December 31, 2021 Asset Allocation Level 1 Level 2 Level 3 Total (In millions) Cash and short-term securities $ — $ 95 $ — $ 95 17 % Public equity 278 — — 278 51 % Fixed income: — 175 — 175 32 % Total $ 278 $ 270 $ — $ 548 100 % FirstEnergy’s target asset allocations for its pension and OPEB trust portfolios for 2022 were as follows: Target Asset Allocations Pension OPEB Equities 36 % 50 % Fixed income 22.5 % 50 % Alternative investments 5 % — % Real estate 10 % — % Private - equity and debt funds 20 % — % Cash and derivatives 6.5 % — % 100 % 100 % FirstEnergy follows a total return investment approach using a mix of equities, fixed income and other available investments while taking into account the pension plan liabilities to optimize the long-term return on plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed-income investments. Equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value, and small and large capitalization funds. Other assets such as real estate and private equity are used to enhance long-term returns while improving portfolio diversification. Derivatives may be used to gain market exposure in an efficient and timely manner; however, derivatives are not used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored on a continuing basis through periodic investment portfolio reviews, annual liability measurements and periodic asset/liability studies. Taking into account estimated employee future service, FirstEnergy expects to make the following benefit payments from plan assets and other payments, net of participant contributions: OPEB Pension Benefit Payments Subsidy Receipts (In millions) 2023 $ 583 $ 44 $ (1) 2024 587 42 (1) 2025 597 40 (1) 2026 605 39 — 2027 612 37 — Years 2028-2031 3,120 167 (2) 6. STOCK-BASED COMPENSATION PLANS FirstEnergy grants stock-based awards through the ICP 2020, primarily in the form of restricted stock and performance-based restricted stock units. There are also awards currently outstanding issued through the ICP 2015 primarily in the form of restricted stock and performance-based restricted stock units. The ICP 2020 and ICP 2015 include shareholder authorization to each issue 10 million shares of common stock or their equivalent. As of December 31, 2022, approximately 11.9 million shares were available for future grants under the ICP 2020 assuming maximum performance metrics are achieved for the outstanding cycles of restricted stock units. No shares are available for future grants under ICP 2015. Shares not issued due to forfeitures or cancellations originally granted through the ICP 2015 may be added back to the ICP 2020. Shares granted under the ICP 2020 and ICP 2015 are issued from authorized but unissued common stock. Vesting periods for stock-based awards range from less than a year to ten years, with the majority of awards having a vesting period of three years. FirstEnergy also issues stock through its 401(k) savings plan, EDCP, and DCPD. Currently, FirstEnergy records the compensation costs for stock-based compensation 95
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