A 21st Century Whale Oil Company
Pros
Due to a reluctance to pivot from a regulated to deregulated business model AEP's revenue stream is mainly based on recovery schemes in place in nearly a dozen states across the US. The current political and regulatory climate in AEP's service territory suggests that the vast majority of favorable recovery requests submitted by AEP will be granted. This allows for immediate profitability in the face of uncertain long term plans. For the average employee this is experienced as a faint sense of stability with the rumor of proposed layoffs or divestiture of subsidiaries always in the background.
Cons
AEP has a near zero risk tolerance due to an unbroken dividend payment streak of over 100 years. They have shown a willingness to divest any asset or operating company to make or exceed quarterly earnings regardless of the long term cost to the organization. This leads a strategy of self-cannibalization of company assets and workforce reductions taken straight from the Jack Welch playbook of 30 years ago. Generating assets and Operating Companies have been sold or closed, routine layoffs, and the addition of contractor and offshore staff wherever possible, are all to be expected. The pay scale and compensation package has not had a meaningful overhaul in over ten years. Merit increases are regularly reduced by upper management due to quota consideration and overall salary increases have fallen behind inflation several years in a row. Bonuses this year are down 60% - 80% compared to previous years even with record revenue. The bonus structure is regularly used by management to justify stunted growth in salary year over year. Overall a stagnant company with no real plan to retain employees or grow their business.