DEF 14A of American Water Works Company, Inc., Mar 27, 2025

DEF 14A of American Water Works Company, Inc.

Filed Mar 27, 2025 · FY20240001193125-25-064607

Open on EDGAR

  1. DIRECTOR NOMINEES

    DIRECTOR NOMINEES The following table presents summary information about each of our eight director nominees, as well as their standing committee memberships and positions as of the date of this proxy statement. The table below also discloses the Board’s determination as to the independence of each director nominee under the listing standards of the New York Stock Exchange, or the NYSE, relevant rules of the Securities and Exchange Commission, or the SEC, and the Board’s categorical standards for director independence. Each director is elected annually.

  2. DIRECTOR NOMINEES

    | Name | Age | Director Since | Occupation | Independent? | Standing Committee Memberships/Position* | | Jeffrey N. Edwards | 64 | 2018 | Vice Chairman, New Vernon Capital (non-executive officer) | Yes | · Audit, Finance and Risk (Chair) · Nominating/Corporate Governance, or Nominating | | John C. Griffith | 58 | — | Until the conclusion of the annual meeting, President of American Water As of the conclusion of the annual meeting, President and Chief Executive Officer of American Water | No | None | | Laurie P. Havanec | 64 | 2022 | Retired Executive Vice President and Chief People Officer of CVS Health Corporation | Yes | · Executive Development and Compensation, or ED&CC · Safety, Environmental, Technology and Operations, or SETO | | Julia L. Johnson | 62 | 2008 | President of Net Communications, LLC | Yes | · ED&CC · Nominating | | Patricia L. Kampling | 65 | 2019 | Retired Chairman and Chief Executive Officer of Alliant Energy Corporation | Yes | · ED&CC (Chair) · Audit, Finance and Risk | | Karl F. Kurz | 63 | 2015 | Private investor and Retired Chief Operating Officer, Anadarko Petroleum Corporation | Yes | Non-Executive Board Chair | | Michael L. Marberry | 66 | 2022 | Retired President and Chief Executive Officer of J.M. Huber Corporation | Yes | · SETO (Chair) · Audit, Finance and Risk · Nominating | | Stuart M. McGuigan | 66 | 2024 | Retired Global Chief Information Officer of Fresenius Medical Care AG | Yes | · ED&CC · SETO |

  3. DIRECTOR NOMINEES

    | * The current vacancy of the Chair of the Nominating Committee is to be filled by the Board in due course. |

  4. BOARD OF DIRECTORS HIGHLIGHTS - BY THE NUMBERS

    BOARD OF DIRECTORS HIGHLIGHTS - BY THE NUMBERS Presented below are certain key metrics about our director nominees:

  5. BOARD OF DIRECTORS HIGHLIGHTS - BY THE NUMBERS

    | vi | | AMERICAN WATER | 2025 PROXY STATEMENT |

  6. DIRECTOR NOMINEE QUALIFICATIONS, EXPERIENCE AND REPRESENTATION

    DIRECTOR NOMINEE QUALIFICATIONS, EXPERIENCE AND REPRESENTATION The following matrix highlights the key skills, qualifications, backgrounds and experiences, as well as director representation characteristics, of our director nominees. All information is based upon voluntary self-identification.

  7. DIRECTOR NOMINEE QUALIFICATIONS, EXPERIENCE AND REPRESENTATION

    | AMERICAN WATER | 2025 PROXY STATEMENT | | vii |

  8. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  9. DIRECTOR NOMINEES

    DIRECTOR NOMINEES We have provided for each of our eight director nominees a summary of biographical and committee information as of the date of this proxy statement.

  10. DIRECTOR NOMINEES

    | JEFFREY N. EDWARDS Independent Director Age 64 Director Since 2018 Committees Audit, Finance and Risk (Chair) Nominating | Other Current Public Company Boards: · AAR CORP. (NYSE: AIR), a diversified worldwide provider of aviation and defense products and services, since March 2024 · Raymond James Financial, Inc. (NYSE: RJF), a diversified financial services company, since 2014 (serving as Lead Independent Director since 2023) Business Experience: · Vice Chairman, New Vernon Capital, an investment advisory firm, since March 8, 2024, and Chief Operating Officer, New Vernon Capital, from 2009 to March 7, 2024 · Various senior executive positions held during 22 years at Merrill Lynch & Co., including Vice Chairman, Chief Financial Officer and Head of Global Capital Markets · Director, Medusind Solutions India Private Limited and Medusind Solutions, Inc., from 2012 to 2019 Experience and Qualifications to Serve on the Board: · Mr. Edwards’ current executive leadership position with an investment advisory firm demonstrates focus on growth and strategic planning. · Longstanding executive experience with a leading global capital markets and financial services firm provides Mr. Edwards with a substantive understanding of many issues confronting our business, including capital markets needs, strategic planning, growth opportunities and a variety of operational matters. |

  11. DIRECTOR NOMINEES

    | JOHN C. GRIFFITH President Age 58 Director Nominee | Business Experience: · President since August 1, 2024, and will also serve as Chief Executive Officer following the annual meeting · Chief Financial Officer, from May 2022 to July 2024 · Managing Director, Mergers and Acquisitions—Global Regulated Utilities and Renewable Energy practice, Bank of America Securities, a diversified financial services company, from 2014 to May 2022 · Chief Executive Officer, HighWave Energy, a renewable fuels start-up company, from 2008 to 2014 Experience and Qualifications to Serve on the Board: · Mr. Griffith’s knowledge and experience regarding our business and industry by virtue of his service as our President, and previously as our principal financial officer, enables him to have valuable insight regarding our strategy, operations, liquidity and financial strength, capital resources and overall administration. · His extensive executive experience with a leading global capital markets and financial services firm, and as a principal executive officer of an operating business, provides Mr. Griffith with a deep and substantive understanding of many issues confronting our business, including with respect to capital markets, business development activities, growth and strategic planning. |

  12. DIRECTOR NOMINEES

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 19 |

  13. DIRECTOR NOMINEES

    | LAURIE P. HAVANEC Independent Director Age 64 Director Since 2022 Committees ED&CC SETO | Business Experience: · Executive Vice President, Chief People Officer, CVS Health Corporation, a health solutions company, from February 2021 to August 2024 · Executive Vice President, Chief People Officer, Otis Worldwide Corporation, an elevator and escalator manufacturing, installation and service company, from 2019 to February 2021 · Vice President, Talent, United Technologies Corporation, from 2017 to 2019 · Vice President, Human Resources-Institution Business, Aetna Inc., from 2013 to 2017 · Vice President, Talent Management and Human Resources, Aetna International Business, Aetna Inc., from 2012 to 2013 Experience and Qualifications to Serve on the Board: · Ms. Havanec’s executive leadership background demonstrates strategic experience managing issues involving human resources and capital management, talent acquisition and development, change management, sustainability and governance, and culture. · Her longstanding human resources experience across various public companies provides Ms. Havanec with deep substantive understanding on a wide range of issues confronting our business, including, for example: compensation and benefits; executive succession planning; employee safety; and labor and employee relations. |

  14. DIRECTOR NOMINEES

    | JULIA L. JOHNSON Independent Director Age 62 Director Since 2008 Committees ED&CC Nominating | Other Current Public Company Boards: · MasTec, Inc. (NYSE: MTZ), a utility infrastructure contractor, since 2002 Past Public Company Boards: · FirstEnergy Corp., a transporter and producer of energy, from 2011 to 2022 · NorthWestern Corporation, a transporter and producer of energy, from 2004 to 2021 Business Experience: · President of Net Communications, LLC, a strategy consulting firm specializing in the communications, energy and information technology public policy arenas, since 2001 Experience and Qualifications to Serve on the Board: · Ms. Johnson’s service on a state public service commission with regulatory oversight over Florida’s electric, telecommunications and water and wastewater industries, as well as her current leadership of a firm specializing in regulatory analysis and legal strategy, enables her to provide valuable perspectives on regulatory and public policy matters affecting our operations. · Ms. Johnson’s current and past public company board experience enables her to share with the Board relevant and experiential insights on a variety of public company matters. |

  15. DIRECTOR NOMINEES

    | 20 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  16. DIRECTOR NOMINEES

    | PATRICIA L. KAMPLING Independent Director Age 65 Director Since 2019 Committees ED&CC (Chair) Audit, Finance and Risk | Other Current Public Company Boards: · Xcel Energy Inc. (Nasdaq: XEL), a utility holding company, since 2020 · Board of Trustees, Fidelity’s Equity and High Income Funds, since May 2020, and Advisory Board Member, from February 2020 to May 2020 Past Public Company Boards: · Briggs and Stratton Corporation, a producer of gasoline engines for outdoor power equipment, from 2011 to 2021 · Alliant Energy Corporation, an investor-owned public utility holding company, from 2012 to 2019 Business Experience: · Chief Executive Officer and Chairman of the Board, Alliant Energy Corporation, from April 2012 to June 2019 · Board Member, American Transmission Company, a privately held electricity transmission and distribution utility company, from June 2011 to June 2019 Experience and Qualifications to Serve on the Board: · Ms. Kampling’s experience in strategic leadership, operations, customer perspective, legal and regulatory, human resources/executive compensation, risk management and environmental and safety matters allows her to contribute significantly to the Board’s oversight on these core strategic functions. · Ms. Kampling’s advocacy for human capital management, workforce development, and community vitality provides the Board with valuable insights on our focus on people, social responsibility and operational excellence. |

  17. DIRECTOR NOMINEES

    | KARL F. KURZ Board Chair Independent Director Age 63 Director Since 2015 Board Chair Since 2018 | Other Current Public Company Boards: · Royal Helium Ltd. (TSX-V: RHC), a company focused on the exploration and development of primary helium in southern Saskatchewan, since May 2023 · Devon Energy Corporation (NYSE: DVN), a U.S. energy producer, since 2021 · Texas Pacific Land Corporation (NYSE: TPL), an owner of land in the State of Texas, since 2022 Past Public Company Boards: · WPX Energy, Inc., from 2014 until its merger of equals with Devon Energy Corporation in 2021 · SemGroup Corporation, from 2009 to 2019 Business Experience: · Mr. Kurz is a private investor in the energy industry · Various executive and management positions with Anadarko Petroleum Corporation, Vastar Resources, Inc. and ARCO Oil and Gas Company Experience and Qualifications to Serve on the Board: · Mr. Kurz’s long history of working in the oil and gas industry is invaluable with respect to the national water-energy nexus discussion, smart water grid development and water supply issues. · His experience in finance and capital markets brings additional insights to us and the Board regarding our operations, including with respect to liquidity and capital resources. |

  18. DIRECTOR NOMINEES

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 21 |

  19. DIRECTOR NOMINEES

    | MICHAEL L. MARBERRY Independent Director Age 66 Director Since 2022 Committees SETO (Chair) Audit, Finance and Risk Nominating | Past Public Company Boards: · AdvanSix Inc., a manufacturer of nylon resin and other related chemical intermediates, from October 2016 to June 2023 · Sigma-Aldrich Corporation, a global life sciences and biotechnology company, from 2012 to 2015 Business Experience: · Various senior executive positions over 25 years at J.M. Huber Corporation, a global, family-owned, specialty engineered materials manufacturing company, including: § President and Chief Executive Officer, from 2009 to 2022 § President, Huber Engineered Materials, from 2006 to 2009 § Chief Financial Officer, from 2002 to 2006 § Senior Vice President, Corporate Strategy and Development, from 1997 to 2002 Experience and Qualifications to Serve on the Board: · Mr. Marberry’s long history of executive experience in the chemical manufacturing industry provides invaluable insights to the Board with respect to technology and water infrastructure and supply issues. · His experience in finance and capital markets, occupational and safety processes, environmental management, and business development brings additional insights regarding safety, growth, sustainability and operational execution, among other areas. |

  20. DIRECTOR NOMINEES

    | STUART M. McGUIGAN Independent Director Age 66 Director Since 2024 Committees ED&CC SETO | Other Public Company Boards: · Enhabit, Inc. (NASDAQ: EHAB), a provider of home health and hospice services, since March 2023 Business Experience: · Global Chief Information Officer, Fresenius Medical Care AG, a provider of products and services for people with chronic kidney failure, from 2023 to 2024 · Chief Information Officer, U.S. Department of State, from 2019 to 2021 · Chief Information Officer, Johnson & Johnson, from 2012 to 2019 · Chief Information Officer, CVS Caremark, Inc., from 2008 to 2012 Experience and Qualifications to Serve on the Board: · Mr. McGuigan’s long history of executive experience in navigating cybersecurity and technology risks and related regulatory compliance in various industries and for the U.S. government provides invaluable insights to the Board with respect to cybersecurity risk management and technology innovation. · His experience with implementing and managing information technology systems and developing enterprise applications brings additional insights regarding information management, human resources, finance and operational excellence, among other areas. |

  21. DIRECTOR NOMINEES

    | 22 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  22. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION As described in the table below, during 2024, our non-employee directors received annual cash retainers, paid in quarterly installments, for their service on the Board. Additionally, each non-employee director received an annual equity grant of approximately $165,000 ($260,000 for the Board Chair). Our Chief Executive Officer did not receive any additional compensation for serving as a director. Our non-employee director cash compensation as of the date of this proxy statement is as follows:

  23. DIRECTOR COMPENSATION

    | Director | Annual Cash Retainer | | Board Chair | $200,000 | | Audit, Finance and Risk Committee Chair | $145,000 | | ED&CC, Nominating Committee and SETO Committee Chairs | $140,000 | | Other Non-Employee Directors | $120,000 |

  24. DIRECTOR COMPENSATION

    We do not pay our directors a separate fee for attendance at Board or committee meetings. For calendar year 2024, Aon Human Capital Solutions, or Aon, the ED&CC’s independent compensation consultant, reviewed American Water’s non-employee director pay program for market competitiveness. The review determined that the cash and equity compensation paid to our non-employee directors and our Board Chair were positioned at the median of our 2024 peer group (as defined below in “Compensation Discussion and Analysis—Compensation Determinations and Pay Competitiveness in 2024” beginning on page 33 of this proxy statement), and that our Board Chair’s total compensation was positioned at the 75th percentile for non-executive chairpersons among the companies in our 2024 peer group with a non-executive chairperson. As a result of the review, and based on, among other things, data and analyses provided by Aon, the ED&CC recommended, and the independent members of the Board approved, an increase in the annual director base equity grant from $155,000 to $165,000, which brought the directors’ total direct compensation to just below the 75th percentile of the compensation peer group. This compensation decision was effective as of May 15, 2024. No changes were made to the cash retainer or to the premiums paid to our non-executive Board Chair or the committee chairs. Equity compensation for our non-employee directors is paid in the form of stock units under our 2017 Omnibus Plan. The actual number of stock units granted is based on the closing price of our common stock on the date of grant, which is typically the date the director is elected or re-elected to the Board. The stock units vest on the date of grant and the shares underlying the stock units are distributed to the directors as soon as administratively practicable after the date of grant. Previously, the distribution of shares of common stock underlying the stock units granted to non-employee directors was deferred until approximately 15 months after the date of grant; the ED&CC discontinued this practice beginning with the 2024 annual equity grants. Non-employee directors are reimbursed for expenses incurred in attending Board and committee meetings or other Company-related functions, and reasonable and necessary expenses incurred for attending up to one director continuing education program each year.

  25. DIRECTOR COMPENSATION

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 25 |

  26. DIRECTOR COMPENSATION TABLE

    DIRECTOR COMPENSATION TABLE The following table presents information regarding compensation earned or paid in 2024 as to each person who served as a non-employee member of the Board during that year. Ms. Harris served as a member of the Board until her resignation effective March 24, 2025. Ms. Harris’s resignation was for personal reasons to focus on her health and recovery from a recent medical issue and was not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. The table does not include amounts paid for reimbursement of travel expenses related to attending Board and committee meetings or other Company related functions, or any reimbursement of director educational expenses, and does not include compensation earned or paid as to the CEO. See “Executive Compensation” beginning on page 46 of this proxy statement for information relating to the CEO’s compensation.

  27. DIRECTOR COMPENSATION TABLE

    | Name | Fee Earned or Paid in Cash ($) | Stock Unit Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | | Jeffrey N. Edwards | $145,000 | $165,048 | $4,513 | $314,561 | | Martha Clark Goss (3) | $120,000 | $165,048 | $4,513 | $289,561 | | Kimberly J. Harris | $140,000 | $165,048 | $4,513 | $309,561 | | Laurie P. Havanec | $120,000 | $165,048 | $4,513 | $289,561 | | Julia L. Johnson (4) | $120,000 | $165,048 | $46,552 | $331,600 | | Patricia L. Kampling | $140,000 | $165,048 | $4,513 | $309,561 | | Karl F. Kurz | $200,000(5) | $260,010 | $7,281 | $467,291 | | Michael L. Marberry | $137,568(6) | $165,048 | $4,513 | $307,129 | | Stuart M. McGuigan (7) | $— | $89,356 | $— | $89,356 | | James G. Stavridis (8) | $35,000 | $— | $2,929 | $37,929 |

  28. DIRECTOR COMPENSATION TABLE

    | (1) The amounts shown in this column reflect the grant date fair value of the stock units granted to the directors as part of their annual retainer. The grant date fair value was computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation, or ASC 718. See Note 10—Stock Based Compensation, in the Notes to Consolidated Financial Statements included in the 2024 Form 10-K for the assumptions used in determining grant date fair value. |

  29. DIRECTOR COMPENSATION TABLE

    | (2) Represents dividend equivalents paid in cash in 2024 at the time of the distribution of shares underlying stock unit awards. |

  30. DIRECTOR COMPENSATION TABLE

    | (3) As of December 31, 2024, Ms. Goss held 1,376 director stock units. |

  31. DIRECTOR COMPENSATION TABLE

    | (4) As of December 31, 2024, Ms. Johnson held 4,618 director stock units. |

  32. DIRECTOR COMPENSATION TABLE

    | (5) Mr. Kurz elected to defer the receipt of 100 percent of his 2024 annual cash retainer fees. |

  33. DIRECTOR COMPENSATION TABLE

    | (6) Mr. Marberry elected to defer the receipt of 50 percent of his 2024 annual cash retainer fees. |

  34. DIRECTOR COMPENSATION TABLE

    | (7) Mr. McGuigan was initially elected to the Board on October 29, 2024 and received a pro rated equity award based on the date of such election. |

  35. DIRECTOR COMPENSATION TABLE

    | (8) Admiral Stavridis served as a member of the Board until his resignation effective February 12, 2024. |

  36. DIRECTOR COMPENSATION TABLE

    We did not grant stock options to non-employee directors in 2024 and none of the non-employee directors held any Company stock options as of December 31, 2024.

  37. DIRECTOR COMPENSATION TABLE

    | 26 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  38. Compensation Program Overview

    | · | our Long-Term Performance Plan, or LTPP, which is our long-term equity compensation program. |

  39. Compensation Program Overview

    We also offer our executives various employee retirement and health and welfare benefit plans, as well as customary post-termination benefits under our Executive Severance Policy and Change of Control Severance Policy. Finally, we offer limited and customary perquisites, primarily consisting of executive physicals, Company-paid life insurance benefits, and, as applicable, relocation benefits.

  40. Compensation Program Overview

    Our allocation of compensation among these elements is designed to align our levels of compensation with market pay, which we define as being within a competitive range of the median of our peer group and benchmarking data for a NEO’s position. For 2024, our compensation program for all of our NEOs consisted of the following key elements: The following graphs depict 2024 total direct compensation mix for our CEO and, on an average basis, for all of our other NEOs as a group, assuming annual and long-term incentive awards are paid at target levels:

  41. Summary of Executive Compensation Practices

    | | | | We do: | We do not: | | · Tie a considerable portion of executive pay to company performance · Weight equity compensation heavily towards performance stock units · Utilize an independent compensation consultant · Require executives to abide by stock ownership guidelines and stock retention requirements · Subject all incentive-based compensation to clawback provisions · Complete an annual compensation program risk assessment, overseen by the ED&CC · Utilize double-trigger vesting of equity awards upon a change of control · Provide reasonable and customary severance arrangements to NEOs | · Provide excise tax gross-ups in our change of control arrangements · Provide employment agreements to our NEOs, other than customary employment offer letters · Allow hedging, pledging or short selling of our common stock by employees or directors · Allow buying of our common stock on margin by employees or directors · Provide excessive perquisites for executives · Distribute dividend equivalents on equity awards before they vest · Allow executives to sell or transfer stock if not in compliance with stock ownership guidelines, subject to exceptions · Provide for a supplemental executive retirement plan open to new participants |

  42. COMPENSATION DETERMINATIONS AND PAY COMPETITIVENESS IN 2024

    COMPENSATION DETERMINATIONS AND PAY COMPETITIVENESS IN 2024 During 2024, the ED&CC reviewed and approved the compensation paid to all of our NEOs and made recommendations to the independent members of the Board with respect to compensation paid to the CEO and the President, which the independent members of the Board approved. The CEO and the President did not participate in the ED&CC’s recommendations regarding their respective compensation and did not attend those portions of the ED&CC and Board meetings during which their respective compensation was deliberated and voted upon. The ED&CC considered the CEO’s and the President’s assessments of the performance of all of the other NEOs, as well as the CEO’s and the President’s compensation recommendations regarding each such NEO’s base salary and their APP and LTPP target award opportunities. The ED&CC, with the CEO’s and the President’s participation, discussed the performance of all NEOs other than the CEO and the President, and, after discussion and deliberation held in executive session, approved compensation determinations for such NEOs. The ED&CC engaged Aon Human Capital Solutions, or Aon, as the independent compensation consultant for 2024. Upon engagement, the ED&CC assessed the independence of Aon and concluded that Aon was independent as determined under SEC and NYSE rules. Through its review of relevant benchmarking data and executive compensation trends presented by its independent compensation consultant, the ED&CC is able to assess competitive market compensation practices. Two of the primary ways that the ED&CC evaluates and benchmarks our executive compensation arrangements and practices are to review them against market data in a Willis Towers Watson study comprised of 60 percent weighting on publicly traded utilities and 40 percent weighting on general industry companies, as well as to similar data on companies in our compensation peer group, as described below. The ED&CC believes that there is a strong likelihood that an executive officer’s skills will be transferable among these companies, and thus we would expect to compete with these companies and others for NEO talent. The ED&CC referred to all of this benchmarking data as part of its review of general compensation practices and trends of the utility industry and our compensation peer group. In September 2023, the composition of our compensation peer group was reviewed by the independent compensation consultant and was reassessed by the ED&CC as part of its annual review to consider structural and methodology changes, as well as corporate transactions or other events that may affect the comparability of one or more of the constituent companies. In reviewing the appropriateness of our peer group companies, the ED&CC considers factors that most reflect our primary business of owning water and wastewater utilities subject to economic regulation by state utility commissions or similar entities, including, in decreasing order of relevance, consolidated total assets, market capitalization and consolidated revenues of companies that primarily operate (greater than 75 percent of revenue) as a regulated utility. After consideration of these factors, only companies that primarily operate as a regulated utility were selected as peer companies. In connection with this review, the ED&CC approved the peer group for 2024 without any changes from the 2023 peer group. Throughout 2024, compensation benchmarking decisions and grants of PSU awards based upon relative TSR were made using the 2024 peer group set forth in the table below.

  43. COMPENSATION DETERMINATIONS AND PAY COMPETITIVENESS IN 2024

    | 2024 American Water Works Company, Inc. Compensation Peer Group | | | | Alliant Energy Corporation | Entergy Corporation | OGE Energy Corp. | | Ameren Corporation | Essential Utilities, Inc. | Pinnacle West Capital Corporation | | Atmos Energy Corporation | Evergy, Inc. | PPL Corporation | | CenterPoint Energy, Inc. | Eversource Energy | Public Service Enterprise Group Incorporated | | CMS Energy Corporation | NiSource Inc. | WEC Energy Group, Inc. |

  44. Compensation Philosophy and Objectives

    | · | focus pay on an appropriate mix of short- and long-term performance, with a proportionately greater emphasis on long-term compensation; |

  45. Compensation Philosophy and Objectives

    | · | build long-term, sustainable value for shareholders by emphasizing long-term performance- and equity-based compensation, and de-emphasizing short-term, cash-based compensation; |

  46. Compensation Philosophy and Objectives

    | · | align our 2024 core strategies with our short-term APP performance measures; |

  47. 2024 Annual Performance Plan

    2024 Annual Performance Plan The APP is designed to provide a portion of a NEO’s at-risk compensation to be paid upon the achievement of our annual business objectives. The APP provides an opportunity for NEOs to earn cash payouts tied to the satisfaction of annual corporate performance goals. The 2024 target award opportunity for all NEOs was equal to a percentage of each NEO’s base salary, based on the individual’s position with American Water. An APP award target is set by the ED&CC, together with the NEO’s other elements of compensation, in an effort to align the NEO’s annual total direct compensation generally with market pay for their position. For 2024:

  48. 2024 Annual Performance Plan

    | · | Ms. Hardwick’s APP target was increased from 120 percent to 125 percent of her base salary to maintain her total direct compensation within the competitive range of the benchmarking data. |

  49. 2024 Annual Performance Plan

    | · | Mr. Bowler’s APP target was set at 80 percent to reflect his appointment as Executive Vice President and Chief Financial Officer as of August 1, 2024. |

  50. 2024 Annual Performance Plan

    | · | Ms. Norton’s APP target was increased from 75 percent to 85 percent to maintain her total direct compensation within the competitive range of the benchmarking data and further increased from 85 percent to 90 percent to reflect her additional responsibilities to oversee the Company’s business development function as of August 1, 2024. |

  51. 2024 Annual Performance Plan

    | · | Ms. Mitchell’s APP target was set at 70 percent effective June 5, 2024, to reflect her appointment as Executive Vice President and General Counsel. |

  52. 2024 Annual Performance Plan

    Information used to calculate the 2024 APP award payouts for all of our NEOs is included in the table below.

  53. 2024 Annual Performance Plan

    | Named Executive Officer | Percentage of Base Salary | 2024 APP Target (1) | 2024 APP Payout Percentage | 2024 APP Award | | M. Susan Hardwick | 125% | $1,397,045 | 157.32% | $2,197,831 | | John C. Griffith | 100% | $849,443 | 157.32% | $1,336,343 | | David M. Bowler | 80% | $303,514 | 157.32% | $477,488 | | Cheryl Norton | 90% | $607,784 | 157.32% | $956,166 | | Melanie M. Kennedy | 65% | $306,346 | 157.32% | $481,943 | | Stacy A. Mitchell | 70% | $293,013 | 157.32% | $460,968 |

  54. 2024 Annual Performance Plan

    | (1) Target amounts were based on the prorated base salaries earned in 2024. For Mr. Bowler and Mses. Norton and Mitchell, target amounts were also prorated based on the effective date of their respective APP target percentage changes. |

  55. 2024 Annual Performance Plan

    The APP performance measures selected for 2024 align with our 2024 core business strategies of growth, customers, safety, operational excellence (in this case, environmental leadership) and people. The following table provides details on each performance measure.

  56. 2024 Annual Performance Plan

    | Strategy | Performance Measure | How We Calculate the Measure | Why We Use this Measure | | Growth | Adjusted EPS | Adjusted EPS is a non-GAAP measure that is calculated as diluted EPS calculated in accordance with GAAP as reported in the Company’s audited consolidated financial statements, adjusted to eliminate the impact of the items shown in Part A of Appendix A. | Adjusted EPS is a key measure of our financial and operational success, and achieving our earnings and strategic goals creates long-term shareholder value, provides greater total return to our shareholders, and benefits customers by contributing to strong credit metrics to provide for cost-effective financing of necessary capital and operational investments. | | Customers | Customer Satisfaction | A quarterly survey is conducted by a third-party firm of random regulated water and wastewater customers, and the results are based on the number of states in the top quartile of the survey. | We are committed to delivering the best customer experience, setting our goal to achieve top-quartile customer satisfaction. Our service quality and ability to satisfy our customers are closely tied to the trust our customers extend to us each day. |

  57. 2024 Annual Performance Plan

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 35 |

  58. 2024 Annual Performance Plan

    | Strategy | Performance Measure | How We Calculate the Measure | Why We Use this Measure | | Safety | OSHA Recordable Injury Rate (ORIR) | ORIR is a measure of injuries and illnesses requiring treatment beyond first aid for every 200,000 hours worked. | ORIR allows us to continue our momentum toward becoming an industry leader with respect to the safety and well-being of our workforce. | | | Days Away, Restricted and Transfer (DART) Severity Rate | DART injury rate measures the number of OSHA defined recordable injuries that resulted in days away from work, work restrictions, or job duty/position transfers in the calendar year per 100 employees. | DART reflects serious incidents that result in the employee being placed in restricted duty or time away from work. This aligns with both our safety and people strategies as we believe that our employees should return home in the same or better condition than when they arrived to work. | | Environmental Leadership | Drinking Water Compliance Notices of Violation | This metric is determined by counting the overall number of drinking water notices of violation, or NOVs, received by the Company in accordance with internally established procedures, which may exclude NOVs for newly acquired systems and third-party violations, among others. | As part of our sustainability initiatives, we are committed to protecting the environment and maintaining our history of materially complying with, and in many cases, surpassing, minimum standards required by applicable laws and regulations. | | | Drinking Water Quality NOVs | This metric is determined by counting the overall number of drinking water NOVs for maximum contaminant level exceedances received by the Company in accordance with internally established procedures, which may exclude NOVs related to newly acquired systems and associated with third-party violations, among others. | We are committed to excellent water quality and maintaining our history of materially complying with, and in many cases, surpassing, minimum standards required by applicable laws and regulations. | | People | Women Representation | This people metric is determined by dividing the number of employees who self-identify as female by the total employee headcount. | We are committed to an inclusive workforce where our employees bring experiences and perspectives to assist with the needs of our customers and communities. | | | Ethnic and Racial Diversity Representation | This people metric is determined by dividing the number of employees who self-identify as a member of a diverse racial or ethnic group by the total employee headcount. | |

  59. 2024 Annual Performance Plan

    For 2024, the maximum payout for each of the performance measures is 200 percent of target. To align with our peer group’s practices, the ED&CC increased the maximum payout for each of the non-financial performance measures from 150 percent to 200 percent of target and approved removing the provision that no payouts would be earned under the APP if the EPS performance measure was less than 90 percent of target. The ED&CC determines the APP payout percentage, using the actual performance of each measure, as soon as reasonably practicable after the end of the year. The APP payout percentage is then computed by adding the weighted results achieved for each performance measure. The ED&CC has adopted guidelines to permit management to make adjustments to EPS for purposes of computing APP performance achievement based on EPS, to the extent greater than $0.02 per share. Please see Part A of Appendix A for details on Adjusted EPS. The ED&CC retains authority to approve other adjustments not covered by this authorization. The following table presents information regarding each of the performance measures used to determine the APP payout percentage, including the threshold, target and maximum performance levels for each measure, as well as the weighting assigned to each measure. If the threshold performance level for a performance measure is not met, there is no payout for that measure. For 2024, the ED&CC increased the weighting for DART Severity Rate from 7.5 percent to 10 percent and reduced the weighting for ORIR from 7.5 percent to 5 percent, providing more focus on mitigating severe incidents within the workplace. The ED&CC also increased the weighting for Drinking Water Quality NOVs from 7.5 percent to 10 percent and reduced the weighting for Drinking Water Compliance NOVs from 7.5 percent to 5 percent, to focus stronger efforts on areas where public health could be impacted.

  60. 2024 Annual Performance Plan

    | 36 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  61. 2024 Annual Performance Plan

    | Performance Measure | Corporate Performance Factor Percentage | Threshold Performance (Weighting) | Target Performance (Weighting) | Maximum Performance (Weighting) | Actual Performance (Percentage Earned) | | Growth: Adjusted EPS (1) | 50.0% | $5.05 (0.0%) | $5.15 (50.0%) | $5.25 (100.0%) | $5.32 (100.0%) | | Customer: Customer Satisfaction | 15.0% | 0 (0.0%) | 4 (15.0%) | 8 (30.0%) | 3 (11.25%) | | Safety: ORIR (2) | 5.0% | 1.11 (0.0%) | 0.61 (5.0%) | 0.40 (10.0%) | 0.40 (10.0%) | | Safety: DART Severity Rate (2) | 10.0% | 0.67 (0.0%) | 0.29 (10.0%) | 0.20 (20.0%) | 0.14 (20.0%) | | Environmental Leadership: Drinking Water Compliance | 5.0% | 13 (0.0%) | 6 (5.0%) | 4 (10.0%) | 8 (3.57%) | | Environmental Leadership: Drinking Water Quality | 10.0% | 4 (0.0%) | 2 (10.0%) | 0 (20.0%) | 2 (10.0%) | | People: Women Representation | 2.5% | 24.0% (0.0%) | 25.0% (2.5%) | 27.0% (5.0%) | 24.5% (1.25%) | | People: Ethnic and Racial Diversity Representation | 2.5% | 20.0% (0.0%) | 21.0% (2.5%) | 23.0% (5.0%) | 20.5% (1.25%) |

  62. 2024 Annual Performance Plan

    | (1) Adjusted EPS is a non-GAAP measure. See Part A of Appendix A for a reconciliation. |

  63. 2024 Annual Performance Plan

    | (2) This goal would not have been earned in the event of a preventable employee fatality during the year. The Company experienced an employee fatality in 2024 that the ED&CC determined not to be preventable for the purpose of certifying the actual performance rate and percentage earned for this goal. |

  64. 2024 Annual Performance Plan

    Based upon our performance with regard to the financial and non-financial performance measures, the ED&CC certified an APP payout of 157.32 percent. Cash awards under the APP are generally paid to participants by March 15 of the year following the performance year.

  65. 2024 Long-Term Performance Plan

    2024 Long-Term Performance Plan The LTPP is designed to incentivize eligible participants to achieve our long-term business objectives by providing an opportunity to earn equity awards tied to our long-term goals and continued employment with the Company. For 2024, the ED&CC approved including an ROE performance measure in the LTPP. ROE is a key performance measure that aligns our interests with those of our shareholders by measuring our ability to efficiently generate profits relative to shareholders’ equity. The 2024 LTPP awards are weighted 30 percent to time-based RSUs and 70 percent to PSUs, with the PSU component consisting of three performance measures: compounded EPS growth weighted at 35 percent of the total LTPP award, TSR relative to the companies in the 2024 peer group weighted at 20 percent of the total LTPP award, and ROE weighted at 15 percent of the total LTPP award. Generally, our RSU awards vest ratably over an approximate three-year period while a participant remains employed with us. PSU awards generally are earned ratably over a three-year performance period while employed, and the vesting of each PSU award is determined by the ED&CC following the end of the three-year performance period based on the satisfaction of pre-determined performance goals. To the extent an RSU award is unvested or a PSU award has not been earned, it is generally forfeited once a participant ceases to be employed with us or if the performance goals are not achieved; however, LTPP awards to certain NEOs may continue to vest after an early or normal retirement. See “—Ongoing and Post-Employment Arrangements and Benefit Plans—Terms of Outstanding Equity Grants” beginning on page 43 of this proxy statement for additional details. The ED&CC has adopted guidelines to permit management to make adjustments for purposes of LTPP performance achievement based on EPS and ROE, to the extent greater than $0.02 per share for EPS, or 0.05 percent for ROE. The ED&CC retains authority to approve other adjustments not covered by this authorization. We based the aggregate target value of LTPP awards on a percentage of each NEO’s salary. For 2024:

  66. 2024 Long-Term Performance Plan

    | · | Mr. Bowler’s LTPP target was set at 160 percent to reflect his appointment as Executive Vice President and Chief Financial Officer as of August 1, 2024; |

  67. 2024 Long-Term Performance Plan

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 37 |

  68. 2024 Long-Term Performance Plan

    | · | Mr. Griffith’s LTPP target was increased from 250 percent to 340 percent to reflect his appointment as President as of August 1, 2024 |

  69. 2024 Long-Term Performance Plan

    | · | Ms. Norton’s LTPP target was increased from 200 percent to 245 percent to reflect her additional responsibilities to oversee the Company’s business development function as of August 1, 2024; and |

  70. 2024 Long-Term Performance Plan

    | · | Ms. Mitchell’s LTPP target was set at 150 percent effective June 5, 2024, to reflect her appointment as Executive Vice President and General Counsel. |

  71. 2024 Long-Term Performance Plan

    Generally, LTPP awards are granted by the ED&CC in February of each year, and additional LTPP awards may otherwise be granted to a NEO based on the reassessment of their job responsibilities or the appointment to a new position. The following table presents a summary, based on target market value, of LTPP awards granted in 2024 for all NEOs. Information regarding the number of shares underlying these awards is found in “Executive Compensation—2024 Grants of Plan-Based Awards” beginning on page 49 of this proxy statement.

  72. 2024 Long-Term Performance Plan

    | Named Executive Officer | LTPP Target Award as a Percentage of Base Salary | Aggregate Target Market Value of LTPP Awards (1) | Aggregate Market Value of RSUs | Aggregate Target Market Value of PSUs (TSR) | Aggregate Target Market Value of PSUs (EPS) | Aggregate Target Market Value of PSUs (ROE) | | M. Susan Hardwick | 435% | $4,893,731 | $1,468,143 | $978,722 | $1,712,854 | $734,012 | | John C. Griffith | 340% | $2,491,212 | $747,359 | $498,247 | $871,927 | $373,679 | | David M. Bowler | 160% | $607,456 | $182,160 | $121,568 | $212,588 | $91,140 | | Cheryl Norton | 245% | $1,535,802 | $460,762 | $307,079 | $537,580 | $230,381 | | Melanie M. Kennedy | 120% | $568,476 | $170,567 | $113,671 | $198,955 | $85,283 | | Stacy A. Mitchell | 150% | $581,850 | $174,560 | $116,365 | $203,585 | $87,340 |

  73. 2024 Long-Term Performance Plan

    | (1) For Messrs. Griffith and Bowler and Mses. Norton and Mitchell, their aggregate LTPP target market values were prorated based on the effective dates of their LTPP target percentage changes. |

  74. 2024 Long-Term Performance Plan

    The following table presents information regarding the performance measures and payout curves related to the PSUs granted in 2024. Relative TSR is based on American Water’s total shareholder return compared to the total shareholder return performance of the companies in the 2024 peer group, during the three-year performance period from January 1, 2024, through December 31, 2026, assuming reinvestment of dividends during the performance period. The TSR metric enables us to encourage performance that increases shareholder value and also increases it to an extent that compares favorably relative to the companies in our 2024 peer group. Compounded EPS growth is based on the rate of EPS growth, compounded annually over the three-year period from January 1, 2024, through December 31, 2026, over our 2023 adjusted EPS. The ROE measure is based on the three-year average from January 1, 2024, through December 31, 2026, using a five-quarter average shareholders’ equity for each year. Compounded EPS growth and ROE are key performance measures that link achievement of our financial and strategic goals to the creation of long-term shareholder value. The payout curves for each of these performance measures were approved in December 2023 and were reflective of the relevant period of our long-term, five-year financial plan that was reviewed and approved by the Board. Earnings impacts from our February 2024 amendment of the HOS seller note in excess of $0.02 (for EPS), or 0.05 percent (for ROE) will be excluded in accordance with the ED&CC’s adopted guidelines.

  75. 2024 Long-Term Performance Plan

    | 38 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  76. 2024 Long-Term Performance Plan

    We do not grant, and since 2017 have not granted, options as part of the LTPP. For this reason, the Company has not adopted a policy or practice on the timing of awards of options in relation to the disclosure of material nonpublic information.

  77. Performance Vesting of PSUs Granted in 2022

    Performance Vesting of PSUs Granted in 2022 In 2022, we granted two equally weighted types of PSUs to all of our NEOs: one with a three-year performance measure based on TSR relative to companies in our 2022 peer group, and the other with a three-year performance measure based on the annual rate of our compounded adjusted EPS growth. The payouts of the two types of PSUs are summarized in the table below:

  78. Performance Vesting of PSUs Granted in 2022

    | Performance Measure | Threshold Performance (Weighting) | Target Performance (Weighting) | Maximum Performance (Weighting) | Actual Performance | Percentage of Target Award Earned | | Relative Total Shareholder Return | 25th percentile (25%) | 50th percentile (100%) | 90th percentile (200%) | 9th percentile | 0.00% | | Compounded Adjusted EPS Growth Rate | 4.0% (0%) | 5.0% (100%) | 8.0% (200%) | 7.77% (1) | 192.33% |

  79. Performance Vesting of PSUs Granted in 2022

    | (1) See Part B of Appendix A for a calculation of actual performance for this 2022 PSU award. |

  80. Performance Vesting of PSUs Granted in 2022

    Actual performance is based on the rate of EPS growth, compounded annually over the three-year period from January 1, 2022, through December 31, 2024, over our 2021 EP S. The ED&CC certified the achievement of the requisite PSU performance measures in February 2025.

  81. Nonqualified Deferred Compensation Plan

    Nonqualified Deferred Compensation Plan The Nonqualified Savings and Deferred Compensation Plan for Employees of American Water Works Company, Inc. and its Designated Subsidiaries, or the Employee Deferred Compensation Plan, enables participants to defer up to 20 percent of their base salary and up to 100 percent of their APP payout and provides benefits in excess of the maximum benefits that may be provided under the Savings Plan as a result of limits imposed by the Code. We refer to compensation in excess of those limits as “excess compensation.” Each of our NEOs is eligible to participate in the Employee Deferred Compensation Plan. We provide matching contributions on excess compensation using the same matching formulas as described above under the Savings Plan. In addition, for participants rehired or hired on or after January 1, 2006 (for 2024, all NEOs except Ms. Norton), we provide an employer defined contribution that is equal to 5.25 percent of the participant’s APP award plus the participant’s base salary in excess of the compensation limit imposed by the Code. Each participant may allocate amounts credited to their account among several notional investments, and the value of the account will be increased or decreased to reflect returns under the selected notional investments. The participant may elect to receive payment of deferred amounts in a lump sum or in annual installments, on or beginning at separation from service or a specified distribution date. See “Executive Compensation—2024 Nonqualified Deferred Compensation” on page 54 of this proxy statement for additional information.

  82. Executive Severance Policy

    Executive Severance Policy Under our Executive Severance Policy, we provide severance benefits to our NEOs. Our policy is designed to provide a clear statement of the rights of our executives if they are involuntarily terminated without cause (as defined under this policy), except in cases following a change of control, as discussed below. Among other things, the Executive Severance Policy provides for 18 months of salary continuation for our Chief Executive Officer and our President and 12 months of salary continuation for other NEOs, and a pro rata APP award for the year in which the termination date occurs to the extent a payment is earned under the terms of the APP. In addition, the policy provides for Company-paid welfare benefits for a specified number of weeks based on years of service, up to 12 months of outplacement services and credit for the severance period for purposes of vesting under any applicable nonqualified deferred compensation or defined benefit retirement plans. See “Executive Compensation—Potential Payments on Termination or Change of Control” beginning on page 55 of this proxy statement for further information.

  83. Executive Severance Policy

    | 42 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  84. Change of Control Severance Policy

    Change of Control Severance Policy The Change of Control Severance Policy provides benefits to each of our NEOs, if within 24 months after the consummation of a “change of control,” the NEO’s employment is involuntarily terminated without “cause” or if the NEO resigns from employment for “good reason” (each as defined in this policy). The occurrence or potential occurrence of a change of control transaction often creates uncertainty regarding the continued employment of a company’s executive officers. In order to continue to encourage our NEOs to remain employed with us in connection with such a transaction, or to attract new executives in the midst of such a transaction, we provide our NEOs with specified severance benefits if the NEO’s employment terminates for the reasons described above in connection with a change of control. In the event of a covered termination, each of the Chief Executive Officer and the President would be eligible to receive three times, and the other NEOs would be eligible to receive two times, the sum of (1) such NEO’s annual base salary on the termination date of employment and (2) the greater of the last APP award paid to the NEO and the average of the NEO’s last three annual APP awards. Each NEO would also receive paid COBRA coverage for health, dental and vision benefits for the maximum statutory period, would continue to be eligible to participate for six months in our Employee Assistance Plan and would receive up to 12 months of outplacement services. The Change of Control Severance Policy also provides that, in the event of a covered termination, each NEO would be entitled to receive unpaid base salary due for periods prior to the termination date, all accrued and unused vacation through the termination date, and reimbursement of all properly documented reasonable and necessary expenses incurred in connection with employment prior to the termination date. In addition, the policy provides that benefits payable under the Employee Deferred Compensation Plan will be fully vested and paid in accordance with the terms of such plan. The benefits and payments provided under this policy are designed to replace and enhance existing benefits payable under the Executive Severance Policy following a change of control. See “Executive Compensation—Potential Payments on Termination or Change of Control” beginning on page 55 of this proxy statement for further information.

  85. Terms of Outstanding Equity Grants

    Terms of Outstanding Equity Grants Acknowledging that executives serving in our CEO, President, CFO and COO positions consistently make decisions that are both in our short- and long-term interests, the ED&CC has approved the granting of long-term equity awards under the 2017 Omnibus Plan to persons serving in these roles with continued vesting after retirement, under circumstances as discussed in more detail below. Except as contemplated in these limited circumstances, we do not provide for continued vesting of long-term equity awards granted under the 2017 Omnibus Plan in the event of retirement. For an executive serving in the CEO, President, CFO or COO role with at least three years of consecutive service in one or more of these positions, an equity award will continue to vest over the normal vesting schedule following a separation of service based upon either normal retirement or early retirement, as follows:

  86. Terms of Outstanding Equity Grants

    | · | in the event of a normal retirement, defined as having attained age 60 and five years of service at |

  87. Terms of Outstanding Equity Grants

    | American Water (including with respect to Mses. Hardwick and Norton), 100 percent of the award will continue to vest; and |

  88. Terms of Outstanding Equity Grants

    | · | in the event of an early retirement, defined as having attained age 55 and five years of service at American Water, 75 percent of the award will continue to vest. |

  89. Terms of Outstanding Equity Grants

    In connection with the foregoing, PSUs will continue to vest and will be paid at the end of the three-year performance period based on actual performance. Any stock option granted to an executive serving in the CEO, President, CFO and COO roles will remain exercisable for a period of two years after the retirement date; however, no stock options have been granted to any of our NEOs in these roles.

  90. Terms of Outstanding Equity Grants

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 43 |

  91. CHANGE OF CONTROL PROVISIONS IN EQUITY PLANS

    CHANGE OF CONTROL PROVISIONS IN EQUITY PLANS Most of our compensation plans and policies do not contain change of control provisions affecting the compensation of our NEOs. Upon a change of control in which American Water is not the surviving entity, the 2017 Omnibus Plan requires all unexercised options and other grants of awards thereunder to be assumed by or converted to similar awards of the acquiring company. The vesting of such assumed or converted awards will be accelerated only if the participant’s employment is terminated other than (i) for cause or (ii) due to death or disability, within 12 months after the change of control. To the extent that any such awards are not assumed or converted, option awards will become fully exercisable, all restrictions upon awards will lapse and all stock units will fully vest, upon the change of control. See “Executive Compensation—Potential Payments on Termination or Change of Control—Equity Awards” on page 57 of this proxy statement for further information.

  92. Accounting Considerations

    Accounting Considerations RSU and PSU awards are accounted for based on their grant date fair value, as determined under ASC 718, which is recognized over the service or vesting period applicable to the grant. Forfeitures are estimated, and the compensation cost of awards will be reversed if the employee does not remain employed by us throughout the service or vesting period.

  93. 2024 SUMMARY COMPENSATION TABLE

    2024 SUMMARY COMPENSATION TABLE The following table sets forth information regarding the compensation of all of our NEOs for 2024.

  94. 2024 SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Year | Salary ($) (1) | Bonus ($) | Stock Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (4) | All Other Compensation ($) (5) | Total ($) | | M. Susan Hardwick Chief Executive Officer (6) | 2024 | $1,126,258 | $— | $4,881,557 | $2,197,831 | $— | $375,084 | $8,580,730 | | | 2023 | $1,057,880 | $— | $4,654,564 | $1,678,611 | $— | $329,770 | $7,720,825 | | | 2022 | $975,096 | $100,000 | $4,067,077 | $1,335,400 | $— | $243,180 | $6,720,753 | | John C. Griffith President (7) | 2024 | $855,657 | $— | $2,479,082 | $1,336,343 | $— | $211,563 | $4,882,645 | | | 2023 | $748,982 | $— | $1,884,974 | $990,538 | $— | $163,754 | $3,788,248 | | | 2022 | $460,099 | $950,000 | $1,812,518 | $554,618 | $— | $234,602 | $4,011,837 | | David M. Bowler Executive Vice President and Chief Financial Officer (8) (9) | 2024 | $473,006 | $— | $603,757 | $477,488 | $— | $100,186 | $1,654,437 | | Cheryl Norton Executive Vice President and Chief Operating Officer | 2024 | $702,927 | $— | $1,530,351 | $956,166 | $1,802,518 | $54,794 | $5,046,756 | | | 2023 | $659,678 | $— | $1,336,248 | $654,055 | $2,496,415 | $50,362 | $5,196,758 | | | 2022 | $613,750 | $— | $1,099,808 | $557,974 | $— | $37,887 | $2,309,419 | | Melanie M. Kennedy Executive Vice President, Chief Human Resources Officer (10) | 2024 | $474,932 | $— | $567,062 | $481,943 | $— | $110,552 | $1,634,489 | | | 2023 | $452,489 | $— | $546,560 | $388,974 | $— | $108,014 | $1,496,037 | | | 2022 | $435,545 | $— | $536,434 | $343,585 | $— | $101,460 | $1,417,024 | | Stacy A. Mitchell Executive Vice President and General Counsel (9) (11) | 2024 | $463,055 | $— | $576,746 | $460,968 | $— | $70,856 | $1,571,625 |

  95. 2024 SUMMARY COMPENSATION TABLE

    | (1) In 2024, the following NEOs deferred a portion of their base salary under the Employee Deferred Compensation Plan: Ms. Hardwick—$55,827; Mr. Griffith—$50,675; Mr. Bowler—$37,210; Ms. Norton—$139,332; and Ms. Kennedy—$47,094. |

  96. 2024 SUMMARY COMPENSATION TABLE

    | (2) The amounts shown in this column reflect the aggregate grant date fair value of PSUs and RSUs granted to each of the NEOs in 2024, as follows: |

  97. 2024 SUMMARY COMPENSATION TABLE

    | Name | PSUs | RSUs | | M. Susan Hardwick | $3,413,414 | $1,468,143 | | John C. Griffith | $1,731,723 | $747,359 | | David M. Bowler | $421,597 | $182,160 | | Cheryl Norton | $1,069,589 | $460,762 | | Melanie M. Kennedy | $396,495 | $170,567 | | Stacy A. Mitchell | $402,186 | $174,560 |

  98. 2024 SUMMARY COMPENSATION TABLE

    With respect to the PSUs, the amounts disclosed in the table above include the grant date fair value based upon the target outcome of the performance conditions, determined at the grant date in accordance with ASC 718. See Note 10—Stock Based Compensation in the Notes to Consolidated Financial Statements in the 2024 Form 10-K for the assumptions that were made in determining grant date fair values of the PSU and RSU awards.

  99. 2024 SUMMARY COMPENSATION TABLE

    | 46 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  100. 2024 SUMMARY COMPENSATION TABLE

    The following table shows the fair value of the PSU awards at the grant date, assuming the highest level of performance was achieved:

  101. 2024 SUMMARY COMPENSATION TABLE

    | | Grant Date Fair Value | | | | Name | 2024 | 2023 | 2022 | | M. Susan Hardwick | $6,826,828 | $6,516,434 | $5,734,170 | | John C. Griffith | $3,463,446 | $2,639,074 | $2,537,560 | | David M. Bowler | $843,194 | $— | $— | | Cheryl Norton | $2,139,178 | $1,870,702 | $1,569,680 | | Melanie M. Kennedy | $792,990 | $765,236 | $767,000 | | Stacy A. Mitchell | $804,372 | $— | $— |

  102. 2024 SUMMARY COMPENSATION TABLE

    | (3) The amounts shown in this column constitute payments under the APP with respect to each performance year, which are generally paid in March of the next calendar year. The following NEOs deferred a portion of their APP payment with respect to 2024 under the Employee Deferred Compensation Plan: Ms. Hardwick—$109,892; Mr. Griffith—$80,181; Mr. Bowler—$71,623; and Ms. Kennedy—$38,555. |

  103. 2024 SUMMARY COMPENSATION TABLE

    | (4) The amounts shown in this column reflect the aggregate changes in the actuarial present values of accumulated benefits under our defined benefit pension plans. For further information on these pension plans, see “—Pension Benefits at December 31, 2024.” None of the NEOs received “above-market” or “preferential” earnings (as defined by SEC regulation) under the Employee Deferred Compensation Plan. The change in pension value for 2022 for Ms. Norton was $(159,010), which is not reflected in the Summary Compensation Table in accordance with SEC regulations. |

  104. 2024 SUMMARY COMPENSATION TABLE

    | (5) The totals shown in this column for 2024 consist of: |

  105. 2024 SUMMARY COMPENSATION TABLE

    | Name | Savings Plan Company Match | Savings Plan Company Defined Contribution Account (a) | Company Contributions to Employee Deferred Compensation Plan (b) | Executive Physical | Dividend Equivalents (c) | Company- Paid Life Insurance | Total All Other Compensation | | M. Susan Hardwick | $13,800 | $18,113 | $274,667 | $1,800 | $66,272 | $432 | $375,084 | | John C. Griffith | $13,800 | $18,113 | $169,823 | $— | $9,395 | $432 | $211,563 | | David M. Bowler | $13,800 | $18,113 | $55,280 | $1,900 | $10,661 | $432 | $100,186 | | Cheryl Norton | $8,625 | $— | $8,791 | $1,730 | $35,216 | $432 | $54,794 | | Melanie M. Kennedy | $13,800 | $18,113 | $56,229 | $1,730 | $20,248 | $432 | $110,552 | | Stacy A. Mitchell | $13,800 | $18,113 | $29,944 | $1,730 | $6,837 | $432 | $70,856 |

  106. 2024 SUMMARY COMPENSATION TABLE

    | (a) The Defined Contribution Account is an account in the Savings Plan to which American Water contributes 5.25 percent of each eligible employee’s total cash compensation (which includes annual base salary), subject to Code limits on compensation that may be taken into account. Generally, only employees hired on or after January 1, 2006, are eligible for this contribution. |

  107. 2024 SUMMARY COMPENSATION TABLE

    | (b) The amounts in this column represent matching contributions with respect to 2024 made by the Company to the NEOs’ accounts in the Employee Deferred Compensation Plan. These contributions are generally paid in the second quarter of the next calendar year. For further information on this plan, see “—2024 Nonqualified Deferred Compensation.” |

  108. 2024 SUMMARY COMPENSATION TABLE

    | (c) Dividend equivalents are paid in cash with respect to PSUs and RSUs at such time, if ever, as the PSUs or RSUs are converted to common stock. Amounts in this column reflect PSU and RSU dividend equivalents that were paid out in 2024. |

  109. 2024 SUMMARY COMPENSATION TABLE

    | (6) Ms. Hardwick has served as Chief Executive Officer since February 2, 2022, and served as President from February 2, 2022, to August 1, 2024. She will retire from the Company effective as of the conclusion of the annual meeting. She served as Executive Vice President and Chief Financial Officer until February 2, 2022. From December 7, 2021, until January 31, 2022, Ms. Hardwick also served as our Interim Chief Executive Officer and continued to serve as Chief Financial Officer until May 16, 2022. |

  110. 2024 SUMMARY COMPENSATION TABLE

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 47 |

  111. 2024 SUMMARY COMPENSATION TABLE

    | (7) Mr. Griffith has served as President since August 1, 2024. He served as Executive Vice President and Chief Financial Officer from May 16, 2022, to July 31, 2024. Mr. Griffith has been designated President and Chief Executive Officer by the Board effective as of the conclusion of the annual meeting and is also a nominee for election to the Board at the annual meeting. |

  112. 2024 SUMMARY COMPENSATION TABLE

    | (8) Mr. Bowler was promoted to Executive Vice President and Chief Financial Officer effective August 1, 2024. |

  113. 2024 SUMMARY COMPENSATION TABLE

    | (9) The executive was not a named executive officer with respect to any year prior to 2024. |

  114. 2024 SUMMARY COMPENSATION TABLE

    | (10) Ms. Kennedy was no longer employed by the Company effective March 1, 2025. |

  115. 2024 SUMMARY COMPENSATION TABLE

    | (11) Ms. Mitchell was promoted to Executive Vice President and General Counsel effective June 5, 2024. |

  116. 2024 GRANTS OF PLAN-BASED AWARDS

    2024 GRANTS OF PLAN-BASED AWARDS The following table presents certain information regarding plan-based awards granted to the NEOs named below during the fiscal year ended December 31, 2024.

  117. 2024 GRANTS OF PLAN-BASED AWARDS

    | Name | Grant Date | Approval Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Grant Date Fair Value of Stock Awards ($)(4) | | | | | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | M. Susan Hardwick | | | | | | | | | | | APP | 2/13/2024 | 2/13/2024 | $1,397,045 | $2,794,090 | — | — | — | — | $— | | RSU | 2/13/2024 | 2/13/2024 | $— | $— | — | — | — | 12,257 | $1,468,143 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 2,043 | 8,171 | 16,342 | — | $966,548 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 3,575 | 14,300 | 28,600 | — | $1,712,854 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 1,532 | 6,128 | 12,256 | — | $734,012 | | John C. Griffith | | | | | | | | | | | APP | 2/13/2024 | 2/13/2024 | $849,443 | $1,698,886 | — | — | — | — | $— | | RSU | 2/13/2024 | 2/13/2024 | $— | $— | — | — | — | 4,910 | 588,120 | | RSU | 8/1/2024 | 7/30/2024 | $— | $— | — | — | — | 1,102 | 159,239 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 818 | 3,273 | 6,546 | — | 387,163 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 1,432 | 5,728 | 11,456 | — | 686,100 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 614 | 2,455 | 4,910 | — | 294,060 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 184 | 735 | 1,470 | — | 98,953 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 322 | 1,286 | 2,572 | — | 185,827 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 138 | 551 | 1,102 | — | 79,620 | | David M. Bowler | | | | | | | | | | | APP | 2/13/2024 | 2/13/2024 | $303,514 | $607,028 | — | — | — | — | $— | | RSU | 2/13/2024 | 2/13/2024 | $— | $— | — | — | — | 1,031 | 123,493 | | RSU | 8/1/2024 | 7/30/2024 | $— | $— | — | — | — | 406 | 58,667 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 172 | 688 | 1,376 | — | 81,384 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 301 | 1,203 | 2,406 | — | 144,095 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 129 | 516 | 1,032 | — | 61,806 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 68 | 271 | 542 | — | 36,485 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 119 | 474 | 948 | — | 68,493 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 51 | 203 | 406 | — | 29,334 | | Cheryl Norton | | | | | | | | | | | APP | 2/13/2024 | 2/13/2024 | $607,784 | $1,215,568 | — | — | — | — | $— | | RSU | 2/13/2024 | 2/13/2024 | $— | $— | — | — | — | 3,480 | $416,834 | | RSU | 8/1/2024 | 7/30/2024 | $— | $— | — | — | — | 304 | $43,928 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 580 | 2,320 | 4,640 | — | $274,433 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 1,015 | 4,061 | 8,122 | — | $486,427 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 435 | 1,740 | 3,480 | — | $208,417 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 51 | 202 | 404 | — | $27,195 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 89 | 354 | 708 | — | $51,153 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 38 | 152 | 304 | — | $21,964 | | Melanie M. Kennedy | | | | | | | | | | | APP | 2/13/2024 | 2/13/2024 | $306,346 | $612,692 | — | — | — | — | $— | | RSU | 2/13/2024 | 2/13/2024 | $— | $— | — | — | — | 1,424 | $170,567 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 237 | 949 | 1,898 | — | $112,257 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 415 | 1,661 | 3,322 | — | $198,955 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 178 | 712 | 1,424 | — | $85,283 |

  118. 2024 GRANTS OF PLAN-BASED AWARDS

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 49 |

  119. 2024 GRANTS OF PLAN-BASED AWARDS

    | Name | Grant Date | Approval Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | Grant Date Fair Value of Stock Awards ($)(4) | | | | | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Stacy A. Mitchell | | | | | | | | | | | APP | 2/13/2024 | 2/13/2024 | $293,013 | $586,026 | — | — | — | — | $— | | RSU | 2/13/2024 | 2/13/2024 | $— | $— | — | — | — | 637 | $76,300 | | RSU | 8/1/2024 | 7/30/2024 | $— | $— | — | — | — | 680 | $98,260 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 106 | 425 | 850 | — | $50,273 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 186 | 743 | 1,486 | — | $88,997 | | PSU | 2/13/2024 | 2/13/2024 | $— | $— | 80 | 319 | 638 | — | $38,210 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 113 | 453 | 906 | — | $60,987 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 198 | 793 | 1,586 | — | $114,589 | | PSU | 8/1/2024 | 7/30/2024 | $— | $— | 85 | 340 | 680 | — | $49,130 |

  120. 2024 GRANTS OF PLAN-BASED AWARDS

    | (1) These columns represent target and maximum APP payout opportunities. The actual payments that were made under the APP for 2024 performance are shown in the 2024 Summary Compensation Table. There is no specified minimum award for participants in the APP, and therefore we did not include a column in the table for the threshold amount of such award. For further information on the APP, see “Compensation Discussion and Analysis—2024 Compensation—2024 Annual Performance Plan” beginning on page 35 of this proxy statement. |

  121. 2024 GRANTS OF PLAN-BASED AWARDS

    | (2) These columns represent threshold, target and maximum payout opportunities under the LTPP with respect to our PSUs. For further information on the LTPP, under which the PSUs were granted, see “Compensation Discussion and Analysis—2024 Compensation—2024 Long-Term Performance Plan” beginning on page 37 of this proxy statement. |

  122. 2024 GRANTS OF PLAN-BASED AWARDS

    | (3) This column represents grants of RSUs. For further information on the LTPP, under which all of the RSUs were granted, see “Compensation Discussion and Analysis—2024 Compensation—2024 Long-Term Performance Plan” beginning on page 37 of this proxy statement. |

  123. 2024 GRANTS OF PLAN-BASED AWARDS

    | (4) This column represents the grant date fair values of the PSUs and RSUs, determined in accordance with ASC 718. See footnote (2) to the 2024 Summary Compensation Table for additional information. |

  124. OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END

    OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END The following table presents information regarding equity awards held by the NEOs named below at December 31, 2024. None of our NEOs held any outstanding stock options as of December 31, 2024; thus, the table below omits all columns pertaining to option awards.

  125. OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END

    | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | M. Susan Hardwick | | | | | | | | 2/15/2022 | 2,726 | $339,360 | 32,862 | $4,090,990 | | | 2/14/2023 | 6,235 | $776,195 | 31,519 | $3,923,800 | | | 2/13/2024 | 12,257 | $1,525,874 | 49,027 | $6,103,371 | | John C. Griffith | | | | | | | | 5/16/2022 | 1,242 | $154,617 | 17,411 | $2,167,495 | | | 2/14/2023 | 2,525 | $314,337 | 12,765 | $1,589,115 | | | 2/13/2024 | 4,910 | $611,246 | 19,639 | $2,444,859 | | | 8/1/2024 | 1,102 | $137,188 | 4,409 | $548,876 |

  126. OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END

    | 50 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  127. OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END

    | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | David M. Bowler | | | | | | | | 2/15/2022 | 170 | $21,163 | 2,050 | $255,205 | | | 2/14/2023 | 496 | $61,747 | 2,505 | $311,847 | | | 2/13/2024 | 1,031 | $128,349 | 4,126 | $513,646 | | | 8/1/2024 | 406 | $50,543 | 1,625 | $202,296 | | Cheryl Norton | | | | | | | | 2/15/2022 | 716 | $89,135 | 8,626 | $1,073,851 | | | 2/14/2023 | 1,791 | $222,962 | 9,048 | $1,126,386 | | | 2/13/2024 | 3,480 | $433,225 | 13,922 | $1,733,150 | | | 8/1/2024 | 304 | $37,845 | 1,214 | $151,131 | | Melanie M. Kennedy | | | | | | | | 2/15/2022 | 348 | $43,323 | 4,189 | $521,489 | | | 2/14/2023 | 732 | $91,127 | 3,701 | $460,737 | | | 2/13/2024 | 1,424 | $177,274 | 5,695 | $708,971 | | Stacy A. Mitchell | | | | | | | | 2/15/2022 | 109 | $13,569 | 1,309 | $162,957 | | | 2/14/2023 | 322 | $40,086 | 1,626 | $202,421 | | | 2/13/2024 | 637 | $79,300 | 2,549 | $317,325 | | | 8/1/2024 | 680 | $84,653 | 2,719 | $338,488 |

  128. OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END

    | (1) This column reflects RSUs that are not subject to performance conditions and will vest in equal increments on January 31 of each of the three years following the year in which the RSUs were granted, and, except as to RSUs with continued vesting, subject to continued employment through each vesting date. |

  129. OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END

    | (2) The market value of the RSUs and PSUs is based on the $124.49 closing price of a share of our common stock on December 31, 2024, the last trading day of the year, as reported by the NYSE. |

  130. OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END

    | (3) This column reflects PSUs that are subject to vesting upon the achievement of stated performance goals over a three-year period and are earned in three equal annual increments on January 31 of each year in such three-year period, and, except as to PSUs with continued vesting, subject to continued employment through each such date. In accordance with applicable SEC regulations, the number of shares disclosed in this column represents the number of shares that would vest if (i) threshold performance were achieved for PSUs related to TSR, and (ii) maximum performance were achieved for PSUs related to EPS and ROE. |

  131. OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 51 |

  132. 2024 OPTION EXERCISES AND STOCK VESTED

    2024 OPTION EXERCISES AND STOCK VESTED The following table presents information regarding the vesting of RSUs and PSUs held by the NEOs named below during 2024. None of the NEOs held any stock options during 2024; thus, the table below omits all columns pertaining to the exercise of option awards.

  133. 2024 OPTION EXERCISES AND STOCK VESTED

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | M. Susan Hardwick | 11,431 | $1,396,969 | | John C. Griffith | 2,504 | $310,546 | | David M. Bowler | 1,594 | $193,329 | | Cheryl Norton | 5,510 | $668,905 | | Melanie M. Kennedy | 2,969 | $359,858 | | Stacy A. Mitchell | 1,023 | $124,074 |

  134. 2024 OPTION EXERCISES AND STOCK VESTED

    | (1) Represents the aggregate market value of the shares realized on vesting, calculated by multiplying the vested number of shares by the closing price of a share of common stock on the date the applicable RSUs or PSUs vested (or on the last trading day prior thereto when the vesting occurs on a non-trading day). |

  135. PENSION BENEFITS AT DECEMBER 31, 2024

    PENSION BENEFITS AT DECEMBER 31, 2024 The following table presents certain information regarding pension benefits for Ms. Norton at December 31, 2024.

  136. PENSION BENEFITS AT DECEMBER 31, 2024

    | Name | Plan Name (1) | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($)(2) | Payments During Last Fiscal Year ($) | | M. Susan Hardwick | N/A | N/A | N/A | N/A | | John C. Griffith | N/A | N/A | N/A | N/A | | David M. Bowler | N/A | N/A | N/A | N/A | | Cheryl Norton (3) | ERP | 36 | $6,086,970 | N/A | | | AWWPP | 36 | $2,155,945 | N/A | | Melanie M. Kennedy | N/A | N/A | N/A | N/A | | Stacy A. Mitchell | N/A | N/A | N/A | N/A |

  137. PENSION BENEFITS AT DECEMBER 31, 2024

    | (1) Since Mses. Hardwick, Kennedy and Mitchell, and Messrs. Griffith and Bowler, were hired after January 1, 2006, they were not eligible to participate in the AWWPP or the ERP. |

  138. PENSION BENEFITS AT DECEMBER 31, 2024

    | (2) Amounts shown reflect the present value of the accumulated benefit as of December 31, 2024. All amounts for the AWWPP and the ERP were determined using the same interest and mortality assumptions as those used for financial reporting purposes. The following assumptions were used to calculate pension values at the following measurement dates: |

  139. PENSION BENEFITS AT DECEMBER 31, 2024

    | · | In 2024, for discounting annuity payments, we used a discount rate of 5.70 percent and the Pri-2012 mortality base table with a 0.94 multiplier projected forward using generational Mortality Projection Scale MP-2021, and for calculating lump sums, we used an interest rate of 5.70 percent and the IRS Prescribed Table for Lump Sums for 2025. |

  140. PENSION BENEFITS AT DECEMBER 31, 2024

    | · | In 2023, for discounting annuity payments, we used a discount rate of 5.18 percent and the Pri-2012 mortality base table projected forward using generational Mortality Projection Scale MP-2021, and for calculating lump sums, we used an interest rate of 5.18 percent and the IRS Prescribed Table for 2024. |

  141. PENSION BENEFITS AT DECEMBER 31, 2024

    | (3) Ms. Norton is eligible for a subsidized early retirement benefit payable in the form of an annuity under the provisions of the AWWPP and the ERP. |

  142. PENSION BENEFITS AT DECEMBER 31, 2024

    | 52 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  143. PENSION BENEFITS AT DECEMBER 31, 2024

    For further information on American Water’s defined benefit pension plans, see “—Description of Pension and Other Retirement Plans” below and “—Potential Payments on Termination or Change of Control—AWWPP and ERP.”

  144. AWWPP

    AWWPP The AWWPP is a qualified pension plan that is generally available to eligible employees who commenced employment with us prior to January 1, 2006. The AWWPP generally provides participants hired prior to July 1, 2001, including Ms. Norton, a grandfathered benefit. For years of service prior to July 1, 2001, the grandfathered benefit is calculated to be:

  145. AWWPP

    | · | 1.85 percent of the final average pay up to the Social Security average wage base multiplied by years of service (up to a maximum of 25 years of service through July 1, 2001), plus |

  146. AWWPP

    | · | 2.1 percent of final average pay in excess of the Social Security average wage base multiplied by years of service (up to a maximum of 25 years of service through July 1, 2001), plus |

  147. AWWPP

    | · | 0.7 percent of final average pay multiplied by years of service in excess of 25 years of service through July 1, 2001. |

  148. AWWPP

    For years of service after July 1, 2001, for participants hired prior to July 1, 2001, the grandfathered benefit is calculated to be:

  149. AWWPP

    | · | 1.6 percent of final average pay up to the Social Security average wage base multiplied by years of service after July 1, 2001 (up to a maximum of 25 years of service, including service prior to July 1, 2001), plus |

  150. AWWPP

    | · | 2.1 percent of final average pay in excess of the Social Security average wage base multiplied by |

  151. AWWPP

    | years of service after July 1, 2001, (up to a maximum of 25 years of service, including service prior to July 1, 2001), plus |

  152. AWWPP

    | · | 1.6 percent of final average pay multiplied by years of service after July 1, 2001, in excess of 25 years of service, including service prior to July 1, 2001. |

  153. AWWPP

    Final average pay is defined for purposes of the plan as the average sum of base pay plus APP payout for the highest 60 consecutive months out of the final 120 months of employment. Normal retirement is defined as age 65, and early retirement eligibility is satisfied when an employee’s age is at least 55 and the employee has attained a service requirement that varies based on whether the employee is in a grandfathered group and, if so, the location of such group. Benefits vest in the AWWPP upon completion of five years of service. Ms. Norton is vested in her pension benefits. The normal form of payment is a single life annuity for single participants and a 50 percent joint and survivor annuity for married participants. The 50 percent joint and survivor annuity benefit amount is determined to be actuarially equivalent to the single life annuity amount. The plan provisions include a reduction in benefits for early retirement for participants other than those who retire at age 62 or older with specified service levels, such as 20 years of service for someone who is age 62.

  154. 2024 NONQUALIFIED DEFERRED COMPENSATION

    2024 NONQUALIFIED DEFERRED COMPENSATION The following table presents certain information regarding the nonqualified deferred compensation benefits of all of our NEOs for 2024.

  155. 2024 NONQUALIFIED DEFERRED COMPENSATION

    | Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($)(2) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions in Last Fiscal Year ($) | Aggregate Balance at Last Fiscal Year-End ($)(3) | | M. Susan Hardwick | $165,719 | $274,667 | $94,267 | $— | $1,506,787 | | John C. Griffith | $130,856 | $169,823 | $13,879 | $— | $533,442 | | David M. Bowler | $108,833 | $55,280 | $35,226 | $— | $482,175 | | Cheryl Norton | $139,332 | $8,791 | $186,052 | $— | $1,921,608 | | Melanie M. Kennedy | $85,649 | $56,229 | $48,503 | $(19,485) | $642,935 | | Stacy A. Mitchell | $— | $29,944 | $1,651 | $— | $66,056 |

  156. 2024 NONQUALIFIED DEFERRED COMPENSATION

    | (1) The following amounts in this column are also reported as compensation to the NEOs shown in the 2024 Summary Compensation Table in the columns indicated: |

  157. 2024 NONQUALIFIED DEFERRED COMPENSATION

    | Name | Salary | Non-Equity Incentive Plan Compensation | | M. Susan Hardwick | $55,827 | $109,892 | | John C. Griffith | $50,675 | $80,181 | | David M. Bowler | $37,210 | $71,623 | | Cheryl Norton | $139,332 | $— | | Melanie M. Kennedy | $47,094 | $38,555 | | Stacy A. Mitchell | $— | $— |

  158. 2024 NONQUALIFIED DEFERRED COMPENSATION

    | (2) The amounts in this column are also reported as compensation to the NEOs in the 2024 Summary Compensation Table in the “All Other Compensation” column. |

  159. 2024 NONQUALIFIED DEFERRED COMPENSATION

    | (3) The following amounts were reported in the Summary Compensation Table in previous years as compensation to the listed NEOs: Ms. Hardwick—$924,553, Mr. Griffith—$217,277, Ms. Norton—$1,178,718, and Ms. Kennedy—$249,950. |

  160. POTENTIAL PAYMENTS ON TERMINATION OR CHANGE OF CONTROL

    POTENTIAL PAYMENTS ON TERMINATION OR CHANGE OF CONTROL This section describes the plans and arrangements that provide for payments to our NEOs in connection with certain events involving termination of employment, a change of control of American Water or a material change in employment responsibilities.

  161. Quantification of Potential Payments on Termination or Change of Control

    Quantification of Potential Payments on Termination or Change of Control The following tables quantify the potential payments and benefits to which the NEOs named below would have been entitled to receive if one of several different termination of employment or change of control events occurred on December 31, 2024. The amounts shown in the tables do not include certain payments and benefits to the extent they are provided on a non-discriminatory basis to non-union employees generally upon a termination of employment, including accrued salary and vacation pay, Savings Plan benefits, continued health and welfare coverage following an involuntary termination of employment and coverage under COBRA (other than the payment by the Company of a NEO’s COBRA premiums). All employees are also entitled to life insurance benefits of up to 1.5 times base salary, up to a maximum amount of $200,000, if death occurs while actively employed, which benefit is also not included in the tables below. The amounts shown in

  162. Quantification of Potential Payments on Termination or Change of Control

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 57 |

  163. Quantification of Potential Payments on Termination or Change of Control

    each table for “APP” are based on target performance. The amounts shown in each table below for “Deferred Compensation Benefits” reflect the value of employee and employer contributions in each NEO’s employee deferred compensation plan account as of December 31, 2024, and any acceleration of benefits provided under the terms of the Employee Deferred Compensation Plan, the Executive Severance Policy or the Change of Control Severance Policy. With regard to the portion of RSUs subject to a continuation or acceleration of vesting at December 31, 2024, the assumed values of such awards are shown in the table in the applicable columns. With regard to the portion of PSUs subject to performance-based vesting following the continuation or acceleration of time-based vesting, we have assumed that such shares will be issued in respect of the PSUs based on target performance, and that dividend equivalents will continue to accrue through the duration of the applicable performance period. For RSUs and PSUs, the values shown in the tables are based on the number of RSUs or PSUs multiplied by $124.49, the closing price of our common stock as reported on the NYSE on December 31, 2024, the last trading day of the year. In addition, the value of accumulated dividends (and, for awards that remain subject to performance conditions through the end of the performance period, expected dividends for the remainder of the performance period) is included.

  164. Quantification of Potential Payments on Termination or Change of Control

    | Name | Benefit | Voluntary Termination | Early/ Normal Retirement | Involuntary Termination without Cause | Voluntary Termination for Good Reason | Involuntary Termination for Cause | Involuntary Termination without Cause Following a Change of Control | Disability | Death | | M. Susan Hardwick | Cash Severance | $— | $— | $1,687,500 | $— | $— | $8,410,833 | $— | $— | | | APP | $— | $— | $1,397,045 | $— | $— | $— | $— | $— | | | Outplacement Services | $— | $— | $15,000 | $— | $— | $15,000 | $— | $— | | | Deferred Compensation Benefits | $1,193,596 | $1,193,596 | $1,193,596 | $1,193,596 | $— | $1,193,596 | $1,193,596 | $1,193,596 | | | COBRA Premiums | $— | $— | $— | $— | $— | $18,698 | $— | $— | | | RSUs and PSUs | $— | $9,546,952 | $— | $— | $— | $9,205,639 | $— | $— | | | Total | $1,193,596 | $10,740,548 | $4,293,141 | $1,193,596 | $— | $18,843,766 | $1,193,596 | $1,193,596 | | Name | Benefit | Voluntary Termination | Early/ Normal Retirement | Involuntary Termination without Cause | Voluntary Termination for Good Reason | Involuntary Termination for Cause | Involuntary Termination without Cause Following a Change of Control | Disability | Death | | John C. Griffith | Cash Severance | $— | $— | $1,425,000 | $— | $— | $5,821,614 | $— | $— | | | APP | $— | $— | $849,443 | $— | $— | $— | $— | $— | | | Outplacement Services | $— | $— | $15,000 | $— | $— | $15,000 | $— | $— | | | Deferred Compensation Benefits | $252,533 | $252,533 | $252,533 | $252,533 | $— | $329,649 | $252,533 | $329,649 | | | COBRA Premiums | $— | $— | $— | $— | $— | $49,616 | $— | $— | | | RSUs and PSUs | $— | $— | $— | $— | $— | $4,352,196 | $— | $— | | | Total | $252,533 | $252,533 | $2,541,976 | $252,533 | $— | $10,568,075 | $252,533 | $329,649 |

  165. Quantification of Potential Payments on Termination or Change of Control

    | 58 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  166. Quantification of Potential Payments on Termination or Change of Control

    | Name | Benefit | Voluntary Termination | Early/ Normal Retirement | Involuntary Termination without Cause | Voluntary Termination for Good Reason | Involuntary Termination for Cause | Involuntary Termination without Cause Following a Change of Control | Disability | Death | | David M. Bowler | Cash Severance | $— | $— | $550,000 | $— | $— | $1,609,552 | $— | $— | | | APP | $— | $— | $303,514 | $— | $— | $— | $— | $— | | | Outplacement Services | $— | $— | $15,000 | $— | $— | $15,000 | $— | $— | | | Deferred Compensation Benefits | $317,397 | $317,397 | $366,384 | $317,397 | $— | $366,384 | $317,397 | $366,384 | | | COBRA Premiums | $— | $— | $— | $— | $— | $49,616 | $— | $— | | | RSUs and PSUs | $— | $— | $— | $— | $— | $904,822 | $— | $— | | | Total | $317,397 | $317,397 | $1,234,898 | $317,397 | $— | $2,945,374 | $317,397 | $366,384 | | Name | Benefit | Voluntary Termination | Early/ Normal Retirement | Involuntary Termination without Cause | Voluntary Termination for Good Reason | Involuntary Termination for Cause | Involuntary Termination without Cause Following a Change of Control | Disability | Death | | Cheryl Norton | Cash Severance | $— | $— | $710,000 | $— | $— | $2,728,110 | $— | $— | | | APP | $— | $607,784 | $607,784 | $— | $— | $— | $— | $— | | | Outplacement Services | $— | $— | $15,000 | $— | $— | $15,000 | $— | $— | | | Deferred Compensation Benefits | $1,921,608 | $1,921,608 | $1,921,608 | $1,921,608 | $— | $1,921,608 | $1,921,608 | $1,921,608 | | | Nonqualified Pension Benefits | $6,548,369 | $6,548,369 | $6,548,369 | $6,548,369 | $6,548,369 | $6,548,369 | $7,117,793 | $5,352,404 | | | Qualified Pension Benefits | $2,232,980 | $2,232,980 | $2,232,980 | $2,232,980 | $2,232,980 | $2,232,980 | $2,744,822 | $2,002,945 | | | COBRA Premiums | $— | $— | $— | $— | $— | $38,962 | $— | $— | | | RSUs and PSUs | $— | $2,825,366 | $— | $— | $— | $2,721,394 | $— | $— | | | Total | $10,702,957 | $14,136,107 | $12,035,741 | $10,702,957 | $8,781,349 | $16,206,423 | $11,784,223 | $9,276,957 | | Name | Benefit | Voluntary Termination | Early/ Normal Retirement | Involuntary Termination without Cause | Voluntary Termination for Good Reason | Involuntary Termination for Cause | Involuntary Termination without Cause Following a Change of Control | Disability | Death | | Melanie M. Kennedy | Cash Severance | $— | $— | $473,741 | $— | $— | $1,725,430 | $— | $— | | | APP | $— | $— | $306,346 | $— | $— | $— | $— | $— | | | Outplacement Services | $— | $— | $15,000 | $— | $— | $15,000 | $— | $— | | | Deferred Compensation Benefits | $559,800 | $559,800 | $559,800 | $559,800 | $— | $559,800 | $559,800 | $559,800 | | | COBRA Premiums | $— | $— | $— | $— | $— | $49,616 | $— | $— | | | RSUs and PSUs | $— | $— | $— | $— | $— | $1,088,433 | $— | $— | | | Total | $559,800 | $559,800 | $1,354,887 | $559,800 | $— | $3,438,279 | $559,800 | $559,800 |

  167. Quantification of Potential Payments on Termination or Change of Control

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 59 |

  168. Quantification of Potential Payments on Termination or Change of Control

    | Name | Benefit | Voluntary Termination | Early/Normal Retirement | Involuntary Termination without Cause | Voluntary Termination for Good Reason | Involuntary Termination for Cause | Involuntary Termination without Cause Following a Change of Control | Disability | Death | | Stacy A. Mitchell | Cash Severance | $— | $— | $550,000 | $— | $— | $1,512,654 | $— | $— | | | APP | $— | $— | $293,013 | $— | $— | $— | $— | $— | | | Outplacement Services | $— | $— | $15,000 | $— | $— | $15,000 | $— | $— | | | Deferred Compensation Benefits | $41,855 | $41,855 | $41,855 | $41,855 | $— | $41,855 | $41,855 | $41,855 | | | COBRA Premiums | $— | $— | $— | $— | $— | $52,487 | $— | $— | | | RSUs and PSUs | $— | $— | $— | $— | $— | $749,659 | $— | $— | | | Total | $41,855 | $41,855 | $899,868 | $41,855 | $— | $2,371,655 | $41,855 | $41,855 |

  169. Quantification of Potential Payments on Termination or Change of Control

    | 60 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  170. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE The following table provides information showing the relationship during 2024, 2023, 2022, 2021 and 2020 between (1) executive compensation “actually paid” (as defined by SEC rule) to (a) each person serving as our principal executive officer, or PEO, and (b) all of our other NEOs on an average basis, and (2) the Company’s financial performance.

  171. PAY VERSUS PERFORMANCE

    | | | | | | | | Value of Initial Fixed $100 | | | | | Year | Summary Compensation Table Total for PEO Serving at End of Year | Compensation Actually Paid to PEO Serving at End of Year(1) | Summary Compensation Table Total for Other PEO Serving During Year | Compensation Actually Paid to Other PEO Serving During Year(1) | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs(1) | Company TSR | Compensation Peer Group TSR (2) | Net Income (in millions) | EPS/ Adjusted EPS(3) | | 2024 | $8,580,730 (4) | $7,829,705 (4) | N/A | N/A | $2,957,990 (5) | $2,438,759 (5) | $96.48 | $121.95 | $1,051 | $5.32 | | 2023 | $7,720,825 (4) | $6,663,470 (4) | N/A | N/A | $3,208,811 (5) | $2,296,630 (5) | $88.32 | $94.14(6) | $944 | $4.89 | | 2022 | $6,720,753 (4) | $6,550,865 (4) | $1,522,833 (7) | $544,611 (7) | $2,826,346 (5) | $2,788,422 (5) | $130.03 | $106.97(6) | $820 | $4.50 | | 2021 | $7,398,128 (7) | $8,409,238 (7) | N/A | N/A | $1,839,683 (5) | $2,025,485 (5) | $158.36 | $105.88 | $1,263 | $4.27 | | 2020 | $5,675,833 (8) | $7,196,530 (8) | $4,072,322 (8) | $10,040,238 (8) | $1,715,619 (5) | $1,986,287 (5) | $126.88 | $91.15 | $709 | $3.91 |

  172. PAY VERSUS PERFORMANCE

    | (1) The table below sets forth each of the amounts required by SEC rule to be deducted from and added to the amount of total compensation as reflected in the Summary Compensation Table, to calculate compensation actually paid. In computing these amounts with respect to PSUs, (i) total fair value (FV) as of year-end is based on the updated expected payout of the PSU using data through year-end (including as estimated through Monte Carlo simulations), and (ii) total FV as of the vesting date is based on the number of shares actually earned based on performance . |

  173. PAY VERSUS PERFORMANCE

    | | 2024 | | 2023 | | 2022 | | | 2021 | | 2020 | | | | Adjustments to Total Compensation, from Summary Compensation Table | PEO at End of Year | All Average NEOs | PEO at End of Year | All Average NEOs | PEO Serving at End of Year | Other PEO Serving During Year | All Average NEOs | PEO Serving at End of Year | All Average NEOs | PEO Serving at End of Year | Other PEO Serving During Year | All Average NEOs | | Total Compensation, from Summary Compensation Table | $8,580,730 | $2,957,990 | $7,720,825 | $3,208,811 | $6,720,753 | $1,522,833 | $2,826,346 | $7,398,128 | $1,839,683 | $5,675,833 | $4,072,322 | $1,715,619 | | Deduct grant date fair value of equity awards granted during the year | $(4,881,557) | $(1,151,400) | $(4,654,564) | $(1,191,531) | $(4,067,077) | $(290,791) | $(1,352,217) | $(3,999,969) | $(689,695) | $(2,543,912) | $(3,499,895) | $(530,355) | | Add year-end FV of equity awards granted during year that are outstanding and unvested as of year-end | $5,038,937 | $1,148,910 | $4,312,502 | $1,103,938 | $3,974,063 | $— | $1,315,031 | $4,011,528 | $706,983 | $3,504,752 | $4,633,888 | $632,680 | | Add change in FV as of year-end of equity awards granted in prior years that are outstanding and unvested as of year-end | $(796,584) | $(161,524) | $(705,528) | $(238,561) | $78,663 | $318,793 | $8,930 | $1,430,514 | $321,927 | $1,334,571 | $4,402,666 | $411,387 | | Add change in FV from end of the prior fiscal year to the vesting date for equity awards granted in prior years that vested during the year | $(111,821) | $(27,665) | $(9,765) | $870 | $(155,537) | $(461,447) | $(57,025) | $116,792 | $23,821 | $156,075 | $431,257 | $32,566 | | Deduct FV at the end of the prior fiscal year for equity awards granted in prior years that were forfeited during the year | $— | $— | $— | $— | $— | $(1,041,948) | $— | $— | $— | $— | $— | $(92,035) | | Deduct change in actuarial present value for all defined benefit and acturial pension plans | $— | $(360,504) | $— | $(624,104) | $— | $— | $— | $(1,017,097) | $(226,613) | $(1,191,466) | $— | $(203,161) | | Add ASC 715 pension service cost attributable to services rendered in the year | $— | $32,952 | $— | $37,207 | $— | $497,171 | $47,357 | $469,342 | $49,379 | $260,677 | $— | $19,586 | | Compensation Actually Paid (as defined by SEC rule) | $7,829,705 | $2,438,759 | $6,663,470 | $2,296,630 | $6,550,865 | $544,611 | $2,788,422 | $8,409,238 | $2,025,485 | $7,196,530 | $10,040,238 | $1,986,287 |

  174. PAY VERSUS PERFORMANCE

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 61 |

  175. PAY VERSUS PERFORMANCE

    | (2) The identity of the companies, and the analysis utilized by the ED&CC to review and approve changes, in the peer group for 2024, 2023, 2022, 2021 and 2020 are incorporated by reference from the descriptions contained in “—Compensation Discussion and Analysis—Compensation Determinations and Pay Competitiveness” in this proxy statement and in the corresponding sections of our 2024, 2023, 2022 and 2021 proxy statements. The peer groups for 2024, 2023 and 2022 were comprised of the same companies, except that UGI Corporation replaced Public Service Enterprise Group Incorporated, beginning with the 2023 peer group. The peer groups for 2021 and 2020 were comprised of the same companies as for 2022, except that MDU Resources Group, Inc., which had been included in the 2021 and 2020 peer groups, was replaced by Essential Utilities, Inc. in 2022. |

  176. PAY VERSUS PERFORMANCE

    | (3) This metric is the Company-Selected Measure, which in our assessment represents the most important financial performance measure that we use to link compensation “actually paid” (as defined by SEC rule) in 2024 to our NEOs. Adjusted EPS for 2024, 2023, 2022 and 2021 is a non-GAAP measure. See Part A of Appendix A for a reconciliation. |

  177. PAY VERSUS PERFORMANCE

    | (4) Ms. Hardwick has been serving as our PEO effective as of February 2, 2022. |

  178. PAY VERSUS PERFORMANCE

    | (5) The persons included as the other NEOs in this calculation for each year are: (i) for 2024, Mses. Kennedy, Norton and Mitchell, and Messrs. Bowler and Griffith; (ii) for 2023 and 2022, Mses. Kennedy and Norton, and James H. Gallegos and Mr. Griffith; (iii) for 2021, Mses. Kennedy, Hardwick and Norton, and Adam Noble and Michael A. Sgro; and (iv) for 2020, Ms. Hardwick, and Brian Chin, Bruce A. Hauk, Mr. Sgro and Loyd A. Warnock. |

  179. PAY VERSUS PERFORMANCE

    | (6) The cumulative TSR reported above for the Company’s peer group for (i) 2023 ($94.14) would have been $92.18 if the companies in the 2022 peer group had been used instead and (ii) 2022 ($106.97) would have been $106.63 if the companies in the 2021 peer group had been used instead. There were no peer group changes that impacted compensation for 2024, 2021 or 2020. |

  180. PAY VERSUS PERFORMANCE

    | (7) During 2021, Walter J. Lynch served as our PEO until his retirement on February 2, 2022. |

  181. PAY VERSUS PERFORMANCE

    | (8) Mr. Lynch was PEO as of December 31, 2020, after succeeding Susan N. Story as our PEO upon her retirement effective April 1, 2020. |

  182. PAY VERSUS PERFORMANCE

    The following is an unranked tabular list of the most important financial and non-financial measures that we use to link compensation “actually paid” (as defined by SEC rule and set forth above) to all of our NEOs during 2024 to our performance. The Company-Selected Measure is denoted with an asterisk.

  183. PAY VERSUS PERFORMANCE

    | Tabular List of Performance Measures | | | Financial | Non-Financial | | EPS* | DART | | EPS CAGR | Drinking Water Quality | | Relative TSR | Customer Satisfaction | | ROE | |

  184. PAY VERSUS PERFORMANCE

    The following graphs present the relationship during 2024, 2023, 2022, 2021 and 2020 between (1) executive compensation “actually paid” (as defined by SEC rule and shown above) to (a) each person serving as PEO and (b) all of our other NEOs on an average basis, and each of (2) (a) our cumulative TSR for such years, (b) our GAAP net income for such years, and (c) the Company-Selected Measure for such years, and a comparison of the cumulative TSR for such years of us and our peer group.

  185. PAY VERSUS PERFORMANCE

    | 62 | | AMERICAN WATER | 2025 PROXY STATEMENT |

  186. PAY VERSUS PERFORMANCE

    | * 2021, 2022, 2023 and 2024 results reflect Adjusted EPS. See Appendix A for a reconciliation of Adjusted EPS. |

  187. PAY VERSUS PERFORMANCE

    Executive compensation “actually paid” (as defined by SEC rule) in the table and graphs above reflects the occurrence of CEO transitions in 2020 and 2022, each of which resulted in the promotion of an existing member of the Company’s executive leadership team. The net income relationship graph above for 2021 also reflects (i) the gain on sale of the Company’s Homeowner Services Group of $491 million after-tax, (ii) the Company’s $45 million contribution to the American Water Charitable Foundation in 2021, and (iii) the revaluation of certain state net operating losses.

  188. CEO PAY RATIO

    CEO PAY RATIO Pursuant to SEC rules, we are required to disclose in this proxy statement the ratio of the annual total compensation of our CEO to the annual total compensation of our “median employee” (excluding the CEO). The identification of this median employee and the calculation of our CEO to median employee pay ratio were made in a manner we believe to be consistent with Item 402(u) of Regulation S-K. In this regard:

  189. CEO PAY RATIO

    | · | We identified the median employee in 2024 by examining the 2024 W-2 earnings for all individuals, excluding Ms. Hardwick, who were employed by us on December 31, 2024. We believe that the use of W-2 earnings represents an objective, easily understood and consistently applied measure of compensation paid across our entire employee base. |

  190. CEO PAY RATIO

    | · | We included 6,706 employees located in the United States as of December 31, 2024, which includes full-time, part-time, seasonal and temporary employees. We did not have any employees located outside of the United States as of December 31, 2024. |

  191. CEO PAY RATIO

    | · | We did not include leased employees or independent contractors. |

  192. CEO PAY RATIO

    | · | We did not make any assumptions, adjustments (such as cost-of-living adjustments) or estimates with respect to W-2 income other than annualizing the compensation of permanent employees that were employed as of December 31, 2024 but were employed for less than the full year. |

  193. CEO PAY RATIO

    After identifying the median employee, we calculated that employee’s annual total compensation using the same methodology that we use for all of our NEOs in the 2024 Summary Compensation Table. The annual total compensation for fiscal year 2024 for Ms. Hardwick, determined as described above, and for the median employee was $8,580,730 and $107,694, respectively. The resulting ratio of Ms. Hardwick’s pay to the pay of our median employee for fiscal year 2024 is 80 to 1. As contemplated by Item 402(u) of Regulation S-K and related interpretations, we relied on methods and assumptions that we determined to be reasonable and appropriate for this calculation. Other public companies may use different methods and assumptions. It may therefore be difficult, for this and other reasons, to compare our reported ratio to those reported by other companies.

  194. CEO PAY RATIO

    | AMERICAN WATER | 2025 PROXY STATEMENT | | 63 |

  195. STATUS OF INFORMATION INCLUDED IN THIS PROXY STATEMENT

    | · | the information contained in “Executive Compensation—Pay Versus Performance”; |