Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. (e) On January 20, 2022, the Executive Development and Compensation Committee (the "Committee") of the Board of Directors of American Water Works Company, Inc. (the "Company"), based on data and analyses provided by the Committee's independent compensation consultant, approved an amendment of, and an adjustment to, the Company's existing internally measured long-term performance plan ("LTPP") performance share unit awards granted in February 2020 and 2021 (collectively, the "PSU-IMs") under the Company's 2017 Omnibus Equity Compensation Plan. The PSU-IM's performance is to be measured based on the rate of the Company's earnings per share ("EPS") growth, compounded annually over a three-year period, and anchored off the Company's 2019 adjusted EPS for the fiscal year ended December 31, 2019 (with respect to the 2020 PSU-IMs) and EPS for the fiscal year ended December 31, 2020 (with respect to the 2021 PSU-IMs). To reflect the sale of the Company's Homeowner Services Group ("HOS") (which was completed on December 9, 2021) in the three-year EPS growth calculations for these LTPP awards, the starting EPS for the PSU-IMs granted in February 2020 and 2021 has been decreased by $0.38 and $0.40, respectively. The amount of the adjustment to the starting EPS is equivalent to the contribution of HOS to the Company's EPS for the 2019 and 2020 fiscal years. Furthermore, the ending EPS will be adjusted to exclude the impact of interest earned under that certain Secured Seller Note Agreement, dated December 9, 2021, and revenue or other income recorded by the Company under that certain Revenue Share Agreement, dated December 9, 2021, each as entered into in connection with the Company's sale of HOS.


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