DEF: Eversource Energy's 2026 Proxy: Strong 2025 Performance, ESG Focus

Eversource Energy reports strong 2025 financial and operational performance, advances clean energy initiatives, and addresses shareholder feedback on executive compensation ahead of its 2026 Annual Meeting.

Summary

• Eversource Energy invested over $4 billion into its core businesses in 2025 to enhance reliability, harden systems against extreme weather, prepare for demand growth, and enable clean energy connections to the grid.
• The company's 2025 Total Shareholder Return (TSR) was up 22.7% for the year, ranking 8th in the Edison Electric Institute Index.
• Non-GAAP earnings per share for 2025 equaled $4.76, exceeding the earnings per share goal by $0.05, while GAAP earnings per share was $4.56.
• The annual dividend rate was increased by 5.2% for 2025 to $3.01 per share, surpassing the EEI Index companies' median dividend growth rate of 5.0%.
• Onshore substation construction for the Revolution Wind project was completed ahead of schedule, and the company successfully challenged stop-work orders in court.
• Eversource achieved constructive regulatory outcomes in Connecticut, Massachusetts, and New Hampshire, including approvals for revenue increases and deferred storm cost recovery totaling nearly $2.0 billion.
• Electric system reliability, measured by months between interruptions, was 21.0 months apart (top decile), and average service restoration time was 66 minutes (top decile).
• The company expanded its climate commitment to achieve a 45% reduction in Scopes 1 and 2 greenhouse gas (GHG) emissions by 2035 and net-zero emissions by 2050, including Scope 3 customer energy use.
• In response to shareholder feedback on the 2025 Say-on-Pay vote, the executive compensation program was refined to include more formulaic annual incentive performance ranges and a cap on performance share payouts if absolute TSR is negative for 2026 onwards.
• Charitable giving and community economic development support totaled approximately $54.1 million in 2025.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a generally positive filing, highlighting strong operational and financial performance in 2025, significant clean energy investments, and proactive responses to shareholder feedback, despite some ongoing regulatory and divestiture challenges.

Positives

• 2025 Total Shareholder Return (TSR) was up 22.7% for the year, ranking 8th in the Edison Electric Institute (EEI) Index.
• 2025 non-GAAP earnings per share (EPS) equaled $4.76, exceeding the earnings per share goal by $0.05.
• The annual dividend rate was increased by 5.2% for 2025 to $3.01 per share, exceeding the EEI Index companies' median dividend growth rate of 5.0%.
• Completed onshore substation construction for the Revolution Wind project ahead of schedule, expected to accelerate commercial operations and reduce financial exposure.
• Successfully challenged stop-work orders for the Revolution Wind project in U.S. District Court, allowing construction to resume.
• Filed and/or received regulatory approval for nearly 98% of deferred storm costs, expecting nearly $2.0 billion in recovery.
• Achieved constructive regulatory outcomes including a $100 million revenue increase for Yankee Gas Services Company (9.32% ROE) and a $100 million rate increase for Public Service Company of New Hampshire (9.50% ROE).
• Electric system reliability (21.0 months between interruptions) and average service restoration time (66 minutes) ranked in the top decile of the industry.
• On-time response to gas customer emergency calls was 98%, exceeding mandated requirements.
• Made significant progress on the multi-year Advanced Metering Infrastructure (AMI) initiative, installing over 100,000 smart meters.
• Successfully executed the $900 million Energy Efficiency Plan with increased focus on equity and customer-centric electrification.
• Expanded climate commitment to a 45% reduction in Scopes 1 and 2 GHG emissions by 2035 and net-zero by 2050 (Scopes 1, 2, and 3 customer energy use).
• Received independent national recognition for excellence in ESG, energy efficiency, veteran hiring, and workplace wellness.
• Corporate philanthropy and employee volunteer programs contributed approximately $54.1 million in charitable giving and community economic development support in 2025.
• The Board of Trustees includes nine independent nominees and eight who have served for eight or fewer years, demonstrating board refreshment.
• Executive compensation program was adjusted to be more formulaic and include a cap on performance share payouts if absolute TSR is negative, in response to shareholder feedback.
• The FFO to debt ratio is approximately 14%, exceeding Moody's 13% threshold.
• Broke ground on the $1.8 billion Greater Cambridge Energy Program, including a first-of-its-kind underground substation.
• The networked geothermal system pilot in Framingham, Massachusetts, demonstrated strong performance and received federal funding for expansion.

Negatives

• 2025 non-GAAP earnings excluded a charge related to previous offshore wind investments.
• The 2025 advisory Say-on-Pay vote received a lower level of support (57.13%) from shareholders.
• CEO performance share awards for the 2021-2023, 2022-2024, and 2023-2025 performance periods represented less than 50% of the original grant date fair value, with the 2023-2025 vesting at 44% of target (34% after share price change).
• An unfavorable regulatory decision from the Connecticut Public Utilities Regulatory Authority (PURA) was initially issued regarding the sale of Aquarion Water Company, though later remanded by a court.
• Fitch placed Eversource and its subsidiaries on Rating Watch Negative in September 2025 due to a Trump administration stop-work order on the Revolution Wind offshore farm.
• Moody's downgraded Connecticut Light & Power, a subsidiary of Eversource.
• Increased losses were attributed to higher interest expenses resulting from the sale of offshore wind projects.
• Investors are reacting negatively to potential cuts in federal clean energy funding.
• GuruFocus highlighted poor financial strength due to high debt, with long-term debt increasing by $8 billion over the prior 3 years.
• Eversource failed to meet its revenue expectations in the second quarter of 2025, contributing to a decline in its stock price.
• Connecticut's challenging regulatory landscape was frequently cited as a risk factor in news reports.
• Customer complaints in early 2025 reported inaccurate and unexpectedly high bills, large delivery rate hikes, fraudulent added fees, and unresponsiveness from customer service.

Risks

• Regulatory turnover in all three states and the challenge of building positive, constructive relationships with new regulatory partners.
• Cyber and physical security risks, including the changing threat landscape and potential attacks on critical infrastructure.
• Sustainability/ESG/Climate risk, encompassing physical and transitional impacts related to climate change, such as more severe weather events, regulatory changes, and evolving customer behavior.
• Financial risks associated with the annual operating plan and enterprise-wide risks.
• Potential for unintended actions from Artificial Intelligence (AI) tools if 'Human in the Loop' controls are not effectively implemented.
• Uncertainty regarding the final regulatory approval and conditions for the sale of Aquarion Water Company.
• The challenging regulatory landscape in Connecticut.
• High long-term debt and potential negative reactions from investors to cuts in federal clean energy funding.
• Supply chain issues impacting operations and costs.

Future Outlook

Eversource Energy expects the Revolution Wind project milestone to contribute to the commencement of commercial operations and reduce financial exposure. The company plans to continue investing in system strength and the clean energy transition, deploying innovative technologies to support state climate goals and enable electrification and decarbonization. Management is committed to building positive relationships with new regulatory partners and anticipates ongoing shareholder engagement to guide future compensation decisions. AI is expected to expedite restoration efforts, improve customer experience, grid management, and employee productivity. Construction for the expansion of the Framingham networked geothermal loop will commence upon regulatory approvals, and smart meter installations in Massachusetts are projected to be completed by the end of 2027. The company is actively participating in regulatory proceedings in Connecticut and New Hampshire to expand grid modernization investments. The Board commits to reevaluating its leadership structure in connection with significant events such as a CEO transition or material strategic pivot.

Management Comments

• "Eversource's team of nearly 11,000 dedicated and engaged employees once again rose to the challenges and opportunities of the utility industry in 2025."
• "We invested more than $4 billion into our core businesses in 2025 to improve our already strong reliability and customer service, harden our systems against the impact of extreme weather, prepare for anticipated demand growth, and enable additional clean energy resources to connect to the grid."
• "While we continue to invest to keep our systems and service strong and enable the clean energy transition, we recognize that affordability is a major concern among our customers, regulators, and other external stakeholders. We are committed to working with those stakeholders to limit the impact on customers as much as possible."
• "Last year saw significant regulatory turnover in all three of our states, and we are working to build positive, constructive relationships with our new regulatory partners."
• "We continue to focus on moving forward as a pure-play electric and natural gas utility company with attractive opportunities for investment and a long record of strong service to customers."
• "The Committee believes these actions demonstrate meaningful responsiveness to shareholder and ISS feedback and reinforce the Company's commitment to a transparent, performance-based executive compensation program aligned with long-term shareholder interests."
• "We believe the compensation paid to our Named Executive Officers in 2025 appropriately reflects that pay for performance alignment."
• "The Committee believes these results provide strong validation that the long term incentive program remains reasonable, well-calibrated, and aligned with both market best practices and long-term shareholder value."

Industry Context

StockSavvy.ai notes that Eversource Energy's strong performance in reliability, customer service, and ESG leadership positions it favorably within the utility sector, especially given its significant investments in clean energy and grid modernization. The company's expanded climate commitments align with broader industry trends towards decarbonization and electrification, differentiating it from utilities still heavily reliant on fossil fuels. The challenges faced with offshore wind divestiture and regulatory hurdles are common for utilities navigating the energy transition, but the company's proactive engagement and successful regulatory outcomes demonstrate resilience. The focus on customer affordability and engagement is critical in a regulated industry facing increasing scrutiny over rates.

Comparison to Industry Standards

• Eversource's 2025 Total Shareholder Return (TSR) of 22.7% ranked 8th in the Edison Electric Institute (EEI) Index, indicating strong relative performance.
• The annual dividend growth rate of 5.2% exceeded the EEI Index companies' median dividend growth rate of 5.0%.
• Electric system reliability (21.0 months between interruptions) and average service restoration time (66 minutes) placed Eversource in the top decile among industry peers.
• Safety performance (0.87 DART rate) was in the top half of New England and Mid-Atlantic peers.
• On-time response to gas customer emergency calls (98%) continues to exceed mandated emergency response requirements.
• The Sustainability Index rating of 102.6% (combined internal and external) ranks Eversource #2 in its industry peer group from two reputable external raters.
• The company's FFO to debt ratio of approximately 14% exceeds Moody's 13% threshold, indicating a strong financial position relative to credit rating agency benchmarks.
• Eversource continues to outperform industry benchmarks in phishing click-rates for employee cyber security training.
• The Zicklin Index rating of 90% for political disclosure and accountability places Eversource in the highest category, 'Trendsetter,' compared to corporate political activity overseers.

Management Changes

Corporate Governance

Legal Proceedings

• The Revolution Wind project successfully challenged stop-work orders issued by the U.S. Department of the Interior's Bureau of Ocean Energy Management in the U.S. District Court for the District of Columbia, permitting construction to resume in October 2025 and overturning a second order on January 12, 2026.
• The company appealed an unfavorable regulatory decision from the Connecticut Public Utilities Regulatory Authority (PURA) on the sale of Aquarion Water Company; a Connecticut court held PURA acted illegally and remanded the matter back to PURA on January 14, 2026.

Related Party Transactions

• The Board has determined that the provision of utility services to residences of Trustees and/or companies with which some Trustees are associated, in the ordinary course of business, on an arms-length basis, and pursuant to applicable public utility commission rates, is immaterial to Trustee independence and does not constitute a Related Person Transaction.
• No Eversource Related Persons, including Trustees, had a direct or indirect material interest in any transaction involving the Company or its subsidiaries as of January 27, 2026.

Stakeholder Impact

• Shareholders: Positive impact from strong TSR, dividend growth, exceeding EPS goals, and proactive response to Say-on-Pay feedback. Negative impact from offshore wind losses, Aquarion sale uncertainty, and increased debt.
• Customers: Benefits from improved reliability, faster restoration times, energy efficiency programs, smart meter rollout, and efforts to address affordability concerns. Potential negative impact from rate adjustments and customer complaints regarding billing.
• Employees: Benefits from a safe, respectful workplace, good wages and benefits, leadership development, and recognition as a 'Healthiest Workplace' and for veteran hiring.
• Communities: Benefits from significant charitable giving ($54.1 million), economic development support, and clean energy initiatives.
• Regulators: Company is actively engaging with new regulatory partners and achieving constructive outcomes, but also facing challenges and unfavorable decisions (e.g., Aquarion sale).
• Creditors: Impacted by increased long-term debt and credit rating actions (Fitch Rating Watch Negative, Moody's downgrade of CL&P), though FFO to debt ratio exceeds Moody's threshold.

Next Steps

• Elect ten nominees as Trustees at the 2026 Annual Meeting on May 6, 2026.
• Consider an advisory proposal approving the compensation of Named Executive Officers at the Annual Meeting.
• Ratify the selection of Deloitte & Touche LLP as the independent registered public accounting firm for 2026 at the Annual Meeting.
• Consider a shareholder proposal titled 'Independent Board Chairman' at the Annual Meeting.
• Continue to invest to keep systems and service strong and enable the clean energy transition.
• Work to build positive, constructive relationships with new regulatory partners.
• Deploy innovative technologies and initiatives to support state climate goals and enable electrification and decarbonization.
• Assess the effectiveness of the revised executive compensation framework and further evaluate incentive compensation program design for 2026 and subsequent years.
• Commence construction activities for the expansion of the Framingham networked geothermal loop upon regulatory approvals.
• Complete meter installations for the Massachusetts AMI project for all 1.4 million customers by the end of 2027.
• Actively participate in regulatory proceedings in Connecticut and New Hampshire to expand grid modernization investments.
• PURA is scheduled to release its final decision on the Aquarion sale on March 25, 2026.

Key Dates

Recommendation

Eversource Energy demonstrates solid operational and financial performance in 2025, with strong reliability metrics, exceeding EPS goals, and a healthy dividend increase. The company's commitment to clean energy and proactive engagement with shareholder feedback are positive long-term indicators. However, the ongoing financial impact from offshore wind divestiture, regulatory uncertainty surrounding the Aquarion sale, and concerns about increasing debt and credit ratings present headwinds. While the core utility business is strong, these factors suggest a balanced "hold" position, as the positive operational momentum is somewhat offset by strategic and financial uncertainties that warrant careful monitoring.

Keywords

Eversource Energy, Utility, Electric, Natural Gas, Water, Clean Energy, ESG, Climate Change, Financial Performance, Executive Compensation, Corporate Governance, Shareholder Return, Regulatory Approval, Smart Meters, Grid Modernization, Revolution Wind, Aquarion, Sustainability, New England