84 and Additional Information-Adjustments for Certain Items on page 56. As disclosed in the Company’s 2025 proxy statement, in February 2025, the Board approved the 2025 LTIP for the three-year performance period of 2025-2027. The 2025 LTIP reflects a continued focus on Earnings Growth. The PS award opportunities under the 2025 LTIP are based on Earnings Growth (weighted at 40%), Relative TSR (weighted at 40%), and FFO/Debt Ratio (weighted at 20%). In February 2025, the Board granted RSAs which will vest over a three-year period thereafter. Consistent with the Blackstone Infrastructure Merger Agreement, if the Blackstone Infrastructure Merger closes prior to the end of the 2025 LTIP performance period, the Company will determine the achievement of the performance measures prior to the closing of the Blackstone Infrastructure Merger with such performance being the greater of (1) the target level of performance or (2) the actual level of performance achieved, determined on a goal-by-goal basis, as of the last day of the last month ending at least 30 days before the closing of the Blackstone Infrastructure Merger. Following closing, the PS award will be converted into the right to receive the merger consideration of $61.25 per share, plus interest at 6%, compounded semi-annually from the closing to the date of payment, less applicable taxes, subject to the same service-based terms and conditions applicable to the original PS awards.
NEO LONG-TERM INCENTIVE AWARD OPPORTUNITY
NEO LONG-TERM INCENTIVE AWARD OPPORTUNITY
NEO LONG-TERM INCENTIVE AWARD OPPORTUNITY
| Position | 2024 LTIP | | | 2025 LTIP | | | | | Total Target Opportunity1 | PS1 | RSA2 | Total Target Opportunity1 | PS1 | RSA | | Patricia K. Collawn 3 | 290.0% | 203.0% | 87.0% | 325.0% | 227.5% | 97.5% | | Joseph D. Tarry 4 | 165.0% | 115.5% | 49.5% | 225.0% | 157.5% | 67.5% | | Brian G. Iverson 5 | 135.0% | 94.5% | 40.5% | 135.0% | 94.5% | 40.5% | | Elisabeth A. Eden 6 | 85.0% | 59.5% | 25.5% | 85.0% | 59.5% | 25.5% | | Henry E. Monroy 7 | 85.0% | 59.5% | 25.5% | 85.0% | 59.5% | — | | Monique Jacobson 8 | 80.0% | 56.0% | 24.0% | 80.0% | 56.0% | — | | Additional LTIP adjustments were made throughout the year for certain NEOs to recognize changes in responsibilities. | | | | | | | | 1 As a percentage of base salary for the time period in which the NEO serves in the applicable position. Such award opportunities were determined based on the NEO’s respective position and base salary. | | | | | | | | 2 The Company does not anticipate granting RSAs under the 2024 LTIP in early 2027. Instead, the Company anticipates granting RSAs in early 2027 under the LTIP which is anticipated to be established for the 2027-2029 performance period. This is consistent with the Company’s approach for RSAs under the 2022 and 2023 LTIPs. | | | | | | | | 3 Ms. Collawn transitioned to the role of Executive Chairman effective July 1, 2025. In connection with this transition, her performance share target was reduced from 227.5% to 150.5% of base salary for the remainder of the 2025-2027 performance period on a pro-rata basis. Because RSAs under the 2025 LTIP were granted prior to July 1, 2025, her RSA opportunity under the 2025 LTIP remained at 97.5%. | | | | | | | | 4 Under the 2024 LTIP, Mr. Tarry’s PS award was increased from 115.5% to 157.5% for the period beginning January 1, 2025 and his RSA award was increased from 49.5% to 67.5%. When Mr. Tarry was named CEO effective July 1, 2025, his performance share target was increased from 157.5% to 227.5% of base salary for the remainder of the performance period under both the 2024 LTIP and 2025 LTIP on a pro-rata basis. Because RSAs under the 2025 LTIP were already granted to Mr. Tarry prior to July 1, 2025, his RSAs under the 2025 LTIP remained at 67.5%. | | | | | | | | 5 Mr. Iverson’s 2024 LTIP was pro-rated based on his hire date of September 16, 2024. | | | | | | | | 6 Ms. Eden’s 2024 LTIP will be pro-rated based on her retirement date of September 8, 2025. She will not be eligible for a PS award under the 2025 LTIP. | | | | | | | | 7 Mr. Monroy was promoted to SVP and CFO effective May 19, 2025. His PS award under the 2024 and 2025 LTIPs will be pro-rated based on that date. | | | | | | | | 8 Ms. Jacobson’s 2024 LTIP and 2025 LTIP were pro-rated based on her hire date of April 14, 2025. | | | | | | |
NEO LONG-TERM INCENTIVE AWARD OPPORTUNITY
LTIP Awards Earned for the Performance Period 2023-2025 In 2023, the Compensation and HC Committee approved the 2023 LTIP for the three-year performance period of 2023-2025. Information regarding the threshold, target and maximum performance targets for the 2023-2025 performance period under the 2023 LTIP for Earnings Growth and FFO/Debt Ratio and the actual 2023-2025 performance results are set forth in the following table. To mitigate potentially adverse tax impacts to the Company and the NEOs in connection with the anticipated closing of the Blackstone Infrastructure Merger, the Compensation and HC Committee and the independent members of the Board reviewed and approved the performance results in December 2025 for each of the NEOs employed at that time. The PSs were awarded on the performance results available at the time of settlement, reflecting achievement at 65% of target. Following the close of the 2023-2025 performance period, final certified results reflected achievement at 63% of target, based on achieving Earnings Growth at below the threshold level (weighted at 50%) and FFO/Debt Ratio at between target and maximum level (weighted at 50%). The Committee and Board determined not to seek recovery of the difference between the shares delivered pursuant to the accelerated settlement and the shares that would have been delivered based on the final certified results. In addition, the Committee exercised its authority to settle the PSs for Ms. Eden, who was not an active officer at the time of the accelerated settlement at the same 65% achievement level, consistent with the payments to the other NEOs in December 2025. The Committee believes these decisions were appropriate because, when considering total incentive compensation under both the 2025 AIP and the 2023 LTIP in the aggregate, each NEO received less in the aggregate for these two awards than they would have received had the awards been paid based on the final certified full-year actual performance. Specifically, the threshold Incentive EPS level payout under the 2025 AIP, combined with the 2023 LTIP payout, resulted in aggregate incentive compensation for each NEO below what would have been earned based on final certified results for both programs.
2023 NEO LONG-TERM INCENTIVE PS AWARD OPPORTUNITIES
2023 NEO LONG-TERM INCENTIVE PS AWARD OPPORTUNITIES
2023 NEO LONG-TERM INCENTIVE PS AWARD OPPORTUNITIES
| Position | Threshold PS Opportunity1 | Target PS Opportunity1 | Maximum PS Opportunity1 | | Patricia K. Collawn | 101.50% | 203.00% | 406.00% | | Joseph D. Tarry2 | 113.75% | 227.50% | 455.00% | | Brian G. Iverson3 | 47.25% | 94.50% | 189.00% | | Elisabeth A. Eden4 | 29.75% | 59.50% | 119.00% | | Henry E. Monroy5 | 29.75% | 59.50% | 119.00% | | Monique Jacobson6 | 28.00% | 56.00% | 112.00% | | 1 As a percentage of base salary at the beginning of the performance period. | | | | | 2 Mr. Tarry’s target PS award opportunity was increased from 115.5% to 157.5% for the period of January 1, 2025 to June 30, 2025. Upon his promotion to President and CEO, his target PS award opportunity was increased to 227.5% for the period beginning July 1, 2025. PS awards are pro-rated based on the time in each award opportunity level. | | | | | 3 Pro-rated based on his hire date of September 16, 2024. | | | | | 4 Pro-rated based on her retirement date of September 8, 2025. | | | | | 5 Pro-rated based on the effective date of his promotion, May 19, 2025. | | | | | 6 Pro-rated based on her hire date of April 14, 2025. | | | |
2023 NEO LONG-TERM INCENTIVE PS AWARD OPPORTUNITIES
Actual PSs received by Ms. Eden under the 2023 LTIP are shown on the Outstanding Equity Awards table on page 63. The RSAs awarded under the LTIPs are time-based awards which vest over a three-year period. In February 2026, the Board declined to grant any RSAs under the 2023 LTIP and instead granted RSAs under the 2026 LTIP. This treatment is consistent with the Company’s approach for RSAs under the 2022 LTIP.
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 68.
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 (for example, upon the closing of the Blackstone Infrastructure Merger), 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 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 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 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 (including the amounts payable to our NEOs upon the closing of the Blackstone Infrastructure Merger) are described in more detail beginning on page 68. Ms. Collawn will terminate employment as Executive Chairman upon completion of the Blackstone Infrastructure Merger, and her termination will be considered a covered termination in connection with such merger.
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 Executive Chairman and the CEO, resides with the Compensation and HC Committee. For the Executive Chairman and 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 compensation levels, 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 recommending appropriate compensation levels for the Executive Chairman, the Compensation and HC Committee considers the Executive Chairman’s scope of responsibilities, Company performance, internal pay equity, and other relevant factors. In setting (or recommending in the case of the CEO) specific compensation levels, the Compensation and HC Committee considers a self-evaluation prepared by the CEO as well as the CEO’s evaluation of the other NEOs. 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 Executive Chairman and CEO compensation.
Role of the Independent Compensation Consultant
Role of the Independent Compensation Consultant Pursuant to its charter, the Compensation and HC Committee may select and retain an independent compensation consultant (at the Company’s expense) whose services could 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 2013, the Compensation and HC Committee selected Pay Governance to be its independent compensation consultant. On an annual basis, most recently at its December 2025 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 2025, 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 2024 to assist in setting 2025 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 42 and (2) market data from the companies comprising the WTW 2024 General Industry Executive Survey Report - United States of general industry companies (listed in Appendix A). •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 2025 Benchmark Data. •The median compensation levels of the 2025 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 reference points 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.
2026 COMPENSATION ACTIONS
2026 COMPENSATION ACTIONS In February 2026, the Compensation and HC Committee approved the following 2026 compensation actions. The Compensation and HC Committee increased the annual base salaries payable to our NEOs (with the independent directors approving the base salary increase for our Executive Chairman and our CEO), effective March 14, 2026. The base salary increases were based on corporate and individual performance and on the current median base salaries for the corresponding executive positions in the 2026 Benchmark Data. The 2026 base salary increases are as follows: Ms. Collawn from $1,199,361 to $1,259,329; Mr. Tarry from $965,000 to $1,022,900; Mr. Iverson from $468,000 to $486,720; Mr. Monroy from $390,000 to $487,500; and Ms. Jacobson from $400,000 to $416,000. As disclosed in our Current Report on Form 8-K filed March 3, 2026, the Compensation and HC Committee also approved the 2026 AIP. The 2026 AIP includes a financial goal of Incentive EPS (weighted 60%) and two operational goals, customer satisfaction (weighted 20%) and reliability (weighted 20%). No incentive award under the 2026 AIP will be paid if performance for the Incentive EPS goal is below the threshold level and incentive awards, if earned, will be capped at a maximum opportunity. Payment under the 2026 AIP is limited to the lesser of Incentive EPS results or performance award results. Straight-line interpolation will determine the incentive awards payout for performance that falls between threshold and target or target and maximum levels. The Compensation and HC Committee and the Board also approved the 2026 LTIP. The 2026 LTIP award mix is comprised of 70% PSs and 30% RSAs. The PS awards pursuant to the 2026 LTIP for the three-year performance period of 2026-2028 aligns with our pay for performance objectives as well as industry trends and market practices. PSs under the 2026 LTIP are based on two performance measures: Earnings Growth (targets are approved by the Board based on the Company’s long-range operating plan) and FFO/Debt Ratio (targets are approved by the Board based on the Company’s long-range operating plan); weighted 50% and 50%, respectively. For 2026, the Compensation and HC Committee elected to suspend the use of a Relative TSR metric in the LTIP in light of the pending Blackstone Infrastructure Merger. Each of the Earnings Growth and FFO/Debt Ratio performance measures for the 2026 LTIP has a threshold, target and maximum award opportunity. The RSAs awarded pursuant to the 2026 LTIP were granted in March 2026, which will vest over a three-year period thereafter. Consistent with the Blackstone Infrastructure Merger Agreement, the Company will determine the achievement of the performance measures prior to the closing of the Blackstone Infrastructure Merger with such performance being the greater of (1) the target level of performance or (2) the actual level of performance achieved, determined on a goal-by-goal basis, as of the last day of the last month ending at least 30 days before the closing of the Blackstone Infrastructure Merger. Following closing, the PS award will be converted into the right to receive the merger consideration of $61.25 per share, plus interest at 6%, compounded semi-annually from the closing to the date of payment, less applicable taxes, subject to the same service-based terms and conditions applicable to the original PS awards.
Double Trigger Vesting Following a Change in Control
Double Trigger Vesting Following a Change in Control The PEP includes, as a general rule, double trigger vesting following a change in control. Double trigger vesting results only if an NEO is terminated without cause or is constructively terminated following a change in control. See Payments Made Upon a Change in Control section of 2025 NEO Compensation Information beginning on page 68.
Stock Option Award Practices
Stock Option Award Practices Our current executive compensation program does not include the award of stock options. While we do not have a formal policy in place with regard to the timing of award of stock options, stock appreciation rights or similar instruments in relation to the disclosure of material nonpublic information, if in the future we anticipate granting stock options, stock appreciation rights or similar instruments, we may determine to establish a policy regarding how the Board determines when to grant such awards and how the Board or the Compensation and HC Committee will take material nonpublic information into account when determining the timing and terms of such awards.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | Name and Principal Position | Year | Salary ($) | 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, Executive Chairman | 2025 | 1,191,299 | — | 2,902,939 | — | 689,632 | — | 436,127 | 5,219,997 | | | 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 | | Joseph D. Tarry, President and CEO | 2025 | 839,462 | — | 2,275,011 | — | 495,058 | 1,685 | 292,732 | 3,903,948 | | | 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 | | Brian G. Iverson, General Counsel, SVP, Regulatory & Public Policy (6) | 2025 | 463,846 | 82,052 | 583,874 | — | 163,800 | — | 123,067 | 1,416,639 | | | 2024 | 121,154 | 184,696 | 658,174 | — | 93,011 | — | 18,763 | 1,075,798 | | Elisabeth A. Eden, former SVP & Chief Financial Officer (7) | 2025 | 341,131 | 70,000 | 367,586 | — | 105,012 | — | 132,036 | 1,015,765 | | | 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 | | Henry E. Monroy, SVP & Chief Financial Officer (8) | 2025 | 363,495 | 60,000 | 353,234 | — | 100,946 | — | 94,635 | 972,310 | | Monique Jacobson, SVP, Corporate Services | 2025 | 276,923 | — | 351,821 | — | 93,315 | — | 53,488 | 775,547 |
SUMMARY COMPENSATION TABLE
(1) The 2025 salary amounts include cash compensation earned by each NEO during 2025, and in the case of Ms. Eden, included payment of unused Paid Time Off upon her retirement. This also includes any amounts earned in 2025 but contributed into the RSP and the ESP II. For amounts deferred pursuant to the ESP II, see the 2025 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 2025, the amount indicated is the aggregate grant date fair value of the 2025 LTIP grants of (A) RSAs granted on February 26, 2025 (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, 2025. 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 2025 stock awards assuming maximum performance of the 2025 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.
Grants of Plan Based Awards in 2025
Grants of Plan Based Awards in 2025 The following table discloses the 2025 grants of awards to our NEOs: (1) annual incentive plan award levels under the 2025 AIP (shown below as AIP) and (2) the following equity awards made under the LTIP: (a) RSAs awarded under the 2025 LTIP in February 2025, (b) PS award opportunity based on Earnings Growth, Relative TSR, and FFO/Debt Ratio performance measured over the 2025-2027 performance period of the 2025 LTIP, as well as the grant date fair value of all such equity awards. RSAs, granted on February 26, 2025, vest in three equal annual installments beginning on March 7, 2026. A uniform vesting date of March 7th was adopted for RSAs granted on and after 2016.
GRANTS OF PLAN BASED AWARDS IN 2025
GRANTS OF PLAN BASED AWARDS IN 2025
GRANTS OF PLAN BASED AWARDS IN 2025
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | 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 (#) | | | | | | | | | | | | | | | | | (2) | | P. K. Collawn | AIP 2/25/2025 | 689,632 | 1,379,265 | 2,758,529 | — | — | — | — | — | — | — | | | PS 2/26/2025 (3) | — | — | — | 18,397 | 36,794 | 73,588 | — | — | — | 1,870,239 | | | RSA 2/26/2025 | — | — | — | — | — | — | 21,963 | — | — | 1,032,700 |
GRANTS OF PLAN BASED AWARDS IN 2025
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | 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 (#) | | | | | | | | | | | | | | | | | (2) | | J. D. Tarry | AIP 2/25/2025 | 495,058 | 990,116 | 1,980,233 | — | — | — | — | — | — | — | | | PS 7/1/2025 (4) | — | — | — | 1,319 | 2,639 | 5,278 | — | — | — | 129,628 | | | PS 7/1/2025 (5) | — | — | — | 2,570 | 5,139 | 10,278 | — | — | — | 161,519 | | | PS 2/26/2025 (6) | — | — | — | 15,136 | 30,272 | 60,545 | — | — | — | 1,538,726 | | | RSA 2/26/2025 | — | — | — | — | — | — | 9,467 | — | — | 445,138 | | B. G. Iverson | AIP 2/25/2025 | 163,800 | 327,600 | 655,200 | — | — | — | — | — | — | — | | | PS 2/26/2025 | — | — | — | 4,113 | 8,226 | 16,453 | — | — | — | 418,128 | | | RSA 2/26/2025 | — | — | — | — | — | — | 3,525 | — | — | 165,746 | | E. A. Eden | AIP 2/25/2025 | 152,100 | 304,200 | 608,400 | — | — | — | — | — | — | — | | | PS 2/26/2025 | — | — | — | 2,589 | 5,179 | 10,359 | — | — | — | 263,249 | | | RSA 2/26/2025 | — | — | — | — | — | — | 2,219 | — | — | 104,337 | | H. E. Monroy | AIP 2/25/2025 | 100,946 | 201,892 | 403,784 | — | — | — | — | — | — | — | | | PS 5/19/2025 (5) | — | — | — | 359 | 718 | 1,436 | — | — | — | 35,268 | | | PS 5/19/2025 (7) | — | — | — | 1,366 | 2,732 | 5,465 | — | — | — | 85,867 | | | PS 5/19/2025 (7) | — | — | — | 1,587 | 3,174 | 6,348 | — | — | — | 161,334 | | | RSA 2/26/2025 (8) | — | — | — | — | — | — | 1,505 | — | — | 70,765 | | M. Jacobson | AIP 4/14/2025 | 93,315 | 186,630 | 373,260 | — | — | — | — | — | — | — | | | PS 4/14/2025 (5) | — | — | — | 506 | 1,013 | 2,026 | — | — | — | 49,759 | | | PS 4/14/2025 (7) | — | — | — | 1,690 | 3,381 | 6,763 | — | — | — | 106,265 | | | PS 4/14/2025 (7) | — | — | — | 1,926 | 3,852 | 7,704 | — | — | — | 195,797 |
GRANTS OF PLAN BASED AWARDS IN 2025
(1) AIP awards were paid in December 2025 for Ms. Collawn, Mr. Tarry, Mr. Iverson, Mr. Monroy, and Ms. Jacobson. Ms. Eden’s 2025 AIP award was paid in March 2026. (2) 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, 2025. For information about the grant date fair value assuming maximum performance of PS awards, see footnote 2 to the SCT. (3) Ms. Collawn’s 2025 target PS opportunity decreased from 227.5% to 150.5% in connection with the change in her role to Executive Chairman effective 7/1/2025. Her PS opportunity is pro-rated based on this effective date. (4) Mr. Tarry's target PS opportunity was increased from 115.5% to 157.5% effective January 1, 2025 and again from 157.5% to 227.5% effective July 1, 2025, the date of his promotion to CEO. This amount reflects the incremental PS award granted under the 2023 LTIP to account for these increases. (5) Mr. Tarry's target PS opportunity was increased from 115.5% to 157.5% effective January 1, 2025 and again from 157.5% to 227.5% effective July 1, 2025, the date of his promotion to CEO. This amount reflects the incremental PS award granted under the 2024 LTIP to account for these increases. (6) Mr. Tarry's target PS opportunity under the 2025 LTIP was 157.5% for the first six months of 2025 and was increased to 227.5% effective July 1, 2025, the date of his promotion to CEO. This amount reflects the full amount of his PS award granted under the 2025 LTIP, inclusive of such increase. (7) Represents Mr. Monroy’s and Ms. Jacobson’s pro-rated PS opportunities under the 2023 LTIP, 2024 LTIP, and 2025 LTIP. (8) Because Mr. Monroy was not an Officer at the time of the RSA grant in March 2025, his RSAs were granted under the non-officer restricted stock program rather than the 2025 LTIP.
Outstanding Equity Awards
Outstanding Equity Awards The table below includes certain information about the following outstanding equity awards (as of December 31, 2025) made under the PEP to the NEOs: (1) RSAs that vest equally over three years from the grant date, (2) PS awards granted to Ms. Eden on February 27, 2023 under the 2023 LTIP reflecting the amount of actual above threshold and below target performance achieved for the 2023-2025 performance period, (3) PS award opportunities granted on March 1, 2024 under the 2024 LTIP, assuming target performance is achieved for the 2024-2025 performance period, (4) PS award opportunities granted on February 26, 2025 (except with respect to Ms. Jacobson on April 14, 2025 and Mr. Monroy on May 19, 2025) under the 2025 LTIP (shown as PS in the GPBA Table above), assuming maximum performance is achieved for the 2025-2027 performance period.
OUTSTANDING EQUITY AWARDS AT 2025 YEAR-END
OUTSTANDING EQUITY AWARDS AT 2025 YEAR-END
OUTSTANDING EQUITY AWARDS AT 2025 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 Unexercised 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 | 2/28/2023 | — | — | — | — | — | 6,019 | 354,399 | — | — | | | 3/1/2024 | — | — | — | — | — | 17,152 | 1,009,910 | 60,031 | 3,534,625 | | | 2/26/2025 | — | — | — | — | — | 21,963 | 1,293,181 | 73,588 | 4,332,861 | | J. D. Tarry | 2/28/2023 | — | — | — | — | — | 1,700 | 100,096 | — | — | | | 3/1/2024 | — | — | — | — | — | 4,846 | 285,332 | 26,209 | 1,543,186 | | | 2/26/2025 | — | — | — | — | — | 9,467 | 557,417 | 60,545 | 3,564,890 | | B. G. Iverson | 9/16/2024 | — | — | — | — | — | — | — | 8,666 | 510,254 | | | 2/26/2025 | — | — | — | — | — | 3,525 | 207,552 | 16,453 | 968,753 | | E. A. Eden | 2/28/2023 | — | — | — | — | — | 2,624 | 154,501 | | | | | 2/28/2023 | — | — | — | — | — | 650 | 38,272 | — | — | | | 3/1/2024 | — | — | — | — | — | 1,854 | 109,164 | 3,604 | 212,204 | | | 2/26/2025 | — | — | — | — | — | 2,219 | 130,655 | — | — | | H. E. Monroy | 2/28/2023 | — | — | — | — | — | 311 | 18,312 | — | — | | | 3/1/2024 | — | — | — | — | — | 361 | 21,256 | — | — | | | 2/26/2025 | — | — | — | — | — | 1,505 | 88,614 | — | — | | | 5/19/2025 | — | — | — | — | — | — | — | 2,732 | 160,860 | | | 5/19/2025 | — | — | — | — | — | — | — | 6,348 | 373,770 | | M. Jacobson | 4/14/2025 | — | — | — | — | — | — | — | 3,381 | 199,073 | | | 4/14/2025 | — | — | — | — | — | — | — | 7,704 | 453,612 |
OUTSTANDING EQUITY AWARDS AT 2025 YEAR-END
(1) No stock options have been granted under the PEP since 2010. (2) As of December 31, 2025, no equity incentive options have been granted under the PEP. (3) This column reflects the earned PSs for Ms. Eden granted on February 28, 2023 under the 2023 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 February 28, 2023 vested on March 7, 2026. One-half of the RSA shown with a grant date of March 1, 2024 vested on March 7, 2025 and the remaining one-half will vest on March 7, 2026. One-third of the RSA shown with a grant date of February 26, 2025 vested on March 7, 2026 and the remaining two-thirds will vest in equal amounts on March 7, 2027 and March 7, 2028. (4) Based on the closing price of $58.88 for our common stock, as quoted on the NYSE on December 31, 2025, the last trading day of fiscal year 2025. (5) Unvested and contingent PS awards listed in column (i) for the 2024-2026 performance period granted on March 1, 2024 are reflected at the target performance level because, as of December 31, 2025, actual performance to date is above threshold and below target and (ii) for the 2025-2027 performance period granted on February 26, 2025 are reflected at the maximum performance level because, as of December 31, 2025, actual performance to date is between target and maximum.
Option Exercises and Stock Vested Table
Option Exercises and Stock Vested Table The following table includes certain information with respect to the vesting during 2025 of PSs and RSAs held by the NEOs. Options and RSAs were awarded under the PEP.
OPTION EXERCISES AND STOCK VESTED DURING 2025
OPTION EXERCISES AND STOCK VESTED DURING 2025
OPTION EXERCISES AND STOCK VESTED DURING 2025
| (a) | (b) | (c) | (d) | (e) | | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | | | | | (1) | | P. K. Collawn | — | — | 78,144 | 4,150,656 | | J. D. Tarry | — | — | 34,921 | 1,940,857 | | B. G. Iverson | — | — | 7,539 | 429,117 | | E. A. Eden | — | — | 4,690 | 234,864 | | H. E. Monroy | — | — | 2,102 | 108,905 | | M. Jacobson | — | — | 658 | 38,631 | | (1) Amounts indicated are the aggregate dollar value realized upon the vesting of PS awards and RSAs based on the number of shares acquired on vesting multiplied by the closing price of our common stock on the delivery date, as quoted on the NYSE. | | | | |
Pension Benefits Table
Pension Benefits Table The table below shows the actuarial present value of accumulated benefits payable to the NEO who is a participant under the ERP using interest rate and mortality rate assumptions consistent with those used in our financial statements. See Note 11 of the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 regarding the valuation method and material assumptions applied in quantifying the present value of the ERP benefits.
Pension Benefits Table
| PENSION BENEFITS 2025 | | | | | | Name | Plan Name | Number of Years of Credited Service * | Present Value of Accumulated Benefit | Payments During Last Fiscal Year | | | | (#) | ($) | ($) | | J. D. Tarry | ERP | 2 | 18,373 | $0 | | * Credited service was frozen as of December 31, 1997. Total service is 30 years. | | | | |
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 ($350,000 in 2025) 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, Mr. Iverson, Ms. Eden, Mr. Monroy, and Ms. Jacobson, 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, none of Mr. Tarry, Mr. Iverson, Ms. Eden, Mr. Monroy, or Ms. Jacobson 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 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, 2025, as reported by the administrator of the RSP.
Non-Qualified Deferred Compensation
| Fund Name | Rate of Return - 2025 % | | Acadian All Country World exUS Equity CIT F | 30.72% | | Vanguard Cash Reserves Federal Money Market Fund Admiral | 4.23% | | Vanguard Institutional Index Fund Institutional Plus Shares | 17.86% | | Vanguard Institutional Target Retirement 2020 Fund | 12.20% | | Vanguard Institutional Target Retirement 2025 Fund | 14.67% | | Vanguard Institutional Target Retirement 2030 Fund | 16.31% | | Vanguard Institutional Target Retirement 2035 Fund | 17.58% | | Vanguard Institutional Target Retirement 2040 Fund | 18.84% | | Vanguard Institutional Target Retirement 2045 Fund | 20.06% | | Vanguard Institutional Target Retirement 2050 Fund | 21.47% | | Vanguard Institutional Target Retirement 2055 Fund | 21.50% | | Vanguard Institutional Target Retirement 2060 Fund | 21.53% | | Vanguard Institutional Target Retirement 2065 Fund | 21.50% | | Vanguard Institutional Target Retirement 2070 Fund | 21.50% | | Vanguard Target Retirement Income Trust II | 11.33% | | JPMorgan Large Cap Growth R6 | 14.00% | | Metropolitan West Total Return Bond Fund P Class | 7.86% | | TXNM Energy, Inc. Common Stock Fund (TXNM) | 23.30% | | Vanguard Retirement Savings Trust III | 2.73% | | Victory Integrity Small/Mid-Cap Value Fund; Class Y | 9.49% | | Vanguard Wellington Fund Admiral Shares | 16.57% | | Vanguard Windsor II Fund Admiral Shares | 18.69% |
Non-Qualified Deferred Compensation
| Fund Name | Rate of Return - 2025 % | | PIMCO Inflation Response Multi-Asset Fund Institutional Class | 16.75% | | Allspring Discovery SMID Cap Growth CIT E1 | 5.70% |
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. As described above, the Company has ceased making supplemental credits. Ms. Collawn is fully vested in her 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.
2025 NON-QUALIFIED DEFERRED COMPENSATION
2025 NON-QUALIFIED DEFERRED COMPENSATION
2025 NON-QUALIFIED DEFERRED COMPENSATION
| (a) | | (b) | (c) | (d) | (e) | (f) | | Name | | Executive Contributions in Last Fiscal Year (2025) ($) | Company Contributions in Last Fiscal Year (2025) ($) | Aggregate Earnings (Loss) in Last Fiscal Year (2025) ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End (2025) ($) | | | | (1) | (2) | | | | | P. K. Collawn | ESP II | 71,478 | 331,873 | 2,590,687 | — | 20,466,751 | | J. D. Tarry | ESP II | 112,452 | 201,812 | 163,293 | — | 1,673,891 | | B. G. Iverson | ESP II | — | 36,180 | 571 | — | 36,751 | | E. A. Eden | ESP II | 102,716 | 48,300 | 121,846 | — | 1,264,819 | | H. E. Monroy | ESP II | 20,595 | 26,686 | 42,894 | — | 297,658 | | M. Jacobson | ESP II | — | 1,214 | 4 | — | 1,218 |
2025 NON-QUALIFIED DEFERRED COMPENSATION
(1) The amounts in this column are included in the “Salary” column (c) of the SCT on page 58. (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 2025 Company contributions to the ESP II.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control As discussed on page 52 under Elements of Compensation-Potential Change in Control Benefits, 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 70 illustrates the amounts payable to each of the NEOs, other than Ms. Eden, 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, 2025, (2) are based on the closing price of our common stock on December 31, 2025, as reported on the NYSE ($58.88), and (3) are estimates of the amounts that would be paid to each NEO based upon the amounts earned through the end of 2025. The precise amount actually due to any NEO upon his or her termination can only be determined at the time of the termination. For Ms. Eden, the table reflects the actual amounts paid to Ms. Eden upon her retirement in September 2025.
CHANGE IN CONTROL, TERMINATION, RETIREMENT, OR IMPACTION
CHANGE IN CONTROL, TERMINATION, RETIREMENT, OR IMPACTION
CHANGE IN CONTROL, TERMINATION, RETIREMENT, OR IMPACTION
| Benefits and Payments | Voluntary Termination by Executive ($) | Termination for Cause ($) | Disability ($) | Death ($) | Constructive or without Cause Termination due to Change in Control ($) | Retirement ($) | Impaction ($) | | | | | | | | (1) | (2) | | P. K. Collawn | | | | | | | | | Restricted Stock Rights (4) | 2,657,490 | — | 2,657,490 | 2,657,490 | 2,657,490 | 2,657,490 | 2,657,490 | | 2024-2026 Performance Shares (6) | 1,508,093 | — | 1,508,093 | 1,508,093 | 2,262,111 | 1,508,093 | 1,508,093 | | 2025-2027 Performance Shares (7) | — | — | — | — | 2,188,099 | — | — | | Health and Welfare Benefits | — | — | — | — | 55,018 | — | 19,731 | | Life Insurance Proceeds (12) | — | — | — | 1,400,000 | — | — | — | | Cash Severance (8) (9) | — | — | — | — | 8,917,390 | — | 1,827,872 | | Legal Fees (10) and Outplacement Services (11) | — | — | — | — | 20,000 | — | 59,968 | | Total P. K. Collawn | 4,165,583 | — | 4,165,583 | 5,565,583 | 16,100,108 | 4,165,583 | 6,073,154 | | J. D. Tarry | | | | | | | | | Restricted Stock Rights (4) | 942,845 | — | 942,845 | 942,845 | 942,845 | 942,845 | 942,845 | | 2024-2026 Performance Shares (6) | 658,396 | — | 658,396 | 658,396 | 987,653 | 658,396 | 658,396 | | 2025-2027 Performance Shares (7) | — | — | — | — | 1,800,256 | — | — | | Health and Welfare Benefits | — | — | — | — | 52,254 | — | 25,167 | | Life Insurance Proceeds (12) | — | — | — | 400,000 | — | — | — | | Cash Severance (8) (9) | — | — | — | — | 4,609,067 | — | 1,674,832 | | Legal Fees (10) and Outplacement Services (11) | — | — | — | — | 20,000 | — | 48,250 | | Total J. D. Tarry | 1,601,241 | — | 1,601,241 | 2,001,241 | 8,412,075 | 1,601,241 | 3,349,490 | | B. G. Iverson | | | | | | | | | Restricted Stock Rights (4) | 207,552 | — | 207,552 | 207,552 | 207,552 | 207,552 | 207,552 | | 2024-2026 Performance Shares (6) | 217,679 | — | 217,679 | 217,679 | 326,548 | 217,679 | 217,679 | | 2025-2027 Performance Shares (7) | — | — | — | — | 489,175 | — | — | | Health and Welfare Benefits | — | — | — | — | 38,923 | — | 18,502 | | Life Insurance Proceeds (12) | — | — | — | 400,000 | — | — | — | | Cash Severance (8) (9) | — | — | — | — | 2,161,848 | — | 558,000 | | Legal Fees (10) and Outplacement Services (11) | — | — | — | — | 20,000 | — | 23,400 | | Total B. G. Iverson | 425,231 | — | 425,231 | 825,231 | 3,244,046 | 425,231 | 1,025,133 |
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) | | E. A. Eden (13) | | | | | | | | | AIP (3) | — | — | — | — | — | 105,012 | — | | Restricted Stock Rights (4) | — | — | — | — | — | 278,090 | — | | 2023-2025 Performance Shares (5) | — | — | — | — | — | 154,501 | — | | 2024-2026 Performance Shares (6) | — | — | — | — | — | 135,777 | — | | 2025-2027 Performance Shares (7) | — | — | — | — | — | — | — | | Health and Welfare Benefits | — | — | — | — | — | — | — | | Life Insurance Proceeds (12) | — | — | — | — | — | — | — | | Cash Severance (8) (9) | — | — | — | — | — | — | — | | Legal Fees (10) and Outplacement Services (11) | — | — | — | — | — | — | — | | Total E. A. Eden | — | — | — | — | — | 673,380 | — | | H. E. Monroy | | | | | | | | | Restricted Stock Rights (4) | 128,182 | — | 128,182 | 128,182 | 128,182 | 128,182 | 128,182 | | 2024-2026 Performance Shares (6) | 68,595 | — | 68,595 | 68,595 | 102,922 | 68,595 | 68,595 | | 2025-2027 Performance Shares (7) | — | — | — | — | 188,710 | — | — | | Health and Welfare Benefits | — | — | — | | 50,695 | — | 24,388 | | Life Insurance Proceeds (12) | — | — | — | 400,000 | — | — | — | | Cash Severance (8) (9) | — | — | — | — | 1,719,829 | — | 624,375 | | Legal Fees (10) and Outplacement Services (11) | — | — | — | — | 20,000 | — | 19,500 | | Total H. E. Monroy | 196,777 | — | 196,777 | 596,777 | 2,210,338 | 196,777 | 865,040 | | M. Jacobson | | | | | | | | | 2024-2026 Performance Shares (6) | — | — | — | — | 127,357 | — | — | | 2025-2027 Performance Shares (7) | — | — | — | — | 229,043 | — | — | | Health and Welfare Benefits | — | — | — | — | 2,671 | — | 708 | | Life Insurance Proceeds (12) | — | — | — | 400,000 | — | — | | | Cash Severance (8) (9) | — | — | — | — | 1,992,590 | — | 472,436 | | Legal Fees (10) and Outplacement Services (11) | — | — | — | — | 20,000 | — | 20,000 | | Total M. Jacobson | — | — | — | 400,000 | 2,371,661 | — | 493,144 |
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, 2025, all of the NEOs, employed on that date, except Ms. Jacobson 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)AIP was paid to Ms. Collawn, Mr. Tarry, Mr. Iverson, Mr. Monroy, and Ms. Jacobson on December 24, 2025. The 2025 AIP was paid to Ms. Eden in March 6, 2026. (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, 2025 ($58.88). (5)PSs under the 2023 LTIP were delivered to Ms. Collawn, Mr. Tarry, Mr. Iverson, Mr. Monroy, and Ms. Jacobson on December 17, 2025. PSs under the 2023 LTIP were delivered to Ms. Eden on March 3, 2026. 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, 2025 ($58.88). (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 2024 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, 2025 ($58.88). (7)The amounts shown are the portion of the amounts payable, if at all, under the 2025 LTIP as in effect on December 31, 2025, 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, 2025 ($58.88). (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 Executive Chairman and 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, 2025. 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 Management Life and, if applicable, Officer Life. (13) As Ms. Eden retired from the Company on September 8, 2025, the termination payments and benefits for Ms. Eden are shown only for that event.
CEO Pay Ratio
CEO Pay Ratio Under rules issued pursuant to the Dodd-Frank Act, TXNM Energy is required to disclose the ratio of the annual total compensation of our median employee to the annual total compensation of the combined compensation of Patricia K. Collawn and Joseph D. Tarry, who each served as our CEO during 2025, non-concurrently. 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 44 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 2025 using the following steps: 1. For purposes of calculating our CEO pay ratio for 2025, 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 2025 compensation, calculated in the manner described below, to the total compensation paid to the median employee of $148,703. 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. Since multiple individuals served as our CEO during 2025, we combined the total annual compensation provided to each of Ms. Collawn and Mr. Tarry for the time each served as CEO during 2025 pursuant to Instruction 10 to Item 402(u) of Regulation S-K in order to arrive at the annual total combined compensation of $5,177,532. For further details regarding the elements of the total CEO 2025 compensation, see the SCT on page 58. Based on the process and calculations described above, our CEO pay ratio for 2025 was 35:1, meaning that the annual total compensation (combined) for 2025 for our non-concurrent CEOs was approximately 35 times the total compensation paid to our median employee in 2025.
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 38 for additional information about our pay for performance and how the Company aligns executive compensation with its performance.
PAY VS. PERFORMANCE
PAY VS. PERFORMANCE
PAY VS. PERFORMANCE
| | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO (Collawn) | Compensation Actually Paid to PEO (Collawn) | Summary Compensation Table Total for PEO (Tarry) | Compensation Actually Paid to PEO (Tarry) | Average Summary Compen-sation Table Total for Non-PEO Named Executive Officers | Average Compen-sation Actually Paid to Non-PEO Named Executive Officers | Total Shareholder Return | Peer Group Total Shareholder Return | Net Earnings (In thousands) | Incentive EPS | | | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | | (1) | (2)(9) | (1) | (2) | (3)(4) | (2)(3)(9) | (5)(9) | (6)(9) | (7) | (8) | | 2025 | 5,219,997 | 6,195,690 | 3,903,948 | 3,904,987 | 1,040,528 | 1,046,244 | 142 | 144 | 169,826 | 2.77 | | 2024 | 5,626,175 | 5,481,090 | N/A | N/A | 1,544,760 | 1,541,512 | 115 | 128 | 258,722 | 2.74 | | 2023 | 7,670,833 | 4,903,568 | N/A | N/A | 1,495,372 | 1,071,031 | 92 | 107 | 106,879 | 2.82 | | 2022 | 6,596,575 | 7,807,506 | N/A | N/A | 1,547,874 | 1,607,675 | 105 | 117 | 185,180 | 2.69 | | 2021 | 5,594,739 | 4,294,466 | N/A | N/A | 1,188,098 | 930,313 | 95 | 116 | 211,847 | 2.45 |
PAY VS. PERFORMANCE
(1)For fiscal year 2025, Ms. Collawn served as our principal executive officer (“PEO”) from January 1, 2025 through June 30, 2025, and Mr. Tarry served as our PEO beginning July 1, 2025 through December 31, 2025. For fiscal years 2021, 2022, 2023, and 2024, Ms. Collawn served as our PEO. Amounts in this column represent the “Total” compensation for our PEO, as reported in the SCT for the applicable fiscal year, which for fiscal year 2025 is set forth in 2025 NEO Compensation Information-Summary of Executive Compensation-Summary Compensation Table on page 58. (2)Compensation actually paid to our PEOs 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 2025 to determine the compensation actually paid.
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 | | | | ($) | ($) | ($) | ($) | ($) | ($) | | | | | | (a) | | (b) | | | PEO (Collawn) | 2025 | 5,219,997 | (2,902,939) | 3,878,632 | — | — | 6,195,690 | | PEO (Tarry) | 2025 | 3,903,948 | (2,275,011) | 2,277,735 | — | (1,685) | 3,904,987 | | Average of non-PEO NEOs | 2025 | 1,040,528 | (414,125) | 419,841 | — | — | 1,046,244 | | PEO | 2024 | 5,626,175 | (2,720,925) | 2,575,840 | — | — | 5,481,090 | | Average of non-PEO NEOs | 2024 | 1,544,760 | (713,873) | 710,627 | — | (2) | 1,541,512 |
PAY VS. PERFORMANCE
(a) Stock award adjustments for 2025 are further detailed in the table below.
PAY VS. PERFORMANCE
| | Year | Year End Fair Value of Outstanding and Unvested Stock Awards Granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Stock Awards | Year over Year Change in Fair Value of Stock Awards Granted in Prior Years that Vested in the Year | Change in Fair Value of Stock Awards Granted in Current Year that Vested in the Year | Total Stock Award Adjustments | | | | ($) | ($) | ($) | ($) | ($) | | PEO (Collawn) | 2025 | 2,892,685 | 306,497 | 679,450 | — | 3,878,632 | | PEO (Tarry) | 2025 | 1,873,339 | 92,164 | 312,232 | — | 2,277,735 | | Average of non-PEO NEOs | 2025 | 272,774 | 39,323 | 107,744 | — | 419,841 | | PEO | 2024 | 2,912,021 | 86,638 | (422,819) | — | 2,575,840 | | Average of non-PEO NEOs | 2024 | 626,979 | (9,029) | (38,463) | 131,140 | 710,627 |
PAY VS. PERFORMANCE
(b) The pension benefit adjustments consist of the average of the actuarially 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 2025, the pension benefit adjustments consist of $0 of average service cost for services rendered, and $0 of average prior service cost. (3)For 2025, our non-PEO NEOs were Messrs. Iverson and Monroy and Mses. Eden and Jacobson. 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. (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, 2020. (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, 2020. (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 2025, Incentive EPS of $2.77 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, 2025) of $1.48 adjusted to exclude: (1) $0.03 per share attributable to the net change in unrealized gains and losses on investment securities; (2) $(0.01) per share attributable to regulatory disallowances; (3) $0.45 per share attributable to pension expense related to previously disposed of gas distribution business; (4) $0.76 per share attributable to merger related costs; (5) $0.04 per share attributable to judgments entered or settlements reached in litigation or other regulatory proceedings; (6) $0.01 per share attributable to process improvement initiatives; and (7) $0.01 per share attributable to the loss, impairment, or write-up of any deferred tax asset or liability that was earned and recognized in a prior tax year, but that must be revalued in the current year. (9)The amounts set forth in this table under “Compensation Actually Paid to PEO (Collawn)”, “Average Compensation Actually Paid to Non-PEO Named Executive Officers”, “Value of Initial Fixed $100 Investment Based on: Total Shareholder Return” and “Value of Initial Fixed $100 Investment Based on: Peer Group Total Shareholder Return” correct such amounts that were reported for 2024 in our 2025 proxy statement, which were inadvertently incorrectly stated therein. The amounts reported under “Compensation Actually Paid to PEO (Collawn)” and “Average Compensation Actually Paid to Non-PEO Named Executive Officers” for 2024 were incorrectly reported in our 2025 proxy statement due to the amount of “Year over Year Change in Fair Value of Outstanding and Unvested Stock Awards” for 2024 being inadvertently incorrect.
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.