DEF 14A: NJR Reports Strong FY25, Proposes New Stock Plan

New Jersey Resources Corporation announces a strong fiscal year 2025 with increased NFEPS and dividend, while proposing a new stock award plan and board elections for its upcoming annual meeting.

Summary

• Fiscal year 2025 was a strong year for New Jersey Resources, marked by focus, execution, innovation, and progress.
• Achieved net financial earnings per share (NFEPS) of $3.29, an increase from $2.95 in the prior year, surpassing the long-term growth target of 7-9 percent.
• Increased NFEPS guidance for the fifth consecutive period during the fiscal year.
• Increased the annual dividend rate to $1.90 per share, marking the 30th consecutive year of dividend growth.
• The 2026 Annual Shareowners Meeting will be held virtually on January 21, 2026, to elect directors, approve executive compensation, approve the 2026 Stock Award and Incentive Plan, and ratify the independent auditor.
• Executive compensation is strongly linked to financial performance, with annual short-term incentive awards for named executive officers ranging from 117.17 percent to 126.17 percent of target.
• The company achieved 116.8 percent of its Commitment to Stakeholders (CTS) targets, which include safety, customer satisfaction, sustainable growth, engaged workforce, social responsibility, and superior financial performance.
• The 2026 Stock Award and Incentive Plan, if approved, will replace the 2017 Plan and reserve 3,551,232 shares for awards, including 2,010,000 new shares.

Sentiment

Score: 8

Explanation: The filing presents a highly positive outlook, highlighting strong financial performance, consistent dividend growth, successful strategic execution across diversified businesses, and robust corporate governance. The proposed 2026 Stock Award and Incentive Plan aims to further align management and shareholder interests. While energy markets are dynamic, the company appears well-positioned to navigate challenges and deliver continued value.

Positives

• Achieved strong fiscal year 2025 net financial earnings per share (NFEPS) of $3.29, up from $2.95, exceeding the robust long-term growth target of 7-9 percent.
• Increased NFEPS guidance for the fifth consecutive period during fiscal year 2025.
• Increased the annual dividend to $1.90 per share, marking the 30th consecutive year of dividend growth.
• NJR's diversified business model continues to deliver strong growth and resilience.
• New Jersey Natural Gas (NJNG) reported NFE of $213.5 million, added over 8,200 new customers, and maintained the fewest leaks per mile of any natural gas utility in the state.
• NJNG invested nearly $550 million in system enhancements and energy-efficiency programs, deploying a record $100 million in SAVEGREEN capital.
• NJR Clean Energy Ventures (NJRCEV) placed a record 93 megawatts of new commercial solar capacity in-service and expanded its portfolio footprint to Pennsylvania.
• NJRCEV successfully divested its residential solar portfolio, accelerating cash flows and earnings.
• NJR Energy Services (NJRES) reported NFE of $34.9 million, exceeding initial forecasts due to its long-option strategy.
• Storage and Transportation (S&T) reported NFE of $18.5 million and reached a settlement with customers of Adelphia Gateway on its rate case, approved in November 2025.
• NJR Home Services (NJRHS) completed approximately 79,000 service calls, nearly 4,000 installations, and achieved a nearly 5-star Google rating.
• Employee engagement score was approximately 89 percent in March 2025, indicating high intent to stay and willingness to recommend the company.
• Strong corporate governance practices are in place, including an independent Board Chair and CEO, 100 percent independent key committees, and robust stock ownership guidelines.
• Over 97 percent of votes cast on the say-on-pay proposal at the 2025 Annual Meeting of Shareowners were in favor of executive compensation.

Negatives

• The fiscal year 2025 NFE target of $282.0 million was lower than the actual fiscal year 2024 NFE of $290.8 million, primarily due to non-recurring outsized earnings from NJRES in fiscal year 2024.
• The company's revenue positioning is at the 20th percentile compared to its peer group, as of May 31, 2024.

Risks

• Dynamic energy markets demand agility, foresight, and continuous investment.
• Growing demand, affordability pressures, and evolving public policy are causing shifts in the industry.
• Cybersecurity, information technology, artificial intelligence, and data analytics risks require ongoing oversight and mitigation strategies.
• Risks related to human capital management, including succession planning and talent retention, are continuously monitored.
• Executive compensation programs are assessed for potential incentives that could lead to excessive risk-taking.
• Corporate governance structure, policies, and practices, as well as sustainability and corporate social responsibility, present ongoing oversight challenges.
• Compensation to certain employees resulting from vesting of awards in connection with a change in control or termination following a change in control may be non-deductible under Code Sections 4999 and 280G.
• If shareowners do not approve the 2026 Stock Award and Incentive Plan, there will be insufficient shares available under the Pre-existing Plan for future annual awards and new hires, requiring a revision of the compensation philosophy and formulation of other cash-based programs.

Future Outlook

The company is positioned for continued success, aiming to grow its business and deliver long-term value by ensuring safety, reliability, and affordability through system enhancements and energy-efficiency programs. Prudent investments in innovative solutions are expected to drive emission reductions and advance sustainability goals. The Board anticipates a smooth leadership transition with the appointment of a new independent Chair and expects the proposed 2026 Stock Award and Incentive Plan to provide sufficient shares for awards for at least the next three years.

Management Comments

• "Fiscal year 2025 was another strong year for New Jersey Resources one defined by focus, execution, innovation and progress."
• "Our prudent investments in innovative solutions are driving emission reductions and advancing our sustainability goals."
• "Guided by our sound strategy, culture of innovation, Commitment to Stakeholders and exceptional team, we have a solid foundation to grow our business and deliver long-term value."

Industry Context

The energy markets are highly dynamic, characterized by growing demand, affordability pressures, and evolving public policy, necessitating agility and continuous investment. The company's diversified portfolio of complementary businesses is uniquely positioned to adapt to these changes. The company is actively expanding its renewable energy footprint, targeting markets with supportive policies, and leveraging strategies like long-option trading to capitalize on market volatility and strong demand.

Comparison to Industry Standards

• NFEPS of $3.29 surpassed the company's robust long-term growth target of 7-9 percent.
• The company has increased its NFEPS guidance for the fifth consecutive period, demonstrating consistent outperformance relative to internal expectations.
• The dividend has been increased for 30 consecutive years, indicating a strong commitment to shareholder returns compared to industry peers.
• New Jersey Natural Gas maintains the fewest leaks per mile of any natural gas utility in the state, with fewer than 0.1 leaks per mile, reflecting superior operational safety and integrity.
• NJR Clean Energy Ventures achieved a record 93 megawatts of new commercial solar capacity in a single year, indicating strong growth in the renewable energy sector.
• NJR Home Services was recognized as a Ruud Top Twenty Pro partner for the ninth consecutive year, highlighting consistent high performance in its segment.
• The company's Total Shareholder Return (TSR) for fiscal year 2023 performance shares was in the 53rd percentile relative to a 10-company industry comparator group, indicating above-average performance.
• The company's market capitalization is at the 53rd percentile of its peer group, while its revenue is at the 20th percentile, suggesting a higher valuation efficiency or a smaller scale compared to some peers.

Management Changes

Corporate Governance

Related Party Transactions

• Andrew Westhoven, brother of CEO Stephen D. Westhoven, is employed by NJRCEV as Director Project and Engineering Management. His total compensation in fiscal year 2025 was within the range for comparable positions ($178,000 to $276,000 salary plus incentives) and was reviewed, approved, and ratified by the Audit Committee in November 2024. Stephen D. Westhoven had no direct responsibility or influence over his compensation.
• NJRCEV developed net-metered rooftop, carport, and ground-mounted solar projects for American Water Works Company, Inc., where M. Susan Hardwick (an NJR director) served as President and CEO until May 2025. The electrical output is sold under separate power purchase agreements, which are arms-length commercial transactions. Ms. Hardwick had no involvement with these projects and received no compensation in connection therewith. These transactions were approved and ratified by the Audit Committee.

Stakeholder Impact

• Shareholders: Benefited from strong financial performance, increased NFEPS, 30th consecutive year of dividend growth, and a 6.0% total shareholder return in FY2025. The company's governance practices aim to align management interests with long-term shareholder value.
• Customers: Received safe, reliable, and affordable service, with NJNG adding over 8,200 new customers and maintaining a low leak rate. Investments in system enhancements and energy-efficiency programs (SAVEGREEN) directly benefit customers.
• Employees: Experienced high engagement (89% score) and benefit from a culture that values inclusion, belonging, and ethics. Executive compensation programs are designed to attract, motivate, reward, and retain talent, with a focus on leadership development and succession planning.
• Communities: Supported through social responsibility initiatives, including employee volunteer hours and customer/community outreach programs. The company's sustainability goals and emission reduction efforts contribute to environmental well-being.
• Regulators: The company actively engages with regulators and policymakers, particularly in highly regulated industries like natural gas utilities, ensuring compliance and alignment with evolving public policy.

Next Steps

• Shareowners to vote on the election of five director nominees at the 2026 Annual Meeting on January 21, 2026.
• Shareowners to vote on a non-binding advisory resolution approving the compensation of named executive officers.
• Shareowners to vote on the approval of the 2026 Stock Award and Incentive Plan.
• Shareowners to vote on the ratification of the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for fiscal year 2026.
• A new independent Chair of the Board will be appointed prior to the Meeting, effective immediately following the Meeting.
• A new Chair of the Executive Committee will be appointed promptly following the Meeting.
• The company intends to register shares available under the 2026 Plan with the SEC on Form S-8 promptly following the Meeting, if approved.
• The Nominating/Corporate Governance Committee will continue its annual review of Board composition and candidate consideration for future retirements and needs.

Key Dates

Recommendation

The filing, a DEF 14A proxy statement, primarily focuses on corporate governance, executive compensation, and proposals for the upcoming annual meeting, rather than new financial results. While it highlights strong past performance for fiscal year 2025, including increased NFEPS and consistent dividend growth, this information is retrospective. The company demonstrates sound management, strategic investments, and robust governance, which are positive for long-term stability. However, without new, forward-looking financial guidance or significant strategic shifts, the filing does not present an immediate catalyst for a 'buy' or 'sell' recommendation. Existing investors should feel confident in the company's trajectory, warranting a 'hold' position.

Keywords

New Jersey Resources, NJR, Proxy Statement, Corporate Governance, Executive Compensation, Net Financial Earnings, NFEPS, Dividend Growth, Energy Utility, Natural Gas, Renewable Energy, Solar Power, ESG, Risk Management, Board of Directors, Stock Award Plan