Tennessee Valley Authority resets 2027 pay metrics
Rhea-AI Filing Summary
Tennessee Valley Authority (TVC) reports that its Board approved updated incentive plan scorecards and goals covering fiscal year 2027 and multiple Long-Term Incentive Plan (LTIP) performance cycles. These actions affect the Winning Performance Team Incentive Plan (WPTIP), Executive Annual Incentive Plan (EAIP), and LTIP, which together govern variable pay for leadership and eligible employees.
For FY 2027, the Enterprise Scorecard for WPTIP and EAIP uses five measures: Personal Safety, Nuclear Reliability, Transmission Reliability, Generation Reliability, and Cost Performance, weighted 15%, 15%, 15%, 15%, and 40%, respectively. Examples of 2027 targets include a Serious Injury Incident Rate of 0.01, Nuclear Reliability at 2.00% Annualized Online Reliability Loss Factor, and balanced budget-level Cost Performance based on FY 2027 non-fuel O&M and capital spending.
The Board also set LTIP performance measures and goals for the FY 2027–FY 2029 cycle, with 20% weight on a Stakeholder Survey (target score 80.0), 20% on Project Milestones (target 90% completed on or ahead of schedule), and 60% on cumulative Total Spend versus the FY 2027 budget. In addition, TVA revised Total Spend and SBU Controllable O&M and Base Capital Spend goals for existing LTIP cycles (FY 2024–2026, 2025–2027, 2026–2028) and the FY 2026 EAIP/WPTIP, aligning thresholds, targets, and stretch goals with updated strategic initiatives and project portfolios.
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8-K Event Classification
Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers
1 item
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers
Governance
Key personnel changes including departures, elections, or appointments of directors and executive officers.
Key Figures
FY 2027 Personal Safety Target (Serious Injury Incident Rate): 0.01
FY 2027 Nuclear Reliability Target: 2.00%
FY 2027 Cost Performance Weight: 40%
+4 more
7 metrics
FY 2027 Personal Safety Target (Serious Injury Incident Rate)
0.01
Target level for FY 2027 Enterprise Scorecard Personal Safety metric
FY 2027 Nuclear Reliability Target
2.00%
Annualized Online Reliability Loss Factor target for FY 2027
FY 2027 Cost Performance Weight
40%
Weight of Cost Performance in FY 2027 WPTIP and EAIP Enterprise Scorecard
FY 2026 SBU Spend Target
$4,679
Target SBU Controllable O&M and Base Capital Spend for FY 2026 under WPTIP and EAIP
LTIP FY 2024–2026 Total Spend Target
$17,844
Target cumulative Total Spend for FY 2024–FY 2026 LTIP performance cycle
LTIP FY 2025–2027 Total Spend Target
$25,290
Target cumulative Total Spend for FY 2025–FY 2027 LTIP performance cycle
LTIP FY 2026–2028 Total Spend Target
$22,582
Target cumulative Total Spend for FY 2026–FY 2028 LTIP performance cycle
Key Terms
Winning Performance Team Incentive Plan, Executive Annual Incentive Plan, Long-Term Incentive Plan, Equivalent Forced Outage Rate, +1 more
5 terms
Winning Performance Team Incentive Plan financial
"Enterprise Scorecard for the Winning Performance Team Incentive Plan"
Executive Annual Incentive Plan financial
"Enterprise Scorecard for the Winning Performance Team Incentive Plan and Executive Annual Incentive Plan"
Long-Term Incentive Plan financial
"performance cycle under the Long-Term Incentive Plan"
A long-term incentive plan is a company program that pays executives or employees with stock, options, or cash tied to multi-year performance goals, where the rewards become theirs only after meeting conditions over time. Think of it as a delayed bonus or retirement-style reward that aligns employees’ interests with shareholders by encouraging them to boost long-term value; investors watch these plans because they affect pay costs, share dilution and management incentives.
Equivalent Forced Outage Rate technical
"Combined Cycle Equivalent Forced Outage Rate"
Load Not Served technical
"Load Not Served ("LNS") is a measure of the magnitude"
FAQ
What executive and employee incentive plans did TVA (TVC) update in this 8-K?
TVA updated performance measures and goals for three plans: the Winning Performance Team Incentive Plan (WPTIP), the Executive Annual Incentive Plan (EAIP) for FY 2027, and the Long-Term Incentive Plan (LTIP) for the FY 2027–FY 2029 cycle and several existing LTIP cycles.
What are the main FY 2027 Enterprise Scorecard measures for TVA (TVC) incentives?
The FY 2027 Enterprise Scorecard for WPTIP and EAIP includes five measures: Personal Safety, Nuclear Reliability, Transmission Reliability, Generation Reliability, and Cost Performance, with respective weights of 15%, 15%, 15%, 15%, and 40% toward short-term incentive payouts.
How is cost performance measured for TVA’s FY 2027 incentives?
The FY 2027 Cost Performance metric (40% weight) compares total Non-Fuel O&M and Base Capital spending for corporate and operational SBUs to the FY 2027 budget. Threshold performance is at 3% O&M / 5% Capital over budget, target at budget, and stretch at 3% O&M / 5% Capital under budget.
What are the key LTIP measures for TVA (TVC) for FY 2027–FY 2029?
For FY 2027–FY 2029, LTIP measures are: Stakeholder Survey (20% weight; target score 80.0), Project Milestones (20%; target 90% of milestones completed on or ahead of schedule), and Total Spend (60%; based on cumulative Non-Fuel O&M, Capital, Inventory, and Cloud Implementation versus the FY 2027 budget).
How did TVA change FY 2026 SBU Controllable O&M and Base Capital Spend goals?
For FY 2026 WPTIP and EAIP, TVA set SBU Controllable O&M and Base Capital Spend at a $4,794 threshold, $4,679 target, and $4,565 stretch level. This metric equals Non-Fuel O&M and Base Capital expenses for corporate and operational SBU organizations, excluding the Board.
What revised LTIP Total Spend targets did TVA (TVC) disclose for existing cycles?
For LTIP Total Spend (60% weight), TVA set target cumulative spend of $17,844 for FY 2024–2026, $25,290 for FY 2025–2027, and $22,582 for FY 2026–2028, with higher threshold and lower stretch amounts framing the performance range for each cycle.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13, 15(d), or 37 of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 20, 2026
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 20, 2026, the Board of Directors (“Board”) of the Tennessee Valley Authority (“TVA”) took several actions related to compensation. The TVA Board (1) established FY 2027 performance measures and goals for the Enterprise Scorecard for the Winning Performance Team Incentive Plan (“WPTIP”) and Executive Annual Incentive Plan (“EAIP”), (2) established performance measures and goals for the FY 2027 – FY 2029 performance cycle under the Long-Term Incentive Plan (“LTIP”), and (3) approved changes to existing incentive plan measures and goals. Each of these items is discussed in more detail below.
FY 2027 Enterprise Scorecard for WPTIP and EAIP
The Board established the following performance measures and goals for the Enterprise Scorecard for both the WPTIP and the EAIP for FY 2027:
| Performance Measure | Weight | Threshold | Target | Stretch | ||||||||||
Personal Safety (1) | 15% | 0.03 | 0.01 | 0.00 | ||||||||||
Nuclear Reliability (2) | 15% | 2.50% | 2.00% | Comparable Fleet Top Decile 24-month Average as of September 2026 | ||||||||||
Transmission Reliability (3) | 15% | 50 | 100 | 150 | ||||||||||
Generation Reliability (4) | 15% | 50 | 100 | 150 | ||||||||||
Cost Performance (5) | 40% | 3% SBU O&M / 5% Capital over Budget | FY 2027 Budget | 3% SBU O&M / 5% Capital under Budget | ||||||||||
Notes
(1) The Personal Safety metric is the Serious Injury Incident Rate, which is a mathematical calculation used by Edison Electric Institute that quantifies the extent of injury for serious injuries and fatalities from events within the control of the employee and/or the employer.
(2) The Nuclear Reliability metric is the Annualized Online Reliability Loss Factor, which is the 12-month ratio of all generation losses minus refueling outage ("RFO") and exempt losses to reference energy generation minus RFO and exempt losses in a normal fuel cycle period, per standard industry guidelines. This measure monitors performance between refueling outages to obtain high unit and energy production reliability.
(3) The Transmission Reliability metric is an aggregate measure of the overall reliability of TVA's transmission system. See Transmission Reliability below.
(4) The Generation Reliability metric is an aggregate measure of the overall reliability of TVA's power operations generation fleet based on key performance measures in Gas, Hydro, and Coal that are intended to ensure that TVA's fleet of power operations generation assets are available and reliable to meet system demand. See Generation Reliability below.
(5) The Cost Performance metric equals the total Non-Fuel Operating & Maintenance ("O&M") and Base Capital expenses for corporate and operational Strategic Business Unit ("SBU") organizations (excluding the Board).
| Transmission Reliability | Weight | Threshold | Target | Stretch | ||||||||||
Load Not Served (1) | 60% | 4.4 | 3.6 | 2.7 | ||||||||||
Outages per Hundred Miles per Year (2) | 20% | 2.87 | 2.61 | 1.98 | ||||||||||
Connection Point Interruption Frequency (3) | 20% | 0.64 | 0.53 | 0.34 | ||||||||||
Notes
(1) Load Not Served ("LNS") is a measure of the magnitude and duration of transmission system outages that affect TVA customers expressed in system minutes. TVA manages this critical indicator to reduce the impact of customer outages. An automatic customer interruption with a duration of one minute or greater is tracked as an LNS event. LNS events caused by TVA on a distributor system will also count as a TVA event even if the TVA system remains energized. LNS excludes interruptions due to declared major events, variances, verified tornadoes, gunfire, vandalism, ice formation, and foreign object/vehicle (DUI, DWI, hit and run, or suicide).
(2) Outages per Hundred Miles per Year ("OHMY") is the number of automatic interruptions (sustained and momentary) to lines greater than or equal to 100-kV per 100 miles of transmission line per year. OHMY excludes interruptions due to declared major events, variances, verified tornadoes, gunfire, vandalism, ice formation, foreign object/vehicle (DUI, DWI, hit and run, or suicide), and nested interruptions.
(3) Connection Point Interruption Frequency ("CPIF") measures reliability from the customer's perspective. CPIF tracks interruptions of power, including momentary interruptions, at connection points caused by the transmission system. CPIF includes automatic and emergency forced outages and excludes prearranged (scheduled or planned) and operational outages as well as interruptions due to declared major events, variances, verified tornadoes, gunfire, vandalism, ice formation, and foreign object/vehicle (DUI, DWI, hit and run, or suicide).
| Generation Reliability | Weight | Threshold | Target | Stretch | ||||||||||
Combined Cycle Equivalent Forced Outage Rate (1) | 45% | 2.5% | 1.7% | 1.1% | ||||||||||
Hydro Equivalent Forced Outage Rate (2) | 25% | 3.7% | 2.3% | 1.9% | ||||||||||
Coal Equivalent Forced Outage Rate (3) | 25% | 4.0% | 3.0% | 2.0% | ||||||||||
Combustion Turbine Economic Starting Reliability (4) | 5% | 99.1% | 99.3% | 99.5% | ||||||||||
Notes
(1) Combined Cycle Equivalent Forced Outage Rate (“EFOR”) measures the generation lost due to forced events as a percentage of time the unit would have been scheduled to run for TVA-operated combined cycle generating assets, based on Generating Availability Data System (“GADS”) event reporting guidelines for megawatt hour losses. Combined Cycle EFOR excludes GADS events classified as outside management control and variances.
(2) Hydro EFOR measures the generation lost as a result of forced events as a percentage of time the unit would have been scheduled to run, based on GADS event reporting guidelines for megawatt hour losses. Hydro EFOR excludes GADS events classified as outside management control and variances.
(3) Coal EFOR measures the generation lost as a result of forced events as a percentage of time the unit would have been scheduled to run, based on GADS event reporting guidelines for megawatt hour losses. Coal EFOR excludes GADS events classified as outside management control and variances.
(4) Combustion Turbine ("CT") Economic Starting Reliability reflects the percentage of successful attempts to start up a unit for generation, performance testing, or black start over a given period that a generating unit was available for TVA-operated CT assets. Total unit performance tests demonstrate that a unit will start and perform as intended. Black start tests demonstrate that a unit will start without relying on external power and perform as intended. CT Economic Starting Reliability excludes GADS events classified as outside management control and variances.
LTIP Performance Measures and Goals for the FY 2027 - FY 2029 Performance Cycle
The Board approved LTIP performance measures and goals for the FY 2027 - FY 2029 performance cycle. These performance measures, along with their associated weights and goals, are as follows:
| Long-Term Incentive Measures | Weight | Threshold | Target | Stretch | ||||||||||
Stakeholder Survey (1) | 20% | 76.0 | 80.0 | 84.0 | ||||||||||
Project Milestones (2) | 20% | 80% | 90% | 100% | ||||||||||
Total Spend (3) | 60% | 3% Non-Fuel O&M, Inventory, and Cloud Spend / 5% Capital Spend Over Budget | FY 2027 - FY 2029 Cumulative Total Spend Based on the FY 2027 Budget | 3% Non-Fuel O&M, Inventory, and Cloud Spend / 5% Capital Spend Under Budget | ||||||||||
Notes
(1) The Stakeholder Survey is conducted among customers, elected officials, business/economic development leaders, and the general public in the TVA service area to assess the strength of various stakeholder relationships with TVA. This measure supports the effective management of TVA's reputation and ability to achieve desired outcomes and deliver on strategic priorities with stakeholders.
(2) For purposes of the Project Milestones measure and related goals, Project Milestones are defined as Board approved projects over $200 million and those considered critical to achieving TVA's mission (projects that extend the life of assets, increase capacity, connect large customers over 100 megawatts to TVA's system, or support regulatory commitments). Milestones will either be identified at the time of scorecard approval for existing projects or in preparation for project approval through TVA's portfolio management process for new projects. Project Milestones will be calculated by dividing the number of milestones completed on or ahead of schedule by the number of milestones included in the approved milestones list. Projects and milestones may be added or removed as a result of Board decisions or factors outside of management's control, such as external regulatory decisions, legal determinations, or extreme weather conditions (such as floods, wildfires, and winter storms). Changes to the approved milestones list will require approval of the Chair of the People and Governance Committee upon the recommendation of the Chief Executive Officer.
(3) Total Spend represents total Non-Fuel O&M, Capital, Non-Fuel Inventory, and Cloud Implementation expenses for corporate and operational SBU organizations (excluding the Board). This measure will support the overall TVA goal of maintaining costs and managing rates based on spending levels approved by TVA management and the Board.
Changes to Existing Incentive Plan Measures and Goals
The Board approved changes to the measures and goals for the SBU Controllable O&M and Base Capital Spend metric for FY 2026 under the WPTIP and EAIP as well as the measures and goals for the Total Spend metric for the FY 2024 – FY 2026, FY 2025 – FY 2027, and FY 2026 – FY 2028 performance cycles under the LTIP in order to reflect changes in strategic initiatives and projects. The revised measures and goals are set forth below.
FY 2026 EAIP and WPTIP
| Performance Measure | Weight | Threshold | Target | Stretch | ||||||||||
SBU Controllable O&M and Base Capital Spend (1) | 40% | $4,794 | $4,679 | $4,565 | ||||||||||
Note
(1) SBU Controllable O&M and Base Capital Spend equals the total Non-Fuel O&M and Base Capital expenses for corporate and operational SBU organizations (excluding the Board).
FY 2024 - FY 2026 LTIP Performance Cycle
| Long-Term Incentive Measures | Weight | Threshold | Target | Stretch | ||||||||||
Total Spend (1) | 60% | $18,399 | $17,844 | $17,289 | ||||||||||
Note
(1) Total Spend equals the total Non-Fuel O&M, Capital, Non-Fuel Inventory, and Cloud Implementation expenses for corporate and operational SBU organizations (excluding the Board). This measure will support the overall TVA goal of maintaining costs and managing rates based on spending levels approved by TVA management and the Board.
FY 2025 - FY 2027 LTIP Performance Cycle
| Long-Term Incentive Measures | Weight | Threshold | Target | Stretch | ||||||||||
Total Spend (1) | 60% | $26,064 | $25,290 | $24,515 | ||||||||||
Note
(1) Total Spend equals the total Non-Fuel O&M, Capital, Non-Fuel Inventory, and Cloud Implementation expenses for corporate and operational SBU organizations (excluding the Board). This measure will support the overall TVA goal of maintaining costs and managing rates based on spending levels approved by TVA management and the Board.
FY 2026 - FY 2028 LTIP Performance Cycle
| Long-Term Incentive Measures | Weight | Threshold | Target | Stretch | ||||||||||
Total Spend (1) | 60% | $23,258 | $22,582 | $21,907 | ||||||||||
Note
(1) Total Spend equals the total Non-Fuel O&M, Capital, Non-Fuel Inventory, and Cloud Implementation expenses for corporate and operational SBU organizations (excluding the Board). This measure will support the overall TVA goal of maintaining costs and managing rates based on spending levels approved by TVA management and the Board.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Tennessee Valley Authority | |||||
| (Registrant) | |||||
| Date: August 25, 2026 | /s/ Thomas C. Rice | ||||
| Thomas C. Rice | |||||
| Executive Vice President and | |||||
| Chief Financial Officer | |||||