NOTICE OF 2025 ANNUAL MEETING OF SHAREHOLDERS
To Our Shareholders: The 2025 Annual Meeting of shareholders of TXNM Energy, Inc. will be held as follows:
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| DATE AND TIME: | Tuesday, May 13, 2025, at 9:00 a.m. Central Time (Meeting Room doors open at 8:15 a.m.) |
| PLACE: | Austin Proper Hotel Moonlight Room 600 W 2nd Street Austin, TX 78701
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WHO CAN VOTE: | You may vote if you were a shareholder of record as of the close of business on March 24, 2025. |
| ITEMS OF BUSINESS: | (1) Elect as directors the director nominees named in the proxy statement. (2) Ratify appointment of KPMG LLP as our independent registered public accounting firm for 2025. (3) Approve, on an advisory basis, the compensation of our named executive officers. (4) Consider any other business properly presented at the meeting. |
| VOTING: | On April 1, 2025, we began mailing to our shareholders either (1) a Notice of Internet Availability of Proxy Materials, which indicates how to access our proxy materials on the Internet or (2) a printed copy of our proxy materials.
After reading the proxy statement, please promptly vote by telephone or internet or by signing and returning the proxy card so that we can be assured of having a quorum present at the meeting and your shares may be voted in accordance with your wishes. See the questions and answers beginning on page 73 of our proxy statement about the meeting (including how to listen to the meeting by webcast), voting your shares, how to revoke a proxy, how to vote shares in person and via the internet and attendance information. |
| By Order of the Board of Directors
Patricia K. Collawn
Chair and Chief Executive Officer |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 13, 2025:
This Notice of Annual Meeting; our 2025 proxy statement; our 2024 Annual Report on Form 10-K; a shareholder letter from Patricia K. Collawn, our Chair and CEO; and stock performance graph are available at www.proxyvote.com and www.txnmenergy.com/asm/annual-proxy.cfm.
You are receiving these proxy materials in connection with the solicitation by the Board of Directors of TXNM Energy, Inc. of proxies to be voted on at the TXNM Energy, Inc. 2025 Annual Meeting of Shareholders. Please vote on the proposals described in this proxy statement.
Thank you for investing in TXNM Energy, Inc. |
TABLE OF CONTENTS
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| 35 | Proposal 3: Approve, On An Advisory Basis, the Compensation of our Named Executive Officers |
| 36 | Executive Compensation |
| 36 | Compensation Discussion and Analysis |
| 36 | Overview |
| 39 | Executive Compensation Practices & Results |
| 41 | Elements of Executive Compensation |
| 48 | Administration and Resources |
| 49 | 2025 Compensation Actions |
| 50 | Additional Information |
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| 54 | |
| 72 | |
| 73 | |
| 79 | Glossary |
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PROXY SUMMARY
We are an investor-owned energy holding company with two regulated utilities, PNM and TNMP, providing electricity and electric services in New Mexico and Texas. To assist you in reviewing the proposals to be acted upon at our Annual Meeting, we call your attention to the following information, which is only a summary. For more complete information about our corporate governance, the experience and composition of our Board and key executive compensation actions and decisions, please review this entire proxy statement. For more complete information about our financial and operational results, strategic direction and our environmental stewardship, community activities, and social initiatives, please review our 2024 Annual Report on Form 10-K (available on our website at www.txnmenergy.com/investors/financial-information/sec-filings.aspx) and our Sustainability Report (available on our website at www.txnmenergy.com/sustainability/reporting-and-disclosures/reporting_library.aspx). For a list of terms defined and used in this proxy statement, see the Glossary beginning on page 79. Information contained on www.txnmenergy.com, www.pnm.com, or any third-party websites referenced in this proxy statement is not incorporated by reference or otherwise deemed to be part of this proxy statement. On April 1, 2025, we began mailing to our shareholders either the Notice of Internet Availability of Proxy Materials or a printed copy of our proxy materials.
Annual Meeting of Shareholders
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| Date and Time: | May 13, 2025, 9:00 a.m. Central Time (Meeting Room doors open at 8:15 a.m.) |
| Place: | Austin Proper Hotel Moonlight Room 600 W 2nd Street Austin, TX 78701 |
| Record Date: | March 24, 2025 |
| How to Vote: | Shareholders as of the record date may vote as follows: |
| By Internet: | Access www.proxyvote.com and follow the instructions. (You will need the control number on your Notice or on the requested paper proxy card to vote your shares.) |
| By Telephone: | For automated telephone voting, call 1-800-690-6903 (toll-free) from any touch-tone telephone and follow the instructions. (You will need the control number on your Notice or on the requested paper proxy card to vote your shares.) |
| By Mail: | If you received a full paper set of materials, date and sign your proxy card exactly as your name appears on your proxy card and mail it in the enclosed, postage-paid envelope. Otherwise, request delivery of the proxy statement and proxy card by following the instructions in your Notice. You do not need to mail the proxy card if you are voting by telephone or internet. |
| During the Meeting: | If the shares are registered in your name, you can attend and cast your vote at the Annual Meeting. To attend the meeting in person, you will need to provide proof of your stock ownership as of the record date and provide a government-issued photo identification. For admission requirements please see Question 19 on page 76. If your stock is held in “street name”, and you do not provide voting instructions to your broker before the meeting, then you can only vote in person if you have an authorized proxy to do so from the registered shareholder. See also Question 23 on page 77. |
Your shares will be voted in the manner you indicate. The telephone and internet voting systems are available 24 hours a day. They will close at 11:59 p.m. Eastern Time on May 12, 2025. Please note that the voting deadline is earlier for voting shares held in our RSP, as described in Question 15 on page 76.
Overview and Strategy
TXNM is a holding company with two regulated utilities serving more than 800,000 residential, commercial, and industrial customers and end-users of electricity in New Mexico and Texas.
TXNM was incorporated in the State of New Mexico in 2000 and its common stock trades on the New York Stock Exchange under the symbol TXNM.
Vision, Values and Business Objectives
TXNM’s vision is to create a clean and bright energy future while fulfilling its purpose to work together with customers and communities to meet their energy needs. TXNM’s core values of Safety, Caring and Integrity are the foundation for the Company’s business objectives focused on safety excellence and customer satisfaction, including reliability. To reach these objectives, the Company is committed to:
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•Preparing our workforce with the knowledge and skills to thrive •Purposefully delivering an intentional customer experience that exceeds our evolving customer and stakeholder expectations •Enabling an environmentally sustainable future and deploying technologically advanced solutions that empower and benefit customers •Demonstrating the relationship between customer excellence and our dedicated focus on financial strength
Meeting the business objectives above will drive key financial results:
•Earning authorized returns on regulated businesses •Delivering at or above industry-average long-term earnings growth, with a dividend payout ratio between 50 and 60 percent of earnings •Maintaining investment grade credit ratings
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Vision Create a clean and bright energy future
Values Safety for ourselves, our co-workers, our customers and communities
Caring about the welfare of others is a Company tradition. It fosters a positive workplace, a focus on customers and dedicated community service
Integrity and honest communications guide our dealings and keep us accountable to our stakeholders and each other
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The Company believes that maintaining strong and modern electric infrastructure is critical to ensuring reliability and supporting economic growth. PNM and TNMP strive to balance service affordability with infrastructure investment to maintain a high level of electric reliability and to deliver a safe and superior customer experience.
Financial Performance
•Delivered ongoing earnings of $2.74 per diluted share in 2024
•Grew the annual dividend payment, with a 5.2% increase approved in December 2024 to be paid to shareholders in 2025
•Maintained investment grade credit ratings
Operational Highlights
•Supported reliable growth and grid resiliency:
–Continued to invest at unprecedented levels across TNMP to support growth, as evidenced by seven new system peaks in 2024 and an 18% increase in year-over-year system demand
–Energized the greatest number of projects in PNM history, including 14 substations and 3 utility-scale solar interconnections
–Submitted TNMP’s first System Resiliency Plan and reached agreement with parties for nearly $700 million of investment and expenses designed to benefit customers through enhanced resiliency of the distribution system
–Received approval for PNM’s Grid Modernization Plan, the first part of a longer-term grid modernization deployment, including $344 million of investments to enhance service to customers through new tools, including smart meters
–Published PNM’s first 20-year transmission study, providing a roadmap to achieving New Mexico’s energy transition and setting the stage for regional transmission planning efforts
–Bolstered efforts to mitigate against wildfire risks through the completion of updated Wildfire Mitigation Plans, along with implementation of a Public Safety Power Shutoff plan in New Mexico after extensive stakeholder engagement, and implementation of new technologies to monitor and evaluate risks, inform planning and support operational decisions
•Progressed on PNM’s transition to clean energy:
–Integrated 1,502 MWs of new solar and battery storage resources to PNM’s generation capacity portfolio, including 12 MW distribution-level battery storage, reaching capacity of 50% renewables and 72% carbon-free resources
–Continued participation in the Western Energy Imbalance Market, maximizing renewables and low-cost, flexible resources across the real-time wholesale energy trading market and contributing to fewer renewable curtailments across the western United States; PNM also returned $56.8 million in fuel savings to customers through its fuel clause in 2024 ($148.3 million cumulative fuel savings returned since joining in 2021)
•Championed our employees, customers, communities and industry:
–Increased our Company diversity through a workforce comprised of 56% minorities, 27% women, 15% identified as disabled and 9% veterans, with 35% of employees represented by a bargaining unit
–Continued SafeMap safety initiative, reflecting improved survey results, and introduced the Culver Workers Public Safety program
–Increased participation in leadership development programs, individualized online learning, intern programs and EPRI-sponsored virtual training
–Trained approximately 30 pre-apprentices through a community college line worker program and launched the PNM Power Pros high school program, graduating nine students in the first semester
–Provided customer payment assistance for over 3,665 families through the PNM Good Neighbor Fund
–Contributed $2.2 million to non-profits and community partners in 2024 through community engagement and grants made through the Company’s Foundation
–Continued to provide leadership, sponsorship and membership in local New Mexico and Texas commerce organizations and industry-focused organizations including EPRI and EEI
–Continued efforts initiated in 2019 to connect homes on the Navajo Nation to the electric grid for the first time as part of the Light up Navajo project; the initiative connected another 300 homes in 2024
•Recognized for these efforts:
–TNMP honored for the eighth year by the Environmental Protection Agency’s ENERGY STAR program, earnings recognition with a sixth Partner of the Year Sustained Excellence Award for its High-Performance Homes program
–TNMP received EEI’s Emergency Assistance Award for efforts in response to Hurricane Helene
–PNM’s New Service Delivery team awarded Fortnightly Lewis Latimer Top Innovator award for process design
Voting Matters and Board Recommendations
This year shareholders will be asked to vote on three proposals. These proposals and the Board’s vote recommendations are listed below:
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| Board vote recommendation | Page References
(for more detail) |
Proposal 1: Elect as directors the director nominees named in this proxy statement | FOR each nominee | 20-31 |
| Nominees provide the needed experience and expertise to direct the management of the business and affairs of the Company and ensure strong independent oversight. |
Proposal 2: Ratify appointment of KPMG LLP as our independent registered public accounting firm for 2025 | FOR | 32 |
| All independence standards have been met and sound practices are used to ensure high quality audits. |
Proposal 3: Approve, on an advisory basis, the compensation of our named executive officers | FOR | 35 |
| Our executive compensation is market-based, performance-driven, and aligned with shareholder interests. |
Governance Highlights
We believe that good governance and transparency are integral to achieving long-term shareholder value and our strategic goals, including delivering at or above industry-average earnings and dividend growth, maintaining strong employee safety and operational performance, transforming to a cleaner energy portfolio, and supporting our communities. Our commitment to governance policies and practices that serve the interests of the Company and our shareholders, customers and communities is underscored by the following corporate governance practices and facts for TXNM Energy that are described further beginning on page 6:
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ü Gender, ethnic and experience-diverse Board | ü Lead independent director with specified duties to ensure strong independent oversight |
ü Annual election of all directors and Board refreshment/service policy | ü Independent directors meeting regularly in executive sessions |
ü Majority voting for all directors | ü Board committees comprised entirely of independent directors with relevant expertise |
ü Annual Board and committee self-evaluation process
| ü Prohibition of hedging Company securities
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ü Proxy access bylaws | ü Prohibition of pledging of Company securities by directors and executive officers, including the NEOs
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ü Sustainability reporting and oversight | ü Incentive compensation awards subject to forfeiture and clawback
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ü Political contributions, lobbying and governmental communications policies, including voluntary reporting of these activities | ü Stock ownership guidelines for directors and executive officers
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2025 Nominees for the Board of Directors
We have highly qualified, diverse, high-functioning and experienced directors that position the Board to provide effective oversight. The Board has a good mix of new and long-standing directors and the Board’s gender diversity has been recognized as having a balanced Board by 50/50 Women on Boards, a leading global education and advocacy campaign driving the movement toward gender and diversity on corporate boards. Detailed background and other skills and experience information about our director nominees can be found beginning on page 21.
Board Nominee Highlights:
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8 of 10 Nominees Are Independent | 50% Are Female and 40% are Minority | 100% Have C-Suite Experience | 80% Have Environmental/ Sustainability Expertise |
2025 Nominees:
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| Name | Age | Director
Since | Occupation / Experience | Independent | TXNM Committees | Other Public
Company Boards |
| Vicky A. Bailey | 72 | 2019 | Founder and President, Anderson Stratton International, LLC | ü
| Compensation and HC Nominating (Chair) | EQT Corporation
Occidental Petroleum Corporation
|
Norman P. Becker
(Lead Director) | 69 | 2016 | Retired President and CEO, New Mexico Mutual Casualty Company | ü
| Compensation and HC Finance | |
| Patricia K. Collawn | 66 | 2010 | Chair and CEO, TXNM Energy | | | Cheniere Energy, Inc.
|
| E. Renae Conley | 67 | 2014 | CEO, ER Solutions, LLC | ü | Audit Compensation and HC (Chair)
| Southwest Gas Holdings
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| Sidney M. Gutierrez | 73 | 2015 | Chair, Vaya Space | ü | Audit Nominating | |
| James A. Hughes | 62 | 2019 | Managing Partner, Encap Investments, L.P. | ü
| Finance (Chair) Nominating | Alcoa Corporation
TPI Composites, Inc. |
Steven C. Maestas | 61 | 2024 | CEO, Maestas Development Group | ü | Audit Finance | |
Lillian J. Montoya | 58 | 2024 | President and CEO, CHRISTUS St. Vincent Health System | ü | Compensation and HC Nominating | |
| Maureen T. Mullarkey | 65 | 2014 | Former EVP and CFO, International Game Technology | ü | Audit (Chair) Finance | Everi Holdings, Inc. |
Joseph D. Tarry | 54 | 2024 | President and COO, TXNM Energy | | | |
