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Share Name | Share Symbol | Market | Type |
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Entergy Corp | NYSE:ETR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.92 | 0.86% | 108.08 | 108.33 | 106.75 | 108.00 | 1,720,555 | 01:00:00 |
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Letter from our Chairman and CEO
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March 27, 2020
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Fellow Shareholders:
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I am pleased to invite you to the Entergy Corporation 2020 Annual Meeting of Shareholders in New Orleans. Each year, we conduct our Annual Meeting in a location in our service territory as another way to celebrate the communities we have the privilege of serving and to engage with our shareholders and other stakeholders. The attached Notice of Annual Meeting of Shareholders and Proxy Statement will serve as your guide to the business to be conducted at the meeting.
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Message from Our Lead Director
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March 27, 2020
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Dear Fellow Shareholders:
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Each year, the Proxy Statement gives the Board an opportunity to provide shareholders with an update on Entergy’s corporate governance. As Entergy’s independent Lead Director, I would like to take the opportunity to share my perspective on the Entergy Board, on the robustness and efficacy of our governance structures and processes, and on the Board’s role in helping the Company drive long-term shareholder value.
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The Entergy Board: Our Board is comprised entirely of independent directors and our CEO. The Board is an experienced group of leaders attentive to the value of diversity in thought, experience and perspective. We are continuously focused on ensuring that Entergy has an optimal Board structure and composition. Each time we evaluate our leadership structure, add a new director, or change the composition of our Board committees, we do so in a thoughtful manner to ensure that the right skills, experiences, and perspectives are brought to our meetings and discussions.
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Independent Board Leadership: As Entergy’s independent Lead Director, I am responsible for helping to ensure that the Board exercises prudent judgment, functioning independently from Company management. To that end, I perform a variety of duties described in this Proxy Statement, including presiding over executive sessions of the independent directors at every Board meeting, without management present. I’m also consulted and advise on all Board meeting schedules, agendas and materials. I have the authority to call meetings of the independent directors and am available for discussion with our shareholders.
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Strategic Oversight: Our Board rigorously oversees the Company’s strategy, monitors the execution of strategy by Entergy’s management and ensures that the Company’s corporate culture aligns with its long-term strategy. Our Board takes these duties very seriously. Our strategic oversight role includes evaluating a changing landscape, challenging current assumptions, balancing short and long-term strategic planning, and helping to ensure the Company is continuously transforming for the future.
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Entergy Corporation
639 Loyola Avenue New Orleans, LA 70113 |
WHEN
Friday, May 8, 2020 10:00 a.m. Central Time WHERE The Hyatt Regency Hotel 601 Loyola Avenue New Orleans, Louisiana 70113 RECORD DATE March 9, 2020 |
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ITEMS OF BUSINESS
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To vote on the following proposals:
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Election of 10 directors proposed by our Board of Directors for a term of one year as named in the attached Proxy Statement.
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Ratification of the appointment of Deloitte & Touche LLP as Independent Registered Public Accountants for 2020.
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An advisory vote to approve the compensation paid to our Named Executive Officers.
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Such other business as may properly come before the meeting.
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Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on May 8, 2020: Our 2020 proxy statement and 2019 Annual Report to shareholders are available at https://www.entergy.com/investor_relations/annual_publications.aspx. Entergy Corporation uses the Securities and Exchange Commission rule permitting companies to furnish proxy materials to their shareholders on the Internet. In accordance with this rule, on or about March 27, 2020, a Notice of Internet Availability of Proxy Materials (the “Notice”) will be provided to stockholders, which includes instructions on how to access our 2020 Proxy Statement and 2019 Annual Report online, and how to vote online for the 2020 Annual Meeting of Shareholders. If you received the Notice and would like to receive a printed copy of our proxy materials, please follow the instructions for requesting such materials included in the Notice.
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Letter from Our Chairman and CEO
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Message from Our Lead Director
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Notice of Annual Meeting of Shareholders
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2020 Proxy Statement
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Date and Time
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10:00 a.m. Central Time, Friday, May 8, 2020
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Location
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The Hyatt Regency Hotel, 601 Loyola Avenue, New Orleans, Louisiana 70113
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Record Date
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March 9, 2020
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Voting Matters
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See Page
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Board’s Recommendation
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Use the Internet at www.proxyvote.com
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Call 1-800-690-6903 if in the United States and Canada
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Scan the QR Code on your proxy card, notice or voting instruction form.
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Mail your signed and dated proxy card or voting instruction form
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Attend the Annual Meeting in person
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2020 Proxy Statement
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• 1
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PROXY SUMMARY
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2 •
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2020 Proxy Statement
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PROXY SUMMARY
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Corporate Governance Highlights
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Board of Directors Highlights
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✔ Annual election of directors
✔ Majority voting for directors ✔ Proxy Access ✔ No poison pill; Board policy requires shareholder approval for adoption ✔ Disclosure of corporate political contributions and oversight of lobbying and political activity ✔ Non-executive directors limited to 4 and executive directors limited to 2 other public-company boards on which they may serve ✔ No supermajority voting provisions ✔ All committee members are independent ✔ Regular executive sessions of independent directors ✔ Responsive, active and ongoing shareholder engagement ✔ Robust share ownership requirements for executive officers and directors ✔ Prohibit short selling, hedging, pledging and margin transactions involving Entergy securities |
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✔ 9 out of 10 directors are independent, except the
Chairman ✔ Strong Independent Lead Director with explicit duties and responsibilities ✔ Robust Board refreshment with 5 new directors since 2015 ✔ Diverse and highly skilled Board that provides a range of viewpoints ✔ Mandatory director retirement at 74 ✔ Resignation policy for directors who do not receive majority vote ✔ Annual Board and committee self-assessments and individual director peer assessments ✔ Director orientation and continuing education programs ✔ Oversight of key enterprise risks ✔ Annual off-site Board meeting focused on Company strategy |
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2020 Proxy Statement
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• 3
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PROXY SUMMARY
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Name
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Age
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Director
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Primary Occupation
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Independent
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Committee
Memberships |
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John R. Burbank
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56
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2018
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Former President, Corporate
Development and Strategy, Nielsen Holdings plc |
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Yes
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• Finance
• Personnel |
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Patrick J. Condon
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71
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2015
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Retired Audit Partner, Deloitte &
Touche LLP |
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Yes
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• Audit (Chair)
• Nuclear |
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Leo P. Denault
(Chairman) |
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60
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2013
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Chairman of the Board and Chief
Executive Officer, Entergy Corporation |
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No
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• Executive (Chair)
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Kirkland H. Donald
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66
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2013
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Former President and Chief
Executive Officer, Systems Planning and Analysis, Inc. |
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Yes
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• Finance
• Nuclear (Chair) |
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Philip L. Frederickson
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63
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2015
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Former Executive Vice President,
ConocoPhillips |
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Yes
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• Audit
• Executive • Finance (Chair) |
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Alexis M. Herman
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72
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2003
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Chair and Chief Executive
Officer, New Ventures, LLC |
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Yes
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• Corporate Governance
• Personnel |
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M. Elise Hyland
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60
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2019
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Former Senior Vice President,
EQT Corporation and Senior Vice President and Chief Operating Officer, EQT Midstream Services, LLC |
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Yes
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• Audit
• Finance |
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Stuart L. Levenick
(Lead Director) |
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67
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2005
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Former Group President and
Executive Office Member, Caterpillar Inc. |
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Yes
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• Corporate Governance
• Executive • Nuclear |
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Blanche L. Lincoln
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59
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2011
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Founder and Principal, Lincoln
Policy Group |
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Yes
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• Corporate Governance (Chair)
• Personnel |
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Karen A. Puckett
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59
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2015
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Former President and Chief
Executive Officer, Harte Hanks, Inc. |
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Yes
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• Audit
• Personnel (Chair) |
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2020 Proxy Statement
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• 5
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PROXY SUMMARY
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What We Do
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Executive compensation programs are highly correlated to performance and focused on long-term value creation
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Double trigger for cash severance payments and equity acceleration in the event of a change in control
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Clawback policy
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Maximum payout capped at 200% of target under our Annual Incentive Plan and Long-Term Performance Unit Program for members of the Office of the Chief Executive
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Minimum vesting periods for equity based awards
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Rigorous goal setting aligned with externally disclosed annual and multi-year financial targets
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Long-term compensation mix weighted more toward performance units than service-based equity awards
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All long-term incentive compensation settled in shares of Entergy stock
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Rigorous stock ownership requirements
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Annual Say-on-Pay vote
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What We Don’t Do
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No 280G tax “gross up” payments in the event of a change in control
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×
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No tax “gross up” payments on any executive perquisites, other than relocation benefits
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×
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No option repricing or cash buy-outs for underwater options without shareholder approval
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×
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No agreements providing for severance payments to executive officers that exceed 2.99 times annual base salary and annual incentive awards without shareholder approval
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No unusual or excessive perquisites
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No hedging or pledging of Entergy stock
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No fixed-term employment agreements
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No new officer participation in the System Executive Retirement Plan
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No grants of supplemental service credit to newly-hired officers under any of the Company’s non-qualified retirement plans
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6 •
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2020 Proxy Statement
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PROXY SUMMARY
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Salary
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Annual Incentive
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Long-Term
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Stock Options and
Restricted Stock |
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Who Receives
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All Named Executive Officers
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When Granted
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Reviewed Annually
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Annually Every January
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Cash
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Equity
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Type of Performance
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Short-Term
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Long-Term
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Performance Period
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Annual
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1 Year
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3 Years
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3 Year Vesting
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How Payout Determined
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Personnel Committee Judgment, Market Data Individual Performance
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Formulaic (Entergy Tax Adjusted Earnings per Share and Entergy Adjusted Operating Cash Flow) Individual Performance and Personnel Committee Judgment
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Formulaic (Relative Total Shareholder Return and Utility Earnings Growth)
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Individual Performance, Market Data and Personnel Committee Judgment
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For 2019, 87% of our Chief Executive Officer’s target TDC was variable, including 70% in long-term incentives and 17% in annual incentives and on average, approximately 76% of our other NEOs’ target TDC was variable, including an average of 59% in long-term incentives and 17% in annual incentives (excluding non-qualified supplemental retirement income, nuclear retention plan payments and compensation reported as “all other compensation” in the 2019 Summary Compensation Table).
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Only the base salary portion of annual target TDC is fixed.
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2020 Proxy Statement
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• 7
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PROXY SUMMARY
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Annual Incentive Awards are tied to our financial and operational performance through the Entergy Achievement Multiplier (“EAM”), which is the performance metric used to determine the maximum funding available for awards under the plan. The 2019 EAM was determined based on ETR Tax Adjusted EPS and ETR Adjusted OCF each weighted equally. ETR Tax Adjusted EPS exceeded the ETR Tax Adjusted EPS target of $5.30 per share by $1.23, but management fell short of achieving its ETR Adjusted OCF target of $3.1 billion by approximately $134 million, leading to a calculated EAM of 139%. After consideration of individual performance, the average payout for the Named Executive Officers was 136% of target.
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Long-Term Performance Units for the three-year period ending in 2019 were measured by assessing Entergy’s total shareholder return in relation to the total shareholder return of the companies in the Philadelphia Utility Index. For the 2017 – 2019 long-term performance period, Entergy’s total shareholder return was in the top quartile, resulting in a payout for each participant of 200% of the target number of shares plus shares representing dividends accrued during the performance period.
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8 •
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2020 Proxy Statement
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Summary of Director Qualifications
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Burbank
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Condon
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Denault
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Donald
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Frederickson
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Herman
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Hyland
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Levenick
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Lincoln
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Puckett
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Technology and Transformation
Our industry is undergoing transformational change as a result of advances in technology and changing customer expectations about the products and services they want and need to power their lives. This creates opportunities for companies whose leadership is able to understand those changes and what they mean for their customers and other stakeholders. Directors with experience managing consumer-facing businesses and operations that have been impacted by transformational change can provide the Board with critical insights and perspective on these issues and challenges. |
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Executive Experience
Directors who hold or have held significant executive or leadership positions within large organizations provide the Company with unique insights. These individuals generally possess extraordinary leadership qualities as well as the ability to identify and develop those qualities in others. Their experiences developing talent and solving problems in large, complex organizations prepare them well for the responsibilities of Board service. |
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Finance and Accounting
Accurate financial reporting and robust auditing are critical to our success. We seek to have at least one director who qualifies as an audit committee financial expert, and we expect all of our directors to be literate in finance and financial reporting processes. |
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Government/Legal/Public Policy
Our businesses are heavily regulated and are directly affected by governmental actions. As such, we seek to have directors with experience in government, law and public policy to provide insight and understanding of effective strategies in these areas. |
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Operations
As a capital – intensive company, we seek to have directors with deep experience in a significant operations role with a large business to develop, implement and assess our capital plan and our business strategy. |
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Regulated Utility/Nuclear
Due to the complexity of our business, we believe it is important to have directors with experience in the utility industry or in nuclear power operations to enable the Board to provide effective oversight of our operations. |
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Risk Management
Managing risk in a rapidly changing environment is critical to our success. Directors should have a sound understanding of the most significant risks facing the Company and the experience and leadership to provide effective oversight of risk management processes. |
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Other Public Boards
Directors who have served on other public company boards are able to draw on lessons learned on their other boards, as they seek to develop and implement best practices for the Company. |
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2020 Proxy Statement
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• 9
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BOARD OF DIRECTORS
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John R. Burbank
Groton, Connecticut Age 56 Director Since 2018 Entergy Board Committees • Finance • Personnel |
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Professional Experience
• Former President, Corporate Development and Strategy, Nielsen Holdings plc (a global information, data and measurement company) – 2017-2019 • Former President, Strategic Initiatives, Nielsen Holdings plc – 2011-2017 • Director, Change Labs, LTD • Trustee, March of Dimes Skills and Attributes Mr. Burbank brings to the Board his extensive management experience in consumer-facing businesses that have been disrupted by technological change. Accordingly, he brings valuable insights and perspective on the potential impact of technological change on our industry and our company. Mr. Burbank also brings the benefit of his extensive senior management experience leading strategic investments and corporate development and strategy at Nielsen Holdings plc. |
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Patrick J. Condon
Frankfort, Illinois Age 71 Director Since 2015 Entergy Board Committees • Audit (Chair) • Nuclear |
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Professional Experience
• Retired Audit Partner of Deloitte & Touche LLP (international public accounting firm) – 2002-2011 • Former Audit Partner of Arthur Andersen LLP (international public accounting firm) • Former Director, Cloud Peak Energy, Inc. and Roundy’s, Inc. Skills and Attributes As a retired audit partner of a “Big Four” accounting firm, Mr. Condon brings his many years of experience in auditing and accounting to the Board. As leader of Arthur Andersen’s utility group, Mr. Condon acquired in-depth knowledge of the utility industry. The Board also benefits from his regional and national leadership experience gained at Deloitte & Touche LLP and his current and prior service to community and charitable organizations and on other public company boards. |
|
10 •
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| |
|
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2020 Proxy Statement
|
| |
|
|
|
| |
BOARD OF DIRECTORS
|
|
|
Leo P. Denault
New Orleans, Louisiana Age 60 Director Since 2013 Entergy Board Committees • Executive (Chair) |
| |
Professional Experience
• Chairman of the Board of Directors of Entergy Corporation since February 2013 • Chief Executive Officer of Entergy Corporation and Entergy Services, LLC since February 2013 • Executive Vice President and Chief Financial Officer of Entergy Corporation – 2004-2013 • Director, Edison Electric Institute, Institute of Nuclear Power Operations and Atlanta Center Regional Governing Board of the World Association of Nuclear Operators Skills and Attributes As our Chairman and Chief Executive Officer and former Executive Vice President and Chief Financial Officer, Mr. Denault brings to the Board his leadership skills, his extensive senior executive experience in the utility industry and his deep knowledge of the Company, as well as the knowledge and experience he has gained through his service on the boards of the Edison Electric Institute, the Institute of Nuclear Power Operations and the Atlanta Center Regional Governing Board of the World Association of Nuclear Operators. |
|
|
Admiral Kirkland H. Donald, USN (Ret.)
Mount Pleasant, South Carolina Age 66 Director Since 2013 Entergy Board Committees • Finance • Nuclear (Chair) |
| |
Professional Experience
• Former President and Chief Executive Officer of Systems Planning and Analysis, Inc. (developer of national defense and homeland security programs) – 2014-2015 • Former Executive Vice President, Chief Operating Officer and Director of Systems Planning and Analysis, Inc. – 2013-2014 • Admiral (retired) U.S. Navy • Former Director, Naval Nuclear Propulsion – 2004-2013 • Director, Huntington Ingalls Industries, Inc., Battelle Memorial Institute, CyberCore Technologies and Naval Submarine League • Committee on Foreign Investment in the United States (“CFIUS”) Security Monitor, LANXESS Corporation • Former CFIUS Voting Trustee, Broadcom Limited • Outside Director, Rolls Royce North America, SSA • Former Executive Advisor to NexPhase Capital Partners (private equity firm, formerly Moelis Capital Partners) • Former Member, Board of Managers, Robbins Gioia LLC Skills and Attributes Mr. Donald brings to the Board deep nuclear expertise and valuable leadership and risk-management experience gained through his distinguished military career in the United States Navy’s nuclear program and through his business and senior management experience since retiring from the Navy. |
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|
| |
2020 Proxy Statement
|
| |
|
| |
• 11
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BOARD OF DIRECTORS
|
| |
|
|
|
Philip L. Frederickson
Horseshoe Bay, Texas Age 63 Director Since 2015 Entergy Board Committees • Audit • Executive • Finance (Chair) |
| |
Professional Experience
• Former Executive Vice President, Planning, Strategy and Corporate Affairs of ConocoPhillips (international oil and gas company) – 2006-2008 • Former Executive Vice President, Commercial of ConocoPhillips – 2002-2006 • Former Director, Sunoco Logistics Partners L.P., Rosetta Resources Inc. and Williams Partners LP Skills and Attributes Mr. Frederickson brings to the Board his extensive senior management, operating and leadership experience gained through his business career at ConocoPhillips and its predecessor, Conoco Inc., where he held a variety of senior management positions in operations, strategy and business development. In addition to his diverse senior-level management experience, Mr. Frederickson brings his experience leading strategic change both at ConocoPhillips and on the other public company boards on which he has served. His strong ties to the State of Texas also enable him to provide insight into the issues and concerns of our service territories. |
|
|
Alexis M. Herman
McLean, Virginia Age 72 Director Since 2003 Entergy Board Committees • Corporate Governance • Personnel |
| |
Professional Experience
• Chair and Chief Executive Officer of New Ventures, LLC (corporate consultants) since 2001 • Former Secretary of Labor of the United States of America • Former White House Assistant to the President of the United States of America • Lead Independent Director, Cummins, Inc. • Director, Coca-Cola Company and MGM Resorts International • Senior Vice Chair, The National Urban League • Chair, Toyota Motor Corporation North American Diversity Advisory Board and Member, Global Advisory Board • President, Dorothy I. Height Education Foundation Skills and Attributes Secretary Herman brings to the Board a combination of high-level U.S. government service, experience as a strategic advisor to numerous U.S. and international companies and broad public policy expertise, as well as her public company board experience, including her service as Lead Independent Director to another public company. Through her service on other boards, Ms. Herman has also gained experience addressing the strategic issues of companies impacted by changing consumer demands and technological change. |
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12 •
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2020 Proxy Statement
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BOARD OF DIRECTORS
|
|
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M. Elise Hyland
Pittsburgh, Pennsylvania Age 60 Director Since 2019 Entergy Board Committees • Audit • Finance |
| |
Professional Experience
• Former Senior Vice President, EQT Corporation and Senior Vice President and Chief Operating Officer, EQT Midstream Services, LLC (a petroleum and natural gas exploration and pipeline company) – 2017-2018 • Former Executive Vice President of Midstream Operations and Engineering, EQT Midstream Services, LLC – 2013-2017 • Former President of Commercial Operations, EQT Midstream Services, LLC – 2010-2013 • Former President of Equitable Gas Company, a previously owned entity of EQT – 2007-2010 • Director, Marathon Oil Corporation and Washington Gas Light Company • Former Director, EQT Midstream Partners LP Skills and Attributes Ms. Hyland brings to the Board her extensive senior executive and operations experience in a capital-intensive industry, gained through her career at EQT Corporation and EQT Midstream Services, LLC. This experience, combined with her experience in finance and strategic planning, will enable her to contribute valuable insights as we grow our utility business and execute on our capital plan. |
|
|
Stuart L. Levenick
Naples, Florida Age 67 Director Since 2005 Lead Independent Director Entergy Board Committees • Corporate Governance • Executive • Nuclear |
| |
Professional Experience
• Lead Director of Entergy Corporation since May 2016 • Former Group President and Executive Office Member of Caterpillar Inc. (a manufacturer of construction and mining equipment) – 2004-2015 • Former Executive Director of U.S. Chamber of Commerce, Washington, D.C. • Former Executive Director and Past Chairman of Association of Equipment Manufacturers, Washington, D.C. • Lead Independent Director, W. W. Grainger, Inc. • Director, Finning International, Inc. Skills and Attributes Mr. Levenick brings to the Board his extensive senior executive experience at a major manufacturing company, as well as his experience as a public company director, including as Lead Independent Director of another public company. This experience enables him to contribute valuable operational and financial expertise and offer an informed perspective on leadership development, management and business issues arising out of evolving customer needs and desires in response to technological change. |
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2020 Proxy Statement
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• 13
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|
BOARD OF DIRECTORS
|
| |
|
|
|
Blanche Lambert Lincoln
Arlington, Virginia Age 59 Director Since 2011 Entergy Board Committees • Corporate Governance (Chair) • Personnel |
| |
Professional Experience
• Founder and Principal of Lincoln Policy Group (a consulting firm) since July 2013 • Former Special Policy Advisor for Alston & Bird LLP (legislative and public policy services) – 2011-2013 • Former United States Senator for the State of Arkansas –1999-2011 • Former United States Representative for the State of Arkansas – 1993-1997 • Former Chair, U.S. Senate Committee on Agriculture, Nutrition and Forestry • Former Member, U.S. Senate Committee on Finance, Committee on Energy and Natural Resources, and Special Committee on Aging • Former Member of the U.S. House Committee on Energy and Commerce, Committee on Agriculture and Committee on Natural Resources (formerly House Committee on Merchant Marine and Fisheries) • Director, Rayonier, Inc. and Hope Enterprise Corporation • Trustee of the Center for the Study of the Presidency and Congress Skills and Attributes As a former member of the U.S. Senate and House of Representatives, Ms. Lincoln brings to the Board her extensive background and experience in governmental, public policy and legislative affairs, providing her with a unique and valuable perspective on many of the critical issues and opportunities facing the Company. Her strong ties to the State of Arkansas also provide the Board with insight into the issues and concerns of our service territories. |
|
|
Karen A. Puckett
Houston, Texas Age 59 Director Since 2015 Entergy Board Committees • Audit • Personnel (Chair) |
| |
Professional Experience
• Former President and Chief Executive Officer, Harte Hanks, Inc. (marketing services company) – 2015-2018 • Former President-Global Markets of CenturyLink, Inc. (a telecommunications company) – 2014-2015 • Former Executive Vice President and Chief Operating Officer of CenturyLink, Inc. – 2009-2014 • Former President and Chief Operating Officer of CenturyTel, Inc. – 2000-2009 • Former Director of Harte Hanks, Inc. Skills and Attributes Ms. Puckett brings to the Board her extensive management, operations and business experience acquired through her senior leadership positions in a rapidly changing and highly regulated industry and her deep experience with technology-driven innovation. Ms. Puckett’s ties to the State of Louisiana, as a former resident and senior executive of a large Louisiana-based company, also enable her to offer insight into the issues and concerns of our service territories. |
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14 •
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2020 Proxy Statement
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|
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|
| |
BOARD OF DIRECTORS
|
|
•
|
Seeks to nominate candidates with superior credentials, sound business judgment and the highest ethical character.
|
•
|
Takes into account the candidate’s relevant experience with businesses or other organizations of comparable size to the Company and seeks to identify candidates whose experience and contributions will add to the collective experience of the Board.
|
•
|
Believes the Board should reflect a diversity of backgrounds and experiences in various areas, including age, gender, race, geography and specialized experience, and candidates are assessed to determine the extent to which they would contribute to that diversity.
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2020 Proxy Statement
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• 15
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BOARD OF DIRECTORS
|
| |
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16 •
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| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
CORPORATE GOVERNANCE
|
|
|
Director Retirement Policy
|
| |
Our Corporate Governance Guidelines provide that a person may not be nominated for election or re-election to the Board if he or she has reached the age of 74 on or before January 1 of the year in which such person would be elected or re-elected, unless specifically recommended to serve beyond the age of 74 by the Corporate Governance Committee and approved by the Board of Directors. The Company does not have term limits for its directors. Instead, our Board addresses the suitability for continued service as a director upon the expiration of each director’s term.
|
|
|
Limits on Other Board Service
|
| |
Without the approval of the Corporate Governance Committee, non-employee directors may not serve on more than 4 other public-company boards, and directors who are either an executive of the Company or an executive of another company may not serve on more than 2 other public-company boards. Our Corporate Governance Guidelines also require directors to advise the Chairman of the Board, the Lead Director, the Chair of the Corporate Governance Committee and the General Counsel in advance of accepting an invitation to sit on the board of another publicly-held company so that an appropriate evaluation can be made of the potential for any conflicts of interest or other issues that should be considered before the Board member accepts another board position. In addition, no director may serve as a member of the Audit Committee if that director serves on the audit committees of more than 2 other public companies unless the Board determines that such simultaneous service would not impair the ability of that director to serve effectively on the Audit Committee.
|
|
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Mandatory Resignation Upon Change in Circumstances
|
| |
Our Corporate Governance Guidelines provide that non-employee directors should offer their resignations when either their employment or the major responsibilities they held when they joined the Board change. The Corporate Governance Committee then reviews the change in circumstances and makes a recommendation to the Board as to whether it is appropriate for the director to continue to serve on the Board and be nominated for re-election.
|
|
|
Anti-Hedging Policy
|
| |
We have adopted an anti-hedging policy that prohibits officers, directors and employees from entering into hedging or monetization transactions involving our common stock. Prohibited transactions include, without limitation, zero-cost collars, forward sale contracts, purchase or sale of options, puts, calls, straddles or equity swaps or other derivatives that are directly linked to the Company’s stock or transactions involving “short-sales” of the Company’s stock. The Board adopted this policy to require officers, directors and employees to continue to own Company stock with the full risks and rewards of ownership, thereby ensuring continued alignment of their objectives with those of the Company’s other shareholders.
|
|
|
Stock Ownership
|
| |
Within five years of their election, directors must hold shares or units of Entergy common stock having a market value of at least five times the annual cash retainer or $562,500. A review of non-employee director stock ownership was conducted at the December 2019 Corporate Governance Committee meeting, and the committee determined that all of our non-employee directors satisfied this requirement, as all non-employee directors who had been members of the Board for at least five years held the requisite number of shares or units.
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2020 Proxy Statement
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• 17
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CORPORATE GOVERNANCE
|
| |
|
|
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Majority Voting in
Director Elections |
| |
Our Bylaws require each director to be elected by a majority of the votes cast with respect to such director in uncontested elections (the number of shares voted “For” a director must exceed the number of shares voted “Against” that director). In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for election of directors will be a plurality of votes cast by holders of shares entitled to vote at any meeting for the election of directors at which a quorum is present.
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|
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Annual Election of Directors
|
| |
All of our directors are elected annually at our annual meeting of shareholders.
|
|
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Proxy Access
|
| |
Any shareholder (or any group of up to 20 shareholders) owning at least 3 percent of Entergy’s outstanding common stock for at least three years may include a specified number of director nominees in our proxy materials for the annual meeting of shareholders. Our Bylaws specify qualifying stock ownership, the number of permitted nominees and other requirements related to proxy access.
|
|
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Policy on Poison Pills
|
| |
Entergy does not have a shareholder rights plan, otherwise known as a “Poison Pill.” The Board will obtain shareholder approval prior to adopting a future shareholder rights plan unless the Board, in the exercise of its fiduciary duties, determines that under the circumstance then existing, it would be in the best interest of the Company and our shareholders to adopt a rights plan without prior shareholder approval. If a rights plan is adopted by the Board without prior shareholder approval, the plan must be approved by shareholders at the next annual meeting.
|
|
|
Executive Severance Arrangements
|
| |
Shareholders must ratify any employment or severance agreement with an executive officer that provides severance benefits exceeding 2.99 times the sum of the executive’s annual base salary and annual incentive award.
|
|
18 •
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| |
2020 Proxy Statement
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| |
CORPORATE GOVERNANCE
|
|
Stuart L. Levenick Lead Director (since 2016) |
| |
Lead Director Duties:
|
|||
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| ||||
|
•
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| |
Calls meetings of the independent directors
|
||
|
•
|
| |
Presides at executive sessions of the independent directors and all meetings of the Board at which the Chairman and Chief Executive Officer is not present
|
||
|
•
|
| |
Serves as a member of the Executive Committee of the Board
|
||
|
•
|
| |
Serves as a liaison with the Chairman and Chief Executive Officer when requested by the independent directors
|
||
|
•
|
| |
Serves as the point of contact for shareholders and others to communicate with the Board
|
||
|
•
|
| |
Meets individually with each director to discuss the performance of the individual director, the Board and its committees
|
||
|
•
|
| |
Reviews and advises on Board meeting agendas and consults with the Chairman and Chief Executive Officer on the preparation of agendas
|
||
|
•
|
| |
Provides feedback from the Board to the Chairman and Chief Executive Officer following each executive session of independent directors and, together with the Chair of the Personnel Committee, provides the Chairman and Chief Executive Officer with an annual performance review
|
||
|
•
|
| |
Assists with recruitment of director candidates and, along with the Chairman, may extend the invitation to a new potential director to join the Board
|
•
|
Operates pursuant to a written charter;
|
•
|
Evaluates its performance annually; and
|
•
|
Reviews its charters annually.
|
|
| |
2020 Proxy Statement
|
| |
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| |
• 19
|
|
CORPORATE GOVERNANCE
|
| |
|
|
|
Audit
|
| |
Key Responsibilities
|
| |||
|
Patrick J. Condon (Chair) Other Members: Philip L. Frederickson, M. Elise Hyland and Karen A. Puckett 9 meetings in 2019 Each member of the Audit Committee satisfies the heightened independence standards and qualification criteria and is financially literate in accordance with the NYSE and SEC rules. Mr. Condon and Mr. Frederickson have been determined to be Financial Experts as defined by the SEC |
| |
• Oversees our accounting and financial reporting
processes and the audits of our financial statements;
• Assists the Board in fulfilling its oversight responsibilities with respect to our compliance with legal and regulatory requirements, including our
disclosure controls and procedures;
• Decides whether to appoint, retain or terminate our
independent auditors;
• Pre-approves all audit, audit-related, tax and other
services, if any, provided by the independent auditors;
• Appoints and oversees the work of our Vice
President, Internal Audit and assesses the
performance our Internal Audit Department; and
• Prepares the Audit Committee Report.
|
| |||
|
|
| |
|
| |
|
|
|
Corporate Governance
|
| |
Key Responsibilities
|
| |||
|
Blanche L. Lincoln (Chair) Other Members: Alexis M. Herman and Stuart L. Levenick 9 meetings in 2019 |
| |
• Develops policies and practices relating to corporate governance and reviews compliance with the
Company’s Corporate Governance Guidelines;
• Recommends the director nominees for approval by
the Board and shareholders;
• Establishes and implements self-evaluation
procedures for the Board and its committees;
• Reviews annually the form and amount of non-
employee director compensation, and makes
recommendations to the Board with respect thereto; and
• Provides oversight of the Company’s sustainability strategies, policies and practices.
|
|
20 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
CORPORATE GOVERNANCE
|
|
|
Finance
|
| |
Key Responsibilities
|
| |||
|
Philip L. Frederickson (Chair) Other Members: John R. Burbank, Kirkland H. Donald and M. Elise Hyland 8 meetings in 2019 |
| |
• Oversees corporate capital structure and budgets and
recommends approval of capital projects;
• Oversees financial plans and key financial risks;
• Reviews and makes recommendations to the Board regarding our financial policies, strategies, and
decisions, including our dividend policy;
• Reviews our investing activities; and
• Reviews and makes recommendations to the Board
with respect to significant investments, including large capital projects. |
| |||
|
|
| |
|
| |
|
|
|
Nuclear
|
| |
Key Responsibilities
|
| |||
|
Kirkland H. Donald (Chair) Other Members: Patrick J. Condon and Stuart L. Levenick 5 meetings in 2019 The number of Nuclear Committee meetings in 2019 does not include visits to our nuclear sites or meetings with the Institute of Nuclear Power Operations by members of the Nuclear Committee. |
| |
• Provides non-management oversight and reviews all
of the Company’s nuclear generating plants;
• Focuses on safety, operating performance, operating
costs, staffing and training; and
• Consults with management concerning internal and external nuclear-related issues.
|
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 21
|
|
CORPORATE GOVERNANCE
|
| |
|
|
|
Personnel
|
| |
Key Responsibilities
|
| |||
|
Karen A. Puckett (Chair) Other Members: John R. Burbank, Alexis M. Herman and Blanche L. Lincoln 9 meetings in 2019 Each member of the Personnel Committee satisfies the heightened independence standards and qualification criteria in the NYSE and SEC rules |
| |
• Determines and approves the compensation of our Chief Executive Officer and other senior executive
officers;
• Approves or makes recommendations to the Board to approve incentive, equity-based and other
compensation plans;
• Develops and implements compensation policies;
• Evaluates the performance of our Chairman and Chief
Executive Officer;
• Reports at least annually to the Board on succession planning, including succession planning for the Chief
Executive Officer; and
• Provides oversight of the Company’s organizational health and diversity and inclusion strategies.
|
|
22 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
CORPORATE GOVERNANCE
|
|
•
|
Board effectiveness;
|
•
|
Satisfaction with the performance of the Lead Director;
|
•
|
Board and committee structure and composition;
|
•
|
Satisfaction with the performance of the Chairman;
|
•
|
Access to the Chief Executive Officer and other members of senior management;
|
•
|
Quality of the Board discussions and balance between presentations and discussion;
|
•
|
Quality of materials presented to directors;
|
•
|
Board and committee information needs;
|
•
|
Satisfaction with Board agendas and the frequency of meetings and time allocation;
|
•
|
Whether the Board is focusing on the most important issues;
|
•
|
Oversight of key risks and risk management;
|
•
|
Board dynamics and culture;
|
•
|
Board dialogue;
|
•
|
Board and committee succession planning;
|
•
|
Director access to experts and advisors; and
|
•
|
Satisfaction with the format of the evaluation.
|
|
| |
2020 Proxy Statement
|
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|
| |
• 23
|
|
CORPORATE GOVERNANCE
|
| |
|
|
|
Board
Overall identification, management and mitigation of risk, with a focus on strategic risks |
|
|
Audit Committee
|
| |
Corporate Governance
Committee |
| |
Finance
Committee |
| |
Nuclear
Committee |
| |
Personnel
Committee |
|
|
• Financial reporting
process and internal control risks • Risks associated with regulatory compliance risks including environmental, NERC, and FERC, • Risks associated with corporate compliance, significant legal matters, and the Company’s insurance programs • Market and credit risks • Physical and Cybersecurity risks |
| |
• Corporate governance
and legislative and regulatory policy risks • Board succession risks • Risks related to shareholder activism • Environmental, sustainability and corporate social responsibility |
| |
• Risks associated with
strategic decisions and major transactions and capital investments • Financial risks, including liquidity, credit and capital market risks |
| |
• Safety risks unique to
the operation of our nuclear fleet |
| |
• Executive
compensation risks • Risks associated with safety and employee matters • Management succession risks |
|
➢
|
recent cyber risk and cybersecurity developments;
|
➢
|
industry engagement activities;
|
➢
|
legislative and regulatory developments;
|
➢
|
cyber risk governance and oversight;
|
➢
|
cyber incident response plans and strategies;
|
➢
|
cybersecurity drills and exercises;
|
➢
|
assessments by third party experts;
|
➢
|
key cyber risk metrics and activities; and
|
➢
|
major projects and initiatives.
|
24 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
CORPORATE GOVERNANCE
|
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 25
|
|
CORPORATE GOVERNANCE
|
| |
|
|
|
Board Committee
|
| |
Primary Sustainability Oversight Responsibility
|
|
|
Corporate Governance
|
| |
Overall corporate sustainability strategy; corporate social responsibility; corporate governance issues; governmental, regulatory, public policy and public relations matters; public advocacy activities; shareholder concerns
|
|
|
Personnel
|
| |
Executive compensation policy; employee and human resources issues; employee training and development; talent management; employee and contractor safety; diversity and inclusion; supplier diversity
|
|
|
Audit
|
| |
Environmental compliance and auditing and environmental policies; ethics and compliance; market and credit risks; cybersecurity risks; financial reporting processes and risks; other strategic risks and general risk oversight
|
|
|
Finance
|
| |
Financial stability; major capital investments
|
|
|
Nuclear
|
| |
Safety risks unique to the nuclear fleet; sustainability of our nuclear plants
|
|
26 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
CORPORATE GOVERNANCE
|
|
✔
|
Provide visibility and transparency into our business and our financial and operational performance;
|
✔
|
Discuss with our shareholders the issues that are important to them, hear their expectations for us and share our views;
|
✔
|
Share our perspective on Company and industry developments;
|
✔
|
Discuss and seek feedback on our executive compensation and corporate governance policies and practices;
|
✔
|
Share our environmental and sustainability strategy and record; and
|
✔
|
Seek feedback on our communications and disclosures to shareholders.
|
➢
|
Shareholders appreciated the opportunity to meet with our team for open discussion and to directly ask questions;
|
➢
|
Shareholders are interested in Board refreshment, the process we use to select new directors, and our Board assessment process;
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 27
|
|
CORPORATE GOVERNANCE
|
| |
|
|
➢
|
Several shareholders shared their perspectives on our climate strategy and disclosure, including our TCFD-aligned climate report; and
|
➢
|
Shareholders are increasingly interested in human capital management issues, particularly relating to how we are managing the challenges of finding and developing talented employees and our efforts at developing a skilled workforce pipeline.
|
✔
|
Addition of a cumulative utility earnings measure, as a second performance metric in addition to relative total shareholder return, to our Long-Term Performance Unit Program;
|
✔
|
Adoption of proxy access for director nominations;
|
✔
|
Addition of a one-on-one individual assessment component to our Board self-evaluation process;
|
✔
|
Amendments to our Corporate Governance Guidelines to limit the number of public-company boards on which our directors may serve;
|
✔
|
Enhancements to our proxy disclosure, including in the areas of risk oversight (including cyber risk oversight), director backgrounds and qualifications, and incentive plan target setting;
|
✔
|
Enhancements to our water management disclosures;
|
✔
|
Publication of a two degree scenario analysis in 2019; and
|
✔
|
Other enhancements to the environmental and sustainability disclosures in our Integrated Report.
|
28 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
CORPORATE GOVERNANCE
|
|
•
|
To any transaction or series of transactions in which the Company or a subsidiary is a participant;
|
•
|
When the amount involved exceeds $120,000; and
|
•
|
When a Related Party (a director or executive officer of the Company, any nominee for director, any shareholder owning an excess of 5% of the total equity of the Company and any immediate family member of any such person) has a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity).
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 29
|
|
Compensation
|
| |
Amount
|
|
|
Quarterly Cash Retainer
|
| |
$28,125
|
|
|
Annual Lead Director Retainer
|
| |
$30,000
|
|
|
Annual Audit Committee Chair Retainer
|
| |
$25,000
|
|
|
Annual Nuclear and Personnel Committee Chair Retainer
|
| |
$20,000
|
|
|
Annual Finance and Corporate Governance Chair Retainer
|
| |
$15,000
|
|
|
Annual Nuclear Committee Member Retainer
|
| |
$18,000
|
|
30 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
2019 NON-EMPLOYEE DIRECTOR COMPENSATION
|
|
|
Name(1)
|
| |
Fees
Earned or Paid in Cash ($)(2) |
| |
Stock Awards
($)(3) |
| |
All Other
Compensation ($)(4) |
| |
Total ($)
|
|
|
John R. Burbank
|
| |
123,500
|
| |
155,268
|
| |
21,984
|
| |
300,752
|
|
|
Patrick J. Condon
|
| |
174,250
|
| |
155,268
|
| |
18,617
|
| |
348,135
|
|
|
Kirkland H. Donald
|
| |
163,750
|
| |
155,268
|
| |
18,325
|
| |
337,343
|
|
|
Philip L. Frederickson
|
| |
125,000
|
| |
155,268
|
| |
11,579
|
| |
291,847
|
|
|
Alexis M. Herman
|
| |
110,000
|
| |
155,268
|
| |
48,007
|
| |
313,275
|
|
|
M. Elise Hyland
|
| |
86,125
|
| |
76,788
|
| |
375
|
| |
163,288
|
|
|
Stuart L. Levenick
|
| |
167,750
|
| |
155,268
|
| |
41,533
|
| |
364,551
|
|
|
Blanche L. Lincoln
|
| |
125,000
|
| |
155,268
|
| |
25,315
|
| |
305,583
|
|
|
Karen A. Puckett
|
| |
145,000
|
| |
155,268
|
| |
21,322
|
| |
321,590
|
|
(1)
|
Leo P. Denault, the Company’s Chairman and Chief Executive Officer, is not included in this table as he was an employee of the Company and thus received no additional compensation for his service as a director during 2019. The compensation received by Mr. Denault as an employee of the Company is shown in the 2019 Summary Compensation Table on page 57. Ms. Hyland became a member of the Board effective March 4, 2019. Accordingly, her compensation reported in this table represents prorated compensation for her service in 2019.
|
(2)
|
The amounts reported in this column consist of all fees earned or paid in cash for services as a director, including retainer fees, and Lead Director, Committee Chair and Nuclear Committee annual retainers, all of which are described under “Cash Compensation Paid to Non-Employee Directors” above.
|
(3)
|
The amounts in this column represent the aggregate grant date fair value determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation (“FASB ASC Topic 718”) for the shares of common stock granted on a quarterly basis to each non-employee director during 2019 and the 825 phantom stock units granted to each director in 2019 under the Director Service Recognition Program, other than Ms. Hyland who received a pro-rated number of phantom stock units. For a discussion of the relevant assumptions used in valuing these amounts, see Note 12 to the Financial Statements in our Form 10-K for the year ended December 31, 2019. As of December 31, 2019, the outstanding phantom units held by each non-employee director were: Mr. Burbank: 1,072; Mr. Condon: 4,074; Mr. Donald: 5,417; Mr. Frederickson: 3,574; Ms. Herman: 13,527; Ms. Hyland: 204; Mr. Levenick: 11,758; Ms. Lincoln: 7,327; and Ms. Puckett: 4,074.
|
(4)
|
The amounts in column (g) include dividend equivalents accrued under the Director Service Recognition Program, Company paid physical exams and related expenses and director education related expenses. For 2019, accrued dividend equivalents under the Director Service Recognition Program were: Mr. Burbank: $2,422; Mr. Condon: $13,409; Mr. Donald: $18,325; Mr. Frederickson: $11,579; Ms. Herman: $48,007; Ms. Hyland: $375; Mr. Levenick: $41,533; Ms. Lincoln: $25,315; and Ms. Puckett: $13,409.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 31
|
32 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
AUDIT MATTERS
|
|
Patrick J. Condon, Chair
|
| |
M. Elise Hyland
|
Philip L. Frederickson
|
| |
Karen A. Puckett
|
|
|
| |
2019
|
| |
2018
|
|
|
Audit Fees
|
| |
$8,710,000
|
| |
$8,801,895
|
|
|
Audit-Related Fees(a)
|
| |
775,000
|
| |
1,017,119
|
|
|
|
| |
|
| |
|
|
|
Total audit and audit-related fees
|
| |
$9,485,000
|
| |
$9,869,014
|
|
|
Tax Fees
|
| |
|
| |
—
|
|
|
All Other Fees
|
| |
31,835
|
| |
—
|
|
|
|
| |
|
| |
|
|
|
Total Fees(b)
|
| |
$9,516,835
|
| |
$9,869,014
|
|
(a)
|
Includes fees for employee benefit plan audits, consultation on financial accounting and reporting, and other attestation services.
|
(b)
|
100% of fees paid in 2019 and 2018 were pre-approved by the Audit Committee.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 33
|
|
AUDIT MATTERS
|
| |
|
|
1.
|
The independent auditor will provide the Audit Committee, for approval, an annual engagement letter outlining the scope of services proposed to be performed during the fiscal year, including audit services and other permissible non-audit services (e.g. audit-related services, tax services, and all other services).
|
2.
|
For other permissible services not included in the engagement letter, Entergy management will submit a description of the proposed service, including a budget estimate, to the Audit Committee for pre-approval. Management and the independent auditor must agree that the requested service is consistent with the SEC’s rules on auditor independence prior to submission to the Audit Committee. The Audit Committee, at its discretion, will pre-approve permissible services and has established the following additional guidelines for permissible non-audit services provided by the independent auditor:
|
•
|
Aggregate non-audit service fees are targeted at fifty percent or less of the approved audit service fee.
|
•
|
All other services should only be provided by the independent auditor if it is a highly qualified provider of that service or if the Audit Committee pre-approves the independent audit firm to provide the service.
|
3.
|
The Audit Committee will be informed quarterly as to the status of pre-approved services actually provided by the independent auditor.
|
4.
|
To ensure prompt handling of unexpected matters, the Audit Committee delegates to the Audit Committee Chair or its designee the authority to approve permissible services and fees. The Audit Committee Chair or designee will report action taken to the Audit Committee at the next scheduled Audit Committee meeting.
|
5.
|
The Vice President and General Auditor will be responsible for tracking all independent auditor fees and will report quarterly to the Audit Committee.
|
34 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 35
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
|
Name
|
| |
Age
|
| |
Title
|
|
|
Leo P. Denault
|
| |
60
|
| |
Chairman of the Board and Chief Executive Officer
|
|
|
Andrew S. Marsh
|
| |
48
|
| |
Executive Vice President and Chief Financial Officer
|
|
|
A. Christopher Bakken, III
|
| |
59
|
| |
Executive Vice President, Nuclear Operations/Chief Nuclear Officer
|
|
|
Marcus V. Brown
|
| |
58
|
| |
Executive Vice President and General Counsel
|
|
|
Roderick K. West
|
| |
51
|
| |
Group President, Utility Operations
|
|
|
|
| |
|
| |
Page
|
|
|
Executive Summary
|
| |
|
| |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
|
What We Pay and Why
|
| |
|
| |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
|
Compensation Policies and Practices
|
| |
|
| |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | |
36 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
•
|
Earnings per Share. Our GAAP earnings per share increased to $6.30 from $4.63 per share in 2018. On an adjusted basis, our earnings per share increased to $5.40 per share from $5.29 per share in 2018.
|
•
|
Dividends. We increased our quarterly common stock dividend for the fifth straight year to $0.93 per share, or $3.72 on an annualized basis.
|
•
|
Total Shareholder Return. Our total shareholder return for 2019 was 44.3%, compared to 26.8% for the Philadelphia Utility Index, placing us in the top quartile of the index.
|
•
|
Entergy Arkansas announced plans for a 100-MW solar energy facility which, pending approval by the Arkansas Public Service Commission, will be the largest utility-owned solar facility in the state and the first to feature battery storage. Construction also continued on Chicot Solar Project, a 100-MW solar photovoltaic installation expected to be completed in 2020, at which time Entergy Arkansas will enter into an agreement to purchase power from the facility.
|
•
|
Entergy Louisiana completed construction of J. Wayne Leonard Power Station, a 943-MW combined cycle gas turbine (CCGT) generating plant, and continued construction of Lake Charles Power Station, a 994-MW CCGT expected to be in service in mid-2020. Additionally, construction continued on the Washington Parish Energy Center, a 361-MW simple-cycle combustion turbine expected to be in service in 2020, at which time Entergy Louisiana will acquire the facility. Construction also began on Capital Region Solar, a 50-MW facility; a 20-year power purchase agreement for the output from this facility was selected from a request for proposals for renewable resources.
|
•
|
Entergy Mississippi acquired Choctaw Generating Station, a 810-MW CCGT. Entergy Mississippi also has proposed to partner with Recurrent Energy on a new 100-MW solar energy farm; the proposal is currently before the Mississippi Public Service Commission.
|
•
|
Entergy New Orleans began construction of the New Orleans Power Station, a 128-MW unit comprised of natural gas-powered reciprocating internal combustion engines expected to be in service in 2020. Entergy New Orleans also (1) continued construction of 5 MW of distributed-scale solar resources through its Commercial Rooftop Solar Program, which leases commercial building rooftops to install utility-owned solar, expected to be completed in 2020, (2) began a pilot project for company-owned residential rooftop solar, completing 64 of 100 planned installations in 2019, and (3) received approval for three solar projects totaling 90 MW from its renewables request for proposals.
|
•
|
Entergy Texas began construction of the Montgomery County Power Station, a 993-MW CCGT expected to be in service in 2021.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 37
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
•
|
We were included on the 2019 Dow Jones Sustainability North America Index and received perfect scores in the areas of materiality, policy influence, climate strategy, water-related risks, and corporate citizenship & philanthropy and top decile performance in the areas of corporate governance, codes of business conduct, transmission & distribution, and labor practice indicators. This was the 18th consecutive year for Entergy to be included on either the World or North America sustainability index or both.
|
•
|
We were named to Newsweek’s first-ever list of America’s Most Responsible Companies.
|
•
|
We were included as an inaugural member of the U.S. Chamber of Commerce Foundation Corporate Citizenship Center’s Corporate Citizenship Hall of Fame.
|
•
|
We received The Civic 50 Award, which recognizes the top 50 community-minded companies in the United States, for the fourth consecutive year.
|
•
|
Entergy's employee resource groups (ERGs) were collectively ranked among the top 25 U.S. employee and business resource groups and diversity councils for 2019 by the Association of ERGs and Councils. The ERG & Council Honors Award recognizes and honors outstanding contributions and achievements of the best employee and business resource groups and diversity councils in the country.
|
38 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
•
|
Motivate our management team to drive strong financial and operational results.
|
•
|
Attract and retain a highly experienced and successful management team.
|
•
|
Incentivize and reward the achievement of financial metrics that are deemed by the Personnel Committee to be consistent with the overall goals and strategic direction that the Board has approved for the Company.
|
•
|
Align the interests of our executives and our shareholders by directly tying the value of equity-based awards to our stock price performance, relative total shareholder return and earnings growth.
|
•
|
Create sustainable value for the benefit of all of our stakeholders, including our owners, customers, employees and communities.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 39
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
|
What We Do
|
| |||
|
✔
|
| |
Executive compensation programs are highly correlated to performance and focused on long-term value creation
|
|
|
✔
|
| |
Double trigger for cash severance payments and equity acceleration in the event of a change in control
|
|
|
✔
|
| |
Clawback policy
|
|
|
✔
|
| |
Maximum payout capped at 200% of target under our Annual Incentive Plan and Long-Term Performance Unit Program for members of the Office of the Chief Executive
|
|
|
✔
|
| |
Minimum vesting periods for equity-based awards
|
|
|
✔
|
| |
Rigorous goal setting aligned with externally disclosed annual and multi-year financial targets
|
|
|
✔
|
| |
Long-term compensation mix weighted more toward performance units than service-based equity awards
|
|
|
✔
|
| |
All long-term incentive compensation settled in Entergy stock
|
|
|
✔
|
| |
Rigorous stock ownership requirements
|
|
|
✔
|
| |
Annual Say-on-Pay vote
|
|
|
What We Don’t Do
|
| |||
|
×
|
| |
No 280G tax “gross up” payments in the event of a change in control
|
|
|
×
|
| |
No tax “gross up” payments on executive perquisites, other than relocation benefits
|
|
|
×
|
| |
No option repricing or cash buy-outs for underwater options without shareholder approval
|
|
|
×
|
| |
No agreements providing for severance payments to executive officers that exceed 2.99 times annual base salary and annual incentive awards without shareholder approval
|
|
|
×
|
| |
No unusual or excessive perquisites
|
|
|
×
|
| |
No hedging or pledging of Entergy stock
|
|
|
×
|
| |
No fixed term employment agreements
|
|
|
×
|
| |
No new officer participation in the System Executive Retirement Plan
|
|
|
×
|
| |
No grants of supplemental service credit to newly-hired officers under any of the Company’s non-qualified retirement plans
|
|
•
|
Changes In Annual Incentive Plan Performance Measures. In 2019, in recognition of the Company’s successful execution on its strategy to exit the EWC business, the Company decided to establish a new, single non-GAAP earnings measure for guidance and investor reporting purposes that would better reflect Entergy’s ongoing business and respond to feedback received from investors on the earnings measures on which the Company had previously reported and guided. This new measure, Entergy Adjusted Earnings Per Share (“ETR Adjusted EPS”), adjusts the Company’s as reported (GAAP) earnings per share results to eliminate the impact of its EWC business, significant tax items and other non-routine items. With this change in the external guidance measure, and given the Personnel Committee’s desire to maintain an appropriate degree of alignment between the Company’s externally communicated earnings targets and the targets under the annual incentive plan, the committee adopted new performance measures to determine the maximum funding level of the annual incentive plan, with each performance measure weighted equally:
|
40 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
○
|
The earnings measure, ETR Tax Adjusted Earnings Per Share or ETR Tax Adjusted EPS, is based on the externally reported ETR Adjusted EPS, which is then adjusted to add back the effect of significant tax items, and to eliminate the effect of major storms, the resolution of certain unresolved regulatory litigation matters, changes in federal income tax law and unrealized gains or losses on equity securities (the “Pre-Determined Exclusions”).
|
○
|
The cash flow measure, ETR Adjusted Operating Cash Flow, or ETR Adjusted OCF, is calculated based on the Company’s as-reported (GAAP) operating cash flow, adjusted to eliminate the effect of any significant non-routine items not representative of the ongoing business, such as items associated with the decisions to sell or close the EWC nuclear plants, and any Pre-Determined Exclusions.
|
•
|
Change in Long-Term Performance Unit Program (“LTIP”) Performance Measures. In keeping with the change in the Company’s external guidance measure, the committee also adopted a new earnings measure for use in measuring performance under the LTIP. In particular, the committee decided that, for the 2019 – 2021 LTIP period, the performance measures will be (1) cumulative ETR Adjusted EPS, adjusted to eliminate the effect of any Pre-Determined Exclusions, and (2) relative total shareholder return (“TSR”), with relative TSR weighted 80% and cumulative ETR Adjusted EPS accounting for the remaining 20%.
|
•
|
Short-Term and Long-Term Incentive Targets Tailored to Role: Beginning in 2019, an executive officer’s short and long-term incentive targets are being determined based on job-specific market data for the officer’s role. Previously, the targets were the average of the market data for the officers within a specific management level, without regard to the officer’s specific job functions. We believe that this change will help assure that each officer’s incentive targets are market competitive with respect to the officer’s particular role.
|
|
| |
Following our 2019 Annual Meeting of Shareholders, the Personnel Committee reviewed the results of the shareholder advisory vote on executive compensation (“Say-on-Pay Vote”) that was held at the meeting with respect to the 2018 compensation actions and decisions for Mr. Denault and the other NEOs. Given the high level of support expressed for the Company’s executive compensation programs and the feedback received through our annual shareholder outreach process, the Personnel Committee believes that the Company’s shareholders are generally supportive of our executive compensation pay practices, and the committee did not make any changes to Entergy’s executive compensation programs in response to this advisory vote.
|
•
|
For 2019, 87% of our Chief Executive Officer’s target TDC was variable, including 70% in long-term incentives and 17% in annual incentives and on average, approximately 76% of our other NEOs’ target TDC was variable, including an average of 59% in long-term incentives and 17% in annual incentives (excluding non-qualified supplemental retirement income, nuclear retention plan payments and compensation reported as “all other compensation” in the 2019 Summary Compensation Table).
|
•
|
Only the base salary portion of annual target TDC is fixed.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 41
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
•
|
Annual incentive awards are tied to our financial and operational performance through the Entergy Achievement Multiplier (“EAM”), which is the performance metric used to determine the maximum funding available for awards under the plan. The 2019 EAM was determined based on two equally weighted performance metrics: (i) ETR Tax Adjusted EPS; and (ii) ETR Adjusted OCF. Below are the 2019 targets and results determined by the Personnel Committee:
|
|
Annual Incentive Plan
|
| |
2019 Targets
|
| |
2019 Results
|
|
|
ETR Tax Adjusted EPS
|
| |
$5.30
|
| |
$6.53
|
|
|
ETR Adjusted OCF ($ billions)
|
| |
$3.100
|
| |
$2.966
|
|
|
EAM
|
| |
100%
|
| |
139%
|
|
|
Average NEO Payout (as a percentage of target)
|
| |
|
| |
136%
|
|
•
|
For the long-term performance units, Entergy’s TSR in relation to the TSR of the companies included in the Philadelphia Utility Index was established as the performance measure for the 2017 – 2019 performance period. In January 2020, the Personnel Committee certified the following results:
|
|
Long-Term Performance Unit Program
|
| |
2017- 2019
LTIP Target |
| |
2017- 2019
LTIP Result |
|
|
Relative TSR
|
| |
Median
|
| |
1st Quartile
|
|
|
Payout (as a percentage of target)
|
| |
100%
|
| |
200%
|
|
42 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
(1)
|
SCT Compensation: (i) base salary paid in each year; (ii) actual bonus earned for each year; (iii) the grant date fair value of long-term incentive awards; (iv) the change in pension value for each year; and (v) all other compensation for each year, each as shown in the Summary Compensation Table.
|
(2)
|
Realized Pay: (i) base salary paid in each year; (ii) the actual bonus earned for each year; (iii) for stock option grants, the gain on any options exercised during each year valued on the exercise date; (iv) for performance units, the actual payout for the performance periods ending each year valued at each year’s closing price; and (v) for restricted stock grants, the value of grants vesting in each year valued at each year’s closing price. The increases in Mr. Denault’s realized pay from 2017 to 2018 and from 2018 to 2019 primarily reflect the impact of increases in the Company’s stock price on the value of long term incentives and the Company’s strong TSR in relation to its peers over the periods presented.
|
➢
|
Market Data for Compensation Comparison
|
•
|
published and private compensation survey data compiled by Pay Governance, the Personnel Committee’s independent compensation consultant;
|
•
|
both utility and general industry data to determine total cash compensation (base salary and annual incentive) for non-industry specific roles;
|
•
|
data from utility companies to determine total cash compensation for management roles that are utility-specific, such as Group President, Utility Operations; and
|
•
|
utility market data to determine long-term incentives for all positions.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 43
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
➢
|
How the Personnel Committee Uses Market Data
|
➢
|
Proxy Peer Group
|
|
AES Corporation
|
| |
Consolidated Edison Inc.
|
| |
El Paso Electric Co.
|
| |
PG&E Corporation
|
|
|
Ameren Corporation
|
| |
Dominion Energy
|
| |
Eversource Energy
|
| |
Public Service Enterprise Group Inc.
|
|
|
American Electric Power Co. Inc.
|
| |
DTE Entergy Company
|
| |
Exelon Corporation
|
| |
Southern Company
|
|
|
American Water Works
|
| |
Duke Energy Corporation
|
| |
FirstEnergy Corporation
|
| |
Xcel Energy Inc.
|
|
|
CenterPoint Energy Inc.
|
| |
Edison International
|
| |
NextEra Energy, Inc.
|
| |
|
|
|
Compensation
Element |
| |
Primary Purpose
|
| |
Performance Measured
|
| |
Performance
Period |
|
|
Base Salary
(Cash) |
| |
Provides a base level of competitive cash compensation for executive talent.
|
| |
Experience, job scope, market data, individual performance and internal equity
|
| |
Annual
|
|
|
Annual Incentive
(Cash) |
| |
Motivates and rewards executives for performance on key financial measures during the year.
|
| |
ETR Tax Adjusted EPS
ETR Adjusted OCF |
| |
1 year
|
|
|
Long-Term Performance Unit Program (Equity)
|
| |
Focuses our executives on growing earnings and building long-term shareholder value and increases our executives’ ownership of our common stock.
|
| |
Relative TSR
Cumulative ETR Adjusted EPS |
| |
3 years
|
|
|
Stock Options
(Equity) |
| |
Align interests of executives with long-term shareholder value, provide competitive compensation and increase our executives’ ownership in our common stock.
|
| |
Stock price, job scope, market data and individual performance
|
| |
3 years
|
|
|
Restricted Stock
(Equity) |
| |
Aligns interests of executives with long-term shareholder value, provides competitive compensation, retains executive talent and increases our executives’ ownership in our common stock.
|
| |
Stock price, job scope, market data and individual performance
|
| |
3 years
|
|
44 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
|
NEO
|
| |
2018 Base Salary
|
| |
2019 Base Salary
|
|
|
Leo P. Denault
|
| |
$1,260,000
|
| |
$1,260,000
|
|
|
Andrew S. Marsh
|
| |
$622,000
|
| |
$650,000
|
|
|
A. Christopher Bakken, III
|
| |
$638,125
|
| |
$654,078
|
|
|
Marcus V. Brown
|
| |
$650,000
|
| |
$666,250
|
|
|
Roderick K. West
|
| |
$696,598
|
| |
$714,013
|
|
•
|
The committee’s goal is to establish performance measures that are consistent with the Company’s strategy and business objectives for the upcoming year, as reflected in its financial plan, and are designed to drive results that represent a high level of achievement.
|
•
|
These measures are approved based on a comprehensive review by the full Board of the Company’s financial plan, conducted in December of the preceding year and updated in January to reflect key drivers of anticipated changes in performance from the preceding year.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 45
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
•
|
Take into account changes in the business environment and specific challenges facing the Company;
|
•
|
Reflect an appropriate balancing of the various risks and opportunities recognized at the time the targets are set; and
|
•
|
Are aligned with external expectations communicated to our shareholders.
|
•
|
They are based on objective financial measures that we and our investors consider to be important in evaluating our financial performance;
|
•
|
They are based on the same metrics we use for internal and external financial reporting; and
|
•
|
They provide both discipline and transparency.
|
46 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
|
|
| |
Weight
|
| |
Performance Goals(1)
|
| |||||||||
|
Minimum
|
| |
Target
|
| |
Maximum
|
| |
2019 Results(2)
|
| ||||||
|
ETR Tax Adjusted EPS ($)(3)
|
| |
50%
|
| |
4.77
|
| |
5.30
|
| |
5.83
|
| |
$6.53
|
|
|
ETR Adjusted OCF($ billion)
|
| |
50%
|
| |
2.650
|
| |
3.100
|
| |
3.550
|
| |
2.966
|
|
|
EAM as % of Target
|
| |
|
| |
25%
|
| |
100%
|
| |
200%
|
| |
139%
|
|
(1)
|
Payouts for performance between minimum and target achievement levels and between target and maximum achievement levels are calculated using straight-line interpolation. There is no payout for performance below the minimum achievement level.
|
(2)
|
See Appendix A for the reconciliation of non-GAAP financial measures to GAAP results.
|
(3)
|
ETR Tax Adjusted EPS is a different measure than the consolidated operational earnings per share and ETR Adjusted OCF was a different measure than the operational operating cash flow used to determine the 2018 annual incentive awards. As a result, the goals and results are not comparable year over year.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 47
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
|
NEO
|
| |
Base Salary
|
| |
Target as
Percentage of Base Salary |
| |
Payout as
Percentage of Target(1) |
| |
2019 Annual
Incentive Award |
|
|
Leo P. Denault
|
| |
$1,260,000
|
| |
140%
|
| |
137%
|
| |
$2,416,680
|
|
|
Andrew S. Marsh
|
| |
$650,000
|
| |
80%
|
| |
137%
|
| |
$712,400
|
|
|
A. Christopher Bakken, III
|
| |
$654,078
|
| |
70%
|
| |
135%
|
| |
$618,104
|
|
|
Marcus V. Brown
|
| |
$666,250
|
| |
75%
|
| |
137%
|
| |
$684,573
|
|
|
Roderick K. West
|
| |
$714,013
|
| |
70%
|
| |
135%
|
| |
$674,742
|
|
(1)
|
The NEOs could earn a maximum payout ranging from 0% to 200% of their target opportunity, not to exceed the EAM.
|
48 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
|
NEO
|
| |
LTI Grant Date Value
|
|
|
Leo P. Denault
|
| |
$6,600,000
|
|
|
Andrew S. Marsh
|
| |
$1,933,750
|
|
|
A. Christopher Bakken, III
|
| |
$1,558,800
|
|
|
Marcus V. Brown
|
| |
$1,528,750
|
|
|
Roderick K. West
|
| |
$1,641,200
|
|
•
|
Each performance unit represents one share of our common stock at the end of the three-year performance period, plus dividends accrued during the performance period.
|
•
|
The performance units and accrued dividends on any shares earned during the performance period are settled in shares of Entergy common stock.
|
•
|
The Personnel Committee sets payout opportunities for the program at the outset of each performance period.
|
•
|
No payout if the TSR falls within the lowest quartile of the peer companies in the Philadelphia Utility Index and Cumulative ETR Adjusted EPS is below the minimum performance goal.
|
•
|
All shares paid out under the LTIP are required to be retained by our executive officers until applicable executive stock ownership requirements are met.
|
|
Performance Measures(1)
|
| |
LTIP
Measure Weight |
| |
Payout
|
|
|
Relative TSR
|
| |
80%
|
| |
Minimum (25%) – Bottom of 3rd Quartile
Target (100%) – Median Percentile Maximum (200%) – Top Quartile |
|
|
Cumulative ETR Adjusted Earnings Per Share ($)
|
| |
20%
|
| |
Minimum (25%) – Minus 10% of Target
Target (100%) – 100% of Target Maximum (200%) – Plus 10% of Target |
|
(1)
|
Payouts for performance between achievement levels are calculated using straight-line interpolation, with no payouts for performance below the minimum achievement level for both performance measures.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 49
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
•
|
The Personnel Committee chose relative TSR as a performance measure because it reflects the Company’s creation of shareholder value relative to other electric utilities included in the Philadelphia Utility Index over the performance period. By measuring performance in relation to an industry benchmark, this measure is intended to isolate and reward management for the creation of shareholder value that is not driven by events that affect the industry as a whole.
|
•
|
Minimum, target and maximum performance levels are determined by reference to the ranking of Entergy’s TSR in relation to the TSR of the companies in the Philadelphia Utility Index. The Personnel Committee identified the Philadelphia Utility Index as the appropriate industry peer group for determining relative TSR because the companies included in this index, in the aggregate, are deemed to be comparable to the Company in terms of business and scale.
|
•
|
Cumulative ETR Adjusted Earnings Per Share, which adjusts Entergy’s as reported (GAAP) results to eliminate the impact of EWC and other non-routine items, was selected in 2019 as a performance measure because the committee wished to incentivize management to achieve steady, predictable earnings growth for the Company over the three-year performance period, and because it aligns with the earnings measure used to communicate the Company’s earnings expectations externally to investors.
|
•
|
In a manner similar to the way targets are established for the annual incentives, targets for the Cumulative ETR Adjusted EPS performance measure were established by the Personnel Committee after the Entergy Board‘s review of Entergy’s financial plan for the three-year period beginning in 2019 and are consistent with the earnings expectations for the Company that are communicated to investors. These targets also incorporate the Pre-Determined Exclusions discussed previously with respect to the annual incentive measures.
|
|
NEO
|
| |
2019 – 2021
Target LTIP Performance Units |
| |
Stock Options
|
| |
Shares of Restricted Stock
|
|
|
Leo P. Denault
|
| |
40,508
|
| |
154,206
|
| |
15,259
|
|
|
Andrew S. Marsh
|
| |
11,869
|
| |
45,182
|
| |
4,471
|
|
|
A. Christopher Bakken, III
|
| |
9,568
|
| |
36,421
|
| |
3,604
|
|
|
Marcus V. Brown
|
| |
9,383
|
| |
35,719
|
| |
3,535
|
|
|
Roderick K. West
|
| |
10,073
|
| |
38,346
|
| |
3,795
|
|
50 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
|
Performance Measure(1)
|
| |
|
| |
Minimum
|
| |
Target
|
| |
Maximum
|
|
|
Relative TSR
|
| |
4th Quartile
|
| |
Bottom of
3rd Quartile |
| |
Median Percentile
|
| |
Top Quartile
|
|
|
Payout
|
| |
No Payout
|
| |
Minimum
Payout of 25% of Target |
| |
100% of Target
|
| |
200% of Target
|
|
(1)
|
Payouts for performance between achievement levels are calculated using straight-line interpolation, with no payouts for performance below the minimum achievement level.
|
|
NEO
|
| |
2017 – 2019
Target |
| |
Number of
Shares Issued(1) |
| |
Value of Shares
Actually Issued(2) |
| |
Grant Date
Fair Value(3) |
|
|
Leo P. Denault
|
| |
48,700
|
| |
106,131
|
| |
$13,405,407
|
| |
$3,477,180
|
|
|
Andrew S. Marsh
|
| |
8,300
|
| |
18,088
|
| |
$2,284,695
|
| |
$592,620
|
|
|
A. Christopher Bakken, III
|
| |
8,300
|
| |
18,088
|
| |
$2,284,695
|
| |
$592,620
|
|
|
Marcus V. Brown
|
| |
8,300
|
| |
18,088
|
| |
$2,284,695
|
| |
$592,620
|
|
|
Roderick K. West
|
| |
8,300
|
| |
18,088
|
| |
$2,284,695
|
| |
$592,620
|
|
(1)
|
Includes accrued dividends.
|
(2)
|
Value determined based on the closing price of our common stock on January 17, 2020 ($126.31), the date the Personnel Committee certified the 2017 – 2019 performance period results.
|
(3)
|
Represents the aggregate grant date fair value calculated in accordance with applicable accounting rules as reflected in the 2017 Summary Compensation Table.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 51
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
|
Plan Type
|
| |
Description
|
| |||
|
Retirement Plans
|
| |
Company-sponsored:
|
| |||
|
|
| |
|
| |
|
|
|
|
| |
•
|
| |
Entergy Retirement Plan − a tax-qualified final average pay defined benefit pension plan that covers a broad group of employees hired before July 1, 2014.
|
|
|
|
| |
•
|
| |
Cash Balance Plan − a tax-qualified cash balance defined benefit pension plan that covers a broad group of employees hired on or after July 1, 2014.
|
|
|
|
| |
•
|
| |
Pension Equalization Plan − a non-qualified pension restoration plan for a select group of management or highly compensated employees who participate in the Entergy Retirement Plan.
|
|
|
|
| |
•
|
| |
Cash Balance Equalization Plan − a non-qualified restoration plan for a select group of management or highly compensated employees who participate in the Cash Balance Plan.
|
|
|
|
| |
•
|
| |
System Executive Retirement Plan − a non-qualified supplemental retirement plan for individuals who became executive officers before July 1, 2014.
|
|
|
|
| |
|
| |
|
|
|
|
| |
See 2019 Pension Benefits beginning on page 62 of this Proxy Statement for additional information regarding the operation of the plans described above.
|
| |||
|
Savings Plan
|
| |
Company-sponsored 401(k) Savings Plan that covers a broad group of employees.
|
| |||
|
Health & Welfare Benefits
|
| |
Medical, dental and vision coverage, life and accidental death and dismemberment insurance, business travel accident insurance and long-term disability insurance.
Eligibility, coverage levels, potential employee contributions and other plan design features are the same for the NEOs as for the broad employee population. |
| |||
|
2019 Perquisites
|
| |
Corporate aircraft usage and annual mandatory physical exams. The NEOs do not receive tax gross ups on any benefits. For additional information regarding perquisites, see the “All Other Compensation” column in the 2019 Summary Compensation Table on page 57 of this Proxy Statement.
|
| |||
|
Deferred Compensation
|
| |
The NEOs are eligible to defer up to 100% of their base salary and annual incentive plan awards into the Company-sponsored Executive Deferred Compensation Plan. As of December 31, 2019, none of the NEOs participated in this plan.
|
| |||
|
Executive Disability Plan
|
| |
Eligible individuals who become disabled under the terms of the plan are eligible for 65% of the difference between their annual base salary and $276,923 (the annual base salary that produces the maximum $15,000 monthly disability payment under our general long-term disability plan).
|
|
52 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
•
|
(i) the payment was predicated upon the achievement of certain financial results with respect to the applicable performance period that were subsequently determined to be the subject of a material restatement other than a restatement due to changes in accounting policy; or (ii) a material miscalculation of a performance award occurs, whether or not the financial statements were restated and, in either such case, a lower payment would have been made to the executive officer based upon the restated financial results or correct calculation; or
|
•
|
in the Board of Directors’ view, the executive officer engaged in fraud that caused or partially caused the need for a restatement or caused a material miscalculation of a performance award, in each case, whether or not the financial statements were restated.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 53
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
|
Role
|
| |
Value of Common Stock to be Owned
|
|
|
Chief Executive Officer
|
| |
6 times base salary
|
|
|
Executive Vice Presidents
|
| |
3 times base salary
|
|
|
Senior Vice Presidents
|
| |
2 times base salary
|
|
|
Vice Presidents
|
| |
1 time base salary
|
|
•
|
all net after-tax shares paid out under our LTIP;
|
•
|
all net after-tax shares of our restricted stock and restricted stock units received upon vesting; and
|
•
|
at least 75% of the after-tax net shares received upon the exercise of Company stock options.
|
54 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
|
Personnel Committee
|
| |
•
|
| |
The Personnel Committee is responsible for the review and approval of all aspects of our executive compensation programs.
|
| |||
|
•
|
| |
Among its duties, the Personnel Committee is responsible for approving the compensation for all members of the Office of Chief Executive, including:
|
| ||||||
|
|
| |
•
|
| |
Annual review of the compensation elements and mix of elements for the following year;
|
| |||
|
|
| |
•
|
| |
Annual review and approval of incentive program design, goals and objectives for alignment with our compensation and business strategies;
|
| |||
|
|
| |
•
|
| |
Evaluation of Company and individual performance results in light of these goals and objectives;
|
| |||
|
|
| |
•
|
| |
Evaluation of the competitiveness of each executive officer’s total compensation package;
|
| |||
|
|
| |
•
|
| |
Approval of any changes to our officers’ compensation, including but not limited to, base salary, annual and long-term incentive award opportunities, and retention programs;
|
| |||
|
|
| |
•
|
| |
Evaluation of the performance of our Chairman and Chief Executive Officer; and
|
| |||
|
|
| |
•
|
| |
Reporting, at least annually, to the Board on succession planning.
|
| |||
|
•
|
| |
Our Personnel Committee has the sole authority to hire its compensation consultant, approve its compensation, determine the nature and scope of its services, evaluate its performance and terminate its engagement.
|
| ||||||
|
Management
|
| |
•
|
| |
The CEO and Chief Human Resources Officer work closely with the Personnel Committee in managing the executive compensation programs and attend meetings of the Personnel Committee. During 2019, Mr. Denault attended 8 meetings of the Personnel Committee.
|
| |||
|
•
|
| |
The CEO makes recommendations to the Committee regarding compensation for executive officers other than himself.
|
| ||||||
|
Independent Compensation Consultant
|
| |
•
|
| |
During 2019, Pay Governance assisted the Personnel Committee with its responsibilities related to the Company’s executive compensation programs.
|
| |||
|
•
|
| |
Pay Governance:
|
| ||||||
|
|
| |
•
|
| |
Regularly attended meetings of the committee;
|
| |||
|
|
| |
•
|
| |
Conducted studies of competitive compensation practices;
|
| |||
|
|
| |
•
|
| |
Identified the Company’s market surveys and proxy peer group;
|
| |||
|
|
| |
•
|
| |
Provided updates on executive compensation trends and regulatory developments;
|
| |||
|
|
| |
•
|
| |
Reviewed base salary, annual incentives and long-term incentive compensation opportunities relative to competitive practices; and
|
| |||
|
|
| |
•
|
| |
Developed conclusions and recommendations related to the Company’s executive compensation programs for consideration by the committee.
|
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 55
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
|
Karen A. Puckett
|
| |
Alexis M. Herman
|
|
|
John R. Burbank
|
| |
Blanche L. Lincoln
|
|
56 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
| |
(f)
|
| |
(g)
|
| |
(h)
|
| |
(i)
|
| |
(j)
|
|
|
Name and
Principal Position |
| |
Year
|
| |
Salary(1)
|
| |
Bonus(2)
|
| |
Stock
Awards(3) |
| |
Option
Awards(4) |
| |
Non-Equity
Incentive Plan Compensation(5) |
| |
Change in
Pension Value and Non-qualified Deferred Compensation Earnings(6) |
| |
All
Other Compensation(7) |
| |
Total
|
|
|
Leo P. Denault
Chairman of the Board and Chief Executive Officer |
| |
2019
|
| |
$1,260,000
|
| |
$—
|
| |
$5,391,253
|
| |
$1,282,994
|
| |
$2,416,680
|
| |
$3,704,500
|
| |
$208,822
|
| |
$14,264,249
|
|
|
2018
|
| |
$1,251,346
|
| |
$—
|
| |
$4,744,977
|
| |
$1,168,029
|
| |
$2,041,200
|
| |
$982,800
|
| |
$138,104
|
| |
$10,326,456
|
| |||
|
2017
|
| |
$1,221,346
|
| |
$—
|
| |
$4,676,190
|
| |
$1,173,276
|
| |
$2,142,045
|
| |
$3,819,500
|
| |
$125,863
|
| |
$13,158,220
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Andrew S. Marsh
Executive Vice President and Chief Financial Officer |
| |
2019
|
| |
$641,923
|
| |
$—
|
| |
$1,579,662
|
| |
$375,914
|
| |
$712,400
|
| |
$1,554,300
|
| |
$69,863
|
| |
$4,934,062
|
|
|
2018
|
| |
$615,654
|
| |
$—
|
| |
$1,057,095
|
| |
$342,510
|
| |
$531,188
|
| |
$—
|
| |
$57,638
|
| |
$2,604,085
|
| |||
|
2017
|
| |
$588,291
|
| |
$—
|
| |
$1,022,853
|
| |
$287,760
|
| |
$541,800
|
| |
$801,900
|
| |
$51,647
|
| |
$3,294,251
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
A. Christopher Bakken, III
Executive Vice President and Chief Nuclear Officer |
| |
2019
|
| |
$649,507
|
| |
$181,500
|
| |
$1,273,100
|
| |
$303,023
|
| |
$618,104
|
| |
$98,500
|
| |
$62,407
|
| |
$3,186,141
|
|
|
2018
|
| |
$632,967
|
| |
$181,500
|
| |
$1,041,479
|
| |
$283,095
|
| |
$544,959
|
| |
$108,700
|
| |
$452,012
|
| |
$3,244,712
|
| |||
|
2017
|
| |
$615,791
|
| |
$181,500
|
| |
$959,376
|
| |
$245,904
|
| |
$559,973
|
| |
$33,000
|
| |
$114,494
|
| |
$2,710,038
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Marcus V. Brown
Executive Vice President and General Counsel |
| |
2019
|
| |
$661,563
|
| |
$—
|
| |
$1,248,839
|
| |
$297,182
|
| |
$684,573
|
| |
$1,455,300
|
| |
$69,955
|
| |
$4,417,412
|
|
|
2018
|
| |
$644,231
|
| |
$—
|
| |
$1,041,479
|
| |
$283,095
|
| |
$546,000
|
| |
$371,800
|
| |
$61,885
|
| |
$2,948,490
|
| |||
|
2017
|
| |
$622,788
|
| |
$—
|
| |
$1,022,853
|
| |
$287,760
|
| |
$568,890
|
| |
$1,217,200
|
| |
$43,269
|
| |
$3,762,760
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Roderick K. West
Group President, Utility Operations |
| |
2019
|
| |
$709,023
|
| |
$—
|
| |
$1,340,679
|
| |
$319,039
|
| |
$674,742
|
| |
$1,604,100
|
| |
$67,191
|
| |
$4,714,774
|
|
|
2018
|
| |
$690,581
|
| |
$—
|
| |
$1,057,095
|
| |
$297,075
|
| |
$560,762
|
| |
$—
|
| |
$67,234
|
| |
$2,672,747
|
| |||
|
2017
|
| |
$670,876
|
| |
$—
|
| |
$818,316
|
| |
$190,968
|
| |
$610,065
|
| |
$867,200
|
| |
$52,220
|
| |
$3,209,645
|
|
(1)
|
The amounts in column (c) represent the actual base salary paid to the NEOs in the applicable year. The 2019 changes in base salaries noted in the Compensation Discussion and Analysis were effective in April 2019.
|
(2)
|
The amount in column (d) in 2019, 2018 and 2017 represents the cash bonus paid to Mr. Bakken pursuant to the Nuclear Retention Plan. See “Nuclear Retention Plan” in Compensation Discussion and Analysis.
|
(3)
|
The amounts in column (e) represent the aggregate grant date fair value of restricted stock, performance units, and restricted stock units granted under the 2015 Equity Plan, each calculated in accordance with FASB ASC Topic 718, without taking into account estimated forfeitures. The grant date fair value of the restricted stock and half of the performance units is based on the closing price of the Company’s common stock on the date of grant. The grant date fair value of the portion of the performance units with vesting based on TSR was measured using a Monte Carlo simulation valuation model. The simulation model applies a risk-free interest rate and an expected volatility assumption. The risk-free interest rate is assumed to equal the yield on a three-year treasury bond on the grant date. Volatility is based on historical volatility for the 36-month period preceding the grant date. The performance units in the table are also valued based on the probable outcome of the applicable performance condition at the time of grant. The maximum value of shares that will be received if the highest achievement level is attained with respect to both the TSR and Cumulative ETR Adjusted EPS for performance units granted in 2019 are as follows: Mr. Denault, $8,269,303; Mr. Marsh, $2,422,938; Mr. Bakken, $1,953,212; Mr. Brown, $1,915,446; and Mr. West, $2,056,302.
|
(4)
|
The amounts in column (f) represent the aggregate grant date fair value of stock options granted under the 2015 Equity Plan calculated in accordance with FASB ASC Topic 718. For a discussion of the relevant assumptions used in valuing these awards, see Note 12 to the Financial Statements in our Form 10-K for the year ended December 31, 2019.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 57
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
(5)
|
The amounts in column (g) represent cash payments made under the annual incentive plan.
|
(6)
|
For all NEOs, the amounts in column (h) include the annual actuarial increase in the present value of these NEOs’ benefits under all pension plans established by the Company using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements and include amounts which the NEOs may not currently be entitled to receive because such amounts are not vested. The increase in pension benefits for all of the NEOs in 2019 was driven by a decline in the discount rate that was a result of the decrease in prevailing interest rates. None of the increase for any of the NEOs is attributable to above-market or preferential earnings on non-qualified deferred compensation. See the 2019 Pension Benefits Table on page 62 of this Proxy Statement. For 2018, the aggregate change in the actuarial present value of Messrs. Marsh and West’s pension benefits was a decrease of $163,000 and $149,300, respectively.
|
(7)
|
The amounts set forth in column (i) for 2019 include (a) matching contributions by the Company under the Savings Plan to each of the NEOs; (b) dividends paid on restricted stock when vested; (c) life insurance premiums; and (d) perquisites and other compensation as described below. The amounts are listed in the following table:
|
|
|
| |
Leo P.
Denault |
| |
Andrew S.
Marsh |
| |
A. Christopher
Bakken, III |
| |
Marcus V.
Brown |
| |
Roderick K.
West |
|
|
Company Contribution – Savings Plan
|
| |
$11,760
|
| |
$11,760
|
| |
$16,800
|
| |
$11,760
|
| |
$11,760
|
|
|
Dividends Paid on Restricted Stock
|
| |
$129,470
|
| |
$49,010
|
| |
$20,114
|
| |
$48,749
|
| |
$39,754
|
|
|
Life Insurance Premiums
|
| |
$11,484
|
| |
$6,275
|
| |
$12,277
|
| |
$7,482
|
| |
$4,002
|
|
|
Perquisites and Other Compensation
|
| |
$56,108
|
| |
$2,818
|
| |
$13,216
|
| |
$1,964
|
| |
$11,675
|
|
|
Total
|
| |
$208,822
|
| |
$69,863
|
| |
$62,407
|
| |
$69,955
|
| |
$67,191
|
|
|
NEO
|
| |
Personal Use of
Corporate Aircraft |
| |
Executive
Physical Exams |
|
|
Leo P. Denault
|
| |
X
|
| |
X
|
|
|
Andrew S. Marsh
|
| |
X
|
| |
X
|
|
|
A. Christopher Bakken, III
|
| |
X
|
| |
X
|
|
|
Marcus V. Brown
|
| |
|
| |
X
|
|
|
Roderick K. West
|
| |
X
|
| |
X
|
|
58 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
|
|
| |
|
| |
Estimated Possible
Payouts Under Non-Equity Incentive Plan Awards(1) |
| |
Estimated Future Payouts
under Equity Incentive Plan Awards(2) |
| |
|
| |
|
| |
|
| |
|
| ||||||||||||
|
Name
|
| |
Grant
Date |
| |
Threshold
($) |
| |
Target
($) |
| |
Maximum
($) |
| |
Threshold
(#) |
| |
Target
(#) |
| |
Maximum
(#) |
| |
All Other
Stock Awards: Number of Shares of Stock or Units (#)(3) |
| |
All Other
Option Awards: Number of Securities Under- lying Options (#)(4) |
| |
Exercise
or Base Price of Option Awards ($/Sh) |
| |
Grant
Date Fair Value of Stock and Option Awards(5) |
|
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
| |
(f)
|
| |
(g)
|
| |
(h)
|
| |
(i)
|
| |
(j)
|
| |
(k)
|
| |
(l)
|
|
|
Leo P. Denault
|
| |
1/31/19
|
| |
$—
|
| |
$1,764,000
|
| |
$3,528,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
1/31/19
|
| |
|
| |
|
| |
|
| |
10,127
|
| |
40,508
|
| |
81,016
|
| |
|
| |
|
| |
|
| |
$4,030,303
|
| |||
|
1/31/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
15,259
|
| |
|
| |
|
| |
$1,360,950
|
| |||
|
1/31/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
154,206
|
| |
$89.19
|
| |
$1,282,994
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Andrew S. Marsh
|
| |
1/31/19
|
| |
$—
|
| |
$520,000
|
| |
$1,040,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
1/31/19
|
| |
|
| |
|
| |
|
| |
2,967
|
| |
11,869
|
| |
23,738
|
| |
|
| |
|
| |
|
| |
$1,180,894
|
| |||
|
1/31/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
4,471
|
| |
|
| |
|
| |
$398,768
|
| |||
|
1/31/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
45,182
|
| |
$89.19
|
| |
$375,914
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
A Christopher Bakken, III
|
| |
1/31/19
|
| |
$—
|
| |
$457,855
|
| |
$915,710
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
1/31/19
|
| |
|
| |
|
| |
|
| |
2,392
|
| |
9,568
|
| |
19,136
|
| |
|
| |
|
| |
|
| |
$951,959
|
| |||
|
1/31/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
3,604
|
| |
|
| |
|
| |
$321,441
|
| |||
|
1/31/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
36,421
|
| |
$89.19
|
| |
$303,023
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Marcus V. Brown
|
| |
1/31/19
|
| |
$—
|
| |
$499,688
|
| |
$999,376
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
1/31/19
|
| |
|
| |
|
| |
|
| |
2,346
|
| |
9,383
|
| |
18,766
|
| |
|
| |
|
| |
|
| |
$933,552
|
| |||
|
1/31/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
3,535
|
| |
|
| |
|
| |
$315,287
|
| |||
|
1/31/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
35,719
|
| |
$89.19
|
| |
$297,182
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Roderick K. West
|
| |
1/31/19
|
| |
$—
|
| |
$499,809
|
| |
$999,618
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
1/31/19
|
| |
|
| |
|
| |
|
| |
2,518
|
| |
10,073
|
| |
20,146
|
| |
|
| |
|
| |
|
| |
$1,002,203
|
| |||
|
1/31/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
3,795
|
| |
|
| |
|
| |
$338,476
|
| |||
|
1/31/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
38,346
|
| |
$89.19
|
| |
$319,039
|
|
(1)
|
The amounts in columns (c), (d) and (e) represent minimum, target and maximum payment levels under the annual incentive plan. The actual amounts awarded are reported in column (g) of the Summary Compensation Table.
|
(2)
|
The amounts in columns (f), (g) and (h) represent the minimum, target and maximum payment levels under the LTIP. Performance under the program is measured using two performance measures—the Company’s TSR relative to the TSR of the companies included in the Philadelphia Utility Index and Cumulative ETR Adjusted EPS with TSR weighted eighty percent and Cumulative ETR Adjusted EPS weighted twenty percent. There is no payout under the program if the Company’s TSR falls within the lowest quartile of the peer companies in the Philadelphia Utility Index and Cumulative ETR Adjusted EPS is below the minimum performance goal. Subject to achievement of performance targets, each unit will be converted into one share of the Company’s common stock on the last day of the performance period (December 31, 2021). Accrued dividends on the shares earned will also be paid in Company stock.
|
(3)
|
The amounts in column (i) represent shares of restricted stock granted under the 2015 Equity Plan. Shares of restricted stock vest one-third on each of the first through third anniversaries of the grant date, have voting rights and accrue dividends during the vesting period.
|
(4)
|
The amounts in column (j) represent options to purchase shares of the Company’s common stock. The options vest one-third on each of the first through third anniversaries of the grant date and have a ten-year term from the date of grant. The options were granted under the 2015 Equity Plan.
|
(5)
|
The amounts in column (l) are valued based on the aggregate grant date fair value of the award calculated in accordance with FASB ASC Topic 718 and, in the case of the performance units, are based on the probable outcome of the applicable performance conditions. See Notes 3 and 4 to the 2019 Summary Compensation Table for a discussion of the relevant assumptions used in calculating the grant date fair value.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 59
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
|
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||||||||
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
| |
(f)
|
| |
(g)
|
| |
(h)
|
| |
(i)
|
| |
(j)
|
|
|
Name
|
| |
Number of
Securities Underlying Unexercised Options (#) Exercisable |
| |
Number of
Securities Underlying Unexercised Options (#) Unexercisable |
| |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |
Number
of Shares or Units of Stock That Have Not Vested (#) |
| |
Market
Value of Shares or Units of Stock That Have Not Vested ($) |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
|
|
Leo P. Denault
|
| |
—
|
| |
154,206(1)
|
| |
|
| |
$89.19
|
| |
1/31/2029
|
| |
|
| |
|
| |
|
| |
|
|
|
55,700
|
| |
111,400(2)
|
| |
|
| |
$78.08
|
| |
1/25/2028
|
| |
|
| |
|
| |
|
| |
|
| |||
|
119,600
|
| |
59,800(3)
|
| |
|
| |
$70.53
|
| |
1/26/2027
|
| |
|
| |
|
| |
|
| |
|
| |||
|
167,000
|
| |
—
|
| |
|
| |
$70.56
|
| |
1/28/2026
|
| |
|
| |
|
| |
|
| |
|
| |||
|
88,000
|
| |
—
|
| |
|
| |
$89.90
|
| |
1/29/2025
|
| |
|
| |
|
| |
|
| |
|
| |||
|
106,000
|
| |
—
|
| |
|
| |
$63.17
|
| |
1/30/2024
|
| |
|
| |
|
| |
|
| |
|
| |||
|
50,000
|
| |
—
|
| |
|
| |
$64.60
|
| |
1/31/2023
|
| |
|
| |
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
81,016(4)
|
| |
$9,705,717
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
85,400(5)
|
| |
$10,230,920
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
15,259(6)
|
| |
$1,828,028
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
10,467(7)
|
| |
$1,253,947
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
5,667(8)
|
| |
$678,907
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Andrew S. Marsh
|
| |
—
|
| |
45,182(1)
|
| |
|
| |
$89.19
|
| |
1/31/2029
|
| |
|
| |
|
| |
|
| |
|
|
|
16,333
|
| |
32,667(2)
|
| |
|
| |
$78.08
|
| |
1/25/2028
|
| |
|
| |
|
| |
|
| |
|
| |||
|
29,333
|
| |
14,667(3)
|
| |
|
| |
$70.53
|
| |
1/26/2027
|
| |
|
| |
|
| |
|
| |
|
| |||
|
45,000
|
| |
—
|
| |
|
| |
$70.56
|
| |
1/28/2026
|
| |
|
| |
|
| |
|
| |
|
| |||
|
24,000
|
| |
—
|
| |
|
| |
$89.90
|
| |
1/29/2025
|
| |
|
| |
|
| |
|
| |
|
| |||
|
35,000
|
| |
—
|
| |
|
| |
$63.17
|
| |
1/30/2024
|
| |
|
| |
|
| |
|
| |
|
| |||
|
32,000
|
| |
—
|
| |
|
| |
$64.60
|
| |
1/31/2023
|
| |
|
| |
|
| |
|
| |
|
| |||
|
10,000
|
| |
—
|
| |
|
| |
$71.30
|
| |
1/26/2022
|
| |
|
| |
|
| |
|
| |
|
| |||
|
4,000
|
| |
—
|
| |
|
| |
$72.79
|
| |
1/27/2021
|
| |
|
| |
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
23,738(4)
|
| |
$2,843,812
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
15,800(5)
|
| |
$1,892,840
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
4,471(6)
|
| |
$535,626
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
3,467(7)
|
| |
$415,347
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
2,034(8)
|
| |
$243,673
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
21,100(9)
|
| |
$2,527,780
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
A. Christopher Bakken, III
|
| |
—
|
| |
36,421(1)
|
| |
|
| |
$89.19
|
| |
1/31/2029
|
| |
|
| |
|
| |
|
| |
|
|
|
—
|
| |
27,000(2)
|
| |
|
| |
$78.08
|
| |
1/25/2028
|
| |
|
| |
|
| |
|
| |
|
| |||
|
—
|
| |
12,534(3)
|
| |
|
| |
$70.53
|
| |
1/26/2027
|
| |
|
| |
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
19,136(4)
|
| |
$2,292,493
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
15,800(5)
|
| |
$1,892,840
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
3,604(6)
|
| |
$431,759
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
3,334(7)
|
| |
$399,413
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
1,734(8)
|
| |
$207,733
|
| |
|
| |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
20,000(10)
|
| |
$2,396,000
|
| |
|
| |
|
|
60 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
|
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||||||||
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
| |
(f)
|
| |
(g)
|
| |
(h)
|
| |
(i)
|
| |
(j)
|
|
|
Name
|
| |
Number of
Securities Underlying Unexercised Options (#) Exercisable |
| |
Number of
Securities Underlying Unexercised Options (#) Unexercisable |
| |
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |
Number
of Shares or Units of Stock That Have Not Vested (#) |
| |
Market
Value of Shares or Units of Stock That Have Not Vested ($) |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
|
|
Marcus V. Brown
|
| |
—
|
| |
35,719(1)
|
| |
|
| |
$89.19
|
| |
1/31/2029
|
| |
|
| |
|
| |
|
| |
|
|
|
—
|
| |
27,000(2)
|
| |
|
| |
$78.08
|
| |
1/25/2028
|
| |
|
| |
|
| |
|
| |
|
| |||
|
1
|
| |
14,667(3)
|
| |
|
| |
$70.53
|
| |
1/26/2027
|
| |
|
| |
|
| |||||||||
|
1
|
| |
—
|
| |
|
| |
$70.56
|
| |
1/28/2026
|
| |
|
| |
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
18,766(4)
|
| |
$2,248,167
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
15,800(5)
|
| |
$1,892,840
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
3,535(6)
|
| |
$423,493
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
3,334(7)
|
| |
$399,413
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
2,034(8)
|
| |
$243,673
|
| |
|
| ||||||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Roderick K. West
|
| |
—
|
| |
38,346(1)
|
| |
|
| |
$89.19
|
| |
1/31/2029
|
| |
|
| |
|
| |
|
| |
|
|
|
14,166
|
| |
28,334(2)
|
| |
|
| |
$78.08
|
| |
1/25/2028
|
| |
|
| |
|
| |
|
| |
|
| |||
|
9,733
|
| |
9,734(3)
|
| |
|
| |
$70.53
|
| |
1/26/2027
|
| |
|
| |
|
| |
|
| |
|
| |||
|
13,667
|
| |
—
|
| |
|
| |
$70.56
|
| |
1/28/2026
|
| |
|
| |
|
| |
|
| |
|
| |||
|
23,000
|
| |
—
|
| |
|
| |
$89.90
|
| |
1/29/2025
|
| |
|
| |
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
20,146(4)
|
| |
$2,413,491
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
15,800(5)
|
| |
$1,892,840
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
3,795(6)
|
| |
$454,641
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
3,467(7)
|
| |
$415,347
|
| |
|
| |
|
| |||
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
1,067(8)
|
| |
$127,827
|
| |
|
| |
|
|
(1)
|
Consists of options granted under the 2015 Equity Plan that vested or will vest as follows: 1/3 of the options granted vest on each of 1/31/2020, 1/31/2021, and 1/31/2022.
|
(2)
|
Consists of options granted under the 2015 Equity Plan that vested or will vest as follows: 1/2 of the remaining unexercisable options vest on each of 1/25/2020 and 1/25/2021.
|
(3)
|
Consists of options granted under the 2015 Equity Plan that vested on 1/26/2020.
|
(4)
|
Consists of performance units granted under the 2015 Equity Plan that will vest on December 31, 2021 based on two performance measures—the Company’s TSR and Cumulative ETR Adjusted EPS over the 2019 – 2021 performance period with TSR weighted eighty percent and Cumulative ETR Adjusted EPS weighted twenty percent, as described under “What We Pay and Why – Principal Executive Compensation Elements – Variable Compensation – Long-Term Incentive Compensation – Long-Term Incentive Performance Unit Program” in the Compensation Discussion and Analysis.
|
(5)
|
Consists of performance units granted under the 2015 Equity Plan that will vest on December 31, 2020 based on two performance measures—the Company’s TSR and Cumulative Utility, Parent & Other Adjusted EPS over the 2018 – 2020 performance period with each performance measure weighted equally.
|
(6)
|
Consists of shares of restricted stock granted under the 2015 Equity Plan that vested or will vest as follows: 1/3 of the shares of restricted stock granted vest on each of 1/31/2020, 1/31/2021, and 1/31/2022.
|
(7)
|
Consists of shares of restricted stock granted under the 2015 Equity Plan that vested or will vest as follows: 1/2 of the shares of restricted stock granted vest on each of 1/25/2020 and 1/25/2021.
|
(8)
|
Consists of shares of restricted stock granted under the 2015 Equity Plan that vested on 1/26/2020.
|
(9)
|
Consists of restricted stock units granted under the 2015 Equity Plan. The units vest on 8/3/2020.
|
(10)
|
Consists of restricted stock units granted under the 2015 Equity Plan. The units vest 1/2 on 4/6/2022 and 4/6/2025.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 61
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
|
|
| |
Options Awards
|
| |
Stock Awards
|
| ||||||
|
(a)
|
| |
(b)
|
| |
(c)
|
| |
(d)
|
| |
(e)
|
|
|
Name
|
| |
Number of
Shares Acquired on Exercise (#) |
| |
Value Realized
on Exercise ($) |
| |
Number of
Shares Acquired on Vesting (#) |
| |
Value Realized
on Vesting ($)(1) |
|
|
Leo P. Denault
|
| |
105,000
|
| |
$ 2,861,250
|
| |
123,760
|
| |
$14,933,716
|
|
|
Andrew S. Marsh
|
| |
17,100
|
| |
$ 468,315
|
| |
24,554
|
| |
$2,845,137
|
|
|
A. Christopher Bakken, III
|
| |
38,566
|
| |
$ 1,377,860
|
| |
31,719
|
| |
$3,543,240
|
|
|
Marcus V. Brown
|
| |
145,031
|
| |
$ 4,056,865
|
| |
24,484
|
| |
$2,839,040
|
|
|
Roderick K. West
|
| |
—
|
| |
$—
|
| |
23,347
|
| |
$2,740,719
|
|
(1)
|
Represents the value of performance units for the 2017 – 2019 performance period (payable solely in shares based on the closing stock price of the Company on the date of vesting) under the LTIP and the vesting of shares of restricted stock in 2019.
|
|
Name
|
| |
Plan
Name |
| |
Number
of Years Credited Service |
| |
Present
Value of Accumulated Benefit |
| |
Payments
During 2019 |
|
|
Leo P. Denault(1)(2)
|
| |
System Executive Retirement Plan
|
| |
35.83
|
| |
$26,526,500
|
| |
$—
|
|
|
|
| |
Entergy Retirement Plan
|
| |
20.83
|
| |
$1,035,100
|
| |
$—
|
|
|
Andrew S. Marsh
|
| |
System Executive Retirement Plan
|
| |
21.37
|
| |
$4,694,700
|
| |
$—
|
|
|
|
| |
Entergy Retirement Plan
|
| |
21.37
|
| |
$738,700
|
| |
$—
|
|
|
A. Christopher Bakken, III
|
| |
Cash Balance Equalization Plan
|
| |
3.74
|
| |
$196,900
|
| |
$—
|
|
|
|
| |
Cash Balance Plan
|
| |
3.74
|
| |
$71,200
|
| |
$—
|
|
|
Marcus V. Brown(1)
|
| |
System Executive Retirement Plan
|
| |
24.74
|
| |
$6,368,400
|
| |
$—
|
|
|
|
| |
Entergy Retirement Plan
|
| |
24.74
|
| |
$1,160,000
|
| |
$—
|
|
|
Roderick K. West
|
| |
System Executive Retirement Plan
|
| |
20.75
|
| |
$5,892,400
|
| |
$—
|
|
|
|
| |
Entergy Retirement Plan
|
| |
20.75
|
| |
$792,700
|
| |
$—
|
|
(1)
|
As of December 31, 2019, Mr. Denault and Mr. Brown were retirement eligible.
|
(2)
|
In 2006, Mr. Denault entered into a retention agreement granting him an additional 15 years of service and permission to retire under the non-qualified System Executive Retirement Plan in the event his employment is terminated by his Entergy employer other than for cause (as defined in the retention agreement), by Mr. Denault for good reason (as defined in the retention agreement), or on account of his death or disability. His retention agreement also provides that if he terminates employment for any other reason, he shall be entitled to the additional 15 years of service under the non-qualified System Executive Retirement Plan only if his Entergy employer grants him permission to retire. The additional 15 years of service increases the present value of his benefit by $3,887,900.
|
62 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
|
|
| |
Entergy Retirement Plan
|
| |
Cash Balance Plan
|
|
|
Eligible NEOs
|
| |
• Leo P. Denault
• Andrew S. Marsh • Marcus V. Brown • Roderick K. West |
| |
A. Christopher Bakken, III
|
|
|
Eligibility
|
| |
Non-bargaining employees hired before July 1, 2014
|
| |
Non-bargaining employees hired on or after July 1, 2014
|
|
|
Vesting
|
| |
A participant becomes vested in the Entergy Retirement Plan upon attainment of at least 5 years of vesting service or upon attainment of age 65 while actively employed by an Entergy system company.
|
| |
A participant becomes vested in the Cash Balance Plan upon attainment of at least 3 years of vesting service or upon attainment of age 65 while actively employed by an Entergy system company.
|
|
|
Form of Payment Upon Retirement
|
| |
Benefits are payable as an annuity or a single lump sum distribution.
|
| |
Benefits are payable as an annuity or single lump sum distribution.
|
|
|
Retirement Benefit Formula
|
| |
Benefits are calculated as a single life annuity payable at age 65 and generally are equal to 1.5% of a participant’s Final Average Monthly Earnings (“FAME”) multiplied by years of service (not to exceed 40).
“Earnings” for the purpose of calculating FAME generally includes the employee’s base salary and eligible annual incentive awards subject to Internal Revenue Code of 1986, as amended (the “Code”), limitations, and excludes all other bonuses. Executive annual incentive awards are not eligible for inclusion in Earnings under this plan. FAME is calculated using the employee’s average monthly Earnings for the 60 consecutive months in which the employee’s earnings were highest during the 120 month period immediately preceding the employee’s retirement and includes up to 5 eligible annual incentive awards paid during the 60 month period. |
| |
The normal retirement benefit at age 65 is determined by converting the sum of an employee’s annual pay credits and his or her annual interest credits, into an actuarially equivalent annuity.
Pay credits ranging from 4-8% of an employee’s eligible Earnings are allocated annually to a notional account for the employee based on an employee’s age and years of service. Earnings for purposes of calculating an employee’s pay credit include the employee’s base salary and annual incentive awards subject to Code limitations and exclude all other bonuses. Executive annual incentive awards are eligible for inclusion in Earnings under this plan. Interest credits are calculated based upon the annual rate of interest on 30-year U.S. Treasury securities, as specified by the Internal Revenue Service, for the month of August preceding the first day of the applicable calendar year subject to a minimum rate of 2.6% and a maximum rate of 9%. |
|
|
Benefit Timing
|
| |
Normal retirement age under the plan is 65.
A reduced terminated vested benefit may be commenced as early as age 55. The amount of this benefit is determined by reducing the normal retirement benefit by 7% per year for the first 5 years commencement precedes age 65, and 6% per year for each additional year commencement precedes age 65. A subsidized early retirement benefit may be commenced by employees who are at least age 55 with 10 years of service at the time they separate from service. The amount of this benefit is determined by reducing the normal retirement benefit by 2% per year for each year that early retirement precedes age 65. |
| |
Normal retirement age under the plan is 65.
A vested cash balance benefit can be commenced as early as the first day of the month following separation from service. The amount of the benefit is determined in the same manner as the normal retirement benefit described above in the “Retirement Benefit Formula” section |
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 63
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
|
|
| |
Pension Equalization Plan
|
| |
Cash Balance Equalization Plan
|
| |
System Executive Retirement Plan
|
|
|
Eligible NEOs
|
| |
• Leo P. Denault
• Andrew S. Marsh • Marcus V. Brown • Roderick K. West |
| |
A. Christopher Bakken, III
|
| |
• Leo P. Denault
• Andrew S. Marsh • Marcus V. Brown • Roderick K. West |
|
|
Eligibility
|
| |
Management or highly compensated employees who participate in the Entergy Retirement Plan
|
| |
Management or highly compensated employees who participate in the Cash Balance Plan
|
| |
Certain individuals who became executive officers before July 1, 2014
|
|
|
Form of Payment Upon Retirement
|
| |
Single lump sum distribution
|
| |
Single lump sum distribution
|
| |
Single lump sum distribution
|
|
|
Retirement Benefit Formula
|
| |
Benefits generally are equal to the actuarial present value of the difference between (1) the amount that would have been payable as an annuity under the Entergy Retirement Plan, including executive annual incentive awards as eligible earnings and without applying Code limitations on pension benefits and earnings that may be considered in calculating tax-qualified pension benefits, and (2) the amount actually payable as an annuity under the Entergy Retirement Plan.
Executive annual incentive awards are taken into account as eligible earnings under this plan. |
| |
Benefits generally are equal to the difference between the amount that would have been payable as a lump sum under the Cash Balance Plan, but for Code limitations on pension benefits and earnings that may be considered in calculating tax-qualified cash balance plan benefits, and the amount actually payable as a lump sum under the Cash Balance Plan.
|
| |
Benefits generally are equal to the actuarial present value of a specified percentage, based on the participant’s years of service (including supplemental service granted under the plan) and management level, of the participant’s “Final Average Monthly Compensation” (which is generally 1/36th of the sum of the participant’s base salary and annual incentive plan award for the 3 highest years during the last 10 years preceding separation from service), after first being reduced by the value of the participant’s Entergy Retirement Plan benefit.
|
|
64 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
|
|
| |
Pension Equalization Plan
|
| |
Cash Balance Equalization Plan
|
| |
System Executive Retirement Plan
|
|
|
Benefit Timing
|
| |
Payable at age 65
Benefits payable prior to age 65 are subject to the same reduced terminated vested or early retirement reduction factors as benefits payable under the Entergy Retirement Plan as described above. An employee with supplemental credited service who terminates employment prior to age 65 must receive prior written consent of the Entergy employer in order to receive the portion of their benefit attributable to their supplemental credited service agreement. Payable upon separation from service subject to 6 month delay required under Code Section 409A. |
| |
Payable upon separation from service subject to 6 month delay required under Code Section 409A.
|
| |
Payable at age 65
Prior to age 65, vesting is conditioned on the prior written consent of the officer’s Entergy employer. Benefits payable prior to age 65 are subject to the same reduced terminated vested or subsidized early retirement reduction factors as benefits payable under the Entergy Retirement Plan as described above. Payable upon separation from service subject to 6 month delay required under Code Section 409A. |
|
1)
|
Effective July 1, 2014, (a) no new grants of supplemental service may be provided to participants in the Pension Equalization Plan; (b) supplemental credited service granted prior to July 1, 2014 was grandfathered; and (c) participants in the Company’s Cash Balance Plan are not eligible to participate in the Pension Equalization Plan and instead may be eligible to participate in the Cash Balance Equalization Plan.
|
2)
|
Benefits accrued under our System Executive Retirement Plan, Pension Equalization Plan and Cash Balance Equalization Plan, if any, will become fully vested if a participant is involuntarily terminated without cause or terminates his or her employment for good reason in connection with a change in control with payment generally made in a lump-sum payment as soon as reasonably practicable following the first day of the month after the termination of employment, unless delayed 6 months under Code Section 409A.
|
3)
|
The System Executive Retirement Plan was closed to new executive officers effective July 1, 2014.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 65
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
|
Compensation Element
|
| |
Payment
|
|
|
Severance*
|
| |
A lump sum severance payment equal to a multiple of the sum of: (a) the participant’s annual base salary as in effect at any time within one year prior to the commencement of a change of control period or, if higher, immediately prior to a circumstance constituting good reason, plus (b) the participant’s annual incentive, calculated using the average annual target opportunity derived under the annual incentive plan for the two calendar years immediately preceding the calendar year in which termination occurs.
|
|
|
Performance Units
|
| |
Participants will forfeit outstanding performance units, and in lieu of any payment for any outstanding performance period, will receive a single-lump sum payment calculated by multiplying the target performance units for the most recent performance period preceding (but not including) the calendar year in which termination occurs by the closing price of Entergy’s common stock as of the later of the date of such termination or the date of the Change in Control.
|
|
|
Equity Awards
|
| |
All unvested stock options, shares of restricted stock and restricted stock units will vest immediately upon a “double trigger” Qualifying Termination pursuant to the terms of the 2015 Equity Plan.
|
|
|
Retirement Benefits
|
| |
Benefits already accrued under our System Executive Retirement Plan, Pension Equalization Plan and Cash Balance Equalization Plan, if any, will become fully vested.
|
|
|
Welfare Benefits
|
| |
Participants who are not retirement-eligible would be eligible to receive Entergy-subsidized COBRA benefits for a period ranging from 12 to 18 months.
|
|
*
|
Cash severance payments are capped at 2.99 times the sum of (a) an executive’s annual base salary plus (b) the higher of his or her actual annual incentive payment under the annual incentive plan or his or her annual incentive, calculated using the average annual target opportunity derived under the annual incentive plan for the two calendar years immediately preceding the calendar year in which termination occurs. Any cash severance payments to be paid under the Continuity Plan in excess of this cap will be forfeited by the participant.
|
•
|
Change in Control: (a) the purchase of 30% or more of either our common stock or the combined voting power of our voting securities; (b) the merger or consolidation of the Company (unless our Board members constitute at least a majority of the board members of the surviving entity); (c) the liquidation, dissolution or sale of all or substantially all of our assets; or (d) a change in the composition of our Board such that, during any two-year period, the individuals serving at the beginning of the period no longer constitute a majority of our Board at the end of the period.
|
66 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
•
|
Potential Change in Control: (a) the Company or an affiliate enters into an agreement the consummation of which would constitute a Change in Control; (b) the Board adopts resolutions determining that, for purposes of the Continuity Plan, a potential Change in Control has occurred; (c) a System Company or other person or entity publicly announces an intention to take actions that would constitute a Change in Control; or (d) any person or entity becomes the beneficial owner (directly or indirectly) of outstanding shares of common stock of the Company constituting 20% or more of the voting power or value of the Company’s outstanding common stock.
|
•
|
Cause: The participant’s (a) willful and continuous failure to perform substantially his or her duties after written demand for performance; (b) engagement in conduct that is materially injurious to us or any of our subsidiaries; (c) conviction or guilty or nolo contendere plea to a felony or other crime that materially and adversely affects either his or her ability to perform his or her duties or our reputation; (d) material violation of any agreement with us or any of our subsidiaries; or (e) disclosure of any of our confidential information without authorization.
|
•
|
Good Reason: The participant’s (a) nature or status of duties and responsibilities is substantially altered or reduced; (b) salary is reduced by 5% or more; (c) primary work location is relocated outside the continental United States; (d) compensation plans are discontinued without an equitable replacement; (e) benefits or number of vacation days are substantially reduced; or (f) Entergy employer purports to terminate his employment other than in accordance with the Continuity Plan.
|
|
Termination
Event |
| |
Severance
|
| |
Annual
Incentive |
| |
Stock
Options |
| |
Restricted
Stock |
| |
Performance Units
|
|
|
Voluntary Resignation
|
| |
None
|
| |
Forfeited*
|
| |
Unvested options are forfeited. Vested options expire on the earlier of (i) 90 days from the last day of active employment and (ii) the option’s normal expiration date.
|
| |
Forfeited
|
| |
Forfeited**
|
|
|
Termination for Cause
|
| |
None
|
| |
Forfeited
|
| |
Forfeited
|
| |
Forfeited
|
| |
Forfeited
|
|
|
Retirement
|
| |
None
|
| |
Pro-rated based on number of days employed during the performance period
|
| |
Unvested stock options vest on the retirement date and expire the earlier of (i) five years from the retirement date and (ii) the option’s normal expiration date.
|
| |
Forfeited
|
| |
Officers with a minimum of 12 months of participation are eligible for a pro-rated award based on actual performance and full months of service during the performance period
|
|
|
Death/
Disability |
| |
None
|
| |
Pro-rated based on number of days employed during the performance period
|
| |
Unvested stock options vest on the termination date and expire the earlier of (i) five years from the termination date and (ii) the option’s normal expiration date.
|
| |
Fully Vest
|
| |
Officers are eligible for a pro-rated award based on actual performance and full months of service during the performance period.
|
|
*
|
If an officer resigns after the completion of an annual incentive plan performance period, he or she may receive, at the Company’s discretion, an annual incentive payment.
|
**
|
If an officer resigns after the completion of a LTIP performance period, he or she will receive a payout under the LTIP based on the outcome of the performance period.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 67
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
68 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
|
Benefits and Payments
Upon Termination |
| |
Voluntary
Resignation |
| |
For
Cause |
| |
Termination
for Good Reason or Not for Cause |
| |
Retirement
|
| |
Disability
|
| |
Death
|
| |
Termination
Related to a Change in Control |
|
|
Leo P. Denault(1)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Severance Payment
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$9,870,588
|
|
|
Performance Units(3)(4)
|
| |
—
|
| |
—
|
| |
$4,480,520
|
| |
$5,028,006
|
| |
$5,028,006
|
| |
$5,028,006
|
| |
$9,991,320
|
|
|
Stock Options
|
| |
—
|
| |
—
|
| |
$12,314,200
|
| |
$12,314,200
|
| |
$12,314,200
|
| |
$12,314,200
|
| |
$12,314,200
|
|
|
Restricted Stock
|
| |
—
|
| |
—
|
| |
$4,015,803
|
| |
—
|
| |
$4,015,803
|
| |
$4,015,803
|
| |
$4,015,803
|
|
|
Welfare Benefits(5)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Andrew S. Marsh(2)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Severance Payment
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$3,315,000
|
|
|
Performance Units(4)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$1,105,035
|
| |
$1,105,035
|
| |
$1,964,720
|
|
|
Stock Options
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$3,468,531
|
| |
$3,468,531
|
| |
$3,468,531
|
|
|
Restricted Stock
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$1,279,045
|
| |
$1,279,045
|
| |
$1,279,045
|
|
|
Welfare Benefits(6)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$29,862
|
|
|
Unvested Restricted Stock Units(7)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$2,527,780
|
| |
$2,527,780
|
| |
$2,527,780
|
|
|
A. Christopher Bakken III(2)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Severance Payment
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$3,335,798
|
|
|
Performance Units(4)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$1,013,149
|
| |
$1,013,149
|
| |
$1,964,720
|
|
|
Stock Options
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$2,858,837
|
| |
$2,858,837
|
| |
$2,858,837
|
|
|
Restricted Stock
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$1,113,669
|
| |
$1,113,669
|
| |
$1,113,669
|
|
|
Welfare Benefits(6)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$22,248
|
|
|
Unvested Restricted Stock Units(8)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$2,396,000
|
|
|
Marcus V. Brown(1)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Severance Payment
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$3,397,875
|
|
|
Performance Units(4)
|
| |
—
|
| |
—
|
| |
—
|
| |
$1,005,721
|
| |
$1,005,721
|
| |
$1,005,721
|
| |
$1,964,720
|
|
|
Stock Options
|
| |
—
|
| |
—
|
| |
—
|
| |
$2,942,442
|
| |
$2,942,442
|
| |
$2,942,442
|
| |
$2,942,442
|
|
|
Restricted Stock
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$1,145,708
|
| |
$1,145,708
|
| |
$1,145,708
|
|
|
Welfare Benefits(5)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Roderick K. West(2)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Severance Payment
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$3,641,466
|
|
|
Performance Units(4)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$1,033,275
|
| |
$1,033,275
|
| |
$1,964,720
|
|
|
Stock Options
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$2,835,460
|
| |
$2,835,460
|
| |
$2,835,460
|
|
|
Restricted Stock
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$1,064,329
|
| |
$1,064,329
|
| |
$1,064,329
|
|
|
Welfare Benefits(6)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$29,862
|
|
(1)
|
As of December 31, 2019, Mr. Denault and Mr. Brown are retirement eligible and would retire rather than voluntarily resign, and in addition to the payments and benefits in the table, Mr. Denault and Mr. Brown also would be entitled to receive their vested pension benefits under the Entergy Retirement Plan. For a description of these benefits, see “2019 Pension Benefits.”
|
(2)
|
See “2019 Pension Benefits” for a description of the pension benefits Mr. Bakken, Mr. Marsh, and Mr. West may receive upon the occurrence of certain termination events.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 69
|
|
EXECUTIVE OFFICER COMPENSATION
|
| |
|
|
(3)
|
For purposes of the table, the value of Mr. Denault’s retention payment was calculated by taking an average of the target performance units from the 2015 – 2017 LTIP performance period (33,100) and from the 2016 – 2018 LTIP performance period (41,700). This average number of units (37,400) multiplied by the closing price of Entergy stock on December 31, 2019 ($119.80) would equal a payment of $4,480,520.
|
(4)
|
For purposes of the table, in the event of a termination related to a change in control, the value of Mr. Denault’s payments was calculated by multiplying the target performance units for the 2016 – 2018 LTIP performance period (41,700) by the closing price of Entergy stock on December 31, 2019 ($119.80), which would equal a payment of $4,995,660 for the forfeited performance units for each performance period. The value of the payments for the other NEOs was calculated by multiplying the target performance units for the 2016 – 2018 LTIP performance period (8,200) by the closing price of Entergy stock on December 31, 2019 ($119.80), which would equal a payment of $982,360 for the forfeited performance units for each performance period.
|
(5)
|
Upon retirement, Mr. Denault and Mr. Brown would be eligible for retiree medical and dental benefits, the same as all other retirees.
|
(6)
|
Pursuant to the Continuity Plan, in the event of a termination related to a change in control, Mr. Bakken, Mr. Marsh and Mr. West would be eligible to receive Entergy-subsidized COBRA benefits for 18 months.
|
(7)
|
Mr. Marsh’s 21,100 restricted stock units vest 100% in 2020. Pursuant to his restricted stock unit agreement, any unvested restricted stock units will vest immediately in the event of his termination of employment due to Mr. Marsh’s
|
70 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
EXECUTIVE OFFICER COMPENSATION
|
|
(8)
|
Mr. Bakken’s 20,000 restricted stock units vest in two equal installments on April 6, 2022 and April 6, 2025. In the event of a change in control, the unvested restricted stock units will fully vest upon Mr. Bakken’s Qualifying Termination during a change in control period. Pursuant to his restricted stock unit agreement, Mr. Bakken is subject to certain restrictions on his ability to compete with Entergy and its affiliates or solicit its employees or customers during and for 12 months after his employment with his Entergy employer. In addition, the restricted stock unit agreement limits Mr. Bakken’s ability to disparage Entergy and its affiliates. In the event of a breach of these restrictions, other than following certain constructive terminations of his employment, Mr. Bakken will forfeit any restricted stock units that are not yet vested and paid, and must repay to Entergy any shares of Entergy stock paid to him in respect of the restricted stock units and any amounts he received upon the sale or transfer of any such shares.
|
•
|
The median of the annual total compensation of all of our employees, other than Mr. Denault, was $129,663.
|
•
|
Mr. Denault’s annual total compensation, as reported in the total column of the 2019 Summary Compensation Table, was $14,264,249.
|
•
|
Based on this information, the ratio of the annual total compensation of Mr. Denault to the median of the annual total compensation of all employees is estimated to be 110:1.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 71
|
ENTERGY SHARE OWNERSHIP
|
|
Name(1)
|
| |
Shares(2)
|
| |
Options
Exercisable Within 60 Days |
| |
Stock Units(3)
|
|
|
Entergy Corporation
|
| |
|
| |
|
| |
|
|
|
A. Christopher Bakken, III
|
| |
7,685
|
| |
—
|
| |
—
|
|
|
Marcus V. Brown
|
| |
28,812
|
| |
—
|
| |
—
|
|
|
John R. Burbank
|
| |
2,573
|
| |
—
|
| |
—
|
|
|
Patrick J. Condon
|
| |
7,990
|
| |
—
|
| |
—
|
|
|
Leo P. Denault
|
| |
267,439
|
| |
753,202
|
| |
—
|
|
|
Kirkland H. Donald
|
| |
7,731
|
| |
—
|
| |
3,105
|
|
|
Philip L. Frederickson
|
| |
6,461
|
| |
—
|
| |
805
|
|
|
Alexis M. Herman
|
| |
14,143
|
| |
—
|
| |
—
|
|
|
M. Elise Hyland
|
| |
883
|
| |
—
|
| |
—
|
|
|
Stuart L. Levenick
|
| |
21,577
|
| |
—
|
| |
—
|
|
|
Blanche L. Lincoln
|
| |
15,093
|
| |
—
|
| |
—
|
|
|
Andrew S. Marsh
|
| |
87,233
|
| |
241,726
|
| |
—
|
|
|
Karen A. Puckett
|
| |
7,990
|
| |
—
|
| |
—
|
|
|
Roderick K. West
|
| |
23,299
|
| |
—
|
| |
—
|
|
|
All directors and executive officers as a group (19) persons
|
| |
554,996
|
| |
1,071,796
|
| |
3,910
|
|
(1)
|
The beneficial ownership of our common stock and stock-based units owned by each individual and by all of our directors and executive officers as a group does not exceed one percent of Entergy’s outstanding shares of common stock.
|
(2)
|
For our directors, the balances include phantom units that are issued under the Service Recognition Program. All non-employee directors are credited with phantom units for each year of service on the Board. These phantom units do not have voting rights, accrue dividends and will be settled in shares of Entergy common stock following the non-employee director’s separation from the Board. See “2019 Director Compensation – 2019 Non-Employee Director Compensation Table” for the amount of phantom units held by each non-employee director as of December 31, 2019.
|
(3)
|
Mr. Donald and Mr. Frederickson have deferred receipt of some of their quarterly stock grants. The deferred shares will be settled in cash in an amount equal to the market value of our common stock at the end of the deferral period.
|
72 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
|
|
| |
ENTERGY SHARE OWNERSHIP
|
|
|
Name and Address of Beneficial Owner
|
| |
Amount and Nature of
Beneficial Ownership |
| |
Percent of Class
|
|
|
BlackRock, Inc.
55 East 52nd Street New York, NY 10055 |
| |
17,391,001(1)
|
| |
8.7%
|
|
|
|
| |
|
| |
|
|
|
State Street Corporation
State Street Financial Center One Lincoln Street Boston, MA 02111 |
| |
11,419,107(2)
|
| |
5.74%
|
|
|
|
| |
|
| |
|
|
|
The Vanguard Group
100 Vanguard Boulevard Malvern, Pennsylvania 19355 |
| |
24,607,158(3)
|
| |
12.35%
|
|
|
Institutional
Shareholder |
| |
Schedule
13G/13GA Filing Date |
| |
Sole Voting
Power |
| |
Shared Voting
Power |
| |
Sole Power To
Dispose or To Direct the Disposition |
| |
Shared Power
To Dispose or To Direct The Disposition |
|
|
BlackRock, Inc.(1)
|
| |
2/5/2020
|
| |
15,566,949
|
| |
0
|
| |
17,391,001
|
| |
0
|
|
|
State Street Corporation(2)
|
| |
2/14/2020
|
| |
0
|
| |
958,876
|
| |
0
|
| |
11,374,316
|
|
|
The Vanguard Group(3)
|
| |
2/11/2020
|
| |
348,658
|
| |
105,307
|
| |
24,225,570
|
| |
381,588
|
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 73
|
|
OTHER IMPORTANT INFORMATION
|
| |
|
|
•
|
the number of shares of Company stock held by the shareholder;
|
•
|
the name and address of the candidate;
|
•
|
a brief biographical description of the candidate, including his or her occupation for at least the last five years, and a statement of the qualifications of the candidate, taking into account the qualification requirements discussed in “Board of Directors – Identifying Director Candidates;” and
|
•
|
the candidate’s signed consent to be named in the proxy statement and a representation of such candidates’ intent to serve as a director for the entire term if elected.
|
74 •
|
| |
|
| |
2020 Proxy Statement
|
| |
|
FREQUENTLY ASKED QUESTIONS REGARDING MEETING
ATTENDANCE AND VOTING |
•
|
access and review the proxy materials;
|
•
|
submit your proxy via the Internet or by telephone; and
|
•
|
request a printed copy of proxy materials by mail.
|
|
| |
2020 Proxy Statement
|
| |
|
| |
• 75
|
|
FREQUENTLY ASKED QUESTIONS REGARDING MEETING ATTENDANCE AND VOTING
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•
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written notice to the Secretary of the Company;
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•
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timely delivery of a valid, later-dated proxy or a later-dated vote by telephone, mobile device or on the Internet; or
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•
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voting by ballot at the Annual Meeting.
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•
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Election of Directors. In the election of directors, each director will be elected by the vote of the majority of votes cast with respect to that director nominee. A majority of votes cast means that the number of votes cast “For” a nominee’s election must exceed the number of votes cast “Against” such nominee’s election. A director who fails to receive a majority “For” vote will be required to tender his or her resignation to the Board of Directors for consideration. For additional information, see “Corporate Governance – Key Corporate Governance Features – Shareholder Rights – Majority Voting In Director Elections.”
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•
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All Other proposals. To approve each of the other proposals discussed in this Proxy Statement, we must receive the affirmative vote of a majority of the shares entitled to vote on the matter and present in person at the Annual Meeting or represented by proxy.
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76 •
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2020 Proxy Statement
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FREQUENTLY ASKED QUESTIONS REGARDING MEETING ATTENDANCE AND VOTING
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•
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directly in your name as the shareholder of record;
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•
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indirectly through a broker, bank or other holder of record in “street name;” or
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•
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indirectly in one of the Company’s Savings Plans.
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2020 Proxy Statement
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• 77
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FREQUENTLY ASKED QUESTIONS REGARDING MEETING ATTENDANCE AND VOTING
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78 •
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2020 Proxy Statement
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APPENDIX A
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GAAP to Non-GAAP Reconciliation – 2019 ETR Adjusted OCF
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OCF
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2019
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| |
($ in billions)
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ETR Operating Cash Flow
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| |
2.817
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Less adjustment:
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| |
|
|
|
EWC items associated with decisions to sell or close EWC nuclear plants
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(0.149)
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|
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ETR Adjusted OCF
|
| |
2.966
|
|
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2020 Proxy Statement
|
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• A-1
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APPENDIX A
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GAAP to Non-GAAP Reconciliation – 2018 ETR Adjusted Earnings
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| ||||||
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Earnings
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EPS
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2018
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($ in millions)
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(after tax, per share in $)
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|
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Net income (loss) attributable to ETR Corp.
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| |
849
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4.63
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Less adjustments:
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Utility
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| |
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|
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Customer sharing associated with internal restructuring
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| |
(30)
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| |
(0.16)
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|
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Income tax benefit from 2012 / 2013 IRS settlement
|
| |
43
|
| |
0.23
|
|
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Income tax benefit from internal restructuring
|
| |
170
|
| |
0.93
|
|
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Tax reform
|
| |
38
|
| |
0.21
|
|
|
EWC
|
| |
(343)
|
| |
(1.87)
|
|
|
ETR Adjusted Earnings
|
| |
970
|
| |
5.29
|
|
|
Calculations may differ due to rounding
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A-2 •
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2020 Proxy Statement
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