March |
Sincerely, | |||||||||||
David L. Goodin | |||||||||||
President and Chief Executive Officer |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY |
Items of | 1. | Election of directors; | ||||||
Business | 2. | Advisory vote to approve the compensation paid to the company’s named executive officers; | ||||||
3. | Ratification of the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for | |||||||
4. | Transaction of any other business that may properly come before the meeting or any adjournment(s) thereof. | |||||||
Record Date | The board of directors has set the close of business on March | |||||||
Meeting Attendance | All stockholders as of the record date of March If your shares are held beneficially in the name of a bank, broker, or other holder of record, and you plan to attend the annual meeting, you will need to submit a written request for an admission ticket by mail to: Investor Relations, MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506 or by email at CorporateSecretary@mduresources.com. The request must include proof of stock ownership as of March Requests for admission tickets must be received no later than May We are actively monitoring the public health and travel safety concerns relating to | |||||||
Proxy Materials | This Proxy Statement will first be sent to stockholders requesting written materials on or about March 25, 2022. A Notice of Availability of Proxy Materials (Notice) will also be |
By order of the Board of Directors, | |||||
Karl A. Liepitz | |||||
Secretary |
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 10, 2022. The are available at |
TABLE OF CONTENTS | |||||||||||||||||||||||
Page | Page | ||||||||||||||||||||||
EXECUTIVE COMPENSATION (continued) | |||||||||||||||||||||||
TABLE OF CONTENTS | ||||||||||||||||||||||||||
Page | Page | |||||||||||||||||||||||||
EXECUTIVE COMPENSATION (continued) | ||||||||||||||||||||||||||
Oversight of Sustainability | ||||||||||||||||||||||||||
Other Items of Business for 2023 Annual Meeting | ||||||||||||||||||||||||||
PROXY STATEMENT SUMMARY |
■ | Annual Meeting Information |
Meeting Information | Summary of Stockholder Voting Matters | ||||||||||||||||||||||||||||
Time and Date | Voting Matters | Board Vote Recommendation | See Page | ||||||||||||||||||||||||||
11:00 a.m. Central Daylight Saving Time Tuesday, May 10, 2022 | Item 1. | Election of Directors | FOR Each Nominee | ||||||||||||||||||||||||||
Item 2. | Advisory Vote to Approve the Compensation Paid to the Company’s Named Executive Officers | FOR | |||||||||||||||||||||||||||
Place | Item 3. | Ratification of the Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for | FOR | ||||||||||||||||||||||||||
MDU Service Center 909 Airport Road Bismarck, ND 58504 | |||||||||||||||||||||||||||||
Who Can Vote | ||||||||||||||
If you held shares of MDU Resources Group, Inc. common stock at the close of business on March | ||||||||||||||
How to Vote | ||||||||||||||
Registered Stockholders | ||||||||||||||
If your shares are held directly with our stock registrar, you can vote any one of four ways: | ||||||||||||||
: | By Internet: | Go to the website shown on the Notice of Availability of Proxy Materials (Notice) or Proxy Card, if you received one, and follow the instructions. | ||||||||||||
) | By Telephone: | Call the telephone number shown on the Notice or Proxy Card, if you received one, and follow the instructions given by the voice prompts. | ||||||||||||
Voting via the Internet or by telephone authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated, and returned the Proxy Card by mail. Your voting instructions may be transmitted up until 11:59 p.m. Eastern Time on May | ||||||||||||||
* | By Mail: | If you received a paper copy of the Proxy Statement, Annual Report, and Proxy Card, mark, sign, date, and return the Proxy Card in the postage-paid envelope provided. | ||||||||||||
In Person: | Attend the annual meeting, or send a personal representative with an appropriate proxy, to vote by ballot at the meeting. | |||||||||||||
Beneficial Stockholders | ||||||||||||||
If you held shares beneficially in the name of a bank, broker, or other holder of record (sometimes referred to as holding shares “in street name”), you will receive voting instructions from said bank, broker, or other holder of record. If you wish to vote in person at the meeting, you must obtain a legal proxy from your bank, broker, or other holder of record of your shares and present it at the meeting. |
■ | Company Overview |
MDU Resources is Building a Strong America® | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
A strong infrastructure is the heart of our country’s economy. It is the natural gas and electricity that power business, industry, and our daily lives. It is the pipes and wires that connect our homes, factories, offices and stores to bring them to life. It is the transportation network of roads, highways, and airports that keeps our economy moving. Infrastructure is our business. We provide essential products and services through our two lines of business: regulated energy delivery and construction materials and services. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our Vision | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
With integrity, Building a Strong America® while being a great and safe place to work. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our Mission | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deliver superior value to stakeholders by providing essential infrastructure and services to America. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our Integrity Code | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitment to Integrity | We will conduct business legally and ethically with our best skills and judgment. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitment to Shareholders | We will act in the best interests of our corporation and protect its assets. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitment to Employees | We will work together to provide a safe and positive workplace. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitment to Customers, Suppliers and Competitors | We will compete in business only by lawful and ethical means. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitment to Communities | We will be a responsible and valued corporate citizen. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our Strategy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deliver superior value with a two-platform model of regulated energy delivery and construction materials and services, while pursuing organic growth opportunities and strategic acquisitions of well-managed companies and properties. |
Name | Age | Director Since | Primary Occupation | Board Committees | |||||||||||||
Thomas Everist | 71 | 1995 | President and chair of The Everist Company, an investment and land development company, formerly engaged in aggregate, concrete, and asphalt production | • Compensation • Nominating and Governance | |||||||||||||
Karen B. Fagg | 67 | 2005 | Former vice president of DOWL LLC, dba DOWL HKM, an engineering and design firm | • Compensation • Environmental and Sustainability (Chair) | |||||||||||||
David L. Goodin | 59 | 2013 | President and chief executive officer, MDU Resources Group, Inc. | Executive officer | |||||||||||||
Dennis W. Johnson | 71 | 2001 | Chair, president, and chief executive officer of TMI Group Incorporated, manufacturers of casework and architectural woodwork | Chair of the board | |||||||||||||
Patricia L. Moss | 67 | 2003 | Former president and chief executive officer of Cascade Bancorp, a financial holding company, subsequently merged into First Interstate Bank | • Compensation • Environmental and Sustainability | |||||||||||||
Dale S. Rosenthal | 64 | Nominee | Former senior executive, including strategic director, division president of Clark Financial Group, and chief financial officer of Clark Construction Group, a building and civil construction firm | ||||||||||||||
Edward A. Ryan | 67 | 2018 | Former executive vice president and general counsel of Marriott International | • Audit • Nominating and Governance (Chair) | |||||||||||||
David M. Sparby | 66 | 2018 | Former senior vice president and group president, revenue, of Xcel Energy and president and chief executive officer of its subsidiary, NSP-Minnesota | • Audit (Chair) • Nominating and Governance | |||||||||||||
Chenxi Wang | 50 | 2019 | Founder and managing general partner of Rain Capital Fund, L.P., a cybersecurity-focused venture fund | • Audit • Environmental and Sustainability |
Our Businesses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric and Natural Gas Utilities | Pipeline | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our utility companies serve more than 1.16 million customers across eight states. | We provide natural gas transportation as well as underground natural gas storage. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction Materials and Contracting | Construction Services | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Knife River Corporation is a Top 10 producer of aggregates in America, has approximately 1.2 billion tons of aggregate reserves, and employs more than 5,000 people during peak construction season. | MDU Construction Services Group, Inc. is one of the largest electrical contractors in the United States, with more than 6,800 employees at the end of 2021. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
■ | Business Performance Highlights |
Throughout 2021 all our business segments performed well despite changing economic conditions, escalating inflationary pressures, and challenges presented by the COVID-19 pandemic. Our overall performance in 2021 was consistent with our long-term strategy as we focused on growing our regulated energy delivery and construction materials and services businesses. In addition to our 2021 financial performance highlighted on the next page, our significant accomplishments include: | ||||||||
Regulated Energy Delivery | ||||||||
■ | Investing in Electric Generation. The electric segment retired three aging coal-fired electric generation units and, during the first half of 2022, intends to begin construction of a new 88-megawatt simple-cycle natural gas-fired combustion turbine peaking unit at the Heskett Station near Mandan, North Dakota. | |||||||
■ | North Bakken Expansion. The pipeline segment put the North Bakken Expansion project into service on February 1, 2022. The expansion has capacity to transport 250 million cubic feet (MMcf) of natural gas per day from the Bakken production area in North Dakota, with the potential to be increased up to 625 MMcf per day through additional compression if needed to meet growing customer demand. Construction of the North Bakken Expansion project began in July 2021 following approval from the Federal Energy Regulatory Commission. | |||||||
■ | Wahpeton Expansion. The pipeline segment announced plans in July 2021 for a natural gas pipeline expansion project in eastern North Dakota. The Wahpeton Expansion project consists of constructing 60 miles of pipeline and ancillary facilities and is designed to increase capacity by 20 MMcf per day of natural gas. Construction is expected to begin in early 2024 pending regulatory approval. | |||||||
Construction Materials & Services | ||||||||
■ | Acquisitions. The construction materials and contracting segment acquired Mt. Hood Rock in April 2021 and Baker Rock Resources and Oregon Mainline Paving in November 2021. Mt. Hood Rock, located near Portland, Oregon, provides construction aggregates in the eastern Portland area. Baker Rock, headquartered in Beaverton, Oregon, has construction aggregates in key growth locations surrounding the Portland metro area. Oregon Mainline Paving, located in McMinnville, Oregon, is one of the state’s largest asphalt paving contractors and provides greater reach for the company’s paving operations in the Northwest. | |||||||
■ | Honey Creek Quarry Expansion. In the first quarter of 2021, the construction materials and contracting segment received the necessary permitting to expand its operation capabilities at its Honey Creek quarry near Austin, Texas. Honey Creek enables the segment to supply a significant portion of the aggregate materials used for its local construction activity and production of ready-mix concrete and asphalt products, along with third-party sales in its Texas market. | |||||||
■ | Market Leader. | |||||||
¨ | The construction services segment ranked No. 10 on a list of top specialty contractors in the nation according to Engineering News-Record (ENR), up from No. 11 in 2020. ENR ranks the 600 largest specialty contractors in the country based on annual revenues. | |||||||
¨ | Electrical Construction & Maintenance Magazine named MDU Construction Services Group No. 4 in its 2021 Top 50 Electrical Contractors list. The leading industry publication annually ranks the 50 largest electrical contractors in the country based on annual revenue. |
Performance from Continuing Operations | ||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | ||||||||||||||||
Electric Distribution | ||||||||||||||||||||
Retail Sales (million kWh) | 3,306.5 | 3,354.4 | 3,314.3 | 3,204.5 | 3,271.6 | |||||||||||||||
Customers | 142,901 | 143,022 | 143,346 | 143,782 | 144,103 | |||||||||||||||
Natural Gas Distribution | ||||||||||||||||||||
Retail Sales (MMdk) | 112.6 | 112.6 | 123.7 | 114.5 | 115.3 | |||||||||||||||
Transportation (MMdk) | 144.5 | 149.5 | 166.1 | 160.0 | 174.4 | |||||||||||||||
Customers | 938,867 | 957,727 | 977,468 | 997,146 | 1,016,670 | |||||||||||||||
Pipeline Transportation (MMdk) | 312.5 | 351.5 | 429.7 | 438.6 | 471.1 | |||||||||||||||
Construction Materials and Contracting Revenues (millions) | $1,812.5 | $1,925.9 | $2,190.7 | $2,178.0 | $2,228.9 | |||||||||||||||
Construction Services Revenues (millions) | $1,367.6 | $1,371.5 | $1,849.3 | $2,095.7 | $2,051.6 |
■ | Financial Performance Highlights |
■ | The company achieved our third-best earnings in company history through strong performance from operations at both our regulated energy delivery and construction materials and services businesses resulting in earnings of $378.1 million, or $1.87 per share, compared to 2020 earnings, the company’s second-best annual earnings, of $390.2 million, or $1.95 per share. | ||||||||||||||||||||||
■ | Our return on invested capital in 2021 was 8.0%. | ||||||||||||||||||||||
■ | The chart below shows our earnings per share from continuing operations and compound annual growth rate (CAGR) of 9.5% over the last five years. |
* | MDU Resources Group, Inc. reported 2017 earnings from continuing operations of $1.45 per share which included a non-recurring benefit of 20 cents per share attributable to the federal Tax Cuts and Jobs Act that was signed into law on December 22, 2017. |
■ | Returned $173 million to stockholders through dividends during 2021: | ||||||||||||||||||||||
¨ | Increased annual dividend for the 31st straight year to 85.5 cents per share paid during 2021; | ||||||||||||||||||||||
¨ | Paid uninterrupted dividends for 84 straight years; and | ||||||||||||||||||||||
¨ | Member of the elite S&P High-Yield Dividend Aristocrats Index which recognizes companies within the S&P Composite 1500 Index that have followed a managed dividend policy of consistently increasing dividends annually for at least 20 years. | ||||||||||||||||||||||
■ | Listed on the 2021 Fortune 500. | ||||||||||||||||||||||
■ | Member of the S&P MidCap 400. | ||||||||||||||||||||||
■ | Maintained BBB+ stable credit rating from Standard & Poor’s and Fitch rating agencies.1 |
31 Years | Dividends Paid | 84 Years | ||||||||||||
of Consecutive | $810 Million | of Uninterrupted | ||||||||||||
Dividend Increases | Over the Last 5 Years | Dividend Payments |
■ | Corporate Governance Practices |
MDU Resources | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | Annual Election of All Directors | ü | Standing Committees Consist Entirely of Independent Directors | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | Majority Voting for Directors | ü | Active Investor Outreach Program | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | No Shareholder Rights Plan | ü | One Class of Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | Succession Planning and Implementation Process | ü | Stock Ownership Requirements for Directors and Executive Officers | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | Separate Board Chair and CEO | ü | Anti-Hedging and Anti-Pledging Policies for Directors and Executive Officers | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | Executive Sessions of Independent Directors at Every Regularly Scheduled Board Meeting | ü | No Related Party Transactions by Our Directors or Executive Officers | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | Annual Board and Committee Self-Evaluations | ü | Compensation Recovery/Clawback Policy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | Risk Oversight by Full Board and Committees | ü | Annual Advisory Approval on Executive Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | ü | Mandatory Retirement for Directors at Age 76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | Proxy Access for Stockholders | ü | Directors May Not Serve on More Than Three Public Boards Including the Company’s Board | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ü | All Directors are Independent Other Than Our CEO | ü | Strong Gender Diversity on Board |
Recognition for Gender Diversity MDU Resources was recognized in 2021 for gender diversity on its board | |||||||||||||||||
•by 50/50 Women on BoardsTM as a •by the Women’s Forum of | |||||||||||||||||
Name | Age | Director Since | Primary Occupation | Board Committees | |||||||||||||
Thomas Everist | 72 | 1995 | President and chair of The Everist Company, an investment and land development company, formerly engaged in aggregate, concrete, and asphalt production | • Compensation • Nominating and Governance | |||||||||||||
Karen B. Fagg | 68 | 2005 | Former vice president of DOWL LLC, dba DOWL HKM, an engineering and design firm | • Compensation (Chair) • Environmental and Sustainability | |||||||||||||
David L. Goodin | 60 | 2013 | President and chief executive officer, MDU Resources Group, Inc. | Executive officer | |||||||||||||
Dennis W. Johnson | 72 | 2001 | Chair, president, and chief executive officer of TMI Group Incorporated, manufacturers of casework and architectural woodwork | Chair of the board | |||||||||||||
Patricia L. Moss | 68 | 2003 | Former president and chief executive officer of Cascade Bancorp, a financial holding company, subsequently merged into First Interstate Bank | • Compensation • Environmental and Sustainability (Chair) | |||||||||||||
Dale S. Rosenthal | 65 | 2021 | Former senior executive, including strategic director, division president of Clark Financial Group, and chief financial officer of Clark Construction Group, a building and civil construction firm | • Audit • Nominating and Governance | |||||||||||||
Edward A. Ryan | 68 | 2018 | Former executive vice president and general counsel of Marriott International | • Audit • Nominating and Governance (Chair) | |||||||||||||
David M. Sparby | 67 | 2018 | Former senior vice president and group president, revenue, of Xcel Energy and president and chief executive officer of its subsidiary, NSP-Minnesota | • Audit (Chair) • Environmental and Sustainability | |||||||||||||
Chenxi Wang | 51 | 2019 | Founder and managing general partner of Rain Capital Fund, L.P., a cybersecurity-focused venture fund | • Audit • Environmental and Sustainability |
Tenure | Diversity | ||||||||||||||||||||||||||||
The board has determined that all director nominees, other than Mr. Goodin, meet the independence standards set by the NYSE and SEC. | The average tenure of the director nominees is approximately 11.7 years, which reflects a balance of company experience and new perspectives. | The board is committed to having a diverse and broadly inclusive membership. | |||||||||||||||||||||||||||
Gender | |||||||||||||||||||||||||||||
Four director nominees are women. | |||||||||||||||||||||||||||||
Yrs of Service | 44% | ||||||||||||||||||||||||||||
0-4 | |||||||||||||||||||||||||||||
89% | Race/Ethnicity | ||||||||||||||||||||||||||||
5-10 | One director nominee is ethnically diverse. | ||||||||||||||||||||||||||||
11% | |||||||||||||||||||||||||||||
11+ | |||||||||||||||||||||||||||||
Performance from Continuing Operations | ||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||
Electric Distribution | ||||||||||||||||||||
Retail Sales (million kWh) | 3,258.5 | 3,306.5 | 3,354.4 | 3,314.3 | 3,204.5 | |||||||||||||||
Customers | 142,948 | 142,901 | 143,022 | 143,346 | 143,782 | |||||||||||||||
Natural Gas Distribution | ||||||||||||||||||||
Retail Sales (MMdk) | 99.3 | 112.6 | 112.6 | 123.7 | 114.5 | |||||||||||||||
Transportation (MMdk) | 147.6 | 144.5 | 149.5 | 166.1 | 160.0 | |||||||||||||||
Customers | 922,408 | 938,867 | 957,727 | 977,468 | 997,146 | |||||||||||||||
Pipeline Transportation (MMdk) | 285.3 | 312.5 | 351.5 | 429.7 | 438.6 | |||||||||||||||
Construction Materials and Contracting Revenues (millions) | $1,874.3 | $1,812.5 | $1,925.9 | $2,190.7 | $2,178.0 | |||||||||||||||
Construction Services Revenues (millions) | $1,073.3 | $1,367.6 | $1,371.5 | $1,849.3 | $2,095.7 |
■ | Compensation Highlights |
The company’s executive compensation is based on providing market competitive compensation opportunities to attract top talent focused on achievement of short and long-term business results. Our compensation program is structured to align compensation with the company’s financial performance as a substantial portion of our executive compensation is directly linked to performance incentive awards. | |||||||||||||||||
■ | Over | ||||||||||||||||
■ | 100% of our | ||||||||||||||||
■ | We require our executive officers to own a significant amount of company stock based upon a multiple of their base salary. | ||||||||||||||||
■ | In February 2022, the board approved a performance modifier for the 2022 annual incentive award program for executive officers based upon the company’s achievement of certain measures to attract, retain, and develop a diverse and inclusive workforce. |
At the to approve executive compensation received support from over 95% of the common stock represented at the meeting and entitled to vote on the matter. |
What We Do | |||||
þ | Pay for Performance - Annual incentive and the performance share award portion of the long-term | ||||
þ | Independent Compensation Committee - All members of the compensation committee meet the independence standards under the New York Stock Exchange listing standards and the Securities and Exchange Commission rules. | ||||
þ | Independent Compensation Consultant - The compensation committee retains an independent compensation consultant to evaluate executive compensation plans and practices. | ||||
þ | Competitive Compensation - Executive compensation reflects executive performance, experience, relative value compared to other positions within the company, relationship to competitive market value compensation, business segment economic environment, and the actual performance of the overall company and the business segments. | ||||
þ | Annual Cash Incentive - Payment of annual cash incentive awards | ||||
þ | Long-Term Equity Incentive - Long-term incentive awards may be earned at the end of a three-year | ||||
þ | Balanced Mix of Pay Components - The target compensation mix represents a balance of annual cash and long-term equity-based compensation. | ||||
þ | Mix of Financial Goals - Use of a mixture of financial goals to measure performance prevents overemphasis on a single metric. | ||||
þ | Annual Compensation Risk Analysis - Risks related to our compensation programs are regularly analyzed through an annual compensation risk assessment. | ||||
þ | Stock Ownership and Retention Requirements - Executive officers are required to own, within five years of appointment or promotion, company common stock equal to a multiple of their base salary. Our | ||||
þ | Clawback Policy - If the company’s audited financial statements are restated due to any material noncompliance with the financial reporting requirements under the securities laws, the compensation committee may, or shall if required, demand repayment of some or all incentives paid to our executive officers within the last three years. | ||||
What We Do Not Do | |||||
ý | Stock Options - The company does not use stock options as a form of incentive compensation. | ||||
ý | Employment Agreements - Executives do not have employment agreements entitling them to specific payments upon termination or a change of control of the company. | ||||
ý | Perquisites - Executives do not receive perquisites that materially differ from those available to employees in general. | ||||
ý | Hedge Stock - Executives are not allowed to hedge company securities. | ||||
ý | Pledge Stock - Executives are not allowed to pledge company securities in margin accounts or as collateral for loans. | ||||
ý | No Dividends or Dividend Equivalents on Unvested Shares - We do not provide for payment of dividends or dividend equivalents on unvested share awards. | ||||
ý | Tax Gross-Ups-Executives do not receive tax gross-ups on their compensation. | ||||
■ | Sustainability Highlights |
MDU Resources | ||||||||||||||||||||||||||||||||
Enhanced Sustainability Reporting | ||||||||||||||||||||||||||||||||
We We have also published a summary of our Task Force on Climate-related Financial Disclosure (TCFD) aligned climate scenario analysis with respect to our electric generation resources. The company applied a net-zero by 2050 target for purposes of completing this analysis, a summary of which can be found on our website. | ||||||||||||||||||||||||||||||||
Reporting Frameworks | |||||
To better serve our investors and other stakeholders, | |||||
Reporting Frameworks | Business Segment | ||||
SASB | Construction Materials and Contracting | ||||
SASB | Construction Services | ||||
AGA | Pipeline | ||||
EEI / AGA | Electric and Natural Gas Utilities | ||||
TCFD | We continue to enhance and expand our |
Governance of Environmental and Social Responsibility |
The board of directors is ultimately responsible for oversight responsibility with respect to | ||||||||||||||||||||||||||||||||||||||||||||
⇓ | ||||||||||||||||||||||||||||||||||||||||||||
Environmental and Sustainability Committee of the Board | The environmental and sustainability committee is a standing committee of the board and meets quarterly in | |||||||||||||||||||||||||||||||||||||||||||
⇓ | ||||||||||||||||||||||||||||||||||||||||||||
Management Policy Committee | The management policy committee is comprised of | |||||||||||||||||||||||||||||||||||||||||||
⇓ | ||||||||||||||||||||||||||||||||||||||||||||
Executive Sustainability Committee | The executive sustainability committee, created in 2021, is comprised of corporate and business unit senior executives and supports execution of the | |||||||||||||||||||||||||||||||||||||||||||
■ | Reduce Electric Segment Greenhouse Gas Emissions. Our electric segment strives to reduce its greenhouse gas (GHG) emissions intensity. We intend to achieve this reduction primarily through the | Electric segment reduced its |
■ | ||||||||
Approximately 29% of our | ||||||||
Approximately 29% of |
☐ | Cascade Natural Gas Corporation ranked at the top of the list of 31 utilities named as 2021 Environmental Champions on Earth Day according to a national survey conducted by Escalent, a top human behavior and analytics firm. | ||||||||||||||||
☐ | |||||||||||||||||
Social Responsibility |
☐ | Diversity, Equity, and Inclusion. MDU Resources is committed to an inclusive environment that respects the differences and embraces the strengths of our diverse employees. Essential to the company’s success is its ability to attract, retain, and engage the best people from a broad range of backgrounds and build an inclusive culture where all employees feel valued and contribute their best. To aid in the company’s commitment to an inclusive environment, each business segment has a diversity officer who serves as a conduit for diversity-related issues and provides a voice for all employees. The company requires employees to participate in training on the company’s code of conduct and additional courses focusing on diversity, effective leadership, equal employment opportunity, workplace harassment, respect, and unconscious bias. To further our commitment to social responsibility with a focus on advancing diversity and inclusion in the workplace, our chief executive officer signed the CEO Action for Diversity and Inclusion pledge. The company has three strategic goals related to diversity: |
☐ | Charitable Giving. MDU Resources is proud of its record of supporting qualified organizations that enhance quality of life. Our philanthropic goal is to be a “neighbor of choice.” The MDU Resources Foundation was incorporated in 1983 to support the corporation’s charitable efforts and has contributed more than $40 million to worthwhile organizations. In 2021, the MDU Resources Foundation contributed $2.1 million to charitable organizations. In addition to contributions through the Foundation, our business segments and companies regularly make charitable donations and in-kind donations to the communities where they do business averaging approximately $500,000 per year. |
☐ | Our utility companies consistently rank high in customer satisfaction. In the J.D. Power 2021 Gas Utility Residential Customer Satisfaction StudySM, Intermountain Gas Company ranked first, Cascade Natural Gas Corporation second, and Montana-Dakota Utilities Co. fourth among mid-size natural gas utilities in the West Region. |
☐ | While our utility companies have made substantial investments in their facilities, retail prices remain competitive providing value to customers. Since 2016, our utility companies’ residential electric retail prices increased an average of 0.4% annually and residential natural gas prices increased an average of 1.8% annually. In comparison, the consumer price index (CPI) increased an average of 2.5% annually over the same period. While the cost of purchased natural gas increased in 2021, residential prices are still below the CPI and a value to customers. | ||||||||||
☐ | We strive to be our customers’ supplier of choice in all our markets by seeking competitive cost advantages and providing high-quality products and services. |
BOARD OF DIRECTORS |
The board of directors recommends that the stockholders vote FOR the election of each nominee. |
Thomas Everist Age | Independent Director Since 1995 Compensation Committee Nominating and Governance Committee | |||||||||||||
Key Contributions to the Board: With a 44-year career in the construction materials and mining industry, Mr. Everist brings critical knowledge of the construction materials and contracting industry to the board. Mr. Everist also contributes strong business leadership and management capabilities and insights through his role as president and chair of his companies for over | ||||||||||||||
Career Highlights | ||||||||||||||
• | President and chair of The Everist Company, Sioux Falls, South Dakota, an investment and land development company, since April 2002. Prior to January 2017, The Everist Company was engaged in aggregate, concrete, and asphalt production. | |||||||||||||
• | Managing member of South Maryland Creek Ranch, LLC, a land development company, since June 2006; president of SMCR, Inc., an investment company, since June 2006; and managing member of MCR Builders, LLC, which provides residential building services to South Maryland Creek Ranch, LLC, since November 2014. | |||||||||||||
• | Director and chair of | |||||||||||||
• | President and chair of L.G. Everist, Inc., Sioux Falls, South Dakota, an aggregate production company, from 1987 to April 2002. | |||||||||||||
Other Leadership Experience | ||||||||||||||
• | Director of publicly traded Raven Industries, Inc., Sioux Falls, South Dakota, a general manufacturer of electronics, flow controls, and engineered films, | |||||||||||||
• | Director and compensation committee chair of Bell, Inc., Sioux Falls, South Dakota, a manufacturer of folding cartons and packages, since April 2011. | |||||||||||||
• | Director and audit committee chair of Showplace Wood Products, Inc., Sioux Falls, South Dakota, a custom cabinets manufacturer, since January 2000. | |||||||||||||
• | Director of Angiologix Inc., Mountain View, California, a medical diagnostic device company, from July 2010 through October 2011 when it was acquired by Everist Genomics, Inc. | |||||||||||||
• | Member of the South Dakota Investment Council, the state agency responsible for investing state funds, from July 2001 to June 2006. | |||||||||||||
Karen B. Fagg Age | Independent Director Since 2005 Compensation Committee Environmental and Sustainability Committee | ||||||||||
Key Contributions to the Board:Through her management experience and knowledge in the fields of engineering, environment, and energy resource development, including four years as director of the Montana Department of Natural Resources and Conservation and over eight years as president, chief executive officer, and chair of her own engineering and environmental services company, as well as her service on a number of Montana state and community boards, Ms. Fagg contributes experience in responsible natural resource development with an informed perspective of the construction, engineering, and energy industries. | |||||||||||
Career Highlights | |||||||||||
• | Vice president of DOWL LLC, dba DOWL HKM, an engineering and design firm, from April 2008 until her retirement in December 2011. | ||||||||||
• | President of HKM Engineering, Inc., Billings, Montana, an engineering and environmental services firm, from April 1995 to June 2000, and chair, chief executive officer, and majority owner from June 2000 through March 2008. HKM Engineering, Inc. merged with DOWL LLC in April 2008. | ||||||||||
• | Employed with MSE, Inc., Butte, Montana, an energy research and development company, from 1976 through 1988, and vice president of operations and corporate development director from 1993 to April 1995. | ||||||||||
• | Director of the Montana Department of Natural Resources and Conservation, | ||||||||||
Other Leadership Experience | |||||||||||
• | |||||||||||
• | Former member of several regional, state, and community boards, including director of St. Vincent’s Healthcare from October 2003 to October 2009 and January 2016 through December 2019, including a term as chair; director of the Billings Catholic Schools Board from December 2011 through December 2018, including a term as chair; the First Interstate BancSystem Foundation from June 2013 to 2016; the Montana Justice Foundation from 2013 into 2015; Montana Board of Investments from 2002 through 2006; Montana State University’s Advanced Technology Park from 2001 to 2005; and Deaconess Billings Clinic Health System from 1994 to 2002. |
David L. Goodin Age | Director Since 2013 President and Chief Executive Officer | ||||||||||
Key Contributions to the Board: Serving as president and chief executive officer of MDU Resources Group, Inc. since 2013, Mr. Goodin is the only officer of the company that serves on our board. With 30 years of operating and leadership positions with our utility operations and | |||||||||||
Career Highlights | |||||||||||
• | President and chief executive officer and a director of the company since January 4, 2013. | ||||||||||
• | Prior to January 4, 2013, served as chief executive officer and president of Intermountain Gas Company, Cascade Natural Gas Corporation, Montana-Dakota Utilities Co., and Great Plains Natural Gas Co. | ||||||||||
• | Began his career in 1983 at Montana-Dakota Utilities Co. as a division electrical engineer and served in positions of increasing responsibility until 2007 when he was named president of Cascade Natural Gas Corporation; positions included division electric superintendent, electric systems manager, vice president-operations, and executive vice president-operations and acquisitions. | ||||||||||
Other Leadership Experience | |||||||||||
• | Member of the U.S. Bancorp Western North Dakota Advisory Board since January 2013. | ||||||||||
• | Director of Sanford Bismarck, an integrated health system dedicated to the work of health and healing, and Sanford Living Center, | ||||||||||
• | Board member of the BSC Innovations Foundation, an extension of Bismarck State College providing curriculum to Saudi Arabia industries, since August 1, 2018. | ||||||||||
• | Former board member of numerous industry associations, including the American Gas Association, the Edison Electric Institute, the North Central Electric Association, the Midwest ENERGY Association, and the North Dakota Lignite Energy Council. | ||||||||||
Dennis W. Johnson Age | Independent Director Since 2001 Chair of the Board | ||||||||||
Key Contributions to the Board: With over | |||||||||||
Career Highlights | |||||||||||
• | Chair of the board of the company effective May 8, 2019; and vice chair of the board from February 15, 2018 to May 8, 2019. | ||||||||||
• | Chair, president, and chief executive officer of TMI Group Incorporated as well as its two wholly owned subsidiary companies, TMI Corporation and TMI Transport Corporation, manufacturers of casework and architectural woodwork in Dickinson, North Dakota; employed since 1974 and serving as president or chief executive officer since 1982. | ||||||||||
Other Leadership Experience | |||||||||||
• | Member of the Bank of North Dakota Advisory Board of Directors since August 2017. | ||||||||||
• | President of the Dickinson City Commission from July 2000 through October 2015. | ||||||||||
• | Director of the Federal Reserve Bank of Minneapolis from 1993 through 1998. | ||||||||||
• | Served on numerous industry, state, and community boards, including the North Dakota Workforce Development Council (chair); the Decorative Laminate Products Association; the North Dakota Technology Corporation; and the business advisory council of the Steffes Corporation, a metal manufacturing and engineering firm. | ||||||||||
• | Served on North Dakota Governor Sinner’s Education Action Commission; the North Dakota Job Service Advisory Council; the North Dakota State University President’s Advisory Council; North Dakota Governor Schafer’s Transition Team; and chaired North Dakota Governor Hoeven’s Transition Team. | ||||||||||
Patricia L. Moss Age | Independent Director Since 2003 Compensation Committee Environmental and Sustainability Committee | Other Current Public Boards: --First Interstate BancSystem, Inc. --Aquila Group of Funds | ||||||||||||
Key Contributions to the Board: With substantial experience in the finance and banking industry, including service on the boards of public banking and investment companies, Ms. Moss contributes broad knowledge of finance, business development, human resources, and compliance oversight, as well as public company governance, to the board. Through her business experience and knowledge of the Pacific Northwest, Ms. Moss also provides insight on state, local, and regional economic and political issues where a significant portion of our operations and the largest number of our employees are located. | ||||||||||||||
Career Highlights | ||||||||||||||
• | President and chief executive officer of Cascade Bancorp, a financial holding company, Bend, Oregon, from 1998 to January 3, 2012; chief executive officer of Cascade Bancorp’s principal subsidiary, Bank of the Cascades, from 1998 to January 3, 2012, serving also as president from 1998 to 2003; and chief operating officer, chief financial officer and secretary of Cascade Bancorp from 1987 to 1998. | |||||||||||||
Other Leadership Experience | ||||||||||||||
• | Member of the Oregon Investment Council, which oversees the investment and allocation of all state of Oregon trust funds, | |||||||||||||
• | Director of First Interstate BancSystem, Inc., since May 30, 2017. | |||||||||||||
• | Director of Cascade Bancorp and Bank of the Cascades from 1993, and vice chair from January 3, 2012 until May 30, 2017 when Cascade Bancorp merged into First Interstate BancSystem, Inc., and became First Interstate Bank. | |||||||||||||
• | Chair of the Bank of the Cascades Foundation Inc. from 2014 to July 31, 2018; co-chair of the Oregon Growth Board, a state board created to improve access to capital and create private-public partnerships, from May 2012 through December 2018; and a member of the Board of Trustees for the Aquila Group of Funds, whose core business is mutual fund management and provision of investment strategies to fund shareholders, from January 2002 to May 2005 (one fund) and from June 2015 to present (currently three funds). | |||||||||||||
• | Former director of the Oregon Investment Fund Advisory Council, a state-sponsored program to encourage the growth of small businesses in Oregon; the Oregon Business Council, with a mission to mobilize business leaders to contribute to Oregon’s quality of life and economic prosperity; the North Pacific Group, Inc., a wholesale distributor of building materials, industrial, and hardwood products; and Clear Choice Health Plans Inc., a multi-state insurance company. | |||||||||||||
Dale S. Rosenthal Age | Independent Director Audit Committee Nominating and Governance Committee | ||||||||||
Key Contributions to the Board: With 22 years of experience with an integrated construction company, serving in senior executive positions as strategic director, division president, and chief financial officer, Ms. Rosenthal contributes expertise in construction, alternative energy, real estate and infrastructure development, risk management, and corporate strategy. Ms. Rosenthal also brings public board experience with a regulated public utility company. | |||||||||||
Career Highlights | |||||||||||
• | Strategic director of Clark Construction Group, LLC, a vertically integrated construction company headquartered in Bethesda, Maryland, from January 2017 to December 2017; division president of Clark Financial Services Group, leveraging Clark’s core turnkey construction expertise into alternative energy development, from April 2008 to December 2016; chief financial officer and senior vice president of Clark Construction Group, LLC, from April 2000 to April 2008; and established a Clark subsidiary, Global Technologies Group, which developed and built data centers for early internet service providers. Ms. Rosenthal joined Clark Construction in 1996. | ||||||||||
Led financing teams for several tax-credit financed housing developers and was instrumental in identifying new sources of funding and innovative tax structures for complex transactions. | |||||||||||
Other Leadership Experience | |||||||||||
• | Director of Washington Gas Light Company, formerly publicly traded and now a subsidiary of AltaGas Ltd., since October 2014, and chair of the audit committee since July 2018. Washington Gas is a regulated public utility company that sells and delivers natural gas in the District of Columbia and surrounding metropolitan areas. | ||||||||||
• | Board advisor of Langan Engineering & Environmental Services, a provider of an integrated mix of engineering and environmental consulting services in support of land development projects, corporate real estate portfolios, and the oil and gas industry, since March 2020. | ||||||||||
• | Member, Board of Trustees of Cornell University since June 2017, serving on the finance and building and properties committees. | ||||||||||
• | Director of Transurban Chesapeake LLC, a company that develops and operates toll roads in the Mid-Atlantic region, since August 2021. | ||||||||||
Edward A. Ryan Age | Independent Director Since 2018 Audit Committee Nominating and Governance Committee | ||||||||||
Key Contributions to the Board: As a former executive vice president and general counsel for a large public company with international operations, Mr. Ryan contributes expertise to the board in the areas of corporate governance, acquisitions, risk management, legal, compliance, and labor relations. Mr. Ryan also brings senior leadership, transactional, and public company experience. | |||||||||||
Career Highlights | |||||||||||
• | Advisor to the chief executive officer and president of Marriott International from December 2017 to December 31, 2018. | ||||||||||
• | Executive vice president and general counsel of Marriott International from December 2006 to December 2017; senior vice president and associate general counsel from 1999 to November 2006; and assumed responsibility for all corporate transactions and corporate governance in 2005. Mr. Ryan joined Marriott International as assistant general counsel in May 1996. | ||||||||||
• | Private law practice from 1979 to 1996. | ||||||||||
Other Leadership Experience | |||||||||||
• | |||||||||||
• | Director and finance committee member of Goodwill of Greater Washington, D.C., a non-profit organization whose mission is to transform lives and communities through education and employment, | ||||||||||
David M. Sparby Age | Independent Director Since 2018 Audit Committee | ||||||||||
Key Contributions to the Board: With over 32 years of public utility management and leadership experience with a large public utility company, including positions as senior vice president and as chief financial officer, Mr. Sparby provides a broad understanding of the public utility and natural gas pipeline industries, including renewable energy expertise. His lengthy senior leadership experience with a public company also contributes to the board. | |||||||||||
Career Highlights | |||||||||||
• | Senior vice president and group president, revenue, of Xcel Energy and president and chief executive officer of its subsidiary, NSP-Minnesota, from May 2013 until his retirement in December 2014; senior vice president and group president, from September 2011 to May 2013; chief financial officer from March 2009 to September 2011; and president and chief executive officer of NSP-Minnesota from 2008 to March 2009. He joined Xcel Energy, or its predecessor Northern States Power Company, as an attorney in 1982 and held positions of increasing responsibility. | ||||||||||
• | Attorney with the State of Minnesota, Office of Attorney General, from 1980 to 1982, during which period his responsibilities included representation of the Department of Public Service and the Minnesota Public Utilities Commission. | ||||||||||
Other Leadership Experience | |||||||||||
• | Board of Trustees of Mitchell Hamline School of Law from July 2011 to July 2020. | ||||||||||
• | Board of Trustees of the College of St. Scholastica since July 2012, including service as chair effective September 2020. | ||||||||||
Chenxi Wang Age | Independent Director Since 2019 Audit Committee Environmental and Sustainability Committee | ||||||||||
Key Contributions to the Board: Having significant technology and cybersecurity expertise through her management and leadership positions with several organizations, Ms. Wang contributes knowledge to the board on technology and cybersecurity issues. As the founder and managing general partner of a cybersecurity-focused venture fund, Ms. Wang also provides knowledge regarding capital markets and business development. | |||||||||||
Career Highlights | |||||||||||
• | Founder and managing general partner of Rain Capital Fund, L.P., a cybersecurity-focused venture fund aiming to fund early-stage, transformative technology innovations in the security market with a goal of supporting women and minority entrepreneurs, since December 2017. | ||||||||||
• | Chief strategy officer at Twistlock, an automated and scalable cloud native cybersecurity platform, from August 2015 to February 2017. | ||||||||||
• | Vice president, cloud security & strategy of CipherCloud, a cloud security software company, from January 2015 to August 2015. | ||||||||||
• | Vice president of strategy of Intel Security, a company focused on developing proactive, proven security solutions and services that protect systems, networks, and mobile devices, from April 2013 to January 2015. | ||||||||||
• | Principal analyst and vice president of research at Forrester Research, a market research company that provides advice on existing and potential impact of technology, from January 2007 to April 2013. | ||||||||||
• | Assistant research professor and associate professor of computer engineering at Carnegie Mellon University from September 2001 through August 2007. | ||||||||||
Other Leadership Experience | |||||||||||
• | Technical Board of Advisors of Secure Code Warriors, a Sydney-based cybersecurity company, since June 2019. | ||||||||||
• | Board of directors of OWASP Global Foundation, a nonprofit global community that drives visibility and evolution in the safety and security of the world’s software, from January 2018 to December 2019, including a term as vice chair. | ||||||||||
• | Recipient of the 2019 Investor in Women Award by Women Tech Founders Foundation, an organization dedicated to advancing women in the tech industry. | ||||||||||
• | Board of advisors of Keyp GmbH, a Munich-based software company with a mission to provide enterprises convenient access to the digital identity ecosystem, from December 2017 to August 2019. | ||||||||||
1 | QUESTIONNAIRES | |||||||||||||||||||||||||||||||||||||||||||
During 2021, each director completed an anonymous written questionnaire with the opportunity to provide comments. In addition, committee members completed a separate written questionnaire directed to the operation of the respective committees. | ||||||||||||||||||||||||||||||||||||||||||||
2 | INDIVIDUAL DIRECTOR INTERVIEWS | |||||||||||||||||||||||||||||||||||||||||||
The chair of the nominating and governance committee then conducted individual interviews with each director. | ||||||||||||||||||||||||||||||||||||||||||||
3 | BOARD SUMMARY AND FEEDBACK | |||||||||||||||||||||||||||||||||||||||||||
The results of the written questionnaires were anonymously aggregated and provided to the board and each committee. The chair of the nominating and governance committee summarized and shared input from the individual interviews in an executive session of the board. Key strengths and opportunities for improvement of the board and each committee were also reviewed in connection with this process. | ||||||||||||||||||||||||||||||||||||||||||||
4 | BOARD SUCCESSION | |||||||||||||||||||||||||||||||||||||||||||
As part of the annual board evaluation process, the nominating and governance committee evaluates our directors considering the current needs of the board and the company. This evaluation supports the nominating and governance committee’s consideration of board succession and potential director recruitment throughout the year. | ||||||||||||||||||||||||||||||||||||||||||||
Board Skills and Diversity Matrix | ||||||||||||||||||||||||||||||||
Everist | Fagg | Goodin | Johnson | Moss | Rosenthal | Ryan | Sparby | Wang | ||||||||||||||||||||||||
Skills & Expertise | ||||||||||||||||||||||||||||||||
EXECUTIVE MANAGEMENT/PUBLIC COMPANY | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Served as CEO or other senior executive of an organization or as a director of another publicly traded company | ||||||||||||||||||||||||||||||||
ACCOUNTING/FINANCE | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Experience in the preparation and review of financial statements and financial reports | ||||||||||||||||||||||||||||||||
CAPITAL MARKETS | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||||
Experience overseeing company financings, investments, capital structures, and financial strategy | ||||||||||||||||||||||||||||||||
INFORMATION TECHNOLOGY/CYBERSECURITY | ü | ü | ||||||||||||||||||||||||||||||
Oversight of or significant background working with information technology systems, data management, and/or cybersecurity risks | ||||||||||||||||||||||||||||||||
RISK MANAGEMENT AND COMPLIANCE | ü | ü | ü | ü | ü | ü | ü | ü | ü | |||||||||||||||||||||||
Regulatory and compliance expertise or experience in the identification, assessment, and mitigation of risks facing our company | ||||||||||||||||||||||||||||||||
INDUSTRY EXPERIENCE | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Experience in our businesses and related industries, including public utilities, natural gas pipelines, construction, and aggregate mining | ||||||||||||||||||||||||||||||||
LEGAL/CORPORATE GOVERNANCE | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Experience in dealing with complex legal and public company governance issues | ||||||||||||||||||||||||||||||||
ENVIRONMENT/SCIENCE | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Experience addressing environmental and sustainability issues relating to our businesses | ||||||||||||||||||||||||||||||||
GOVERNMENT/REGULATORY/PUBLIC AFFAIRS | ü | ü | ü | ü | ü | |||||||||||||||||||||||||||
Background or experience in governmental regulations and public policy issues affecting our businesses | ||||||||||||||||||||||||||||||||
Gender/Age/Tenure | ||||||||||||||||||||||||||||||||
Gender | M | F | M | M | F | F | M | M | F | |||||||||||||||||||||||
Age | 72 | 68 | 60 | 72 | 68 | 65 | 68 | 67 | 51 | |||||||||||||||||||||||
Tenure | 27 | 17 | 9 | 21 | 19 | 1 | 4 | 4 | 3 | |||||||||||||||||||||||
Race/Ethnicity/Nationality | ||||||||||||||||||||||||||||||||
African American/Black | ||||||||||||||||||||||||||||||||
Alaskan Native or Native American | ||||||||||||||||||||||||||||||||
Asian | ü | |||||||||||||||||||||||||||||||
Hispanic/Latinx | ||||||||||||||||||||||||||||||||
Native Hawaiian or Pacific Islander | ||||||||||||||||||||||||||||||||
White (not Hispanic or Latinx origins) | ü | ü | ü | ü | ü | ü | ü | ü | ||||||||||||||||||||||||
Two or more Races or Ethnicities | ||||||||||||||||||||||||||||||||
LGBTQ | ||||||||||||||||||||||||||||||||
Independence | Tenure | Diversity |
0-4 | |||||||||||||||||||||||||||||
89% | Race/Ethnicity | ||||||||||||||||||||||||||||
5-10 | One director nominee is ethnically diverse. | ||||||||||||||||||||||||||||
11% | |||||||||||||||||||||||||||||
Nominee Independence | 11+ | ||||||||||||||||||||||||||||
CORPORATE GOVERNANCE AND THE BOARD OF DIRECTORS |
WHO WE ENGAGE | HOW WE ENGAGE | WHO PARTICIPATES | ||||||||||||||||||||||||||||||
• | Institutional Investors | • | One-on-One and Group Meetings | • | Executive Management | |||||||||||||||||||||||||||
• | Sell-Side Analysts | • | Quarterly Earnings Conference Calls | • | Investor Relations | |||||||||||||||||||||||||||
• | Retail Stockholders | • | Written and Electronic Communications | • | Senior Leadership | |||||||||||||||||||||||||||
• | Pension Funds | • | Company-Hosted Events and Presentations | • | Subject Matter Experts | |||||||||||||||||||||||||||
• | Holders of Bonds | • | Webcasts with Over 200 Stockholders and | • | Board Members | |||||||||||||||||||||||||||
• | Rating Agencies/Firms | Investment Firms | ||||||||||||||||||||||||||||||
• | Industry and Sell-Side Presentations and | KEY TOPICS OF ENGAGEMENT | ||||||||||||||||||||||||||||||
Conferences | • | Company Strategy | ||||||||||||||||||||||||||||||
KEY ENGAGEMENT RESOURCES | • | Executive Compensation | ||||||||||||||||||||||||||||||
• | MDU Resources Website at investor.mdu.com | • | Sustainability Report | • | Operational and Financial Updates | |||||||||||||||||||||||||||
• | Quarterly Earnings Webcasts | • | Public Events and Presentations | • | Impact of COVID-19 Pandemic | |||||||||||||||||||||||||||
• | Annual Proxy Statement | • | SEC Filings | • | Sustainability | |||||||||||||||||||||||||||
• | Annual Report | • | Disclosures to Various Ratings Assessors | • | Environmental, Social, and Corporate | |||||||||||||||||||||||||||
• | Annual Stockholder Meeting | • | Press Releases | Governance Practices | ||||||||||||||||||||||||||||
• | Capital Expenditure Forecast/Capital Allocation |
OUTCOMES OF STOCKHOLDER ENGAGEMENT | |||||||||||||||||
• | Expanded disclosure of financial metrics for our business segments to help investors better understand key business drivers | • | Completed a TCFD-aligned electric generation climate scenario analysis | ||||||||||||||
• | Enhanced Sustainability Reporting | • | Created an executive sustainability committee to support execution of the company’s environmental and sustainability strategy |
The Board | |||||||||||||||||||||||||||||||||||||||||
While the board is ultimately responsible for risk oversight at our company, our standing board committees assist the board in fulfilling its oversight responsibilities in certain areas of risk. | |||||||||||||||||||||||||||||||||||||||||
ô | |||||||||||||||||||||||||||||||||||||||||
Audit Committee | Compensation Committee | Nominating and Governance Committee | Environmental and Sustainability Committee | ||||||||||||||||||||||||||||||||||||||
Risk Oversight Responsibilities | Risk Oversight Responsibilities | Risk Oversight Responsibilities | Risk Oversight Responsibilities | ||||||||||||||||||||||||||||||||||||||
ü | Financial Reporting | ü | Executive Compensation | ü | Board Organization | ü | Environmental | ||||||||||||||||||||||||||||||||||
ü | Internal Controls | ü | Incentive Plans | ü | Board Membership and Structure | ü | Health and Safety | ||||||||||||||||||||||||||||||||||
ü | Cybersecurity | ü | Conflicts of Interest Assessment | ü | Succession Planning | ü | Social Sustainability | ||||||||||||||||||||||||||||||||||
ü | Compliance with Legal and Regulatory Requirements | ü | Director Compensation Policy | ü | Corporate Governance | ü | Climate Change Risks | ||||||||||||||||||||||||||||||||||
ô | |||||||||||||||||||||||||||||||||||||||||
Management | |||||||||||||||||||||||||||||||||||||||||
The management policy committee meets monthly, or more frequently as warranted, to receive reports from each business unit on safety, operations, business development, and to discuss the company’s challenges and opportunities. Reports are also provided by the company’s financial, human resources, legal, and enterprise information technology departments. Special presentations are made by other employees on matters that affect the company’s operations. The company has also developed a robust compliance program to promote a culture of compliance, consistent with the right “tone at the top,” to mitigate risk. The program includes training and adherence to our code of conduct and legal compliance guide. We further mitigate risk through our internal audit and legal departments. |
Name | Audit Committee | Compensation Committee | Nominating and Governance Committee | Environmental and Sustainability Committee | |||||||||||||
Thomas Everist | ● | ● | |||||||||||||||
Karen B. Fagg | C | ||||||||||||||||
● | |||||||||||||||||
Patricia L. Moss | ● | C | |||||||||||||||
Dale S. Rosenthal | ● | ● | |||||||||||||||
Edward A. Ryan | ● | C | |||||||||||||||
David M. Sparby | C | ● | |||||||||||||||
Chenxi Wang | ● | ● | |||||||||||||||
C - Chair | |||||||||||||||||
● - Member |
Nominating and Governance Committee | Met Four Times in |
Audit Committee | Met |
Compensation Committee | Met |
Environmental and Sustainability Committee | Met Four Times in |
Ownership Threshold: | 3% of outstanding shares of our common stock | ||||
Nominating Group Size: | Up to 20 stockholders may combine to reach the 3% ownership threshold | ||||
Holding Period: | Continuously for three years | ||||
Number of Nominees: | The greater of two nominees or 20% of our board |
Corporate Governance Materials | Website | |||||||
• | Bylaws | |||||||
• | Corporate Governance Guidelines | |||||||
• | Board Committee Charters for the Audit, Compensation, Nominating and Governance, and Environmental and Sustainability Committees | |||||||
• | Leading With Integrity Guide | www.mdu.com/ |
COMPENSATION OF NON-EMPLOYEE DIRECTORS |
Prior to June 1, 2021 | Effective June 1, 2021 | ||||||||||||||||
Base Cash Retainer | $85,000 | $100,000 | |||||||||||||||
Additional Cash Retainers: | |||||||||||||||||
Non-Executive Chair | 95,000 | 112,500 | |||||||||||||||
Audit Committee Chair | 20,000 | 20,000 | |||||||||||||||
Compensation Committee Chair | 15,000 | 15,000 | |||||||||||||||
Nominating and Governance Committee Chair | 15,000 | 15,000 | |||||||||||||||
Environmental and Sustainability Committee Chair | 15,000 | 15,000 | |||||||||||||||
Annual Stock Grant1 - Directors (other than Non-Executive Chair) | 125,000 | 140,000 | |||||||||||||||
Annual Stock Grant2 - Non-Executive Chair | 150,000 | 165,000 | |||||||||||||||
1 | The annual stock grant is a grant of shares of company common stock equal in value to $140,000. | ||||||||||||||||
2 | The annual stock grant is a grant of shares of company common stock equal in value to $165,000. |
Name | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)1 | All Other Compensation ($)2 | Total ($) | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)1 | All Other Compensation ($)2 | Total ($) | ||||||||||||||||||||||||||||||||||||||||||||||||
Thomas Everist | Thomas Everist | 85,000 | 125,000 | 5,083 | 215,083 | Thomas Everist | 93,750 | 140,000 | 5,103 | 238,853 | ||||||||||||||||||||||||||||||||||||||||||||||||
Karen B. Fagg | Karen B. Fagg | 100,000 | 125,000 | 3,683 | 228,683 | Karen B. Fagg | 108,750 | 140,000 | 3,703 | 252,453 | ||||||||||||||||||||||||||||||||||||||||||||||||
Mark A. Hellerstein | 85,000 | 125,000 | 3,683 | 213,683 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mark A. Hellerstein3 | Mark A. Hellerstein3 | 35,417 | 58,333 | 3,643 | 97,393 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dennis W. Johnson | Dennis W. Johnson | 180,000 | 150,000 | 3,683 | 333,683 | Dennis W. Johnson | 198,958 | 165,000 | 5,103 | 369,061 | ||||||||||||||||||||||||||||||||||||||||||||||||
Patricia L. Moss | Patricia L. Moss | 85,000 | 125,000 | 2,083 | 212,083 | Patricia L. Moss | 102,500 | 140,000 | 2,603 | 245,103 | ||||||||||||||||||||||||||||||||||||||||||||||||
Edward A. Ryan3 | 100,000 | 125,000 | 3,683 | 228,683 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dale S. Rosenthal4 | Dale S. Rosenthal4 | 65,417 | 93,333 | 69 | 158,819 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Edward A. Ryan5 | Edward A. Ryan5 | 108,750 | 140,000 | 5,103 | 253,853 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
David M. Sparby | David M. Sparby | 105,000 | 125,000 | 5,083 | 235,083 | David M. Sparby | 113,750 | 140,000 | 5,103 | 258,853 | ||||||||||||||||||||||||||||||||||||||||||||||||
Chenxi Wang | Chenxi Wang | 85,000 | 125,000 | 1,283 | 211,283 | Chenxi Wang | 93,750 | 140,000 | 103 | 233,853 | ||||||||||||||||||||||||||||||||||||||||||||||||
John K. Wilson | 100,000 | 125,000 | 2,083 | 227,083 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
John K. Wilson3 | John K. Wilson3 | 41,667 | 58,333 | 3,643 | 103,643 |
SECURITY OWNERSHIP |
Name1 | Name1 | Shares of Common Stock Beneficially Owned | Percent of Class | Name1 | Shares of Common Stock Beneficially Owned | Percent of Class | ||||||||||||||||||||||||||||
David C. Barney | David C. Barney | 93,820 | 2,3 | * | David C. Barney | 88,294 | 2,3 | * | ||||||||||||||||||||||||||
Thomas Everist | Thomas Everist | 870,899 | * | Thomas Everist | 662,256 | * | ||||||||||||||||||||||||||||
Karen B. Fagg | Karen B. Fagg | 83,100 | * | Karen B. Fagg | 87,931 | * | ||||||||||||||||||||||||||||
David L. Goodin | David L. Goodin | 426,344 | 2 | * | David L. Goodin | 296,021 | 2 | * | ||||||||||||||||||||||||||
Mark A. Hellerstein | 33,207 | * | ||||||||||||||||||||||||||||||||
Dennis W. Johnson | Dennis W. Johnson | 112,679 | 4 | * | Dennis W. Johnson | 120,170 | 4 | * | ||||||||||||||||||||||||||
Nicole A. Kivisto | Nicole A. Kivisto | 101,241 | 2,5 | * | Nicole A. Kivisto | 89,204 | 2,5 | * | ||||||||||||||||||||||||||
Patricia L. Moss | Patricia L. Moss | 85,535 | * | Patricia L. Moss | 88,816 | * | ||||||||||||||||||||||||||||
Dale S. Rosenthal | Dale S. Rosenthal | 3,220 | * | |||||||||||||||||||||||||||||||
Edward A. Ryan | Edward A. Ryan | 25,581 | * | Edward A. Ryan | 31,823 | * | ||||||||||||||||||||||||||||
David M. Sparby | David M. Sparby | 25,728 | * | David M. Sparby | 30,559 | * | ||||||||||||||||||||||||||||
Jeffrey S. Thiede | Jeffrey S. Thiede | 105,047 | 2 | * | Jeffrey S. Thiede | 100,733 | 2 | * | ||||||||||||||||||||||||||
Jason L. Vollmer | Jason L. Vollmer | 45,900 | 2 | * | Jason L. Vollmer | 48,912 | 2 | * | ||||||||||||||||||||||||||
Chenxi Wang | Chenxi Wang | 7,778 | * | Chenxi Wang | 12,609 | * | ||||||||||||||||||||||||||||
John K. Wilson | 138,808 | * | ||||||||||||||||||||||||||||||||
All directors and executive officers as a group (18 in number) | All directors and executive officers as a group (18 in number) | 2,265,237 | 2,6 | 1.13 | % | All directors and executive officers as a group (18 in number) | 1,800,586 | 2,6 | * | |||||||||||||||||||||||||
* | * | Less than one percent of the class. Percent of class is calculated based on 200,522,277 outstanding shares as of February 28, 2021. | * | Less than one percent of the class. Percent of class is calculated based on 203,350,740 outstanding shares as of February 28, 2022. | ||||||||||||||||||||||||||||||
1 | 1 | The table includes the ownership of all current directors, named executive officers, and other executive officers of the company without naming them. | 1 | The table includes the ownership of all current directors, named executive officers, and other executive officers of the company without naming them. | ||||||||||||||||||||||||||||||
2 | 2 | Includes full shares allocated to the officer’s account in our 401(k) retirement plan. | 2 | Includes full shares allocated to the officer’s account in our 401(k) retirement plan. | ||||||||||||||||||||||||||||||
3 | 3 | The total includes 687 shares owned by Mr. Barney’s spouse. | 3 | The total includes 687 shares owned by Mr. Barney’s spouse. | ||||||||||||||||||||||||||||||
4 | 4 | Mr. Johnson disclaims all beneficial ownership of the 163 shares owned by his spouse. | 4 | Mr. Johnson disclaims all beneficial ownership of the 163 shares owned by his spouse. | ||||||||||||||||||||||||||||||
5 | 5 | The total includes 531 shares owned by Ms. Kivisto’s spouse. | 5 | The total includes 531 shares owned by Ms. Kivisto’s spouse. | ||||||||||||||||||||||||||||||
6 | 6 | Includes shares owned by a director’s or executive’s spouse regardless of whether the director or executive claims beneficial ownership. | 6 | Includes shares owned by a director’s or executive’s spouse regardless of whether the director or executive claims beneficial ownership. |
Title of Class | Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock | The Vanguard Group | 20,724,538 | 1 | 10.34 | % | Common Stock | The Vanguard Group | 22,537,128 | 1 | 11.08 | % | ||||||||||||||||||||||||||||||||||||||||
100 Vanguard Blvd. | 100 Vanguard Blvd. | |||||||||||||||||||||||||||||||||||||||||||||||||||
Malvern, PA 19355 | Malvern, PA 19355 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock | BlackRock, Inc. | 17,069,272 | 2 | 8.50 | % | Common Stock | BlackRock, Inc. | 18,020,281 | 2 | 8.90 | % | ||||||||||||||||||||||||||||||||||||||||
55 East 52nd Street | 55 East 52nd Street | |||||||||||||||||||||||||||||||||||||||||||||||||||
New York, NY 10055 | New York, NY 10055 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock | State Street Corporation | 13,699,907 | 3 | 6.83 | % | Common Stock | State Street Corporation | 13,751,230 | 3 | 6.76 | % | ||||||||||||||||||||||||||||||||||||||||
State Street Financial Center | State Street Financial Center | |||||||||||||||||||||||||||||||||||||||||||||||||||
One Lincoln Street | One Lincoln Street | |||||||||||||||||||||||||||||||||||||||||||||||||||
Boston, MA 02111 | Boston, MA 02111 | |||||||||||||||||||||||||||||||||||||||||||||||||||
1 | 1 | Based solely on the Schedule 13G, Amendment No. 9, filed on February 10, 2021, The Vanguard Group reported sole dispositive power with respect to 20,407,235 shares, shared dispositive power with respect to 317,303 shares, and shared voting power with respect to 134,536 shares as the parent holding company or control person of Vanguard Asset Management, Limited; Vanguard Fiduciary Trust Company; Vanguard Global Advisors, LLC; Vanguard Group (Ireland) Limited; Vanguard Investments Australia Ltd; Vanguard Investments Canada Inc.; Vanguard Investments Hong Kong Limited; and Vanguard Investments UK, Limited. | 1 | Based solely on the Schedule 13G, Amendment No. 10, filed on February 9, 2022, The Vanguard Group reported sole dispositive power with respect to 22,262,310 shares, shared dispositive power with respect to 274,818 shares, and shared voting power with respect to 96,425 shares. | ||||||||||||||||||||||||||||||||||||||||||||||||
2 | 2 | Based solely on the Schedule 13G, Amendment No. 12, filed on January 29, 2021, BlackRock, Inc. reported sole voting power with respect to 16,370,416 shares and sole dispositive power with respect to 17,069,272 shares as the parent holding company or control person of BlackRock Life Limited; BlackRock Advisors, LLC; BlackRock (Netherlands) B.V.; BlackRock Institutional Trust Company, National Association; BlackRock Asset Management Ireland Limited; BlackRock Financial Management, Inc.; BlackRock Asset Management Schweiz AG; BlackRock Investment Management, LLC; BlackRock Investment Management (UK) Limited; BlackRock Asset Management Canada Limited; BlackRock Investment Management (Australia) Limited; BlackRock Advisors (UK) Limited; BlackRock Fund Advisors; and BlackRock Fund Managers Ltd. | 2 | Based solely on the Schedule 13G, Amendment No. 13, filed on February 1, 2022, BlackRock, Inc. reported sole voting power with respect to 17,090,854 shares and sole dispositive power with respect to 18,020,281 shares as the parent holding company or control person of BlackRock Life Limited; Aperio Group, LLC; BlackRock Advisors, LLC; BlackRock (Netherlands) B.V.; BlackRock Fund Advisors; BlackRock Institutional Trust Company, National Association; BlackRock Asset Management Ireland Limited; BlackRock Financial Management, Inc.; BlackRock Asset Management Schweiz AG; BlackRock Investment Management, LLC; BlackRock Investment Management (UK) Limited; BlackRock Asset Management Canada Limited; BlackRock (Luxembourg) S.A., BlackRock Investment Management (Australia) Limited; BlackRock Advisors (UK) Limited; and BlackRock Fund Managers Ltd. | ||||||||||||||||||||||||||||||||||||||||||||||||
3 | 3 | Based solely on the Schedule 13G, filed on February 9, 2021, State Street Corporation reported shared voting power with respect to 13,228,547 shares and shared dispositive power with respect to 13,699,907 shares as the parent holding company or control person of SSGA Funds Management, Inc.; State Street Global Advisors Limited (UK); State Street Global Advisors, Australia Limited; State Street Global Advisors GmbH; and State Street Global Advisors Trust Company. | 3 | Based solely on the Schedule 13G, filed on February 11, 2022, State Street Corporation reported shared voting power with respect to 13,355,385 shares and shared dispositive power with respect to 13,751,230 shares as the parent holding company or control person of SSGA Funds Management, Inc.; State Street Global Advisors, Limited; State Street Global Advisors, LTD; State Street Global Advisors Europe Limited; State Street Global Advisors, Australia, Limited; State Street Global Advisors Asia, Limited; and State Street Global Advisors Trust Company. |
EXECUTIVE COMPENSATION |
The board of directors recommends a vote “for” the approval, on a non-binding advisory basis, of the compensation of the company’s named executive officers, as disclosed in this Proxy Statement. |
Name | Age | Present Corporate Position and Business Experience | ||||||||||||||||||
David L. Goodin | Mr. Goodin was elected president and chief executive officer of the company and a director effective January 4, 2013. For more information about Mr. Goodin, see the section entitled “Item 1. Election of Directors.” | |||||||||||||||||||
David C. Barney | Mr. Barney was elected president and chief executive officer of Knife River Corporation effective April 30, 2013, and president effective January 1, 2012. | |||||||||||||||||||
Stephanie A. Barth | 49 | Ms. Barth was elected vice president, chief accounting officer and controller of the company effective September 30, 2017. Prior to that, she was controller of the company effective May 30, 2016, and served as vice president, treasurer and chief accounting officer of WBI Energy, Inc. effective January 1, 2015, and controller effective September 30, 2013. | ||||||||||||||||||
Trevor J. Hastings | Mr. Hastings was elected president and chief executive officer of WBI | |||||||||||||||||||
Anne M. Jones | Ms. Jones was elected vice | |||||||||||||||||||
Nicole A. Kivisto | Ms. Kivisto was elected president and chief executive officer of Montana-Dakota Utilities Co., Cascade Natural Gas Corporation, and Intermountain Gas Company effective January 9, 2015. Prior to that, she was vice president of operations for Montana-Dakota Utilities Co. and Great Plains Natural Gas Co. effective January 3, 2014, and vice president, controller and chief accounting officer for the company effective February 17, 2010. | |||||||||||||||||||
Karl A. Liepitz | Mr. Liepitz was elected vice president, general counsel and secretary effective February 6, 2021. Prior to that, he was assistant general counsel and assistant secretary effective January 1, 2017, and senior attorney and assistant secretary effective January 9, 2016. He held legal positions of increasing responsibility with the company since August 2003. | |||||||||||||||||||
Margaret (Peggy) A. Link | Ms. Link was elected vice president and chief information officer effective December 1, 2017. Prior to that, she was chief information officer effective January 1, 2016, assistant vice president-technology and cybersecurity officer effective January 1, 2015, and director shared IT services effective June 2, 2009. | |||||||||||||||||||
Jeffrey S. Thiede | Mr. Thiede was elected president and chief executive officer of MDU Construction Services Group, Inc. effective April 30, 2013, and president effective January 1, 2012. | |||||||||||||||||||
Jason L. Vollmer | Mr. Vollmer was named vice president and chief financial officer effective November 23, 2020. Prior to that, he was vice president, chief financial officer and treasurer effective September 30, 2017, vice president, chief accounting officer and treasurer effective March 19, 2016, treasurer and director of cash and risk management effective November 29, 2014, and manager of treasury services and risk management effective June 30, 2014. |
David L. Goodin | President and Chief Executive Officer (CEO) | ||||
Jason L. Vollmer | Vice President and Chief Financial Officer (CFO) | ||||
David C. Barney | President and Chief Executive Officer - Construction Materials and Contracting Segment | ||||
Jeffrey S. Thiede | President and Chief Executive Officer - Construction Services Segment | ||||
Nicole A. Kivisto | President and Chief Executive Officer - Electric and Natural Gas Distribution Segments |
Prior Executive Compensation Practice | Revised Executive Compensation Practice | Rationale for Change | |||||||||
Annual Incentive for MDU Resources Group, Inc. Corporate Officers | The annual cash incentive award for corporate executives was based on the achievement of the performance measures for each business segment executive and weighted by each business segment’s invested capital relative to the company’s total invested capital. | 100% MDU Resources earnings per share | • Aligns the award with overall corporate responsibility. • Eliminates complex weighting based on invested capital to determine payouts. | ||||||||
Long-Term Incentive | 100% Performance Share Awards | 25% Time-vesting Restricted Stock Units 75% Performance Share Awards | Awarding 25% of the long-term incentive as time-vesting restricted stock units adds a retention tool to the long-term incentives while still emphasizing performance through 75% performance share awards. | ||||||||
Three performance measures including: - Relative Total Stockholder Return - EBITDA Growth - Earnings Growth | Two performance measures including: - Relative Total Stockholder Return - Earnings Growth | Eliminates the potential redundancy of two profit-related performance measures. Earnings as a bottom-line performance measure is simple and a comprehensive profit metric. | |||||||||
Peer group of 21 companies for evaluation of relative Total Stockholder Return. | Peer group expanded to selected companies within the S&P MidCap 400 reflective of the size, value, and risk profile of MDU Resources. | A larger, stable group lessens aberrations. | |||||||||
Total Stockholder Return of MDU Resources and peer group companies based on single beginning and ending period stock prices. | Total Stockholder Return of MDU Resources and peer group companies based on a 20-day average stock price for beginning and ending points. | Eliminates potential aberrations due to single day spikes or declines in stock prices. |
Long-Term Performance Measures for the 2019 - 2021 Performance Period | |||||||||||||||||||||||
TSR Ranking | Earnings Growth | EBITDA Growth | |||||||||||||||||||||
14th | 12.1% | 11.5% | |||||||||||||||||||||
Ranking out of 22 | Compound Annual Growth Rate | Compound Annual Growth Rate | |||||||||||||||||||||
Target Ranking = 12th out of 22 | Target Growth = 6.5% | Target Growth = 6.5% | |||||||||||||||||||||
Weighting = 50% | Weighting = 25% | Weighting = 25% | |||||||||||||||||||||
Weighted Vesting = 35.6% | Weighted Vesting = 50.0% | Weighted Vesting = 50.0% | |||||||||||||||||||||
Total Vesting of 135.6% | |||||||||||||||||||||||
Long-Term Performance Measures for the 2018 through 2020 Performance Period | ||||||||||||||
TSR Ranking | Earnings Growth | EBITDA Growth | ||||||||||||
50th Percentile | 16.9% | 10.3% | ||||||||||||
Compound Annual Growth Rate | Compound Annual Growth Rate | |||||||||||||
Target Ranking = 50th Percentile | Target Growth = 6.5% | Target Growth = 6.5% | ||||||||||||
Weighting = 50% | Weighting = 25% | Weighting = 25% |
What We Do | |||||
þ | Pay for Performance - Annual incentive and the performance share award portion of the long-term | ||||
þ | Independent Compensation Committee - All members of the compensation committee meet the independence standards under the New York Stock Exchange listing standards and the Securities and Exchange Commission rules. | ||||
þ | Independent Compensation Consultant - The compensation committee retains an independent compensation consultant to evaluate executive compensation plans and practices. | ||||
þ | Competitive Compensation - Executive compensation reflects executive performance, experience, relative value compared to other positions within the company, relationship to competitive market value compensation, business segment economic environment, and the actual performance of the overall company and the business segments. | ||||
þ | Annual Cash Incentive - Payment of annual cash incentive awards | ||||
þ | Long-Term Equity Incentive - Long-term incentive awards may be earned at the end of a three-year | ||||
þ | Balanced Mix of Pay Components - The target compensation mix represents a balance of annual cash and long-term equity-based compensation. | ||||
þ | Mix of Financial Goals - Use of a mixture of financial goals to measure performance prevents overemphasis on a single metric. | ||||
þ | Annual Compensation Risk Analysis - Risks related to our compensation programs are regularly analyzed through an annual compensation risk assessment. | ||||
þ | Stock Ownership and Retention Requirements - Executive officers are required to own, within five years of appointment or promotion, company common stock equal to a multiple of their base salary. Our | ||||
þ | Clawback Policy - If the company’s audited financial statements are restated due to any material noncompliance with the financial reporting requirements under the securities laws, the compensation committee may, or shall if required, demand repayment of some or all incentives paid to our executive officers within the last three years. | ||||
What We Do Not Do | |||||
ý | Stock Options - The company does not use stock options as a form of incentive compensation. | ||||
ý | Employment Agreements - Executives do not have employment agreements entitling them to specific payments upon termination or a change of control of the company. | ||||
ý | Perquisites - Executives do not receive perquisites that materially differ from those available to employees in general. | ||||
ý | Hedge Stock - Executives are not allowed to hedge company securities. | ||||
ý | Pledge Stock - Executives are not allowed to pledge company securities in margin accounts or as collateral for loans. | ||||
ý | No Dividends or Dividend Equivalents on Unvested Shares - We do not provide for payment of dividends or dividend equivalents on unvested share awards. | ||||
ý | Tax Gross-Ups-Executives do not receive tax gross-ups on their compensation. | ||||
August 2020 | November 2020 | February 2021 | February 2022 | ||||||||
Received the market analysis from Meridian regarding executive base salaries and incentives to establish the 2021 salary grade structure and incentive guidelines. | Approved the 2021 salary and incentive compensation targets as recommended by the CEO for each executive officer other than himself. | Approved the 2021 performance metrics for annual and long-term incentives. | Certified the achievement of performance metrics and incentive payouts for the 2021 annual incentive and 2019-2021 performance share award. | ||||||||
Determined and approved 2021 salary and incentive compensation for the CEO based on recommendations from Meridian. | Approved the 2021-2023 grant of share awards under the Long-Term Performance Based Incentive Plan. |
Component | Payments | Purpose | How Determined | How it Links to Performance | ||||||||||||||||
Base Salary | Assured | Provides sufficient, regularly paid income to attract and retain executives with the knowledge, skills, and abilities necessary to successfully execute their job responsibilities and reflects the individual role, responsibilities, performance, and experience of each named executive officer and the importance of the role to the company. | Based on analysis by the compensation consultant to be within range of the 50th percentile of salary survey data and recommendation from the CEO for executives other than himself and analysis of peer company and industry compensation information. Base salary for the CEO is determined after consideration of input from the independent compensation consultant. | Base salary is a means to attract and retain talented executives capable of driving success and performance. | ||||||||||||||||
Annual Cash Incentive | Performance Based At Risk | Provides an opportunity to earn annual incentive compensation to ensure focus on annual financial and operating results and to be competitive from a total | Annual cash incentives are calculated as a percentage of base salary with payout based on the achievement of performance measures established | Annual incentive performance measures are tied to the achievement of financial goals aimed to drive the success of the company and the individual business segments. | ||||||||||||||||
Performance Shares | Performance Based At Risk | Provides an opportunity to earn long-term compensation to ensure focus on long-term value creation and the company’s strategic objectives and to be competitive from a total | Performance share awards represent 75% of total long-term incentive award | Fosters ownership in company stock and aligns the executive’s interests with those of stockholders in increasing long-term stockholder value. | ||||||||||||||||
Time-Vesting Restricted Stock Units | Retention Based At Risk | Provides an opportunity to earn long-term compensation as long as the executive remains an employee of the company through the vesting period. | Time-vesting restricted stock units represent 25% of the total long-term incentive award recommended by the CEO and approved by the compensation committee for executives other than himself and determined by the compensation committee based on input from the independent compensation consultant for the CEO. Vesting of the awards is at the end of a three-year vesting period as long as the executive remains employed with the company through the vesting period. | Fosters continued leadership in the company to achieve company objectives through retention of key executives as well as aligning the executive’s interests with those of stockholders in increasing long-term stockholder value. |
Alcoa Corporation | Eastman Chemical Company | Portland General Electric Company | ||||||||||||
Edison International | ||||||||||||||
Alliant Energy Corporation | EMCOR Group, Inc. | |||||||||||||
Ameren Corporation | Entergy Corporation | |||||||||||||
Ashland Global Holdings, Inc. | Evergy Inc. | Scotts Miracle-Gro Company | ||||||||||||
Atmos Energy Corporation | Eversource Energy | Sealed Air Corporation | ||||||||||||
Avery Dennison Corporation | Granite Construction Incorporated | SNC-Lavalin Group Inc. | ||||||||||||
Avient Corporation | Graphic Packaging Holding Company | Sonoco Products Company | ||||||||||||
Axalta Coating Systems LTD. | H.B. Fuller Company | Southwest Gas Holdings, Inc. | ||||||||||||
Ball Corporation | International Flavors & Fragrances, Inc. | Spire Inc. | ||||||||||||
Berry Global Group, Inc. | Jacobs Engineering Group, Inc. | Summit Materials, Inc. | ||||||||||||
Black Hills Corporation | KBR, Inc. | |||||||||||||
Cabot Corporation | Kinross Gold Corporation | United States Steel Corporation | ||||||||||||
Celanese Corporation | Martin Marietta Materials, Inc. | Valvoline Inc. | ||||||||||||
CenterPoint Energy, Inc. | MasTec, Inc. | Vulcan Materials Company | ||||||||||||
CF Industries Holdings, Inc. | The Mosaic Company | WEC Energy Group, Inc. | ||||||||||||
The Chemours Company | Newmont Corporation | Westlake Chemical Corporation | ||||||||||||
Cheniere Energy, Inc. | NiSource Inc. | Worthington Industries, Inc. | ||||||||||||
Cleveland-Cliffs Inc. | OGE Energy Corp. | W.R. Grace & Co. | ||||||||||||
CMS Energy Corporation | ONE Gas, Inc. | |||||||||||||
Owens-Illinois, Inc. | ||||||||||||||
Pinnacle West Capital Corporation | ||||||||||||||
Companies shown in bold are the companies used for compensation benchmarking of the CEO and CFO positions. |
David L. Goodin | David L. Goodin | 2020 ($) | Compensation Component as a % of Base Salary | David L. Goodin | 2021 ($) | Compensation Component as a % of Base Salary | ||||||||||||||||
Base Salary | Base Salary | 960,000 | Base Salary | 1,000,000 | ||||||||||||||||||
Target Annual Cash Incentive Opportunity | Target Annual Cash Incentive Opportunity | 1,200,000 | 125 | % | Target Annual Cash Incentive Opportunity | 1,250,000 | 125 | % | ||||||||||||||
Target Long-Term Incentive Opportunity | 2,400,000 | 250 | % | |||||||||||||||||||
Target Long-Term Equity Incentive Opportunity | Target Long-Term Equity Incentive Opportunity | 2,800,000 | 280 | % | ||||||||||||||||||
Target Total Direct Compensation | Target Total Direct Compensation | 4,560,000 | Target Total Direct Compensation | 5,050,000 | ||||||||||||||||||
The compensation committee considered information provided in the 2019 compensation study showing Mr. Goodin's base salary, total cash compensation, and long-term incentives were below market levels and increased Mr. Goodin’s base salary by 11.6%. Mr. Goodin’s 2020 annual incentive target increased from 100% to 125% of his base salary. The compensation committee, based on recommendations from its compensation consultant, Meridian Compensation Partners, LLC, set Mr. Goodin’s long-term incentive target at $2,400,000, which is the same as 2019 and represents 250% of his base salary. | ||||||||||||||||||||||
The compensation committee considered information provided in Meridian’s 2020 compensation study showing Mr. Goodin's base salary, total cash compensation, and long-term incentives were below the median of the compensation peer group and increased Mr. Goodin’s base salary by 4.2%. Mr. Goodin’s 2021 annual incentive target remained at 125% of his base salary. The compensation committee, based on recommendations from Meridian, set Mr. Goodin’s long-term incentive target at $2,800,000, which is an increase from 250% to 280% of his base salary. | The compensation committee considered information provided in Meridian’s 2020 compensation study showing Mr. Goodin's base salary, total cash compensation, and long-term incentives were below the median of the compensation peer group and increased Mr. Goodin’s base salary by 4.2%. Mr. Goodin’s 2021 annual incentive target remained at 125% of his base salary. The compensation committee, based on recommendations from Meridian, set Mr. Goodin’s long-term incentive target at $2,800,000, which is an increase from 250% to 280% of his base salary. |
Jason L. Vollmer | Jason L. Vollmer | 2020 ($) | Compensation Component as a % of Base Salary | Jason L. Vollmer | 2021 ($) | Compensation Component as a % of Base Salary | ||||||||||||||||
Base Salary | Base Salary | 440,000 | Base Salary | 490,000 | ||||||||||||||||||
Target Annual Cash Incentive Opportunity | Target Annual Cash Incentive Opportunity | 330,000 | 75 | % | Target Annual Cash Incentive Opportunity | 367,500 | 75 | % | ||||||||||||||
Target Long-Term Incentive Opportunity | 528,000 | 120 | % | |||||||||||||||||||
Target Long-Term Equity Incentive Opportunity | Target Long-Term Equity Incentive Opportunity | 735,000 | 150 | % | ||||||||||||||||||
Target Total Direct Compensation | Target Total Direct Compensation | 1,298,000 | Target Total Direct Compensation | 1,592,500 | ||||||||||||||||||
Mr. Vollmer received a 10.0% increase in his base salary in 2020. The compensation committee considered information provided in the 2019 compensation study showing Mr. Vollmer’s base salary was below market based on peer group and compensation survey data. The compensation committee maintained Mr. Vollmer’s target annual and long-term incentive opportunities at 75% and 120% of base salary, respectively. | ||||||||||||||||||||||
Mr. Vollmer received an 11.4% increase in his base salary in 2021. The compensation committee considered information provided in Meridian’s 2020 compensation study showing Mr. Vollmer’s base salary was below market based on peer group and compensation survey data. The compensation committee maintained Mr. Vollmer’s target annual cash incentive opportunity at 75% of base salary but the compensation committee increased his long-term incentive target from 120% to 150% of his base salary. | Mr. Vollmer received an 11.4% increase in his base salary in 2021. The compensation committee considered information provided in Meridian’s 2020 compensation study showing Mr. Vollmer’s base salary was below market based on peer group and compensation survey data. The compensation committee maintained Mr. Vollmer’s target annual cash incentive opportunity at 75% of base salary but the compensation committee increased his long-term incentive target from 120% to 150% of his base salary. |
David C. Barney | David C. Barney | 2020 ($) | Compensation Component as a % of Base Salary | David C. Barney | 2021 ($) | Compensation Component as a % of Base Salary | ||||||||||||||||
Base Salary | Base Salary | 487,000 | Base Salary | 512,500 | ||||||||||||||||||
Target Annual Cash Incentive Opportunity | Target Annual Cash Incentive Opportunity | 365,250 | 75 | % | Target Annual Cash Incentive Opportunity | 384,375 | 75 | % | ||||||||||||||
Target Long-Term Incentive Opportunity | 585,000 | 120 | % | |||||||||||||||||||
Target Long-Term Equity Incentive Opportunity | Target Long-Term Equity Incentive Opportunity | 768,750 | 150 | % | ||||||||||||||||||
Target Total Direct Compensation | Target Total Direct Compensation | 1,437,250 | Target Total Direct Compensation | 1,665,625 | ||||||||||||||||||
Mr. Barney received a 3.9% increase in base salary for 2020. The compensation committee maintained Mr. Barney’s target annual and long-term incentive opportunities at 75% of his base salary and $585,000, respectively. | ||||||||||||||||||||||
Mr. Barney received a 5.2% increase in base salary for 2021. The compensation committee maintained Mr. Barney’s target annual cash incentive opportunity at 75% of his base salary and increased his long-term incentive target from 120% to 150% of his base salary. | Mr. Barney received a 5.2% increase in base salary for 2021. The compensation committee maintained Mr. Barney’s target annual cash incentive opportunity at 75% of his base salary and increased his long-term incentive target from 120% to 150% of his base salary. |
Jeffrey S. Thiede | Jeffrey S. Thiede | 2020 ($) | Compensation Component as a % of Base Salary | Jeffrey S. Thiede | 2021 ($) | Compensation Component as a % of Base Salary | ||||||||||||||||
Base Salary | Base Salary | 487,000 | Base Salary | 507,500 | ||||||||||||||||||
Target Annual Cash Incentive Opportunity | Target Annual Cash Incentive Opportunity | 365,250 | 75 | % | Target Annual Cash Incentive Opportunity | 380,625 | 75 | % | ||||||||||||||
Target Long-Term Incentive Opportunity | 585,000 | 120 | % | |||||||||||||||||||
Target Long-Term Equity Incentive Opportunity | Target Long-Term Equity Incentive Opportunity | 761,250 | 150 | % | ||||||||||||||||||
Target Total Direct Compensation | Target Total Direct Compensation | 1,437,250 | Target Total Direct Compensation | 1,649,375 | ||||||||||||||||||
Mr. Thiede received a 3.9% increase in his base salary for 2020. The compensation committee maintained Mr. Thiede’s target annual and long-term incentive opportunities at 75% of base salary and $585,000, respectively. | ||||||||||||||||||||||
Mr. Thiede received a 4.2% increase in his base salary for 2021. The compensation committee maintained Mr. Thiede’s target annual cash incentive opportunity at 75% of his base salary and increased his long-term incentive target from 120% to 150% of his base salary. | Mr. Thiede received a 4.2% increase in his base salary for 2021. The compensation committee maintained Mr. Thiede’s target annual cash incentive opportunity at 75% of his base salary and increased his long-term incentive target from 120% to 150% of his base salary. |
Nicole A. Kivisto | Nicole A. Kivisto | 2020 ($) | Compensation Component as a % of Base Salary | Nicole A. Kivisto | 2021 ($) | Compensation Component as a % of Base Salary | ||||||||||||||||
Base Salary | Base Salary | 487,000 | Base Salary | 507,500 | ||||||||||||||||||
Target Annual Cash Incentive Opportunity | Target Annual Cash Incentive Opportunity | 365,250 | 75 | % | Target Annual Cash Incentive Opportunity | 380,625 | 75 | % | ||||||||||||||
Target Long-Term Incentive Opportunity | 585,000 | 120 | % | |||||||||||||||||||
Target Long-Term Equity Incentive Opportunity | Target Long-Term Equity Incentive Opportunity | 761,250 | 150 | % | ||||||||||||||||||
Target Total Direct Compensation | Target Total Direct Compensation | 1,437,250 | Target Total Direct Compensation | 1,649,375 | ||||||||||||||||||
Ms. Kivisto received a base salary increase of 7.0% for 2020. The compensation committee maintained her target annual and long-term incentive opportunities at 75% of her base salary and $585,000, respectively. | ||||||||||||||||||||||
Ms. Kivisto received a base salary increase of 4.2% for 2021. The compensation committee maintained her target annual cash incentive opportunity at 75% of her base salary and increased her long-term incentive target from 120% to 150% of her base salary. | Ms. Kivisto received a base salary increase of 4.2% for 2021. The compensation committee maintained her target annual cash incentive opportunity at 75% of her base salary and increased her long-term incentive target from 120% to 150% of her base salary. |
Measure | Measure | Applies to | Purpose | Measurement | Target | Weight | How Target was Selected | Measure | Applies to | Purpose | Measurement | Target | Weight | How Target was Selected | ||||||||||||||||||||||||||
MDU Resources Diluted Adjusted Earnings per Share (EPS) | MDU Resources Diluted Adjusted Earnings per Share (EPS) | All Business Segment Presidents | EPS is a generally accepted accounting principle (GAAP) measurement and is a key driver of stockholder return. This is the basis on which we provide annual performance expectations and consistent with how we report results to the financial community. This goal applies to the presidents of all business segments to engage them as members of the company’s management policy committee in the overall success of the company. | GAAP EPS (diluted) before discontinued operations plus earnings/losses from any operations discontinued after December 31, 2019, and adjustments approved by the compensation committee to remove: - the effect on earnings at the company level of intersegment earnings eliminations; - the negative effect on earnings from asset sales/dispositions/retirements; - the effect on earnings from withdrawal liabilities relating to multiemployer pension plans; - the effect on earnings from transaction costs incurred for acquisitions and mergers; and - the effect on earnings from unanticipated changes and interpretations of tax law. | td.76 | 20% | Target reflects 2020 financial goal to achieve an estimated return on invested capital of 8.1%. The 2020 target is 31 cents more than the 2019 target and 7 cents more than 2019 actual EPS before discontinued operations (diluted). | MDU Resources Diluted Adjusted Earnings per Share (EPS) | All Business Segment Presidents | EPS is a generally accepted accounting principle (GAAP) measurement and is a key driver of stockholder return. This is the basis on which we provide annual performance expectations and consistent with how we report results to the financial community. This goal applies to the presidents of all business segments and corporate officers to engage them as members of the company’s management policy committee in the overall success of the company. | GAAP EPS (diluted) before discontinued operations plus earnings/losses from any operations discontinued after December 31, 2020, and adjustments approved by the compensation committee to remove: - the effect on earnings at the company level of intersegment earnings eliminations; - the negative effect on earnings from asset sales/dispositions/retirements; - the effect on earnings from withdrawal liabilities relating to multiemployer pension plans; - the effect on earnings from transaction costs incurred for acquisitions or mergers; and - the effect on earnings from unanticipated changes and interpretation of tax law. The positive effect on earnings from asset sales/dispositions/retirements will be considered for removal if the compensation committee determines such positive effect is not indicative of underlying business performance. | td.05 | 20% | Target reflects 2021 financial goal to achieve an estimated return on invested capital of 8.6%. The 2021 target is 29 cents more than the 2020 target and 10 cents more than 2020 actual EPS before discontinued operations (diluted). | ||||||||||||||||||||||||||
MDU Resources Diluted Adjusted Earnings per Share (EPS) | MDU Resources Corporate Officers | 100% | ||||||||||||||||||||||||||||||||||||||
Business Segment Earnings | Electric and Natural Gas Distribution Segments President | Provides a measure of financial performance and an incentive to drive business results. Regulated entities are valued based on earnings potential and rate base. | GAAP business segment earnings before discontinued operations plus earnings/losses from any operations discontinued after December 31, 2019, and adjustments approved by the compensation committee to remove: - the negative effect on earnings from asset sales/dispositions/retirements; - the effect on earnings from transaction costs incurred for acquisitions or mergers; and - the effect on earnings from unanticipated changes and interpretations of tax law. | $99.0 million | 80% | Target reflects the 2020 financial goal for the business segment to achieve an estimated return on invested capital of 5.0%. The 2020 target is 5.0% above 2019 actual results reflecting continued investment in its infrastructure and regulatory recovery from completed and pending rate cases. | Business Segment Earnings | Electric and Natural Gas Distribution Segments President | Provides a measure of financial performance and an incentive to drive business results. Regulated entities are valued based on earnings potential and rate base. | GAAP business segment earnings before discontinued operations plus earnings/losses from any operations discontinued after December 31, 2020, and adjustments approved by the compensation committee to remove: - the negative effect on earnings from asset sales/dispositions/retirements; - the effect on earnings from transaction costs incurred for acquisitions or mergers; and - the effect on earnings from unanticipated changes and interpretation of tax law. The positive effect on earnings from asset sales/dispositions/retirements will be considered for removal if the compensation committee determines such positive effect is not indicative of underlying business performance. | td04.5 million | 80% | Target reflects the 2021 financial goal for the business segments to achieve an estimated return on invested capital of 4.9%. The 2021 target is 4.8% above 2020 actual results reflecting continued investment in its infrastructure and regulatory recovery from completed and pending rate cases. | |||||||||||||||||||||||||||
Business Segment Earnings | Pipeline Segment President | $31.1 million | 80% | Target reflects the 2020 financial goal of the business segment to achieve an estimated return on invested capital of 7.8%. The 2020 target is 5.0% above the 2019 actual results and reflects the business segment’s continued execution of pipeline expansion projects. | Pipeline Segment President | $37.5 million | 80% | Target reflects the 2021 financial goal of the business segment to achieve an estimated return on invested capital of 7.3%. The 2021 target is 1.4% above the 2020 actual results and reflects the business segment’s continued execution of pipeline expansion projects. | ||||||||||||||||||||||||||||||||
Business Segment Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) | Construction Materials and Contracting Segment President | Provides a measure of financial performance common to the industries in which these segments operate. Focusing on EBITDA encourages growth by excluding the impact of decisions regarding interest, taxes, depreciation, and amortization made during the acquisition process. | EBITDA from continuing operations adjusted plus EBITDA from any operations discontinued after December 31, 2019, and adjustments approved by the compensation committee to remove: - the negative effect on EBITDA from asset sales/dispositions/retirements; - the effect on EBITDA from withdrawal liabilities relating to multiemployer pension plans; and - the effect on EBITDA from transaction costs incurred for acquisitions or mergers. | td70.1 million | 80% | Target reflects the 2020 financial goal of the business segment to achieve an estimated return on invested capital of 10.7% and is 4.3% above the actual 2019 EBITDA results. The increase reflects acquisitions completed in 2019 and backlog at 2019 year-end. | ||||||||||||||||||||||||||||||||||
Business Segment Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) | Construction Services Segment President | td50.9 million | 80% | Target reflects the 2020 financial goal of the business segment to achieve an estimated return on invested capital of 20.4% and is 3.8% above the actual 2019 EBITDA results reflecting backlog at 2019 year-end and anticipated organic and acquisition growth. |
Measure | Applies to | Purpose | Measurement | Target | Weight | How Target was Selected | ||||||||||||||
Business Segment Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) | Construction Materials and Contracting Segment President | Provides a measure of financial performance common to the industries in which these segments operate. Focusing on EBITDA encourages growth by excluding the impact of decisions regarding interest, taxes, depreciation, and amortization made during the acquisition process. | EBITDA from continuing operations adjusted plus EBITDA from any operations discontinued after December 31, 2020, and adjustments approved by the compensation committee to remove: - the negative effect on EBITDA from asset sales/dispositions/retirements; - the effect on EBITDA from withdrawal liabilities relating to multiemployer pension plans; and - the effect on EBITDA from transaction costs incurred for acquisitions or mergers. The positive effect on earnings from asset sales/dispositions/retirements will be considered for removal if the compensation committee determines such positive effect is not indicative of underlying business performance. | $308.6 million | 80% | Target reflects the 2021 financial goal of the business segment to achieve an estimated return on invested capital of 11.5% and is 0.9% above the actual 2020 EBITDA results. The increase reflects acquisitions completed in 2020 and backlog at 2020 year-end. | ||||||||||||||
Construction Services Segment President | $183.9 million | 80% | Target reflects the 2021financial goal of the business segment to achieve an estimated return on invested capital of 26.0% and is 6.1% above the actual 2020 EBITDA results reflecting backlog at 2020 year-end and anticipated organic and acquisition growth. |
Measure | Measure | Weighting | Threshold | Maximum | Measure | Weighting | Threshold | Maximum | ||||||||||||||||||||||||||||||||||||||
% of Target | Payout % | % of Target | Payout % | % of Target | Payout % | % of Target | Payout % | |||||||||||||||||||||||||||||||||||||||
MDU Resources Diluted Adjusted EPS | MDU Resources Diluted Adjusted EPS | 20 | % | 85 | % | 25 | % | 115 | % | 200 | % | MDU Resources Diluted Adjusted EPS | 20% / 100% | 85 | % | 25 | % | 115 | % | 200 | % | |||||||||||||||||||||||||
Electric and Natural Gas Distribution Earnings | Electric and Natural Gas Distribution Earnings | 80 | % | 90 | % | 50 | % | 110 | % | 200 | % | Electric and Natural Gas Distribution Earnings | 80 | % | 90 | % | 50 | % | 110 | % | 200 | % | ||||||||||||||||||||||||
Pipeline Earnings | Pipeline Earnings | 80 | % | 85 | % | 25 | % | 115 | % | 200 | % | Pipeline Earnings | 80 | % | 85 | % | 25 | % | 115 | % | 200 | % | ||||||||||||||||||||||||
Construction Materials and Contracting EBITDA | Construction Materials and Contracting EBITDA | 80 | % | 75 | % | 25 | % | 115 | % | 250 | % | Construction Materials and Contracting EBITDA | 80 | % | 75 | % | 25 | % | 115 | % | 250 | % | ||||||||||||||||||||||||
Construction Services EBITDA | Construction Services EBITDA | 80 | % | 65 | % | 25 | % | 115 | % | 250 | % | Construction Services EBITDA | 80 | % | 65 | % | 25 | % | 115 | % | 250 | % |
Business Segment | Performance Measure | Result | Percent of Performance Measure Achieved | Percent of Award Opportunity Payout | Weight | Weighted Award Opportunity Payout % | ||||||||||||||
All Business Segments | Earnings per Share | $1.95 | 110.8 | % | 172.0 | % | 20 | % | 34.4 | % | ||||||||||
Electric and Natural Gas Distribution | Earnings | $99.7 million | 100.7 | % | 106.5 | % | 80 | % | 85.2 | % | ||||||||||
Pipeline | Earnings | $37.0 million | 119.1 | % | 200.0 | % | 80 | % | 160.0 | % | ||||||||||
Construction Materials and Contracting | EBITDA | $305.9 million | 113.2 | % | 232.4 | % | 80 | % | 185.9 | % | ||||||||||
Construction Services | EBITDA | $173.3 million | 114.9 | % | 248.6 | % | 80 | % | 198.9 | % |
Business Segment | Column A Business Segment Award Payout | Column B Percentage of Average Invested Capital | Column A x Column B | |||||||||||
Electric and Natural Gas Distribution | 119.6 | % | 57.3 | % | 68.5 | % | ||||||||
Pipeline | 194.4 | % | 8.9 | % | 17.3 | % | ||||||||
Construction Materials and Contracting | 194.4 | % | 25.0 | % | 48.6 | % | ||||||||
Construction Services | 194.4 | % | 8.8 | % | 17.1 | % | ||||||||
Total Payout Percentage | 151.5 | % | ||||||||||||
For purposes of calculating the incentive awards for Messrs. Goodin and Vollmer, the award payouts associated with the construction materials and contracting and construction services segments’ EBITDA performance measures were limited to 200% which resulted in a weighted payout of 194.4% versus 232.4% and 248.6% for the construction materials and contracting and construction services business segment presidents, respectively. |
Business Segment | Performance Measure | Result | Percent of Performance Measure Achieved | Percent of Award Opportunity Payout | Weight | Weighted Award Opportunity Payout % | ||||||||||||||
MDU Resources Corporate Officers | Earnings per Share | $1.87 | 91.2 | % | 56.1 | % | 100 | % | 56.1 | % | ||||||||||
All Business Segment Presidents | Earnings per Share | $1.87 | 91.2 | % | 56.1 | % | 20 | % | 11.2 | % | ||||||||||
Electric and Natural Gas Distribution | Earnings | $103.5 million | 99.0 | % | 95.2 | % | 80 | % | 76.2 | % | ||||||||||
Pipeline* | Earnings | $40.9 million | 109.0 | % | 159.9 | % | 80 | % | 127.9 | % | ||||||||||
Construction Materials and Contracting* | EBITDA | $295.1 million | 95.6 | % | 86.9 | % | 80 | % | 69.5 | % | ||||||||||
Construction Services* | EBITDA | $168.7 million | 91.8 | % | 82.4 | % | 80 | % | 65.9 | % | ||||||||||
*The pipeline, construction materials and contracting, and construction services results were adjusted to remove the effect of transaction costs incurred for acquisitions and mergers. |
Name | Name | Target Annual Incentive ($) | Annual Incentive Earned | Name | Target Annual Incentive ($) | Annual Incentive Earned | ||||||||||||||||||||||
Payout as a % of Target (%) | Amount ($) | Payout as a % of Target (%) | Amount ($) | |||||||||||||||||||||||||
David L. Goodin | David L. Goodin | 1,200,000 | 151.5 | 1,818,000 | David L. Goodin | 1,250,000 | 56.1 | 701,250 | ||||||||||||||||||||
Jason L. Vollmer | Jason L. Vollmer | 330,000 | 151.5 | 499,950 | Jason L. Vollmer | 367,500 | 56.1 | 206,168 | ||||||||||||||||||||
David C. Barney | David C. Barney | 365,250 | 220.3 | 804,646 | David C. Barney | 384,375 | 80.7 | 310,191 | ||||||||||||||||||||
Jeffrey S. Thiede | Jeffrey S. Thiede | 365,250 | 233.3 | 852,128 | Jeffrey S. Thiede | 380,625 | 77.1 | 293,462 | ||||||||||||||||||||
Nicole A. Kivisto | Nicole A. Kivisto | 365,250 | 119.6 | 436,839 | Nicole A. Kivisto | 380,625 | 87.4 | 332,666 |
Name | Base Salary ($) | Target Long-Term Incentive of Base Salary (%) | Long-Term Incentive Target ($) | Total Target Long-Term Incentive Share Opportunities (#) | 75% Performance Share Opportunities (#) | 25% Time-Vesting Restricted Stock Unit Opportunities (#) | ||||||||||||||
David L. Goodin | 1,000,000 | 280 | 2,800,000 | 102,865 | 77,149 | 25,716 | ||||||||||||||
Jason L. Vollmer | 490,000 | 150 | 735,000 | 27,002 | 20,252 | 6,750 | ||||||||||||||
David C. Barney | 512,500 | 150 | 768,750 | 28,242 | 21,182 | 7,060 | ||||||||||||||
Jeffrey S. Thiede | 507,500 | 150 | 761,250 | 27,966 | 20,975 | 6,991 | ||||||||||||||
Nicole A. Kivisto | 507,500 | 150 | 761,250 | 27,966 | 20,975 | 6,991 |
The Company’s Peer TSR Percentile Rank | The Company’s Peer TSR Percentile Rank | The Company’s Earnings and EBITDA Growth Rate as a Percentage of Target | Vesting Percentage of Award Target | The Company’s Peer TSR Percentile Rank | The Company’s Earnings Growth Rate as a Percentage of Target | Vesting Percentage of Award Target | ||||||||||
75th or higher | 75th or higher | 153.8% or higher | 200 | % | 75th or higher | 153.8% or higher | 200 | % | ||||||||
50th | 50th | Target | 100 | % | 50th | Target | 100 | % | ||||||||
25th | 25th | 46.2 | % | 20 | % | 25th | 46.2 | % | 20 | % | ||||||
Less than 25th | Less than 25th | less than 46.2% | 0 | % | Less than 25th | less than 46.2% | 0 | % |
Name | Base Salary ($) | Target Long-Term Performance Share Incentive % of Base Salary (%) | Long-Term Performance Share Incentive Target ($) | Performance Share Opportunities (#) | ||||||||||
David L. Goodin | 960,000 | 250 | 2,400,000 | 82,191 | ||||||||||
Jason L. Vollmer | 440,000 | 120 | 528,000 | 18,082 | ||||||||||
David C. Barney | 487,000 | 120 | 585,000 | 20,034 | ||||||||||
Jeffrey S. Thiede | 487,000 | 120 | 585,000 | 20,034 | ||||||||||
Nicole A. Kivisto | 487,000 | 120 | 585,000 | 20,034 | ||||||||||
Performance Criteria | Result | Vesting % | Weighting | Weighted Payout | ||||||||||
Relative TSR Percentile Ranking | 50th | 100 | % | 50 | % | 50 | % | |||||||
EBITDA Growth | 10.3 | % | 200 | % | 25 | % | 50 | % | ||||||
Earnings Growth | 16.9 | % | 200 | % | 25 | % | 50 | % | ||||||
Total Weighted Payout | 150 | % |
Name | Target Performance Shares (#) | Performance Shares Vested (#) | Dividend Equivalents ($) | ||||||||
David L. Goodin | 78,460 | 117,690 | 287,752 | ||||||||
Jason L. Vollmer | 15,987 | 23,980 | 58,631 | ||||||||
David C. Barney | 20,784 | 31,176 | 76,225 | ||||||||
Jeffrey S. Thiede | 20,784 | 31,176 | 76,225 | ||||||||
Nicole A. Kivisto | 19,642 | 29,463 | 72,037 |
Performance Criteria | Result | Vesting % | Weighting | Weighted Payout | ||||||||||
Relative TSR Percentile Ranking | 41st | 71.2 | % | 50 | % | 35.6 | % | |||||||
EBITDA Growth* | 11.5 | % | 200.0 | % | 25 | % | 50.0 | % | ||||||
Earnings Growth* | 12.1 | % | 200.0 | % | 25 | % | 50.0 | % | ||||||
Total Weighted Payout | 135.6 | % | ||||||||||||
*The 2021 EBITDA and earnings results used in the calculation of EBITDA Growth and Earnings Growth were adjusted to remove the effect of costs incurred for acquisitions and mergers. These adjustments had no impact on the vesting percentages. |
Name | Target Performance Shares (#) | Performance Shares Vested (#) | Dividend Equivalents ($) | ||||||||
David L. Goodin | 98,806 | 133,980 | 335,620 | ||||||||
Jason L. Vollmer | 19,761 | 26,795 | 67,121 | ||||||||
David C. Barney | 24,083 | 32,656 | 81,803 | ||||||||
Jeffrey S. Thiede | 24,083 | 32,656 | 81,803 | ||||||||
Nicole A. Kivisto | 24,083 | 32,656 | 81,803 |
Plans | David L. Goodin | Jason L. Vollmer | David C. Barney | Jeffrey S. Thiede | Nicole A. Kivisto | ||||||||||||
Pension Plans | Yes | Yes | No | No | Yes | ||||||||||||
401(k) Retirement Plan | Yes | Yes | Yes | Yes | |||||||||||||
Yes | |||||||||||||||||
Supplemental Income Security Plan | Yes | No | Yes | No | Yes | ||||||||||||
No | Yes | Yes | Yes | No |
Name | SISP Benefits | ||||||||||
Annual Death Benefit ($) | Annual Retirement Benefit ($) | ||||||||||
David L. Goodin | 552,960 | 276,480 | |||||||||
Jason L. Vollmer | n/a | n/a | |||||||||
David C. Barney | 262,464 | 131,232 | |||||||||
Jeffrey S. Thiede | n/a | n/a | |||||||||
Nicole A. Kivisto | 157,728 | 78,864 |
Name | Ownership Policy Multiple of Base Salary Within 5 Years | Actual Holdings as a Multiple of Base Salary1 | Ownership Requirement Must Be Met By: | ||||||||
David L. Goodin | 01/01/2018 | ||||||||||
Jason L. Vollmer | 3X | 01/01/2023 | |||||||||
David C. Barney | 3X | 01/01/2019 | |||||||||
Jeffrey S. Thiede | 3X | 01/01/2019 | |||||||||
Nicole A. Kivisto | 3X | 01/01/2020 | |||||||||
1 Includes performance |
Name and Principal Position (a) | Name and Principal Position (a) | Year (b) | Salary ($) (c) | Stock Awards ($) (e)1 | Non-Equity Incentive Plan Compensation ($) (g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (h)2 | All Other Compensation ($) (i)3 | Total ($) (j) | Name and Principal Position (a) | Year (b) | Salary ($) (c) | Stock Awards ($) (e)1 | Non-Equity Incentive Plan Compensation ($) (g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (h)2 | All Other Compensation ($) (i)3 | Total ($) (j) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David L. Goodin | David L. Goodin | 2020 | 960,000 | 2,974,497 | 1,818,000 | 484,134 | 186,779 | 6,423,410 | David L. Goodin | 2021 | 1,000,000 | 3,222,639 | 701,250 | 65,571 | 221,007 | 5,210,467 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President and CEO | President and CEO | 2019 | 860,000 | 3,029,392 | 1,403,520 | 735,366 | 116,077 | 6,144,355 | President and CEO | 2020 | 960,000 | 2,974,497 | 1,818,000 | 484,134 | 186,779 | 6,423,410 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 824,460 | 2,433,437 | 807,971 | 16,503 | 72,884 | 4,155,255 | 2019 | 860,000 | 3,029,392 | 1,403,520 | 735,366 | 116,077 | 6,144,355 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jason L. Vollmer | Jason L. Vollmer | 2020 | 440,000 | 654,388 | 499,950 | 6,880 | 105,928 | 1,707,146 | Jason L. Vollmer | 2021 | 490,000 | 845,942 | 206,168 | — | 122,163 | 1,664,273 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vice President and CFO | Vice President and CFO | 2019 | 400,000 | 605,877 | 489,600 | 8,455 | 86,049 | 1,589,981 | Vice President and CFO | 2020 | 440,000 | 654,388 | 499,950 | 6,880 | 105,928 | 1,707,146 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 350,000 | 495,840 | 222,950 | — | 69,589 | 1,138,379 | 2019 | 400,000 | 605,877 | 489,600 | 8,455 | 86,049 | 1,589,981 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David C. Barney | David C. Barney | 2020 | 487,000 | 725,030 | 804,646 | 86,980 | 220,062 | 2,323,718 | David C. Barney | 2021 | 512,500 | 884,789 | 310,191 | — | 219,420 | 1,926,900 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President and CEO of | President and CEO of | 2019 | 468,500 | 738,389 | 843,300 | 174,117 | 201,771 | 2,426,077 | President and CEO of | 2020 | 487,000 | 725,030 | 804,646 | 86,980 | 220,062 | 2,323,718 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Knife River Corporation | Knife River Corporation | 2018 | 455,000 | 958,410 | 384,589 | — | 251,255 | 2,049,254 | Knife River Corporation | 2019 | 468,500 | 738,389 | 843,300 | 174,117 | 201,771 | 2,426,077 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Thiede | Jeffrey S. Thiede | 2020 | 487,000 | 725,030 | 852,128 | — | 170,362 | 2,234,520 | Jeffrey S. Thiede | 2021 | 507,500 | 876,148 | 293,462 | — | 171,822 | 1,848,932 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President and CEO of | President and CEO of | 2019 | 468,500 | 738,389 | 843,300 | — | 151,751 | 2,201,940 | President and CEO of | 2020 | 487,000 | 725,030 | 852,128 | — | 170,362 | 2,234,520 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MDU Construction | MDU Construction | 2018 | 455,000 | 958,410 | 437,141 | — | 140,925 | 1,991,476 | MDU Construction | 2019 | 468,500 | 738,389 | 843,300 | — | 151,751 | 2,201,940 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Services Group, Inc. | Services Group, Inc. | Services Group, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nicole A. Kivisto | Nicole A. Kivisto | 2020 | 487,000 | 725,030 | 436,839 | 184,058 | 73,374 | 1,906,301 | Nicole A. Kivisto | 2021 | 507,500 | 876,148 | 332,666 | 2,645 | 83,272 | 1,802,231 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President and CEO of | President and CEO of | 2019 | 455,000 | 738,389 | 480,139 | 243,761 | 54,763 | 1,972,052 | President and CEO of | 2020 | 487,000 | 725,030 | 436,839 | 184,058 | 73,374 | 1,906,301 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Montana-Dakota Utilities Co., | Montana-Dakota Utilities Co., | 2018 | 430,000 | 609,197 | 225,277 | 210 | 42,302 | 1,306,986 | Montana-Dakota Utilities Co., | 2019 | 455,000 | 738,389 | 480,139 | 243,761 | 54,763 | 1,972,052 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cascade Natural Gas Corporation, | Cascade Natural Gas Corporation, | Cascade Natural Gas Corporation, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
and Intermountain Gas Company | and Intermountain Gas Company | and Intermountain Gas Company |
Name | Aggregate ($) | |||||||
David L. Goodin | ||||||||
Jason L. Vollmer | ||||||||
David C. Barney | ||||||||
Jeffrey S. Thiede | ||||||||
Nicole A. Kivisto |
Name | Name | Accumulated Pension Change ($) | Above Market Earnings ($) | Name | Accumulated Pension Change ($) | Above Market Earnings ($) | ||||||||||||||||||||||
David L. Goodin | David L. Goodin | 435,581 | 48,553 | David L. Goodin | (111,487) | 65,571 | ||||||||||||||||||||||
Jason L. Vollmer | Jason L. Vollmer | 6,880 | — | Jason L. Vollmer | (2,516) | — | ||||||||||||||||||||||
David C. Barney | David C. Barney | 86,980 | — | David C. Barney | (46,638) | — | ||||||||||||||||||||||
Jeffrey S. Thiede | Jeffrey S. Thiede | — | — | Jeffrey S. Thiede | — | — | ||||||||||||||||||||||
Nicole A. Kivisto | Nicole A. Kivisto | 181,795 | 2,263 | Nicole A. Kivisto | (73,377) | 2,645 |
Name | Name | 401(k) Plan ($)a | Nonqualified Defined Contribution Plan ($) | Life Insurance Premium ($) | Matching Charitable Contributions ($) | Dividend Equivalents ($)b | Total ($) | Name | 401(k) Plan ($)a | Nonqualified Deferred Compensation Plan ($)b | Life Insurance Premium ($) | Matching Charitable Contributions ($) | Dividend Equivalents ($)c | Total ($) | ||||||||||||||||||||||||||||||||||||||
David L. Goodin | David L. Goodin | 41,325 | — | 774 | 3,600 | 141,080 | 186,779 | David L. Goodin | 42,050 | — | 774 | 3,600 | 174,583 | 221,007 | ||||||||||||||||||||||||||||||||||||||
Jason L. Vollmer | Jason L. Vollmer | 28,500 | 44,000 | 681 | 3,600 | 29,147 | 105,928 | Jason L. Vollmer | 29,000 | 49,000 | 759 | 4,350 | 39,054 | 122,163 | ||||||||||||||||||||||||||||||||||||||
David C. Barney | David C. Barney | 22,800 | 150,000 | 754 | 1,200 | 45,308 | 220,062 | David C. Barney | 23,200 | 150,000 | 774 | 1,200 | 44,246 | 219,420 | ||||||||||||||||||||||||||||||||||||||
Jeffrey S. Thiede | Jeffrey S. Thiede | 22,800 | 100,000 | 754 | 1,500 | 45,308 | 170,362 | Jeffrey S. Thiede | 23,200 | 100,000 | 774 | 3,750 | 44,098 | 171,822 | ||||||||||||||||||||||||||||||||||||||
Nicole A. Kivisto | Nicole A. Kivisto | 34,200 | — | 754 | 3,600 | 34,820 | 73,374 | Nicole A. Kivisto | 34,800 | — | 774 | 3,600 | 44,098 | 83,272 | ||||||||||||||||||||||||||||||||||||||
a | a | Represents company contributions to the 401(k) plan, which includes matching contributions and retirement contributions associated with the freeze of the pension plans at December 31, 2009. | a | Represents company contributions to the 401(k) plan, which includes matching contributions and retirement contributions associated with the frozen pension plans as of December 31, 2009. | ||||||||||||||||||||||||||||||||||||||||||||||||
b | b | Represents accrued dividend equivalents for 2020 on the 2020-2022, 2019-2021, and 2018-2020 performance share awards associated with financial performance measures and restricted stock units awarded to Mr. Barney and Mr. Thiede in 2018. The 2020-2022 and 2019-2021 performance share awards are presented at target, and the 2018-2020 performance share awards are presented based on the actual achievement of the performance measure. | b | Represents company contribution amounts to the MDU Resources Group, Inc. Deferred Compensation Plan (DCP) which are approved by the compensation committee and the board of directors. The purpose of the plan is to recognize outstanding performance coupled with enhanced retention as the DCP requires a vesting period. For further information, see the section entitled “Nonqualified Deferred Compensation for 2021.” | ||||||||||||||||||||||||||||||||||||||||||||||||
c | c | Represents accrued dividend equivalents for 2021 on the 2021-2023, 2020-2022, and 2019-2021 performance share awards associated with financial performance measures and restricted stock units. The 2021-2023 and 2020-2022 awards are presented at target, and the 2019-2021 performance share awards are presented based on the actual achievement of the performance measures. |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | Grant Date Fair Value of Stock and Option Awards ($) (l) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name (a) | Grant Date (b) | Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | Threshold (#) (f) | Target (#) (g) | Maximum (#) (h) | |||||||||||||||||||||||||||||||||||||||||||||||||
David L. Goodin | 2/13/2020 | 1 | 435,000 | 1,200,000 | 2,400,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2/13/2020 | 2 | 16,438 | 82,191 | 164,382 | 2,974,497 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Jason L. Vollmer | 2/13/2020 | 1 | 119,625 | 330,000 | 660,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2/13/2020 | 2 | 3,616 | 18,082 | 36,164 | 654,388 | |||||||||||||||||||||||||||||||||||||||||||||||||||
David C. Barney | 2/13/2020 | 1 | 91,313 | 365,250 | 876,600 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2/13/2020 | 2 | 4,006 | 20,034 | 40,068 | 725,030 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Thiede | 2/13/2020 | 1 | 91,313 | 365,250 | 876,600 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2/13/2020 | 2 | 4,006 | 20,034 | 40,068 | 725,030 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Nicole A. Kivisto | 2/13/2020 | 1 | 164,363 | 365,250 | 730,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2/13/2020 | 2 | 4,006 | 20,034 | 40,068 | 725,030 | |||||||||||||||||||||||||||||||||||||||||||||||||||
1 | Annual incentive for 2020 granted pursuant to the MDU Resources Group, Inc. Executive Incentive Compensation Plan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Performance shares for the 2020-2022 performance period granted pursuant to the MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan. |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) (i) | Grant Date Fair Value of Stock and Option Awards ($) (l) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name (a) | Grant Date (b) | Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | Threshold (#) (f) | Target (#) (g) | Maximum (#) (h) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
David L. Goodin | 2/11/2021 | 1 | 312,500 | 1,250,000 | 2,500,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/11/2021 | 2 | 15,429 | 77,149 | 154,298 | 2,519,306 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/11/2021 | 3 | 25,716 | 703,333 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jason L. Vollmer | 2/11/2021 | 1 | 91,875 | 367,500 | 735,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/11/2021 | 2 | 4,050 | 20,252 | 40,504 | 661,329 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/11/2021 | 3 | 6,750 | 184,613 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David C. Barney | 2/11/2021 | 1 | 96,094 | 384,375 | 922,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/11/2021 | 2 | 4,236 | 21,182 | 42,364 | 691,698 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/11/2021 | 3 | 7,060 | 193,091 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Thiede | 2/11/2021 | 1 | 95,156 | 380,625 | 913,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/11/2021 | 2 | 4,195 | 20,975 | 41,950 | 684,944 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/11/2021 | 3 | 6,991 | 191,204 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nicole A. Kivisto | 2/11/2021 | 1 | 171,281 | 380,625 | 761,250 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/11/2021 | 2 | 4,195 | 20,975 | 41,950 | 684,944 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/11/2021 | 3 | 6,991 | 191,204 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 | Annual incentive for 2021 granted pursuant to the MDU Resources Group, Inc. Executive Incentive Compensation Plan. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Performance shares for the 2021-2023 performance period granted pursuant to the MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Restricted Stock Units for the 2021-2023 period granted pursuant to the MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan. |
Name | Name | Salary ($) | Bonus ($) | Total Compensation ($) | Salary and Bonus as a % of Total Compensation | Name | Salary ($) | Bonus ($) | Total Compensation ($) | Salary and Bonus as a % of Total Compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David L. Goodin | David L. Goodin | 960,000 | — | 6,423,410 | 14.9 | % | David L. Goodin | 1,000,000 | — | 5,210,467 | 19.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jason L. Vollmer | Jason L. Vollmer | 440,000 | — | 1,707,146 | 25.8 | % | Jason L. Vollmer | 490,000 | — | 1,664,273 | 29.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David C. Barney | David C. Barney | 487,000 | — | 2,323,718 | 21.0 | % | David C. Barney | 512,500 | — | 1,926,900 | 26.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Thiede | Jeffrey S. Thiede | 487,000 | — | 2,234,520 | 21.8 | % | Jeffrey S. Thiede | 507,500 | — | 1,848,932 | 27.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nicole A. Kivisto | Nicole A. Kivisto | 487,000 | — | 1,906,301 | 25.5 | % | Nicole A. Kivisto | 507,500 | — | 1,802,231 | 28.2 | % |
Stock Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||
Name (a) | Name (a) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i)1 | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j)2 | Name (a) | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (g)1 | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (h)2 | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i)3 | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j)2 | |||||||||||||||||||||||||||||
David L. Goodin | David L. Goodin | 337,917 | 8,900,734 | David L. Goodin | 25,716 | 793,081 | 356,952 | 11,008,400 | |||||||||||||||||||||||||||||
Jason L. Vollmer | Jason L. Vollmer | 69,817 | 1,838,980 | Jason L. Vollmer | 6,750 | 208,170 | 77,856 | 2,401,079 | |||||||||||||||||||||||||||||
David C. Barney | David C. Barney | 97,104 | 2,557,719 | David C. Barney | 7,060 | 217,730 | 89,382 | 2,756,541 | |||||||||||||||||||||||||||||
Jeffrey S. Thiede | Jeffrey S. Thiede | 97,104 | 2,557,719 | Jeffrey S. Thiede | 6,991 | 215,602 | 89,175 | 2,750,157 | |||||||||||||||||||||||||||||
Nicole A. Kivisto | Nicole A. Kivisto | 83,401 | 2,196,782 | Nicole A. Kivisto | 6,991 | 215,602 | 89,175 | 2,750,157 |
Name | 2021-2023 Grant (#) | Total (#) | ||||||||||||||||||
David L. Goodin | 25,716 | 25,716 | ||||||||||||||||||
Jason L. Vollmer | 6,750 | 6,750 | ||||||||||||||||||
David C. Barney | 7,060 | 7,060 | ||||||||||||||||||
Jeffrey S. Thiede | 6,991 | 6,991 | ||||||||||||||||||
Nicole A. Kivisto | 6,991 | 6,991 |
2018 Award | 2019 Award | 2020 Award | Total | 2019-2021 Award | 2020-2022 Award | 2021-2023 Award | Total | |||||||||||||||||||||||||||||||||
Name | Name | Performance Period End | 12/31/2020 | 12/31/2021 | 12/31/2022 | Name | (#) | |||||||||||||||||||||||||||||||||
David L. Goodin | David L. Goodin | 156,920 | 98,806 | 82,191 | 337,917 | David L. Goodin | 197,612 | 82,191 | 77,149 | 356,952 | ||||||||||||||||||||||||||||||
Jason L. Vollmer | Jason L. Vollmer | 31,974 | 19,761 | 18,082 | 69,817 | Jason L. Vollmer | 39,522 | 18,082 | 20,252 | 77,856 | ||||||||||||||||||||||||||||||
David C. Barney | David C. Barney | 52,987 | 24,083 | 20,034 | 97,104 | David C. Barney | 48,166 | 20,034 | 21,182 | 89,382 | ||||||||||||||||||||||||||||||
Jeffrey S. Thiede | Jeffrey S. Thiede | 52,987 | 24,083 | 20,034 | 97,104 | Jeffrey S. Thiede | 48,166 | 20,034 | 20,975 | 89,175 | ||||||||||||||||||||||||||||||
Nicole A. Kivisto | Nicole A. Kivisto | 39,284 | 24,083 | 20,034 | 83,401 | Nicole A. Kivisto | 48,166 | 20,034 | 20,975 | 89,175 |
Stock Awards | Stock Awards | |||||||||||||||||||||||||||||||||
Name (a) | Name (a) | Number of Shares Acquired on Vesting (#) (d)1 | Value Realized on Vesting ($) (e)2 | Name (a) | Number of Shares Acquired on Vesting (#) (d)1 | Value Realized on Vesting ($) (e)2 | ||||||||||||||||||||||||||||
David L. Goodin | David L. Goodin | 14,234 | 484,170 | David L. Goodin | 105,921 | 3,155,916 | ||||||||||||||||||||||||||||
Jason L. Vollmer | Jason L. Vollmer | 899 | 30,580 | Jason L. Vollmer | 21,581 | 643,006 | ||||||||||||||||||||||||||||
David C. Barney | David C. Barney | 3,067 | 104,324 | David C. Barney | 39,477 | 1,176,217 | ||||||||||||||||||||||||||||
Jeffrey S. Thiede | Jeffrey S. Thiede | 3,144 | 106,943 | Jeffrey S. Thiede | 39,477 | 1,176,217 | ||||||||||||||||||||||||||||
Nicole A. Kivisto | Nicole A. Kivisto | 2,714 | 92,317 | Nicole A. Kivisto | 26,516 | 790,044 | ||||||||||||||||||||||||||||
1 | 1 | Reflects performance shares for the 2017-2019 performance period ended December 31, 2019, which were settled February 13, 2020. | 1 | Reflects performance shares for the 2018-2020 performance period ended December 31, 2020, and restricted stock units for Messrs. Barney and Thiede, all of which were settled February 11, 2021. | ||||||||||||||||||||||||||||||
2 | 2 | Reflects the value of vested performance shares based on the closing stock price of $31.63 per share on February 13, 2020, and the dividend equivalents paid on the vested shares. | 2 | Reflects the value of vested performance shares based on the closing stock price of $27.35 per share on February 11, 2021, and the dividend equivalents paid on the vested shares. |
Name (a) | Name (a) | Plan Name (b) | Number of Years Credited Service (#) (c)1 | Present Value of Accumulated Benefit ($) (d) | Name (a) | Plan Name (b) | Number of Years Credited Service (#) (c)1 | Present Value of Accumulated Benefit ($) (d) | ||||||||||||||||||||||||||||||||||||||||||||
David L. Goodin | David L. Goodin | Pension | 26 | 1,433,114 | David L. Goodin | Pension | 26 | 1,409,516 | ||||||||||||||||||||||||||||||||||||||||||||
Basic SISP 2 | 10 | 3,209,181 | Basic SISP | 10 | 3,120,841 | |||||||||||||||||||||||||||||||||||||||||||||||
Excess SISP 3 | 26 | 44,583 | Excess SISP 2 | 26 | 45,034 | |||||||||||||||||||||||||||||||||||||||||||||||
Jason L. Vollmer | Jason L. Vollmer | Pension | 4 | 36,192 | Jason L. Vollmer | Pension | 4 | 33,676 | ||||||||||||||||||||||||||||||||||||||||||||
Basic SISP 3 | n/a | — | Basic SISP 2 | n/a | — | |||||||||||||||||||||||||||||||||||||||||||||||
Excess SISP 3 | n/a | — | Excess SISP 2 | n/a | — | |||||||||||||||||||||||||||||||||||||||||||||||
David C. Barney | David C. Barney | Pension 3 | n/a | — | David C. Barney | Pension 2 | n/a | — | ||||||||||||||||||||||||||||||||||||||||||||
Basic SISP 2 | 10 | 1,710,384 | Basic SISP | 10 | 1,663,746 | |||||||||||||||||||||||||||||||||||||||||||||||
Excess SISP 3 | n/a | — | Excess SISP 2 | n/a | — | |||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Thiede | Jeffrey S. Thiede | Pension 3 | n/a | — | Jeffrey S. Thiede | Pension 2 | n/a | — | ||||||||||||||||||||||||||||||||||||||||||||
Basic SISP 3 | n/a | — | Basic SISP 2 | n/a | — | |||||||||||||||||||||||||||||||||||||||||||||||
Excess SISP 3 | n/a | — | Excess SISP 2 | n/a | — | |||||||||||||||||||||||||||||||||||||||||||||||
Nicole A. Kivisto | Nicole A. Kivisto | Pension | 14 | 345,211 | Nicole A. Kivisto | Pension | 14 | 324,230 | ||||||||||||||||||||||||||||||||||||||||||||
Basic SISP 2 | 10 | 726,043 | Basic SISP | 10 | 673,647 | |||||||||||||||||||||||||||||||||||||||||||||||
Excess SISP 3 | n/a | — | Excess SISP 2 | n/a | — | |||||||||||||||||||||||||||||||||||||||||||||||
1 | 1 | Years of credited service related to the pension plan reflects the years of participation in the plan as of December 31, 2009, when the pension plan was frozen. Years of credited service related to the Basic SISP reflects the years toward full vesting of the benefit which is 10 years. Years of credited service related to Excess SISP reflects the same number of credited years of services as the pension plan. | 1 | Years of credited service related to the pension plan reflects the years of participation in the plan as of December 31, 2009, when the pension plan was frozen. Years of credited service related to the Basic SISP reflects the years toward full vesting of the benefit which is 10 years. Years of credited service related to Excess SISP reflects the same number of credited years of service as the pension plan. | ||||||||||||||||||||||||||||||||||||||||||||||||
2 | 2 | The present value of accumulated benefits for the Basic SISP assumes the named executive officer would be fully vested in the benefit on the benefit commencement date; therefore, no reduction was made to reflect actual vesting levels. | 2 | Messrs. Barney and Thiede are not eligible to participate in the pension plans. Messrs. Vollmer and Thiede do not participate in the SISP. Mr. Goodin is the only named executive officer eligible to participate in the Excess SISP. | ||||||||||||||||||||||||||||||||||||||||||||||||
3 | Messrs. Barney and Thiede are not eligible to participate in the pension plans. Messrs. Vollmer and Thiede do not participate in the SISP. Mr. Goodin is the only named executive officer eligible to participate in the Excess SISP. |
Name (a) | Executive Contributions in Last FY ($) (b) | Registrant Contributions in Last FY ($) (c) | Aggregate Earnings in Last FY ($) (d) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE ($) (f) | |||||||||||||||||||||||||||||||||
David L. Goodin | 701,760 | — | 108,834 | — | 2,795,829 | 1 | ||||||||||||||||||||||||||||||||
Jason L. Vollmer | — | 44,000 | 26,331 | — | 194,007 | 2 | ||||||||||||||||||||||||||||||||
David C. Barney | — | 150,000 | 96,016 | — | 790,996 | 3 | ||||||||||||||||||||||||||||||||
Jeffrey S. Thiede | — | 100,000 | 132,359 | — | 1,116,799 | 4 | ||||||||||||||||||||||||||||||||
Nicole A. Kivisto | 120,035 | — | 5,073 | — | 143,587 | 5 | ||||||||||||||||||||||||||||||||
1 | Mr. Goodin deferred 50% of his 2019 annual incentive compensation which was $1,403,520 as reported in the Summary Compensation Table for 2019. | |||||||||||||||||||||||||||||||||||||
2 | Mr. Vollmer received $44,000 under the Nonqualified Defined Contribution Plan for 2020. Mr. Vollmer’s balance also includes contributions of $40,000, $35,000, and $22,550 for 2019, 2018, and 2017, respectively. Each of these amounts are reported in column (i) of the Summary Compensation Table for its respective year, where applicable. | |||||||||||||||||||||||||||||||||||||
3 | Mr. Barney received $150,000 under the Nonqualified Defined Contribution Plan for 2020. Mr. Barney’s balance also includes contributions of $150,000 for each of 2019, 2018, and 2017. Each of these amounts are reported in column (i) of the Summary Compensation Table for its respective year. | |||||||||||||||||||||||||||||||||||||
4 | Mr. Thiede received $100,000 under the Nonqualified Defined Contribution Plan for 2020. Mr. Thiede’s balance also includes contributions of $100,000 for each of 2019, 2018, 2017, and 2016, $150,000 for 2015, $75,000 for 2014, and $33,000 for 2013. Each of these amounts was reported in column (i) of the Summary Compensation Table in the Proxy Statement for its respective year, where applicable. | |||||||||||||||||||||||||||||||||||||
5 | Ms. Kivisto deferred 25% of her 2019 annual incentive compensation which was $480,139 as reported in the Summary Compensation Table for 2019. |
Name (a) | Executive Contributions in Last FY ($) (b) | Registrant Contributions in Last FY ($) (c) | Aggregate Earnings in Last FY ($) (d) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE ($) (f) | |||||||||||||||||||||||||||||||||
David L. Goodin | 909,000 | — | 115,788 | — | 3,820,617 | 1 | ||||||||||||||||||||||||||||||||
Jason L. Vollmer | 22,615 | 49,000 | 38,864 | — | 304,486 | 2 | ||||||||||||||||||||||||||||||||
David C. Barney | — | 150,000 | 71,867 | — | 1,012,863 | 3 | ||||||||||||||||||||||||||||||||
Jeffrey S. Thiede | — | 100,000 | 157,981 | — | 1,374,780 | 4 | ||||||||||||||||||||||||||||||||
Nicole A. Kivisto | — | — | 4,669 | — | 148,255 | |||||||||||||||||||||||||||||||||
1 | Mr. Goodin deferred 50% of his 2020 annual incentive compensation paid in 2021 which was $1,818,000 as reported in the Summary Compensation Table for 2020. | |||||||||||||||||||||||||||||||||||||
2 | Mr. Vollmer deferred 5% of his base salary and received company credit of $49,000 under the MDU Resources Group, Inc. Deferred Compensation Plan for 2021. Mr. Vollmer’s balance also includes contributions of $44,000, $40,000, $35,000, and $22,550 for 2020, 2019, 2018, and 2017, respectively to the Nonqualified Defined Contribution Plan. Each of these amounts are reported in column (i) of the Summary Compensation Table for its respective year, where applicable. | |||||||||||||||||||||||||||||||||||||
3 | Mr. Barney received $150,000 under the MDU Resources Group, Inc. Deferred Compensation Plan for 2021. Mr. Barney’s balance also includes contributions of $150,000 for each of 2020, 2019, 2018, and 2017 to the Nonqualified Defined Contribution Plan. Each of these amounts are reported in column (i) of the Summary Compensation Table for its respective year. | |||||||||||||||||||||||||||||||||||||
4 | Mr. Thiede received $100,000 under the MDU Resources Group, Inc. Deferred Compensation Plan for 2021. Mr. Thiede’s balance also includes contributions of $100,000 for each of 2020, 2019, 2018, 2017, and 2016; $150,000 for 2015; $75,000 for 2014; and $33,000 for 2013 to the Nonqualified Defined Contribution Plan. Each of these amounts was reported in column (i) of the Summary Compensation Table in the Proxy Statement for its respective year, where applicable. | |||||||||||||||||||||||||||||||||||||
Monthly SISP Retirement Payment ($) | Monthly SISP Death Payment ($) | ||||||||||||||||
David L. Goodin | 23,040 | 46,080 | |||||||||||||||
David C. Barney | 10,936 | 21,872 | |||||||||||||||
Nicole A. Kivisto | 6,572 | 13,144 |
Executive Benefits and Payments upon Termination or Change of Control | Voluntary Termination ($) | Not for Cause Termination ($) | Death ($) | Disability ($) | Change of Control (With Termination) ($) | Change of Control (Without Termination) ($) | |||||||||||||||||||||||
David L. Goodin | |||||||||||||||||||||||||||||
Compensation: | |||||||||||||||||||||||||||||
Performance Shares | 4,103,672 | 4,103,672 | 4,103,672 | 4,103,672 | 6,608,842 | 6,608,842 | |||||||||||||||||||||||
Benefits and Perquisites: | |||||||||||||||||||||||||||||
Basic SISP | 3,212,382 | 3,212,382 | — | 3,212,382 | 3,212,382 | — | |||||||||||||||||||||||
SISP Death Benefits | — | — | 7,198,103 | — | — | — | |||||||||||||||||||||||
Disability Benefits | — | — | — | — | — | — | |||||||||||||||||||||||
Total | 7,316,054 | 7,316,054 | 11,301,775 | 7,316,054 | 9,821,224 | 6,608,842 | |||||||||||||||||||||||
Jason L. Vollmer | |||||||||||||||||||||||||||||
Compensation: | |||||||||||||||||||||||||||||
Performance Shares | — | — | — | — | 1,088,165 | 1,088,165 | |||||||||||||||||||||||
Benefits and Perquisites: | |||||||||||||||||||||||||||||
Disability Benefits | — | — | — | 995,310 | — | — | |||||||||||||||||||||||
Total | — | — | — | 995,310 | 1,088,165 | 1,088,165 | |||||||||||||||||||||||
David C. Barney | |||||||||||||||||||||||||||||
Compensation: | |||||||||||||||||||||||||||||
Performance Shares | 956,112 | 956,112 | 956,112 | 956,112 | 1,607,038 | 1,607,038 | |||||||||||||||||||||||
Restricted Stock Units | — | — | 326,127 | 326,127 | 326,127 | 326,127 | |||||||||||||||||||||||
Benefits and Perquisites: | |||||||||||||||||||||||||||||
Basic SISP | 1,708,300 | 1,708,300 | — | 1,708,300 | 1,708,300 | — | |||||||||||||||||||||||
SISP Death Benefits | — | — | 3,416,600 | — | — | — | |||||||||||||||||||||||
Disability Benefits | — | — | — | 286,082 | — | — | |||||||||||||||||||||||
Total | 2,664,412 | 2,664,412 | 4,698,839 | 3,276,621 | 3,641,465 | 1,933,165 | |||||||||||||||||||||||
Jeffrey S. Thiede | |||||||||||||||||||||||||||||
Compensation: | |||||||||||||||||||||||||||||
Performance Shares | 970,335 | 970,335 | 970,335 | 970,335 | 1,616,520 | 1,616,520 | |||||||||||||||||||||||
Restricted Stock Units | — | — | 326,127 | 326,127 | 326,127 | 326,127 | |||||||||||||||||||||||
Benefits and Perquisites: | |||||||||||||||||||||||||||||
Disability Benefits | — | — | — | 344,478 | — | — | |||||||||||||||||||||||
Total | 970,335 | 970,335 | 1,296,462 | 1,640,940 | 1,942,647 | 1,942,647 | |||||||||||||||||||||||
Nicole A. Kivisto | |||||||||||||||||||||||||||||
Compensation: | |||||||||||||||||||||||||||||
Performance Shares | — | — | — | — | 1,514,878 | 1,514,878 | |||||||||||||||||||||||
Benefits and Perquisites: | |||||||||||||||||||||||||||||
Basic SISP | 727,629 | 727,629 | — | 727,629 | 727,629 | — | |||||||||||||||||||||||
SISP Death Benefits | — | — | 2,053,209 | — | — | — | |||||||||||||||||||||||
Disability Benefits | — | — | — | 740,094 | — | — | |||||||||||||||||||||||
Total | 727,629 | 727,629 | 2,053,209 | 1,467,723 | 2,242,507 | 1,514,878 |
Executive Benefits and Payments upon Termination or Change of Control | Voluntary or Not for Cause Termination ($) | Death ($) | Disability ($) | Change of Control (With Termination) ($) | Change of Control (Without Termination) ($) | |||||||||||||||||||||
David L. Goodin | ||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||
Performance Shares | 6,249,068 | 6,249,068 | 6,249,068 | 8,412,306 | 8,412,306 | |||||||||||||||||||||
Restricted Stock Units | 271,647 | 271,647 | 271,647 | 814,940 | 814,940 | |||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||
Basic SISP | 3,112,653 | — | 3,112,653 | 3,112,653 | — | |||||||||||||||||||||
Excess SISP | 45,965 | — | 45,965 | 45,965 | — | |||||||||||||||||||||
SISP Death Benefits | — | 6,983,444 | — | — | — | |||||||||||||||||||||
Disability Benefits | — | — | — | — | — | |||||||||||||||||||||
Total | 9,679,333 | 13,504,159 | 9,679,333 | 12,385,864 | 9,227,246 | |||||||||||||||||||||
Jason L. Vollmer | ||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||
Performance Shares | — | — | — | 1,888,735 | 1,888,735 | |||||||||||||||||||||
Restricted Stock Units | 71,303 | 71,303 | 71,303 | 213,908 | 213,908 | |||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||
Disability Benefits | — | — | 926,791 | — | — | |||||||||||||||||||||
Total | 71,303 | 71,303 | 998,094 | 2,102,643 | 2,102,643 | |||||||||||||||||||||
David C. Barney | ||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||
Performance Shares | 1,500,583 | 1,500,583 | 1,500,583 | 2,217,723 | 2,217,723 | |||||||||||||||||||||
Restricted Stock Units | 74,567 | 74,567 | 74,567 | 223,731 | 223,731 | |||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||
Basic SISP | 1,657,355 | — | 1,657,355 | 1,657,355 | — | |||||||||||||||||||||
SISP Death Benefits | — | 3,314,711 | — | — | — | |||||||||||||||||||||
Disability Benefits | — | — | 283,134 | — | — | |||||||||||||||||||||
Total | 3,232,505 | 4,889,861 | 3,515,639 | 4,098,809 | 2,441,454 | |||||||||||||||||||||
Jeffrey S. Thiede | ||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||
Performance Shares | 1,045,241 | 1,045,241 | 1,045,241 | 1,894,948 | 1,894,948 | |||||||||||||||||||||
Restricted Stock Units | 73,838 | 73,838 | 73,838 | 221,545 | 221,545 | |||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||
Disability Benefits | — | — | 287,574 | — | — | |||||||||||||||||||||
Total | 1,119,079 | 1,119,079 | 1,406,653 | 2,116,493 | 2,116,493 | |||||||||||||||||||||
Nicole A. Kivisto | ||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||
Performance Shares | — | — | — | 2,221,104 | 2,221,104 | |||||||||||||||||||||
Restricted Stock Units | 73,838 | 73,838 | 73,838 | 221,545 | 221,545 | |||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||
Basic SISP | 670,124 | — | 670,124 | 670,124 | — | |||||||||||||||||||||
SISP Death Benefits | — | 1,991,979 | — | — | — | |||||||||||||||||||||
Disability Benefits | — | — | 676,057 | — | — | |||||||||||||||||||||
Total | 743,962 | 2,065,817 | 1,420,019 | 3,112,773 | 2,442,649 |
AUDIT MATTERS |
The board of directors recommends a vote “for” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year |
2019 | 2020 | 2020 | 2021 | |||||||||||||||||||||||||||||||||||||||||||
Audit Fees 1 | Audit Fees 1 | $ | 2,919,950 | $ | 2,798,015 | Audit Fees 1 | $ | 2,798,015 | $ | 2,910,640 | ||||||||||||||||||||||||||||||||||||
Audit-Related Fees | Audit-Related Fees | — | — | Audit-Related Fees | — | — | ||||||||||||||||||||||||||||||||||||||||
Tax Fees | Tax Fees | — | — | Tax Fees | — | — | ||||||||||||||||||||||||||||||||||||||||
All Other Fees 2 | 5,000 | — | ||||||||||||||||||||||||||||||||||||||||||||
Total Fees 3 | $ | 2,924,950 | $ | 2,798,015 | ||||||||||||||||||||||||||||||||||||||||||
All Other Fees | All Other Fees | — | — | |||||||||||||||||||||||||||||||||||||||||||
Total Fees 2 | Total Fees 2 | $ | 2,798,015 | $ | 2,910,640 | |||||||||||||||||||||||||||||||||||||||||
Ratio of Tax and All Other Fees to Audit and Audit-Related Fees | Ratio of Tax and All Other Fees to Audit and Audit-Related Fees | 0.2 | % | 0.0 | % | Ratio of Tax and All Other Fees to Audit and Audit-Related Fees | 0 | % | 0 | % |
David M. Sparby, Chair | ||
Edward A. Ryan | ||
Chenxi Wang |
INFORMATION ABOUT THE ANNUAL MEETING |
Who Can Vote? | Stockholders of record at the close of business on March | ||||||||||
Distribution of Our Proxy Materials Using Notice and Access | We distributed proxy materials to certain of our stockholders via the Internet under the SEC’s “Notice and Access” rules to reduce our costs and decrease the environmental impact of our proxy materials. Using this method of distribution, on or about March | ||||||||||
How to Vote | You are encouraged to vote in advance of the meeting using one of the following voting methods, even if you are planning to attend the | ||||||||||
Registered Stockholders: Stockholders of record who hold their shares directly with our stock registrar can vote any one of four ways: | |||||||||||
: | By Internet: Go to the website shown on the Notice or Proxy Card, if you received one, and follow the instructions. | ||||||||||
) | By Telephone: Call the telephone number shown on the Notice or Proxy Card, if you received one, and follow the instructions given by the voice prompts. | ||||||||||
Voting via the Internet or by telephone authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated, and returned the Proxy Card by mail. Your voting instructions may be transmitted up until 11:59 p.m. Eastern Time on May | |||||||||||
* | By Mail: If you received a paper copy of the Proxy Statement, Annual Report, and Proxy Card, mark, sign, date, and return the Proxy Card in the postage-paid envelope provided. | ||||||||||
In Person: Attend the annual meeting, or send a personal representative with an appropriate proxy, to vote by ballot at the meeting. | |||||||||||
Beneficial Stockholders: Stockholders whose shares are held beneficially in the name of a bank, broker, or other holder of record (sometimes referred to as holding shares “in street name”), will receive voting instructions from said bank, broker, or other holder of record. If you wish to vote in person at the meeting, you must obtain a legal proxy from your bank, broker, or other holder of record of your shares and present it at the meeting. | |||||||||||
See discussion below regarding the MDU Resources Group, Inc. 401(k) Plan for voting instructions for shares held under our 401(k) plan. | |||||||||||
Revoking Your Proxy or Changing Your Vote | You may change your vote at any time before the proxy is exercised. | ||||||||||
Registered Stockholders: | |||||||||||
• | If you voted by mail: you may revoke your proxy by executing and delivering a timely and valid later dated proxy, by voting by ballot at the meeting, or by giving written notice of revocation to the corporate secretary. | ||||||||||
• | If you voted via the Internet or by telephone: you may change your vote with a timely and valid later Internet or telephone vote, as the case may be, or by voting by ballot at the meeting. | ||||||||||
• | Attendance at the meeting will not have the effect of revoking a proxy unless (1) you give proper written notice of revocation to the corporate secretary before the proxy is exercised, or (2) you vote by ballot at the meeting. | ||||||||||
Beneficial Stockholders: Follow the specific directions provided by your bank, broker, or other holder of record to change or revoke any voting instructions you have already provided. Alternatively, you may vote your shares by ballot at the meeting if you obtain a legal proxy from your bank, broker, or other holder of record and present it at the meeting. |
Discretionary Voting Authority | If you complete and submit your proxy voting instructions, the individuals named as proxies will follow your instructions. If you are a stockholder of record and you submit proxy voting instructions but do not direct how to vote on each item, the individuals named as proxies will vote as the board recommends on each proposal. The individuals named as proxies will vote on any other matters properly presented at the annual meeting in accordance with their discretion. Our bylaws set forth requirements for advance notice of any nominations or agenda items to be brought up for voting at the annual meeting, and we have not received timely notice of any such matters, other than the items from the board of directors described in this Proxy Statement. | |||||||
Voting Standards | A majority of outstanding shares of stock entitled to vote must be present in person or represented by proxy to hold the meeting. Abstentions and broker non-votes are counted for purposes of determining whether a quorum is present at the annual meeting. | |||||||
If you are a beneficial holder and do not provide specific voting instruction to your broker, the organization that holds your shares will not be authorized to vote your shares, which would result in broker non-votes, on proposals other than the ratification of the selection of our independent registered public accounting firm for | ||||||||
The following chart describes the proposals to be considered at the annual meeting, the vote required to elect directors and to adopt each other proposal, and the manner in which votes will be counted: |
Item No. | Proposal | Voting Options | Vote Required to Adopt the Proposal | Effect of Abstentions | Effect of “Broker Non-Votes” | ||||||||||||
1 | Election of Directors | For, against, or abstain on each nominee | A nominee for director will be elected if the votes cast for such nominee exceed the votes cast against such nominee. | No effect | No effect | ||||||||||||
2 | Advisory Vote to Approve the Compensation Paid to the Company’s Named Executive Officers | For, against, or abstain | The affirmative vote of a majority of the shares of common stock represented at the annual meeting and entitled to vote thereon | Same effect as votes against | No effect | ||||||||||||
3 | Ratification of the Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for | For, against, or abstain | The affirmative vote of a majority of the shares of common stock represented at the annual meeting and entitled to vote thereon | Same effect as votes against | Brokers have discretion to vote | ||||||||||||
Proxy Solicitation | The board of directors is furnishing proxy materials to solicit proxies for use at the Annual Meeting of Stockholders on May |
Electronic Delivery of Proxy Statement and Annual Report Documents | For stockholders receiving proxy materials by mail, you can elect to receive an email in the future that will provide electronic links to these documents. Opting to receive your proxy materials online will save the company the cost of producing and mailing documents to your home or business and will also give you an electronic link to the proxy voting site. | |||||||
• | Registered Stockholders: If you vote on the Internet, simply follow the prompts for enrolling in the electronic proxy delivery service. You may also enroll in the electronic proxy delivery service at any time in the future by going directly to http://enroll.icsdelivery.com/mdu to request electronic delivery. You may revoke an electronic delivery election at this site at any time. | |||||||
• | Beneficial Stockholders: If you hold your shares in a brokerage account, you may also have the opportunity to receive copies of the proxy materials electronically. You may enroll in the electronic proxy delivery service at any time by going directly to http://enroll.icsdelivery.com/mdu to request electronic delivery. You may also revoke an electronic delivery election at this site at any time. In addition, you may also check the information provided in the proxy materials mailed to you by your bank or broker regarding the availability of this service or contact your bank or broker to request electronic delivery. | |||||||
Householding of Proxy Materials | In accordance with a Notice sent to eligible stockholders who share a single address, we are sending only one Annual Report to Stockholders and one Proxy Statement to that address unless we received instructions to the contrary from any stockholder at that address. This practice, known as “householding,” is designed to reduce our printing and postage costs. However, if a stockholder of record wishes to receive a separate Annual Report to Stockholders and Proxy Statement in the future, he or she may contact the Office of the Treasurer at MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506-5650, Telephone Number: (701) 530-1000. Eligible stockholders of record who receive multiple copies of our Annual Report to Stockholders and Proxy Statement can request householding by contacting us in the same manner. Stockholders who own shares through a bank, broker, or other nominee can request householding by contacting the nominee. | |||||||
We will promptly deliver, upon written or oral request, a separate copy of the Annual Report to Stockholders and Proxy Statement to a stockholder at a shared address to which a single copy of the document was delivered. | ||||||||
MDU Resources Group, Inc. 401(k) Plan | This Proxy Statement is being used to solicit voting instructions from participants in the MDU Resources Group, Inc. 401(k) Plan with respect to shares of our common stock that are held by the trustee of the plan for the benefit of plan participants. If you are a plan participant and also own other shares as a registered stockholder or beneficial owner, you will separately receive a Notice or proxy materials to vote those other shares you hold outside of the MDU Resources Group, Inc. 401(k) Plan. If you are a plan participant, you must instruct the plan trustee to vote your shares by utilizing one of the methods described on the voting instruction form that you receive in connection with shares held in the plan. If you do not give voting instructions, the trustee generally will vote the shares allocated to your personal account in accordance with the recommendations of the board of directors. Your voting instructions may be transmitted up until 11:59 p.m. Eastern Time on May | |||||||
Annual Meeting Admission and Guidelines | Admission: All stockholders as of the record date of March If your shares are held beneficially in the name of a bank, broker, or other holder of record, and you plan to attend the annual meeting, you will need to submit a written request for an admission ticket by mail to: Investor Relations, MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506 or email at CorporateSecretary@mduresources.com. The request must include proof of stock ownership as of March Requests for admission tickets must be received no later than May Guidelines: The use of cameras or sound recording equipment is prohibited except by the media or those employed by the company to provide a record of the proceedings. The use of cell phones and other personal communication devices is also prohibited during the meeting. All devices must be turned off or muted. No firearms or weapons, banners, packages, or signs will be allowed in the meeting room. MDU Resources Group, Inc. reserves the right to inspect all items, including handbags and briefcases, that enter the meeting room. |
Annual Meeting Admission and Guidelines (continued) | Public Health Concerns: We are actively monitoring the public health and travel safety concerns relating to COVID-19 and the advisories or mandates that federal, state, and local governments and related agencies may issue. In the event it is not possible or advisable to hold our annual meeting as currently planned, we will | ||||
Conduct of the Meeting | Neither the board of directors nor management intends to bring before the meeting any business other than the matters referred to in the Notice of Annual Meeting and this Proxy Statement. We have not been informed that any other matter will be presented at the meeting by others. However, if any other matters are properly brought before the annual meeting, or any adjournment(s) thereof, your proxies include discretionary authority for the persons named in the proxy to vote or act on such matters in their discretion. |
Stockholder Proposals, Director Nominations, and Other Items of Business for | Stockholder Proposals for Inclusion in Next Year’s Proxy Statement:To be included in the proxy materials for our | |||||||
Director Nominations From Stockholders for Inclusion in Next Year’s Proxy Statement: If a stockholder or group of stockholders wishes to nominate one or more director candidates to be included in our proxy statement for the | ||||||||
Director Nominations and Other Stockholder Proposals Raised From the Floor at the |
By order of the Board of Directors, | |||||
Karl A. Liepitz | |||||
Secretary | |||||
March |