UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Welcome to the Duke Energy
| | | March 21, 2022 Dear Fellow Shareholders:
I am pleased to invite you to Duke Energy’s Annual Meeting to be held on Thursday, May 5, 2022, at 1:00 p.m. Eastern time. We look forward to updating you at the Annual Meeting on our strategy and areas of focus and progress in 2021, as well as plans for the future of Duke Energy. We have made progress over the past year on our path to reach our goals to achieve at least 50% reduction in CO2 emissions by 2030 from electricity generation and net-zero CO2 emissions by 2050 from electricity generation, as well as the goal of our natural gas local distribution business to reach net-zero methane emissions by 2030. In addition, earlier this year we announced the expansion of our net-zero by 2050 goal to include Scope 2 emissions and certain Scope 3 emissions. We also announced a goal to exit coal generation by 2035, subject to regulatory approvals. The progress we made in 2021 on our climate strategy and further details on our goals are discussed in this proxy statement. | |
As a result of positive feedbackshareholders from our shareholders, we are excited to once again hold this year's Annual Meeting via live webcast. This format will continue to enable us to use technology to open our Annual Meeting to shareholders all over the world and improve our communications with them while still providing themyou the same opportunities to vote and ask questions that theyyou would have had at previousan in-person meetings. Once again, we will use a pre-meeting forum onproxyvote.com to enable shareholders to submitmeeting, including by submitting questions in writing in advance of the Annual Meeting.Meeting on our pre-meeting forum at proxyvote.com. An audio broadcast of the Annual Meeting will also be available by phone toll-free at 1.800.239.9838, conference number 7668330.800.289.0720, confirmation code 6176182. Details regarding how to participate in the Annual Meeting via live webcast, andas well as the items to be voted on, are more fully described in the accompanying Notice of Annual Meeting of Shareholders, “Rules of Conduct for the Annual Meeting” on page 1 of the Proxy Summary, and in the Frequently“Frequently Asked Questions and Answers About the Annual MeetingMeeting” on page 7276 of this proxy statement.
This proxy statement contains details about our strong corporate governance and executive compensation practices. We have made numerous positive changes to our governance practices in recent years. These changes are in addition to the progress made on implementing the Corporation's strategy in 2017 which is further detailed in the 2017 Annual Report that accompanies this proxy statement.
Your participation as a shareholder is important to us.
Annual Meeting.
Lynn J. GoodChairman,Chair, President and Chief Executive OfficerCEO
Letter from the Board of Directors
Dear Fellow Shareholders:
Shareholders:
The focus of these conversations in 2017 involved our corporate strategy, compensation and governance practices, the composition of our Board and the progress to date on environmental and sustainability goals. Membersindependent members of the Board were present in many of these conversations and feedback from shareholders was discussed by the Board.
Shareholders also expressed a desire to learn more about how we are mitigating risks from climate change. In response to this feedback, and with leadership and oversight by the Board, we published a Climate Report in March 2018. The publication of this report is a testament to the Board's commitment to act on shareholder feedback and is in addition to other changes we have made in recent years, including the Board's adoption of majority voting for the election of directors, proxy access and the ability for shareholders to call special shareholder meetings and act by written consent. These changes reflect the Board's commitment to evolve our compensation and governance practices to align with best practices and to honor the perspectives of our shareholders.
Throughout the year, I have had the privilege of working with an engaged and experienced group of directors. The diversity of experience, background and skills present in the boardroom allows for active Board oversight of the most important issues facing Duke Energy as we navigate and make progress on our strategic initiatives. The Board strikes the right balance between fresh perspectives and established experience. Since 2014, we have added six new directors to the Board. This mix of new ideas and experiences has resulted in a dynamic Board uniquely equipped to lead Duke Energy as it navigates the rapid changes occurring in the utility industry. I have been honored to lead this Board as Independent Lead Director for the past two years and to work closely with our Chief Executive OfficerChair, President and CEO, Lynn Good, who has skillfully positioned Duke Energy as a leader while the utility industry navigates rapid changes. We are a diverse, engaged, and experienced group of directors who are deeply committed to sound corporate governance, human capital management, executive compensation, and risk management policies and practices to ensure that Duke Energy operates responsibly and efficiently and achieves long-term sustainable value for our fellow shareholders. The varied perspectives of this Board allow us to actively oversee the most important issues facing Duke Energy.
our Company. We look forward to continuing our dialogue with you. On behalf ofshareholders at the entire Board, thank you for your continued support.
2022 Annual Meeting and throughout the year.
Michael G. BrowningIndependent Lead Director
| Michael G. Browning Derrick Burks Annette K. Clayton Theodore F. Craver, Jr. Robert M. Davis Caroline Dorsa | | | W. Roy Dunbar Nicholas C. Fanandakis John T. Herron Idalene F. Kesner | | | E. Marie McKee Michael J. Pacilio Thomas E. Skains William E. Webster, Jr. | |
| Notice of 2022 Annual Meeting of | | | |
| Items of Business | | | Board’s Voting Recommendation | | | ||||||
| 1 | | | Election of Directors | | | | | ||||
| 2 | | | Ratification of Deloitte & Touche LLP as Duke Energy’s independent registered public accounting firm for 2022 | | | | | | | | |
| 3 | | | Advisory vote to approve Duke Energy’s named executive officer compensation | | | | | | | | |
| 4 | | | Shareholder proposal, if properly presented at the meeting | | | | | | | | |
| 5 | | | Any other business that may properly come before the meeting (or any adjournment or postponement of the meeting) | | | | | |
| Vote Now | | |||
| By Internet | | | By Mailing Your Proxy Card | |
| Visit 24/7 proxyvote.com | | | Vote, sign your proxy card, and mail free of postage | |
| By Phone | | | Participate in the Annual Meeting | |
| Call toll free 24/7 at 800.690.6903 or by calling the number provided by your broker, bank, or other nominee if your shares are not registered in your name | | | You will need the 16-digit control number, which can be found on your Notice, on your proxy card, and on the instructions that accompany your proxy materials | |
| |
We will convene the Annual Meeting March 7, 2022
The purpose of the Annual Meeting is to consider and take action on the following:
Shareholders of recordcommon stock as of the close of business on March 9, 2018,the record date are entitled to participate in, vote, and ask questions at the Annual Meeting by visitingMeeting.
This year Because we again plan to providewill be providing our proxy materials to our shareholders electronically. By doing so,electronically, most of our shareholders will receive only receive the Notice containing instructions on how to access the proxy materials electronically and vote online, by phone, or by mail. If you would like to request paper copies of the proxy materials, you may follow the instructions on theyour Notice. If you receive paper copies of the proxy materials, we ask you to consider signing up to receive these materials electronically in the future by following the instructions contained in this proxy statement. By delivering proxy materials electronically, we can reduce the consumption of natural resources and the cost of printing and mailing our proxy materials.
Please take time to vote now. If you choose to vote by mail, you may do so by marking, dating and signing the proxy card and returning it to us. Please follow the voting instructions that are included on your proxy card. Regardless of the manner in which you vote, we urge and greatly appreciate your prompt response.
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Dated: March | | | By order of the Board of Directors, | | |
| | | | | |
| | | | Kodwo Ghartey-Tagoe Executive Vice President, | |
DUKE ENERGY – 2018 Proxy Statement
| DUKE ENERGY | | | BUILDING A | |
| | Duke Energy strives to provide our shareholders at the online-only Annual Meeting the same rights that they would have had at an in-person meeting and an enhanced opportunity for participation and discourse. • Shareholders who have submitted a proposal for the Annual Meeting are given the choice of recording the presentation of their proposal in advance or presenting their proposal live via a third-party operated telephone line. • A representative of Broadridge Financial Solutions has been appointed as the independent inspector of elections. • Shareholders as of the record date who would like to submit questions in writing in advance of the Annual Meeting may do so by visiting our pre-meeting forum at proxyvote.com using their 16-digit control number. • Shareholders participating in the Annual Meeting live via webcast may also submit questions in writing during the Annual Meeting. Shareholders are encouraged to provide their name and contact information in case the Company needs to contact them after the Annual Meeting. • Individuals who are not shareholders as of the record date who are interested in viewing or listening to the Annual Meeting will be allowed to check-in to duke-energy.onlineshareholdermeeting.com to view the Annual Meeting as a guest, or listen to the Annual Meeting toll-free at 800.289.0720, confirmation code 6176182. • Questions submitted by shareholders will be read during the Annual Meeting unedited. Of course, questions that are of an inappropriate personal nature or that use offensive language will not be read at the Annual Meeting or posted on our website after the Annual Meeting. Questions regarding technical issues related to the Annual Meeting will be referred to technical support personnel to respond separately. Similarly, questions regarding the availability or location of proxy materials will be responded to separately. • We will post answers to all questions received in advance of or during the Annual Meeting, including those questions that we do not answer during the Annual Meeting, on our website at duke-energy.com/our-company/investors/financial-news under “05/05/2022 – Annual Meeting of Shareholders.” All unedited questions and the answers to those questions, as well as a video replay of the Annual Meeting, will be available on our website until the release of the proxy statement for the 2023 Annual Meeting. • Questions on topics that have been previously asked and answered during the Annual Meeting will be answered after the Annual Meeting and posted on our website at duke-energy.com/our-company/investors/financial-news under “05/05/2022 – Annual Meeting of Shareholders” along with all other submitted questions. • The Question and Answer portion of the Annual Meeting will end upon the earlier of 2:00 p.m. Eastern time, or after all question topics that are not of an inappropriate nature have been answered. | | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 1 | |
| Headquartered in Charlotte, North Carolina, Duke Energy is one of the largest energy holding companies in the United States, providing electricity to approximately 8.2 million retail electric customers in six states and natural gas distribution services to 1.6 million customers in five states. We own approximately 50,259 MW of electric generating capacity in North Carolina, South Carolina, the Midwest, and Florida, and approximately 3,554 MW of generating capacity through our commercial renewables business, which owns and operates diverse power generation assets throughout North America, including a portfolio of renewable wind, solar, energy storage, and microgrid projects. More information about Duke Energy is available on our website at duke-energy.com. | | | |
| | | | | | | Broker Non-Votes* | | | Abstentions | | | Votes Required for Approval | |
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| | Proposal 1: Election of Directors (page 11) The Board recommends you vote FOR each Nominee | | | Do not count | | | Do not count | | | Majority of votes cast, with a resignation policy | | ||
| | | Proposal 2: Ratification of Deloitte & Touche LLP as Duke Energy’s independent registered public accounting firm for 2022 (page 39) The Board recommends you vote FOR this proposal | | | Brokers have discretion to vote | | | Vote against | | | Majority of shares represented | | |
| | | Proposal 3: Advisory vote to approve Duke Energy’s named executive officer compensation (page 41) The Board recommends you vote FOR this proposal | | | Do not count | | | Vote against | | | Majority of shares represented | | |
| | | Proposal 4: Shareholder proposal regarding shareholder right to call for a special shareholder meeting (page 73) The Board recommends you vote AGAINST this proposal | | | Do not count | | | Vote against | | | Majority of shares represented | |
DUKE ENERGY – 2018 Proxy Statement
PARTICIPATE IN THE FUTURE OF DUKE ENERGY; CAST YOUR VOTE NOW
It is very important that you vote to participate in the future of Duke Energy Corporation ("Duke Energy" or the "Corporation"). New York Stock Exchange ("NYSE")
Eligibility to Vote
You can vote if you were a shareholder of record at the close of business on March 9, 2018.
Vote Now
Even if you plan to participate in this year's Annual Meeting, it is a good idea to vote your shares before the Annual Meeting in the event your plans change. Whether you vote online, by phone or by mail, please have your proxy card or instructions that accompanied your proxy materials in hand and follow the instructions.
Participate in the Annual Meeting
This year's Annual Meeting will be held exclusively via live webcast enabling shareholders from around the world to participate, submit questions in writing and vote. Shareholders of record as of the close of business on March 9, 2018, are entitled to participate in and vote at the Annual Meeting by visitingduke-energy.onlineshareholdermeeting.com. To participate in the Annual Meeting via live webcast, you will need the 16-digit control number included on your Notice, on your proxy card and on the instructions that accompanied your proxy materials. The Annual Meeting will begin promptly at 12:30 p.m. Eastern Time. Online check-in will begin at 12:00 p.m. Eastern Time. Please allow ample time for the online check-in procedures. An audio broadcast of the Annual Meeting will be available by phone toll-free at 1.800.239.9838, conference number 7668330.
Shareholders who would like to submit questions in writing in advance of the Annual Meeting can do so by visiting our pre-meeting forum atproxyvote.com using your 16-digit control number. We will post answers to all questions received in advance of or during the Annual Meeting, including those questions that we do not have time to answer during the Annual Meeting, to our website atduke-energy.com/our-company/investors/financial-newsunder "May 3, 2018 - 2018 Annual Meeting of Shareholders".
2 DUKE ENERGY – 2018 Proxy Statement
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider. You should read the entire proxy statement carefully before voting. Page references ("XX") are supplied to help you find further information in this proxy statement.
Voting Matters
| 2 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
| | Our Greenhouse Gas Emission Reduction Goals | | | |||||||||||
| | 2030 | | | | | | | • At least 50% reduction in CO2 emissions from 2005 levels from electricity generation (Scope 1 emissions) | | | ||||
| Natural Gas Local Distribution Business | | | | • Reduction in methane emissions to net-zero (Scope 1 emissions) | | | ||||||||
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| | | | | | • Net-zero CO2 emissions from electricity generation (Scope 1 emissions) | |||||||||
Net-zero CO2 emissions from electricity purchased for Company use (Scope 2 emissions) • Net-zero greenhouse gas emissions from the power we purchase for resale and from the procurement of fossil fuels used for generation (Scope 3 emissions) | | ||||||||||||||
| Natural Gas Local Distribution Business | | | | • Net-zero emissions from upstream methane and carbon emissions related to purchased gas and downstream carbon emissions from customers’ consumption (Scope 3 emissions) | | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 3 | | |||||||
| | 27,605 Employees | | | | 18.3% Union | | | | |||
| | | 19.6% People of Color | | |
Duke Energy Overview
Headquartered in Charlotte, North Carolina, Duke EnergyThe Company is one of the largest energy holding companies in the United States. Our Electric Utilities and Infrastructure business serves approximately 7.6 million customers located in six states in the Southeast and Midwest. Our Gas Utilities and Infrastructure business distributes natural gas to approximately 1.5 million customers in the Carolinas, Ohio, Kentucky and Tennessee. Our Commercial Renewables business operates a growing renewable energy portfolio across the United States. More informationbeing intentional about our business is available atduke-energy.com.
2017 Business Highlights
actions to support our employees and attract diverse talent. We entered 2017 in a position of strength, having completedwork hard to help ensure that all employees feel that they have an equitable and inclusive experience by leveraging our multi-year transformation to exitemployee resource groups, as well as diversity and inclusion councils.
| Support for Employee Well-Being | | | We support our employees physically, emotionally, and financially through our wellness and mental health programs and provide webinars and coaching focused on improving financial wellness. | |
| Diversity & Inclusion Learning Programs | | | We have developed a portfolio of training for all employees to build our knowledge and understanding of diversity, equity, and inclusion, and build skills and capabilities for creating a more inclusive workplace. | |
| Fair and Equitable Compensation | | | The Company is committed to providing market competitive, fair, and equitable compensation by regularly reviewing employee pay. We conduct internal pay equity reviews and benchmarking against peer companies to ensure our pay is competitive. | |
| Attracting Diverse Talent | | | We continuously evaluate our practices across the hiring life cycle to attract a talented and diverse workforce to deliver on our commitments to customers. We have a dedicated team focused on building relationships with four-year colleges and technical schools, as well as community organizations to strengthen diversity in our future pipeline of talent. In 2021, we partnered to create a HBCU Energy Leadership Pathway pilot program with four HBCUs located in North Carolina and South Carolina. This program will provide students of color with mentoring, internships, and access to the rapidly evolving clean energy workforce. | |
| Courageous Conversations | | | “Let’s Talk About It” is a series of organized employee events the Company held around difficult but necessary and thought-provoking topics that help build understanding and awareness and support an inclusive workplace. In 2021, we had 50 sessions with nearly 6,000 employees attending. | |
| 4 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 5 | |
In conjunction with our strategic accomplishments, we maintained a sharp focus during the year on operational excellence, including:
Our strategic and operational accomplishments contributed to strong financial performance for the year. We demonstrated flexibility in the management of our spending to offset the impact of an extraordinarily mild 2017 Winter season. Despite the significant headwind from weather, including Hurricane Irma impacts, we delivered on our earnings guidance for the year. Additionally, our total shareholder return was 13.0% in 2017, compared to 13.5% in 2016. The total shareholder return of the Philadelphia Utility Index ("UTY") was 12.8% in 2017, compared to 17.4% in 2016.
During 2017, we increased the dividend payment to our shareholders by approximately 4%, reflecting our confidence in the strength of our businesses and commitment to return value to shareholders. This is the eleventh consecutive year of annual dividend growth. 2017 also marked the ninety-first consecutive year that Duke Energy has paid a quarterly cash dividend on our common stock, a record we expect to continue for shareholders who rely on a steady and growing dividend.
| | 1 | | | Environmental The Company's progress on its goal to reach net-zero carbon emissions from electricity generation by 2050 | |
| | 2 | | | Social Our human capital management and diversity, equity, and inclusion initiatives | |
| | 3 | | | Governance Board oversight, diversity, skills, and the changes to the Company's Political Expenditures Policy | |
| • Annual ESG Report (formerly known as the Sustainability Report) • 2017 and 2020 Climate Reports, which are aligned with the recommendations of the TCFD • Semi-annual Corporate Political Expenditures Report | | | • Annual Trade Association Climate Review • SASB disclosures • EEI/AGA template disclosure • GRI disclosures | |
4 DUKE ENERGY – 2018 Proxy Statement
Board Nominees (page 9)
Name | Age | Gender, Racial or Ethnically Diverse | Director since | Occupation | Independent | Committee Memberships | Other Public Company Boards | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Michael G. Browning | 71 | | 2006 | Chairman, Browning Consolidated, LLC | ü | • Compensation • Corporate Governance (C) • Finance and Risk Management | • None | |||||||
| | | | | | | | | | | | | | |
Theodore F. Craver, Jr. | 66 | 2017 | Retired Chairman, President and Chief Executive Officer, Edison International | ü | • Audit (C) • Finance and Risk Management | • Wells Fargo & Company | ||||||||
| | | | | | | | | | | | | | |
Robert M. Davis | 51 | | 2018 | Chief Financial Officer and Executive Vice President, Global Services, Merck & Co., Inc. | ü | • Audit • Finance and Risk Management | • None | |||||||
| | | | | | | | | | | | | | |
Daniel R. DiMicco | 67 | 2007 | Chairman Emeritus, Retired President and Chief Executive Officer, Nucor Corporation | ü | • Corporate Governance • Nuclear Oversight | • Hennessy Capital Acquisition Corp. III | ||||||||
| | | | | | | | | | | | | | |
John H. Forsgren | 71 | | 2009 | Retired Vice Chairman, Executive Vice President and Chief Financial Officer, Northeast Utilities | ü | • Compensation • Finance and Risk Management (C) | • None | |||||||
| | | | | | | | | | | | | | |
Lynn J. Good | 58 | ü | 2013 | Chairman, President and Chief Executive Officer, Duke Energy Corporation | • None | • The Boeing Company | ||||||||
| | | | | | | | | | | | | | |
John T. Herron | 64 | | 2013 | Retired President, Chief Executive Officer and Chief Nuclear Officer, Entergy Nuclear | ü | • Nuclear Oversight (C) • Regulatory Policy and Operations | • None | |||||||
| | | | | | | | | | | | | | |
James B. Hyler, Jr. | 70 | 2012 | Retired Vice Chairman and Chief Operating Officer, First Citizens BancShares, Inc. | ü | • Audit • Regulatory Policy and Operations (C) | • None | ||||||||
| | | | | | | | | | | | | | |
William E. Kennard | 61 | ü | 2014 | Non-Executive Chairman, Velocitas Partners, LLC | ü | • Corporate Governance • Finance and Risk Management | • AT&T Inc. • Ford Motor Company • MetLife, Inc. | |||||||
| | | | | | | | | | | | | | |
E. Marie McKee | 67 | ü | 2012 | Retired Senior Vice President, Corning Incorporated | ü | • Compensation (C) • Corporate Governance | • None | |||||||
| | | | | | | | | | | | | | |
Charles W. Moorman IV | 66 | | 2016 | Senior Advisor, Amtrak | ü | • Nuclear Oversight • Regulatory Policy and Operations | • Chevron Corporation | |||||||
| | | | | | | | | | | | | | |
Carlos A. Saladrigas | 69 | ü | 2012 | Chairman, Regis HR Group | ü | • Audit • Compensation | • None | |||||||
| | | | | | | | | | | | | | |
Thomas E. Skains | 61 | | 2016 | Retired Chairman, President and Chief Executive Officer, Piedmont Natural Gas Company, Inc. | ü | • Nuclear Oversight • Regulatory Policy and Operations | • BB&T Corporation • National Fuel Gas Company | |||||||
| | | | | | | | | | | | | | |
William E. Webster, Jr. | 64 | 2016 | Retired Executive Vice President, Industry Strategy for the Institute of Nuclear Power Operations | ü | • Nuclear Oversight • Regulatory Policy and Operations | • None | ||||||||
| | | | | | | | | | | | | | |
| 6 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
DUKE ENERGY – 2018 Proxy Statement 5
6 DUKE ENERGY – 2018 Proxy Statement
Board Representation
| Independence | | | | • Independent Lead Director with clearly defined roles and responsibilities • Independent Board committees • Independent directors meet in executive session at each regularly scheduled Board meeting | |
| Shareholder Rights | | | |||
| • Ability for shareholders to nominate directors through proxy access | |||||
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Robust year-round shareholder engagement program, | ||||||
involvement | ||||||
• Ability for shareholders to take action by less than unanimous written consent | ||||||
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Ability for shareholders to call a special shareholder meeting • Board responsiveness to majority support of shareholder proposals • Each share of common stock is equal to one vote | | |||||
| Good Governance Practices | | | |||
| • Majority voting for directors with mandatory resignation policy and plurality carve out for contested elections • Annual Board, committee, and director assessments • Clearly defined environmental and social initiatives and goals | |||||
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Annual election of all directors | ||||||
• Policy to prohibit all hedging and pledging of corporate securities • Regular Board refreshment | | |||||
42) Our executive compensation program is designed to:36)Principles and Objectives•
| | 1 | | | Link Pay to Performance | |
| | 2 | | | Attract and Retain talented executive officers and key employees | |
| | 3 | | | Emphasize Performance-Based Compensation to motivate executives and key employees | |
| | 4 | | | Reward Individual Performance | |
| | 5 | | | Encourage Long-Term Commitments to Duke Energy and align the interests of executives with shareholders | |
We meet these objectives through the appropriate mix of compensation, including:
DUKE ENERGY – 2018 Proxy Statement 7
Key Executive Compensation Features (pages 37performance shares and 41)RSUs.
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| COMPENSATION COMPONENTS | | |||||||||
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| Base | | STI | | | LTI | | ||||
| Link pay to performance | | | | | | | | | ||
| Attract and retain talented executives and key employees | | | | | | | | |||
| Emphasize performance-based compensation to motivate executives and key employees | | | | | | | | | ||
| Reward individual performance | | | | | | | | | ||
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| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 7 | |
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AT DUKE ENERGY WE… | | AT DUKE ENERGY WE DO NOT… | | ||
| Integrate key performance metrics in our incentive plans relating to environmental, climate, safety, and customer initiatives | | | Provide tax gross-ups to NEOs | |
| Require significant stock ownership, including 6x base salary for our CEO and 3x base salary for other NEOs | | | Permit hedging or pledging of Duke Energy securities | |
| Maintain a stock retention policy | | | Provide “single trigger” vesting of stock awards upon a change in control | |
| Tie equity and cash-based incentive compensation to a clawback policy | | | Provide employment agreements to a broad group | |
Use an independent compensation consultant retained by and reporting directly to the Compensation and People Development Committee to advise on compensation matters | | Encourage excessive or inappropriate risk-taking through our compensation program | | ||
| Review tally sheets on an annual basis | | | Provide excessive perquisites | |
| Consider shareholder feedback and the prior year’s “say-on-pay” vote | | | Provide dividend equivalents on unearned performance shares | |
| Require that equity awards must be subject to a one-year minimum vesting period, subject to limited exceptions | | | | |
| Disclose performance targets for | | | | |
| 8 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
| | | |||||||||||||||||||||||||||
| Name | ||||||||||||||||||||||||||||
| | Gender Diversity | | | Racial, or Ethnic Diversity | | | Other Public Boards | | | Audit | | | Compensation and People Development | | | Corporate Governance | | | Finance and Risk Management | | | Operations and Nuclear Oversight | | |||||
| | | Derrick Burks Independent, 65, 2022 Retired Managing Partner of Ernst & Young, LLP, Indianapolis office | | | | | | X | | | Equity LifeStyles Properties ELS and Kite Realty Group Trust KRG | | | ● | | | | | | | | | ● | | | | | |
| | | Annette K. Clayton Independent, 58, 2019 President and CEO, North America Operations, Schneider Electric SA | | | X | | | | | | NXP Semiconductors N.V. | | | ● | | | | | | | | | | | | ● | | |
| | | Theodore F. Craver, Jr. Independent, 70, 2017 Retired Chairman, President and CEO, Edison International | | | | | | | | | Wells Fargo & Company | | | C | | | | | | | | | ● | | | | | |
| | | Robert M. Davis Independent, 55, 2018 President and CEO, Merck | | | | | | | | | Merck | | | | | | | | | ● | | | C | | | | | |
| | | Caroline Dorsa Independent, 62, 2021 Retired Executive Vice President and CFO, Public Service Enterprise Group Incorporated | | | X | | | | | | Biogen Inc., Illumina, Inc., and Intellia Therapeutics, Inc. | | | ● | | | ● | | | | | | | | | | | |
| | | W. Roy Dunbar Independent, 60, 2021 Retired Chairman and CEO of Network Solutions, LLC | | | | | | X | | | Johnson Controls International, PLC and SiteOne Landscape Supply, Inc. | | | | | | ● | | | | | | | | | ● | | |
| | | Nicholas C. Fanandakis Independent, 65, 2019 Retired Executive Vice President, DuPont de Nemours, Inc. (fka DowDuPont, Inc.) | | | | | | | | | FTI Consulting, Inc. and ITT Inc. | | | ● | | | | | | | | | ● | | | | | |
| | | Lynn J. Good Executive Director, 62, 2013 Chair, President and CEO, Duke Energy Corporation | | | X | | | | | | The Boeing Company | | | | | | | | | | | | | | | | | |
| | | John T. Herron Independent, 68, 2013 Retired President, CEO and Chief Nuclear Officer, Entergy Nuclear | | | | | | | | | None | | | | | | | | | | | | ● | | | C | | |
| | | Idalene F. Kesner Independent, 64, 2021 Dean, Indiana University Kelley School of Business | | | X | | | | | | Berry Global Group, Inc. and Olympic Steel, Inc. | | | | | | | | | ● | | | | | | ● | | |
| | | E. Marie McKee Independent, 71, 2012 Retired Senior Vice President, Corning Incorporated | | | X | | | | | | None | | | | | | C | | | ● | | | | | | | | |
| | | Michael J. Pacilio Independent, 61, 2021 Retired Executive Vice President and COO, Exelon Generation, Exelon Corp. | | | | | | | | | None | | | | | | | | | | | | ● | | | ● | | |
| | | Thomas E. Skains Independent, 65, 2016 Retired Chairman, President and CEO, Piedmont Natural Gas Company, Inc. | | | | | | | | | National Fuel Gas Company and Truist Financial Corporation | | | | | | ● | | | ● | | | | | | | | |
| | | William E. Webster, Jr. Independent, 68, 2016 Retired Executive Vice President, Institute of Nuclear Power Operations | | | | | | | | | None | | | | | | | | | ● | | | | | | ● | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 9 | |
TableDiversity of ContentsSkills, Qualifications, and Experience*
| | | | | | | | | | |
| | | | Customer Service experience is important as Duke Energy focuses on meeting customer expectations and transforming the customer experience. | | | | 9 | | |
| | | | Cybersecurity/Technology experience is important in overseeing the security of Duke Energy’s business and operational technical systems, including customer experience, financial systems, and internal and grid operations. | | | | 9 | | |
| | | | ESG experience is important as incorporating sustainable business operations into our Duke Energy’s actions is vital to the success of our strategy. | | | | 11 | | |
| | | | Human Capital Management experience is important in overseeing the needs of our workforce – Duke Energy’s most critical resource. | | | | 6 | | |
| | | | Industry experience is important in understanding the unique technical, regulatory, and financial aspects of the utility industry. | | | | 9 | | |
| | | | Regulatory/Government experience is important in understanding the regulated nature of the utility industry, including environmental regulations. | | | | 12 | | |
| | | | Risk Management experience is important in overseeing a myriad of risks, including operational, financial, strategic, and reputational risks that affect our business. | | | | 13 | |
| 10 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A | |
If any director is unable to stand for election, the Board may reduce the number of directors or designate a substitute. In that case, shares represented by proxies may be voted for a substitute
The Corporation's
Duke Energy.
DUKE ENERGY – 2018 Proxy Statement 9
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 11 | |
Derrick Burks | | |||||||||
| ||||||||||
| | |||||||||
Age: Director of Duke Energy since | | | Committees: •
Audit Committee •
Finance and Risk Management Committee Other current public directorships: • Equity LifeStyles Properties ELS Kite Realty Group Trust KRG | |
| Skills and qualifications: | |||||
| | |||||
|
| |||||
Mr. | ||||||
| |
Annette K. Clayton | | ||||||
Independent Director Nominee | | ||||||
| | Age: 58 Director of Duke Energy since 2019 President and CEO, North America Operations, Schneider Electric SA | | | Committees: • Audit Committee • Operations and Nuclear Oversight Committee Other current public directorships: • NXP Semiconductors N.V. | |
| | Skills and qualifications: | | |
| | Ms. Clayton’s qualifications for election include her experience as senior management of Schneider Electric overseeing the strategic direction and financial accountability of the company’s North America operations. In her role as President and CEO of Schneider Electric’s North America Operations, she has gained experience in customer service through her direct responsibility for the customer call centers, in cybersecurity and technology through Schneider Electric’s work with the government on cybersecurity infrastructure, and the digital transformation of their supply chain, and in environmental regulations, clean energy and ESG issues through work with Schneider Electric’s sustainability division, through her oversight of Schneider Electric’s Safety and Environment function, and as a Thought Leader on sustainable procurement for manufacturing with the World Economic Forum in Davos, Switzerland. She also has human capital management experience through her work on talent management initiatives, succession planning, and supply chain workforce planning at Schneider Electric. These skills uniquely fit the skillsets that benefit Duke Energy in our corporate strategy. | | |
| 12 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
Theodore F. Craver, Jr. | | ||||||
Independent Director Nominee | | ||||||
| | Age: 70 Director of Duke Energy since 2017 Retired Chairman, President and CEO, Edison International | | | Committees: • Audit Committee (Chair) • Finance and Risk Management Committee Other current public directorships: • Wells Fargo & Company | |
| | Skills and qualifications: | | |
| | Mr. Craver’s qualifications for election include his experience as CEO of Edison International, which gives him in-depth knowledge of the utility industry and the regulatory arena, including environmental regulations, as well as his financial and risk management experience obtained as a |
10 DUKE ENERGY – 2018 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS
| |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 13 | |
Robert M. Davis | | ||||||
Independent Director Nominee | | ||||||
| | Age: Director of Duke Energy since 2018 | | | Committees: •
Corporate Governance Committee • Finance and Risk Management Committee (Chair) Other current public directorships: •
Merck | |
| Skills and qualifications: | | | |
| | Mr. | ||
| |
Caroline Dorsa | | ||||||
Independent Director Nominee | | ||||||
| | ||||||
Director of Duke Energy since | | | Committees: •
Audit Committee •
Compensation and People Development Committee Other current public directorships: • Biogen Inc. Illumina, Inc. • Intellia Therapeutics, Inc. | |
| Skills and qualifications: | | | |
| | Ms. Dorsa’s qualifications for election include her financial acumen, her cybersecurity and technology experience, and her understanding of the regulatory and human capital management risks in the energy industry, gained during her time at Public Service Enterprise Group, where she served as a member of the board of directors, Executive Vice President and CFO, head of the finance department, and was directly responsible for the information technology and business development groups. | | |
| 14 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
W. Roy Dunbar | | ||||||
Independent Director Nominee | | ||||||
| | Age: 60 Director of Duke Energy since 2021 Retired Chairman and CEO of Network Solutions, LLC | | | Committees: • Compensation and People Development Committee • Operations and Nuclear Oversight Committee Other current public directorships: • Johnson Controls International, PLC • SiteOne Landscape Supply, Inc. | |
| | Skills and qualifications: | | |
| | Mr. | | |
Nicholas C. Fanandakis | | ||||||
Independent Director Nominee | | ||||||
| | Age: 65 Director of Duke Energy since 2019 Retired Executive Vice President, DuPont de Nemours, Inc. | | | Committees: • Audit Committee • Finance and Risk Management Committee Other current public directorships: • FTI Consulting, Inc. • ITT Inc. | |
| | Skills and qualifications: | | |
| | Mr. Fanandakis’ qualifications for election include his management |
DUKE ENERGY – 2018 Proxy Statement 11
PROPOSAL 1: ELECTION OF DIRECTORS
| |
| ||||||
| | | DUKE ENERGY 2022 PROXY STATEMENT 15 | |
Lynn J. Good | | ||||||
Non-Independent Director Nominee | | ||||||
| | Age: Director of Duke Energy since 2013 Duke Energy Corporation | | | Committees: • None Other current public directorships: • The Boeing Company | |
| Skills and qualifications: | | | |
| | Ms. Good is our | | |
12 DUKE ENERGY – 2018 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS
John T. Herron | | |||||||||
| ||||||||||
| | |||||||||
Age: Director of Duke Energy since 2013 Retired President, | | | Committees: • Finance and Risk Management Committee • Operations and Nuclear Oversight Committee (Chair)
Other current public directorships: • None | |
| Skills and qualifications: | | |
| | Mr. | |
|
| 16 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
Idalene F. Kesner | | ||||||
Independent Director Nominee | | ||||||
| | Age: 64 Director of Duke Energy since 2021 Dean, Indiana University Kelley School of Business | | | Committees: • Corporate Governance Committee • Operations and Nuclear Oversight Committee Other current public directorships: • Berry Global Group, Inc. • Olympic Steel, Inc | |
| | Skills and qualifications: | | |
| | Dr. Kesner’s qualifications for election include her risk management, governance and strategy expertise obtained as part of her educational background, as well as her work on the boards of other highly regulated companies, and her customer service and regulatory knowledge obtained as a leader at Indiana University and a part of the Indiana state government. | | |
E. Marie McKee | | ||||||
Independent Director Nominee | | ||||||
| | Director of Duke Energy since 2012 Retired Senior Vice Corning Incorporated | | | Committees: •
Compensation and People Development Committee (Chair) •
Corporate Governance Committee Other current public directorships: • None | |
| Skills and qualifications: | |||
DUKE ENERGY – 2018 Proxy Statement 13
PROPOSAL 1: ELECTION OF DIRECTORS
| | |||||
| ||||||
| | |||||
| ||||||
Ms. | ||||||
| |
14 DUKE ENERGY – 2018 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS
| | | DUKE ENERGY 2022 PROXY STATEMENT 17 | |
Michael J. Pacilio | | ||||||
Independent Director Nominee | | ||||||
| | Age: Director of Duke Energy since Retired Executive Vice President and COO, Exelon Generation, Exelon Corp. | | | Committees: • Finance and Risk Management Committee • Operations and Nuclear Oversight Committee
Other current public directorships: •
None | |
| Skills and qualifications: | |||
| | |||
| ||||
Mr. | ||||
DUKE ENERGY – 2018 Proxy Statement 15
PROPOSAL 1: ELECTION OF DIRECTORS
| |
Thomas E. Skains | | ||||||
Independent Director Nominee | | ||||||
| | Age: Director of Duke Energy since 2016 Retired Chairman, President and Piedmont Natural Gas Company, Inc. | | | Committees: •
Compensation and People Development Committee •
Corporate Governance Committee Other current public directorships: •
National Fuel Gas Company • Truist Financial Corporation | |
| Skills and qualifications: | | | |
| | Mr. | | |
| 18 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
William E. Webster, Jr. | | ||||||
Independent Director Nominee | | ||||||
| | ||||||
Age: Director of Duke Energy since 2016 Retired Executive Vice President, Institute of Nuclear Power Operations | | | Committees: • Corporate Governance Committee • Operations and Nuclear Oversight Committee
Other current public directorships: • None | |
| Skills and qualifications: | | | |
| | Mr. | | |
"FOR"“FOR” Each Nominee.
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 19 | |
Michael G. Browning serves as the Corporation's
SEC.
| 20 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
For Mr. Webster, the Board considered a relationship between the Corporation and PriceWaterhouseCoopers ("PwC"), a firm that provides professional tax and other services from time to time to the Corporation and at which Mr. Webster's brother-in-law was a partner for the majority of 2017. In December 2017, Mr. Webster's brother-in-law left his partnership with PwC to join the board of directors of the Public Company Accounting Oversight Board. The Board determined
| The Board met 10 times during 2021 and has met once so far in 2022. During 2021 Board meetings, our Board held five executive sessions with independent directors only. Directors are expected to attend at least 75% of Board meetings and the meetings of the committees upon which he or she serves. The overall attendance percentage for our directors was approximately 99% in 2021, and all directors attended more than 75% of the Board meetings and the meetings of the committees upon which he or she served in 2021. Directors are also encouraged to attend the Annual Meeting. All directors who were directors at the time of last year’s Annual Meeting on May 6, 2021, attended the 2021 Annual Meeting. | | | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 21 | |
this prior relationship did not impair Mr. Webster's independence in 2017, and, because there is no longer any ongoing relationship, there is no related person transaction for Mr. Webster with PwC at this time.
See Related Person Transactions on page 75 for further information.
The Board of Duke Energy met five times during 2017 and has met once so far in 2018. The overall attendance percentage for our directors was approximately 96% in 2017, and all directors attended more than 75% of the Board meetings and the meetings of the committees upon which he or she served in 2017. Directors are encouraged to attend the Annual Meeting. All of our directors who were directors at the time of last year's Annual Meeting on May 4, 2017, attended the 2017 Annual Meeting except Ann Maynard Gray who retired from the Board at the 2017 Annual Meeting and Michael J. Angelakis who resigned from the Board in 2017.
discussed in executive session.
skills, as well as more information on topics for the Board to focus on in the following year.
18 DUKE ENERGY – 2018 Proxy Statement
| 22 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
Each
DUKE ENERGY – 2018 Proxy Statement 19
focus.
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 23 | |
| 24 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
meet, as well as every shareholder who requested to meet with us.
disclosures. During the Fall of 2017,2021, we focused our engagements with shareholders on explaining recent changesthe following topics:
DUKE ENERGY – 2018 Proxy Statement 21
this proxy statement; and the preparation of a Climate Report in 2022 to update shareholders on our progress toward our climate-related goals and to include additional net-zero analyses. Additional information on our discussions with shareholders regarding executive compensation matters is provided on page 42.
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 25 | |
| |||||||||||||||||
Name | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | Audit | | | Compensation and People Development | | | Corporate Governance | | | Finance and Risk Management | | | Operations and Nuclear Oversight | | ||
| Derrick Burks | | | ✓ | | | | | |||||||||
| |||||||||||||||||
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| |||||||||||||||||
| |||||||||||||||||
| |||||||||||||||||
| |||||||||||||||||
| | | | ✓ | | | | | |||||||||
| Michael G. Browning(2) | | | | | | ✓ | | | C | | | | | | | |
| Annette K. Clayton | | | ✓ | | | | | | | | | | | | ✓ | |
| Theodore F. Craver, Jr. | | | C | | | | | | | | | ✓ | | | | |
| Robert M. Davis | | | | | | | | | ✓ | | | C | | | | |
| Caroline Dorsa | | | ✓ | | | ✓ | | | | | | | | | | |
| W. Roy Dunbar | | | | | | ✓ | | | | | | | | | ✓ | |
| Nicholas C. Fanandakis | | | ✓ | | | | | | | | | ✓ | | | | |
| Lynn J. Good | | | | | | | | | | | | | | | | |
| John T. Herron | | | | | | | | | | | | ✓ | | | C | |
| Idalene F. Kesner | | | | | | | | | ✓ | | | | | | ✓ | |
| E. Marie McKee | | | | | | C | | | ✓ | | | | | | | |
| Michael J. Pacilio | | | | | | | | | | | | ✓ | | | ✓ | |
| Thomas E. Skains | | | | | | ✓ | | | ✓ | | | | | | | |
| William E. Webster, Jr. | | | | | | | | | ✓ | | | | | | ✓ | |
| 26 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
The Board has the six standing, permanent committees described below:
Eight meetings held in 2017
| | Meetings in 2021: 7 | | | | | | | | |
| | Theodore F. Craver, Jr. Chair | | | Committee Members | |||||
Theodore F. Craver, Jr., Chair* Caroline Dorsa* Nicholas C. Fanandakis* *
Designated as an Audit Committee Financial Expert by the Board | | | | |
Theodore F. Craver, Jr.
the Audit Committee in 2021.
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 27 | |
Six meetings held in 2017
| | Meetings in 2021: 5 | | | | | | | | |
| | E. Marie McKee Chair | | | Committee Members | |||||
E. Marie McKee, Chair Michael G. Browning Thomas E. Skains | | | | |
E. Marie McKee
DUKE ENERGY – 2018 Proxy Statement 23
| 28 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
Five meetings held in 2017
| | Meetings in 2021: 7 | | | | | | | | |
| | Michael G. Browning Chair | | | Committee Members | |||||
Michael G. Browning, Chair E. Marie McKee Thomas E. Skains William E. Webster, Jr. | | | | |
Michael G. Browning
Four meetings held in 2017
| | Meetings in 2021: 5 | | | | | | | | |
| | Robert M. Davis Chair | | | Committee Members | |||||
Theodore F. Craver, Jr. Michael J. Pacilio | | | | |
John H. Forsgren
24 DUKE ENERGY – 2018 Proxy Statement
Tablethe financial and risk implications of Contents
any significant transaction requiring Board approval.
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 29 | |
Four meetings held in 2017
| | Meetings in 2021: 5 | | | | | | | | |
| | John T. Herron Chair | | | Committee Members | |||||
John T. Herron, Chair Michael J. Pacilio William E. Webster, Jr. | | | | |
John T. Herron
Regulatory Policy and Operations Committee
Four meetings held in 2017
James B. Hyler, Jr.
Each committee operates under a written charter adopted by the Board. The charters are posted onperformance of our websitegeneration assets atduke-energy.com/our-company/investors/corporate-governance/board-committee-charters.
DUKE ENERGY – 2018 Proxy Statement 25
| 30 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
The Corporate Governance Committee’s charter is available on our website at duke-energy.com/our-company/investors/corporate-governance/board-committee-charters/corporate-governance and is summarized below. Additional information about the Corporate Governance Committee and its members is detailed on page 29 of this proxy statement.
Code of Business Ethics, either through our anonymous EthicsLine or otherwise, is provided on the Ethics section of our website at duke-energy.com/our-company/about-us/ethics.
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 31 | |
| 32 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
DUKE ENERGY – 2018 Proxy StatementDirector Onboarding. 27
REPORT OF THE CORPORATE GOVERNANCE COMMITTEE
New Directors Since the 2017 Annual Meeting
Following the 2017 Annual Meeting at which one of the Corporation's directors, Ann Maynard Gray, retired in accordance with our Principles for Corporate Governance, as well as following the departure of Michael J. Angelakis from our Board in August 2017, the Corporate Governance Committee sought to recruit an additional Board member whose qualifications align with the needs ofmembers have joined the Board in light of the major risks and issues facing the Corporation, as well as our long-term strategy. After working with an independent search firm, the committee recommended in December 2017 that Robert M. Davis be appointedlast five years. In order to help those new directors quickly transition into their roles on the Board, effective January 8, 2018. Mr. Davis brings extensive financial and cybersecurity knowledge, along with experience working in an industry under going rapid transformation gained during his tenure as Chief Financial Officer of Merck & Co. and during his career at Baxter International. For more information on Mr. Davis' skills and qualifications, see page 11.
Director Onboarding. With the addition of a number of new directors to our Board over the past several years,
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 33 | |
Corporate Governance Committee
28 DUKE ENERGY – 2018 Proxy Statement
| 34 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
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During its annual review of the non-employee director compensation program in 2017,2021, the Compensation and People Development Committee considered an analysis prepared by its independent consultant, FW Cook, which summarized non-employee director compensation trends for independent directors and pay levels at the same peer companies used to evaluate the compensation of our named executive officers.NEOs. Following this review, and after considering the advice of FW Cook about market practices and pay levels, the Compensation and People Development Committee recommended, and the Board approved, the followingdid not recommend any changes to our non-employee director compensation program:
following:
DUKE ENERGY – 2018 Proxy Statement 29
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 35 | |
| Name | | | Fees Earned or Paid in Cash ($)(2) | | | Stock Awards ($)(3) | | | All Other Compensation ($)(4) | | | Total ($) | | ||||||||||||
| Michael G. Browning | | | | | 205,000 | | | | | | 160,000 | | | | | | 4,681 | | | | | | 369,681 | | |
| Annette K. Clayton | | | | | 125,000 | | | | | | 160,000 | | | | | | 2,638 | | | | | | 287,638 | | |
| Theodore F. Craver, Jr. | | | | | 160,000 | | | | | | 160,000 | | | | | | 3,774 | | | | | | 323,774 | | |
| Robert M. Davis | | | | | 144,766 | | | | | | 160,000 | | | | | | 3,774 | | | | | | 308,540 | | |
| Daniel R. DiMicco (1) | | | | | 43,613 | | | | | | 0 | | | | | | 2,827 | | | | | | 46,440 | | |
| Caroline D. Dorsa (1) | | | | | 81,387 | | | | | | 160,000 | | | | | | 1,179 | | | | | | 242,566 | | |
| W. Roy Dunbar (1) | | | | | 81,387 | | | | | | 160,000 | | | | | | 3,679 | | | | | | 245,066 | | |
| Nicholas C. Fanandakis | | | | | 135,000 | | | | | | 160,000 | | | | | | 1,274 | | | | | | 296,274 | | |
| John T. Herron | | | | | 145,000 | | | | | | 160,000 | | | | | | 3,774 | | | | | | 308,774 | | |
| William E. Kennard (1) | | | | | 58,847 | | | | | | 0 | | | | | | 5,255 | | | | | | 64,102 | | |
| Idalene F. Kesner (1) | | | | | 15,965 | | | | | | 75,165 | | | | | | 3,535 | | | | | | 94,665 | | |
| E. Marie McKee | | | | | 145,000 | | | | | | 160,000 | | | | | | 3,774 | | | | | | 308,774 | | |
| Michael J. Pacilio (1) | | | | | 81,387 | | | | | | 160,000 | | | | | | 3,679 | | | | | | 245,066 | | |
| Marya M. Rose (1) | | | | | 43,613 | | | | | | 0 | | | | | | 2,755 | | | | | | 46,368 | | |
| Thomas E. Skains | | | | | 140,234 | | | | | | 160,000 | | | | | | 3,774 | | | | | | 304,008 | | |
| William E. Webster, Jr. | | | | | 125,000 | | | | | | 160,000 | | | | | | 3,774 | | | | | | 288,774 | | |
|
Name | | Fees Earned or Paid in Cash ($)(2) | | Stock Awards ($)(3) | | All Other Compensation ($)(4) | | Total ($) | | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | ||||||||
Michael J. Angelakis(1) | | | 99,903 | | | 160,000 | | | 2,674 | | | 262,577 | | ||||
Michael G. Browning | | | 190,077 | | | 160,000 | | | 6,269 | | | 356,346 | | ||||
Theodore F. Craver, Jr.(1) | | | 113,523 | | | 181,978 | | | 6,225 | | | 301,726 | | ||||
Daniel R. DiMicco | | | 129,077 | | | 160,000 | | | 6,269 | | | 295,346 | | ||||
John H. Forsgren | | | 147,577 | | | 160,000 | | | 6,269 | | | 313,846 | | ||||
Ann Maynard Gray(1) | | | 45,003 | | | 0 | | | 7,694 | | | 52,697 | | ||||
John T. Herron | | | 150,374 | | | 160,000 | | | 6,269 | | | 316,643 | | ||||
James B. Hyler, Jr. | | | 145,077 | | | 160,000 | | | 1,269 | | | 306,346 | | ||||
William E. Kennard | | | 134,077 | | | 160,000 | | | 6,269 | | | 300,346 | | ||||
E. Marie McKee | | | 149,374 | | | 160,000 | | | 6,269 | | | 315,643 | | ||||
Charles W. Moorman IV | | | 125,077 | | | 160,000 | | | 6,269 | | | 291,346 | | ||||
Carlos A. Saladrigas | | | 131,077 | | | 160,000 | | | 6,269 | | | 297,346 | | ||||
Thomas E. Skains | | | 130,077 | | | 160,000 | | | 6,269 | | | 296,346 | | ||||
William E. Webster, Jr. | | | 132,077 | | | 160,000 | | | 6,201 | | | 298,278 | | ||||
| | | | | | | | | |
| Name | | | Business Travel Accident Insurance ($) | | | Charitable Contributions ($) | | | Other* ($) | | | Total ($) | | ||||||||||||
| Michael G. Browning | | | | | 274 | | | | | | 3,500 | | | | | | 907 | | | | | | 4,681 | | |
| Annette K. Clayton | | | | | 274 | | | | | | 2,364 | | | | | | 0 | | | | | | 2,638 | | |
| Theodore F. Craver, Jr. | | | | | 274 | | | | | | 3,500 | | | | | | 0 | | | | | | 3,774 | | |
| Robert M. Davis | | | | | 274 | | | | | | 3,500 | | | | | | 0 | | | | | | 3,774 | | |
| Daniel R. DiMicco | | | | | 96 | | | | | | 2,500 | | | | | | 231 | | | | | | 2,827 | | |
| Caroline D. Dorsa | | | | | 179 | | | | | | 1,000 | | | | | | 0 | | | | | | 1,179 | | |
| W. Roy Dunbar | | | | | 179 | | | | | | 3,500 | | | | | | 0 | | | | | | 3,679 | | |
| Nicholas C. Fanandakis | | | | | 274 | | | | | | 1,000 | | | | | | 0 | | | | | | 1,274 | | |
| John T. Herron | | | | | 274 | | | | | | 3,500 | | | | | | 0 | | | | | | 3,774 | | |
| William E. Kennard | | | | | 96 | | | | | | 5,000 | | | | | | 159 | | | | | | 5,255 | | |
| Idalene F. Kesner | | | | | 35 | | | | | | 3,500 | | | | | | 0 | | | | | | 3,535 | | |
| E. Marie McKee | | | | | 274 | | | | | | 3,500 | | | | | | 0 | | | | | | 3,774 | | |
| Michael J. Pacilio | | | | | 179 | | | | | | 3,500 | | | | | | 0 | | | | | | 3,679 | | |
| Marya M. Rose | | | | | 96 | | | | | | 2,500 | | | | | | 159 | | | | | | 2,755 | | |
| Thomas E. Skains | | | | | 274 | | | | | | 3,500 | | | | | | 0 | | | | | | 3,774 | | |
| William E. Webster, Jr. | | | | | 274 | | | | | | 3,500 | | | | | | 0 | | | | | | 3,774 | | |
|
| 36 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
Name | | Personal Use of Airplane ($) | | Business Travel Accident Insurance ($) | | Charitable Contributions ($) | | Retirement Gift ($) | | Total ($) | | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | |||||||||||||
Michael J. Angelakis | | | 0 | | | | 174 | | | | 2,500 | | | | 0 | | | 2,674 | | |||||
Michael G. Browning | | | 0 | | | | 269 | | | | 6,000 | | | | 0 | | | 6,269 | | |||||
Theodore F. Craver, Jr. | | | 0 | | | | 225 | | | | 6,000 | | | | 0 | | | 6,225 | | |||||
Daniel R. DiMicco | | | 0 | | | | 269 | | | | 6,000 | | | | 0 | | | 6,269 | | |||||
John H. Forsgren | | | 0 | | | | 269 | | | | 6,000 | | | | 0 | | | 6,269 | | |||||
Ann Maynard Gray | | | 0 | | | | 91 | | | | 7,500 | | | | 103 | | | 7,694 | | |||||
John T. Herron | | | 0 | | | | 269 | | | | 6,000 | | | | 0 | | | 6,269 | | |||||
James B. Hyler, Jr. | | | 0 | | | | 269 | | | | 1,000 | | | | 0 | | | 1,269 | | |||||
William E. Kennard | | | 0 | | | | 269 | | | | 6,000 | | | | 0 | | | 6,269 | | |||||
E. Marie McKee | | | 0 | | | | 269 | | | | 6,000 | | | | 0 | | | 6,269 | | |||||
Charles W. Moorman IV | | | 0 | | | | 269 | | | | 6,000 | | | | 0 | | | 6,269 | | |||||
Carlos A. Saladrigas | | | 0 | | | | 269 | | | | 6,000 | | | | 0 | | | 6,269 | | |||||
Thomas E. Skains | | | 0 | | | | 269 | | | | 6,000 | | | | 0 | | | 6,269 | | |||||
William E. Webster, Jr. | | | 0 | | | | 269 | | | | 5,932 | | | | 0 | | | 6,201 | | |||||
| | | | | | | | | | | |
30 DUKE ENERGY – 2018 Proxy Statement
| ||||||||||||||
Name or Identity of Group | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Total Shares Beneficially Owned(1) | | | Percent of Class | | |||||||
| Michael G. Browning | | | | 102,837 | | | |||||||
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| | | | * | | | ||||||||
| Derrick Burks | | | | | 29 | | | | | | * | | |
| Annette K. Clayton | | | | | 10,691 | | | | | | * | | |
| Theodore F. Craver, Jr. | | | | | 9,943 | | | | | | * | | |
| Robert M. Davis | | | | | 8,331 | | | | | | * | | |
| Caroline Dorsa | | | | | 4,441 | | | | | | * | | |
| W. Roy Dunbar | | | | | 1,591 | | | | | | * | | |
| Nicholas C. Fanandakis | | | | | 5,280 | | | | | | * | | |
| Kodwo Ghartey-Tagoe | | | | | 12,053 | | | | | | | | |
| Lynn J. Good | | | | | 356,343 | | | | | | * | | |
| John T. Herron | | | | | 24,681 | | | | | | * | | |
| Dhiaa M. Jamil | | | | | 40,648 | | | | | | * | | |
| Julia S. Janson | | | | | 38,064 | | | | | | * | | |
| Idalene F. Kesner | | | | | 1,006 | | | | | | * | | |
| E. Marie McKee | | | | | 169 | | | | | | * | | |
| Michael J. Pacilio | | | | | 1,636 | | | | | | * | | |
| Thomas E. Skains | | | | | 25,833 | | | | | | * | | |
| William E. Webster, Jr. | | | | | 4,240 | | | | | | * | | |
| Steven K. Young | | | | | 107,273 | | | | | | * | | |
| Directors and executive officers as a group (26) | | | | | 798,615 | | | | | | * | | |
| ||||||||
| | | | |||||
| Michael G. Browning | | | |||||
| | | ||||||
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| | | ||||||
| Derrick Burks | | | | | 286 | | |
| Annette K. Clayton | | | | | 10,691 | | |
| Theodore F. Craver, Jr. | | | | | 13,670 | | |
| Robert M. Davis | | | | | 8,331 | | |
| Caroline Dorsa | | | | | 4,441 | | |
| W. Roy Dunbar | | | | | 1,591 | | |
| Nicholas C. Fanandakis | | | | | 5,280 | | |
| Kodwo Ghartey-Tagoe | | | | | 13,242 | | |
| Lynn J. Good | | | | | 356,430 | | |
| John T. Herron | | | | | 24,681 | | |
| Dhiaa M. Jamil | | | | | 42,862 | | |
| Julia S. Janson | | | | | 38,311 | | |
| Idalene F. Kesner | | | | | 1,006 | | |
| E. Marie McKee | | | | | 69,539 | | |
| Michael J. Pacilio | | | | | 1,636 | | |
| Thomas E. Skains | | | | | 25,833 | | |
| William E. Webster, Jr. | | | | | 11,554 | | |
| Steven K. Young | | | | | 107,859 | | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 37 | |
| Name or Identity of Beneficial Owner | | | Shares of Common Stock Beneficially Owned | ��� | | Percentage | | ||||||
| The Vanguard Group(1) 100 Vanguard Blvd. Malvern, PA 19355 | | | | | 66,738,560 | | | | | | 8.68% | | |
| BlackRock Inc.(2) 40 East 52nd Street New York, NY 10022 | | | | | 53,412,420 | | | | | | 6.90% | | |
| State Street Corporation(3) State Street Financial Center One Lincoln Street Boston, MA 02111 | | | | | 39,416,653 | | | | | | 5.13% | | |
Name or Identity of Beneficial Owner | | Shares of Common Stock Beneficially Owned | | Percentage | | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | ||||||
The Vanguard Group | | | 51,528,433 | | | | 7.36 | % | | ||
100 Vanguard Blvd. Malvern, PA 19355 | | | | | | | | ||||
BlackRock Inc. | | | 45,499,220 | | | | 6.5 | % | | ||
40 East 52nd Street New York, NY 10022 | | | | | | | | ||||
| | | | | |
| 38 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
The Audit Committee Deloitte’s level of service, industry experience, and the Board believe that the continued retention of Deloitte as Duke Energy's independent registered public accounting firm is in the best interests of the Corporation and our shareholders. Deloitte's years of experience with Duke Energy have allowed them to gain expertise regarding Duke Energy'sEnergy’s operations, accounting policies and practices, and internal controls over financial reporting. It also prevents the significant time commitment that educating a new auditor would entail, which could also result in a distraction in focus for Duke Energy management.
management and enables a more efficient fee structure.
Information on Deloitte’s fees for services rendered in 2021 and 2020 are listed below.
partner, including discussing candidate qualifications and interviewing potential candidates put forth by Deloitte. Deloitte’s lead engagement partner was last approved by the Audit Committee in 2018 to begin in the 2019 audit year.
advance of or at the Annual Meeting.
| Type of Fees | | | 2021 | | | 2020 | | ||||||
| Audit Fees(1) | | | | $ | 13,160,000 | | | | | $ | 12,949,000 | | |
| Audit-Related Fees(2) | | | | | 1,496,000 | | | | | | 1,681,000 | | |
| Tax Fees(3) | | | | | 20,000 | | | | | | 75,000 | | |
| All Other Fees(4) | | | | | 30,000 | | | | | | 10,000 | | |
| Total fees: | | | | $ | 14,706,000 | | | | | $ | 14,715,000 | | |
Type of Fees | | 2017 | | 2016 | | ||||
---|---|---|---|---|---|---|---|---|---|
| | | | | | ||||
Audit Fees(1)(5) | | $ | 13,535,000 | | | $ | 13,616,400 | | |
Audit-Related Fees(2)(5) | | 249,000 | | | 626,000 | | | ||
Tax Fees(3) | | 1,746,000 | | | 384,000 | | | ||
All Other Fees(4) | | 50,000 | | | 225,000 | | | ||
| | | | | | ||||
TOTAL FEES: | | $ | 15,580,000 | | | $ | 14,851,400 | | |
| | | | | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 39 | |
2021. The information contained in this report of the Audit Committee shall not be deemed to be "soliciting material"“soliciting material” or "filed"“filed” or "incorporated“incorporated by reference"reference” in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that Duke Energy specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act.
” issued by the Committee of Sponsoring Organizations of the Treadway Commission.
34 DUKE ENERGY – 2018 Proxy Statement
| 40 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
At the 2011 and 2017 Annual Meetings, our
NEOs.
"
”
NEOs.
DUKE ENERGY – 2018 Proxy Statement 35
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 41 | |
| |||||
Name | |||||
---|---|---|---|---|---|
| | Title | | ||
| Lynn J. Good | | Chair, President and | | |
| Steven K. Young | | | Executive Vice President and | |
| Dhiaa M. Jamil | | | Executive Vice President and | |
| Julia S. Janson | | | Executive Vice President | |
| Kodwo Ghartey-Tagoe | | | Executive Vice President, Chief Legal Officer and Corporate Secretary | |
| • Our compensation program is designed to link pay to performance, with the goal of attracting and | |||
aligning the interests of our management team with those of key stakeholders, including shareholders and customers. • Our compensation program provides significant upside and downside potential depending on actual results, as compared to predetermined goals for success. • When establishing our executive compensation program for 2021, we took into consideration the evolving nature of our business strategy along with a focus on maximizing long-term value and providing safe, reliable, and cost-effective service to our customers. | | | |
|
|
We have a longstandinglong-standing history of engaging with, and responding to the feedback provided by, our shareholders and value the deep relationships we have built. TheThat feedback our shareholders have provided over time has greatly informed our compensation and governance programs, as well as our environmental and social initiatives. We received 82.71% favorable support from our shareholders for our executive compensation program pursuant to the "say on pay" vote at our 2017 annual meeting. In response,Given its success, we continued our shareholder outreach program in 2017, reaching out to shareholders representing approximately 36%2021, meeting with the holders of outstanding shares and engaging with shareholders representing approximately 30%more than one-third of our outstanding shares. Our outreach team included independent members of our Board, as well as management who represented therepresenting, among others, Investor Relations, Government Affairs, Sustainability, Human Resources, and the Legal Departments, as well as E. Marie McKee, the Chair of the Compensation Committee, who participated in a number of the conversations with our largest shareholders.
Department.
36 DUKE ENERGY – 2018 Proxy Statement
| 42 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
Taking into account the feedback
executive compensation program. Shareholders also were pleased that environmental, customer satisfaction, and safety metrics continue to be incorporated into our incentive plans.
topics.
| BUILDING A | | | DUKE ENERGY 2022 PROXY STATEMENT 43 | |
We have successfully implemented our business transformation strategy to maximize the competitiveness
Our value proposition is to be the leading energy infrastructure company. Under the leadership of Ms. Good, who became Chief Executive Officer in July 2013, Duke Energy haswe have intensified our focus on serving our customers and communities while leading the way to a safe, secure, and responsible energy future. With our transition complete, ourOur strategy for the next decade is clear. We see greata long runway of opportunities ahead and remain focused on investing in infrastructure our customers value and delivering sustainable growth for our investors. We will do this while building on our foundation of customer satisfaction and stakeholder engagement, all while remaining focused on safety, operational excellence and the environment.
DUKE ENERGY – 2018 Proxy Statement 37
Tabledistribution by 2030. We have also set an ambitious goal to reach net-zero carbon emissions from electricity generation by 2050. In February 2022, we broadened those goals to reach net-zero carbon emissions by 2050 to incorporate Scope 2 emissions and certain Scope 3 emissions. See page 3 of Contentsthis proxy statement for more detail on our greenhouse gas emission reduction goals.
| 44 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
| BUILDING A | | | DUKE ENERGY 2022 PROXY STATEMENT 45 | |
During 2017 we made meaningful progress on our strategy. We developed a multi-year plan to modernize the energy grid across our jurisdictions, and in the Carolinas we branded our efforts as Power/Forward Carolinas. We placed the Sabal Trail natural gas pipeline into service and obtained several key permits necessary to advance the Atlantic Coast Pipeline. We achieved constructive regulatory outcomes, including the facilitation of renewables-related legislation in North Carolina and a comprehensive multi-year rate settlement in Florida. In addition, we announced a more stringent carbon dioxide emissions reduction target for our generation fleet – a 40% reduction from the 2005 level by 2030. We also maintained a sharp focus during the year on the performance measures that relate to our incentive plans, including the following.
|
$1,500,000, increased her target STI opportunity from 165% to 175% of her annual base salary, and increased her target LTI opportunity from 800% to 1,050% of her annual base salary. •ChangesCore CompensationGood'sGood’s leadership, which has been instrumental to the evolution of Duke Energy.Energy’s ability to respond to changing market conditions and opportunities. Since becoming Chief Executive Officerour CEO in July 2013, Ms. Good has led the development of our strategy (focused on modernizing theclean energy grid, generating cleaner energy and expanding our natural gas infrastructure),strategy, driven industry-leading operational performance, and guided us through several major transactions as we restructured our portfolio of businesses to reduce risk and improve returns. As we seek to advance and continue executing our strategic vision and execution in the coming years, Ms. Good'sGood’s leadership will continue to be critical to the organization.When Ms. Good became Chief Executive Officerour success.2013, her compensation was significantly below the market. To address this gap, the Compensation Committee conducted a detailed review of Ms. Good's compensation and analyzed her pay relative to the competitive market, within and outside the utility sector. The Compensation Committee took into account the size and complexity of Duke Energy and our ability to compete for talent against multiple industries, and relied heavily on data from its independent compensation consultant. To address the initial gap in 2013 between Ms. Good's pay and the competitive market, rather than provide a large compensation adjustment or bonus, the Compensation Committee adopted a step-like approach that allowed flexibility to make pay decisions based on Ms. Good's specific contributions and experience in her role. As illustrated below, the steps taken by the Compensation Committee resulted in closing the significant competitive pay gap relative to the market over time.*Target TDC (Total Direct Compensation) = the sum of base salary, target annual incentive opportunity and the grant date fair value of long-term incentive awards**Because peer group information was not yet available for 2017, it was assumed to be at the same level as in 2016.After conducting its analysis, the Compensation Committee determined it was appropriate to make the following adjustments to Ms. Good's compensation for 2017:
2021•Awarded a 3.8% merit adjustment to Ms. Good's salary, increased her target short-term incentive ("STI") opportunity from 150% to 155% and increased her LTI opportunity from 700% to 750% of her salary.DUKE ENERGY – 2018 Proxy Statement 39COMPENSATION DISCUSSION AND ANALYSISOne-Time, Performance-Based Retention GrantThe Compensation Committee believes alignment with shareholders is best achieved and retention risk mitigated when our senior executives hold unvested equity grants with a value of approximately 2x or more of their total direct compensation. Realizing that Ms. Good fell well below this standard despite her four-year tenure as Chief Executive Officer and her history of strong performance, the Compensation Committee developed a strategy to strengthen shareholder alignment and mitigate retention risk by providing Ms. Good a one-time, performance-based retention grant valued at $7,000,000. Three other NEOs also received performance-based retention grants in amounts ranging from $250,000 to $1,000,000, as well as increases to base salary described on page 42 of this Compensation Discussion and Analysis.Details of the performance-based retention grants are as follows:•Performance Requirement. The grants are subject to a return on equity ("ROE") goal, which, if not achieved, results in zero payout. Duke Energy's average ROE (excluding goodwill) over the 2017-2019 period must equal or exceed 10%. In light of Duke Energy's large capital deployment program, the Compensation Committee believed that it was important to make the vesting of the retention grants subject to a return on equity goal.•Stringent Vesting Conditions. The awards are subject to a three-year cliff vesting requirement, and no pro-rata vesting upon retirement.•Strengthens Retention. Ms. Good's grant increases the ratio of her outstanding equity awards (that would be forfeited if she voluntarily terminated employment) to her total direct compensation from 1.33x to 1.85x.The Compensation Committee designed the supplemental retention grant for Ms. Good to address unique retention concerns, and it is not part of our regular compensation program.We discussed Ms. Good's compensation and the supplemental retention grant during the shareholder engagement process to ensure that our shareholders were aware of the circumstances that drove the need for additional retention.During these conversations, shareholders provided the following feedback:•Understood the historically conservative approach to compensating Ms. Good and the need to make adjustments commensurate with market levels•Acknowledged that the Compensation Committee followed a thoughtful approach to addressing retention risk by providing Ms. Good with the performance-based retention grant, which contains a stringent three-year cliff vesting requirementCore Compensation Structure and Incentive Metrics in 2017•restricted stock units ("RSUs"))RSUs), as outlined in the table below. Element Performance Metrics Aligned to Strategy Base Salary Element•Performance Metrics Aligned to Strategy Base SalaryShort-Term
Incentive Incentive AnnualLong-TermIncentiveEquity•Short-Term Cash Incentive•Adjusted EPS•Operational Excellence•Customer Satisfaction•Individual Objectives•Safety Long Term •Cumulative Adjusted EPS•Relative TSR•Safety Equity Incentive RSUs (30%)•Service-based with three-year pro-rata vesting 46 DUKE ENERGY 2022 PROXY STATEMENT
NEOs:
|
Following are key features of our executive compensation program:
| |||||||
| | | | | |||
| AT DUKE ENERGY WE… | | | AT DUKE ENERGY WE DO NOT… | | ||
Integrate key performance metrics in our incentive plans relating to environmental, climate, safety, and customer initiatives | | | Provide tax gross-ups to NEOs | | |||
| Require significant stock ownership, including 6x base salary for our | | |||||
Permit hedging or pledging of Duke Energy securities | | ||||||
Maintain a stock retention policy | | | Provide “single trigger” vesting of stock awards upon a change in control | | |||
| Tie equity and cash-based incentive compensation to a clawback policy | | |||||
Provide employment agreements to a broad group | | ||||||
Use an independent compensation consultant retained by and reporting directly to the Compensation and People Development Committee to advise on compensation matters | | Encourage excessive or inappropriate risk-taking through our compensation program | |||||
Review tally sheets on an annual basis | | Provide excessive perquisites | | ||||
| Consider shareholder feedback and the prior year’s “say-on-pay” vote | | | Provide dividend equivalents on unearned performance shares | |||
| | ||||||
| Require that equity awards must be subject to a one-year minimum vesting period, subject to limited exceptions | | | ||||
| Disclose performance targets for the performance share cycle granted in the most recent year | | | | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 47 | |
|
We design our compensation program so that it motivates our executives to focus on our core business priorities and aligns the interests of executives and shareholders.
|
As discussed in more detail below, during 2017,2021, the components of total directTDC for our NEOs were base salary, STI compensation, for the NEOs were: base salary; STI compensation; and LTI compensation.
our other NEOs.
| Name | | | |||||||||||
(as a % of base | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ||||||||||||||
| Lynn J. Good | | | | 165% | | | |||||||
| Steven K. Young | | | | | 90% | | | ||||||
| Dhiaa M. Jamil | | | | | 90% | | | ||||||
| Julia S. Janson | | | | | 90% | | | ||||||
| Kodwo Ghartey-Tagoe | | | | | 80 | % | | ||||||
| ||||||||||||||
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| | |||||||||||||
|
| 48 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
target levels.
| | Goal Setting Process Financial Performance Measures. The Compensation and People Development Committee believes that tying a portion of the STI payments to adjusted basic EPS aligns pay outcomes of our NEOs with the interests of shareholders and other stakeholders. • When setting financial goals, the Compensation and People Development Committee reviews our long-term financial plan, as well as the current economic and regulatory environment and expectations for investment opportunities. • The Compensation and People Development Committee calibrates the adjusted basic EPS goal with our publicly announced guidance range and considers industry comparisons and growth expectations to establish the threshold, target, and maximum performance levels. • For 2021, our adjusted EPS guidance range was $5.00 to $5.30, and the adjusted basic EPS target under the 2021 STI plan was set in the middle of this guidance range at $5.15. This target exceeded adjusted basic EPS of $5.12 in 2020 and was established after considering significant developments that did not exist when our adjusted basic EPS target of $5.30 was set under the 2020 STI plan, including the cancellation of our ACP project in July 2020, and the announced sale of 19.9% of Duke Energy Indiana. The EPS target of $5.15 will serve as the baseline for earnings guidance and growth expectations in subsequent years as well, given the above changes to our portfolio of businesses. Operational Performance Measures. The Compensation and People Development Committee sets operational performance measure targets at challenging levels to drive long-term growth and success. Stretch performance levels are set to motivate employees to strive for continuous improvement. As part of its goal-setting process, the Compensation and People Development Committee reviews previous targets and performance to appropriately align the threshold, target, and maximum goals with expected performance. | | |
| Objective(1) | | | Weight | | | Threshold (25%) | | | Target (100%) | | | Maximum(2) | | | Result | | | Sub-Total | | | Payout | | |||||||||||||||||||||
| Adjusted Basic EPS | | | | | 50% | | | | | $ | 5.00 | | | | | $ | 5.15 | | | | | $ | 5.35 | | | | | $ | 5.24 | | | | | | | | | | | | 145.00%(3) | | |
| O&M Expense | | | | | 10% | | | | | $ | 5,400M | | | | | $ | 5,250M | | | | | $ | 5,050M | | | | | $ | 5,166M | | | | | | | | | | | | 131.37% | | |
| Operational Excellence | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 122.63% | | |
| (a) Reliability Index(4) | | | | | 5% | | | | | | 25 | | | | | | 100 | | | | | | 175 | | | | | | 107.75 | | | | | | 107.75% | | | | | | | | |
| (b) Safety/Environmental | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| TICR Employees | | | | | 2.5% | | | | | | 0.48 | | | | | | 0.36 | | | | | | 0.30 | | | | | | 0.36 | | | | | | 100% | | | | | | | | |
| Reportable Environmental Events | | | | | 2.5% | | | | | | 18 | | | | | | 12 | | | | | | 8 | | | | | | 2 | | | | | | 175% | | | | | | | | |
| Customer Satisfaction | | | | | 10% | | | | | | 44 | | | | | | 48 | | | | | | 53 | | | | | | 48.3 | | | | | | | | | | | | 104.5% | | |
Objective(1) | Weight | Threshold (50%) | Target (100%) | Maximum(2) | Result | Sub-Total | Payout | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | | | | | | | |
Adjusted Diluted EPS(3) | | 50 | % | $ | 4.35 | $ | 4.60 | $ | 4.85 | $ | 4.57 | | | | 94 | % | ||||||
Operational Excellence(4) | 20 | % | 127.2 | % | ||||||||||||||||||
(a) Operations and Maintenance Expense | | | $ | 5.040B | $ | 4.890B | $ | 4.740B | $ | 4.785B | | 135.10 | % | | | |||||||
(b) Reliability(5) | ||||||||||||||||||||||
Regulated Generation (Fossil/Hydro) Commercial Availability | | | | 85 | % | | 87 | % | | 88 | % | | 88.01 | % | | 150 | % | | | |||
Nuclear Generation Capacity Factor | 92 | % | 94 | % | 95 | % | 95.64 | % | 150 | % | ||||||||||||
System Average Interruption Duration Index | | | | 146 | | 135 | | 124 | | 151 | | 0 | % | | | |||||||
Renewables Availability | 93.5 | % | 94.5 | % | 96.0 | % | 94.6 | % | 103.33 | % | ||||||||||||
Natural Gas Business Outage Factor | | | | 4 | | 2 | | 1 | | 2 | | 100 | % | | | |||||||
(c) Safety/Environmental(6) | ||||||||||||||||||||||
Total Incident Case Rate: | | | | | | | | |||||||||||||||
Employees | | | | 0.50 | | 0.38 | | 0.35 | | 0.36 | | 133.33 | % | | | |||||||
Contractors | | | | 1.00 | | 0.90 | | 0.85 | | 0.80 | | 150 | % | | | |||||||
Reportable Environmental Events | 48 | 39 | 35 | 24 | 150 | % | ||||||||||||||||
Customer Satisfaction | | 10 | % | | 789 | | 799 | | 809 | | 793 | | | | 70 | % | ||||||
| | | | | | | | | | | | | | | | | | | | | | |
In order to reflect our focus on expense reduction, the Compensation Committee established the targetlevel for the operationsEPS performance objective.
DUKE ENERGY – 2018 Proxy Statement 43
Tableeach have a relative weight of Contents
10%.
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 49 | |
Establishment of EPS Target for 2017
The EPS target for purposes of the STI Plan has been relatively flat from 2015 to 2017, primarily due to Duke Energy's multi-year portfolio transition, which lowered our business risk to provide shareholders with more consistent earnings and cash flow growth. As a result, Duke Energy now operates almost exclusively in stable, predictable regulated businesses. Due to the impact of the portfolio transition and the other items described below, the Compensation Committee determined it was appropriate to establish the EPS targets as follows:
STI 2015 Target to 2016 Target
STI 2016 Target to 2017 Target
STI 2016 Actual to 2017 Target
44 DUKE ENERGY – 2018 Proxy Statement
COMPENSATION DISCUSSION AND ANALYSIS
| | |||||
| | Description/Rationale | | |
| Financial Metrics | | | |||
| | |||||
|
| | ||||
A widely accepted, easily understood, and important metric used to evaluate the success of our | |||||
| O&M Expense | | | A measure that includes those costs necessary to support daily operations, as well as operate and maintain the operating efficiency and productive life of assets. Carefully managing expenses enables us to make investments while mitigating customer costs. | |
| |||||
Reliability | |||||
---|---|---|---|---|---|
| | | | ||
Nuclear Annual Unit Capability Factor | | The percentage of | | ||
Regulated and Renewable Energy Coal/CC Tiers 1-2 Equivalent Forced Outage Factor | | | A measure of the | | |
Commercial Renewables Availability | | | A measure | ||
| |||||
| Electric Grid – T&CD System Average Interruption Duration Index | | | A measure of the sum of all customer interruption durations, divided by the total number of customers served. The metric is measured in units of time, often minutes. | |
| Transmission Outages per 100 Miles per Year – Sustained | | | A measure of the number of sustained (greater than 1 minute) transmission line events that are incurred per one hundred circuit miles per year, applicable to 100kV lines and greater. | |
| Natural Gas | | | A measure of the number of outages in the natural gas local distribution business. For this purpose, an | |
| Safety/Environmental Metrics | | |
| | ||||
TICR | | A measure of the number of occupational injuries and illnesses per 100 | | ||
| Reportable Environmental Events | | A measure of environmental events resulting from operations that have an impact on the environment, require the notification | ||
|
| |||||
Customer Satisfaction Metric | |||||
---|---|---|---|---|---|
| | | | ||
| CSAT | | | A composite of customer satisfaction results for each regulated utility. | |
| 50 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
Safety Component
In order to emphasize a continued focus on safety,advance the Compensation Committee included the following safety measures in the 2017 STI Plan:
There were three LAIs during 2017, and two work-related fatalities, and, therefore, the safety adder did not apply and the safety penalty applied such that total payments under the 2017 STI Plan for NEOs were decreased by 5%.
Payouts
Based on the aggregate corporate operational and individual performance results, including the safety penalty, each NEO'sNEO’s aggregate payout under the 20172021 STI Planplan was equal to:
| Name | | | Target STI Opportunity ($) | | | Achievement of Corporate Objectives (80% Weighting) | | | Achievement of Individual Objectives (20% Weighting) | | | Final Payout as a % of Target STI Opportunity | | | Payout ($) | | |||||||||||||||
| Lynn J. Good | | | | $ | 2,294,325 | | | | | | 135.48% | | | | | | 175% | | | | | | 143.4% | | | | | $ | 3,288,915 | | |
| Steven K. Young | | | | $ | 698,107 | | | | | | 135.48% | | | | | | 175% | | | | | | 143.4% | | | | | $ | 1,000,737 | | |
| Dhiaa M. Jamil | | | | $ | 785,749 | | | | | | 135.48% | | | | | | 140% | | | | | | 136.4% | | | | | $ | 1,071,369 | | |
| Julia S. Janson | | | | $ | 675,675 | | | | | | 135.48% | | | | | | 175% | | | | | | 143.4% | | | | | $ | 968,580 | | |
| Kodwo Ghartey-Tagoe | | | | $ | 476,667 | | | | | | 135.48% | | | | | | 150% | | | | | | 138.4% | | | | | $ | 659,468 | | |
Name | | Payout | | | |
---|---|---|---|---|---|
| | | | | |
Lynn J. Good | | $ | 2,110,736 | | |
Steven K. Young | | $ | 557,291 | | |
Dhiaa M. Jamil | | $ | 643,863 | | |
Julia S. Janson | | $ | 496,731 | | |
Lloyd M. Yates | | $ | 532,072 | | |
| | | | |
Long-Term Incentive Compensation
This action was taken to strengthen the competitiveness of Ms. Good's total annual compensation opportunity. The Compensation Committee believes it in the best interests of our shareholders to ensure that our Chief Executive Officer is compensated in a way that fosters alignment with their long-term interests. Given the importance of the performance measures used in our LTI program (cumulative adjusted EPS, relative TSR and safety), and the focus on the ROE goal for Ms. Good's supplemental performance-based retention grant, the Compensation Committee determined it appropriate to provide Ms. Good with an increased LTI award opportunity in 2017. The increased annual LTI award opportunity completed the Compensation Committee's 2017 strategy of addressing both: (1) retention concerns (resolved with the granting of the one-time, performance-based retention grant) and (2) alignment with the 50th percentile of the market (resolved with the continuation of the Compensation Committee's step-like approach to elevate Ms. Good's total annual target pay opportunity to be consistent with the market).
| Name | | | ||||||
Target LTI Opportunity (as a % of base | |||||||||
---|---|---|---|---|---|---|---|---|---|
| |||||||||
| |||||||||
| |||||||||
| |||||||||
| | ||||||||
| Lynn J. Good | | | | | 800% | | | |
| Steven K. Young | | | | | 300% | | | |
| Dhiaa M. Jamil | | | | | 325% | | | |
| Julia S. Janson | | | | | 300% | | | |
| Kodwo Ghartey-Tagoe | | | | | 275% | | |
comparisons.
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 51 | |
shareholders and other stakeholders.
| Cumulative Adjusted EPS | | | Percent Payout of Target 2021 – 2023 Performance Shares | | |||
| $17.25 or Higher | | | | | 200% | | |
| $16.25 (Target) | | | | | 100% | | |
| $14.60 | | | | | 50% | | |
| Lower than $14.60 | | | | | 0% | | |
| ||||||||
Relative TSR Performance Percentile | ||||||||
---|---|---|---|---|---|---|---|---|
| | | ||||||
| ||||||||
| | |||||||
| 90th or Higher | | | | | 200% | | |
| 55th (Target) | | | | | 100% | | |
| 25th | | | | | 50% | | |
| Below 25th | | | | | 0% | | |
| Relative TICR Performance Percentile | | | Percent Payout of Target 2021 – 2023 Performance Shares | | |||
| Top Company | | | | | 200% | | |
| 90th (Target) | | | | | 100% | | |
| 75th | | | | | 50% | | |
| Below 75th | | | | | 0% | | |
Cumulative Adjusted EPS | | Percent Payout of Target 2017-2019 Performance Shares | | |||
---|---|---|---|---|---|---|
| | | | |||
$15.00 or Higher | | | 200 | % | | |
$14.40 (Target) | | | 100 | % | | |
$13.80 | | | 50 | % | | |
Lower than $13.80 | | | 0 | % | | |
| | | |
If Duke Energy's cumulative adjusted EPSEnergy’s safety performance during the performance2021 – 2023 period is between the minimum and target level, or between the target and maximum level, the payout for the portion of the performance shares related to this performance measure is interpolated on a straight-line basis.
The third performance measure is based on Duke Energy's safety as determined based on our TICR for employees, as compared to pre-established target levels. The Compensation Committee established the target levels in February 2017, based on the relative historical performance of the companies in the EEI Group 1 large company index from 2013 to 2015, with minimum performance based on the 75th percentile, target performance based on the 90th percentile, and maximum
DUKE ENERGY – 2018 Proxy Statement 47
| 52 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
performance based on the results of the top company during the historical period. The following table provides the TICR target levels and corresponding payout levels:
Total Incident Case Rate for Employees | | Percent Payout of Target 2017-2019 Performance Shares | | |||
---|---|---|---|---|---|---|
| | | | |||
0.45 or Better | | | 200 | % | | |
0.59 (Target) | | | 100 | % | | |
0.77 | | | 50 | % | | |
Worse than 0.77 | | | 0 | % | | |
| | | |
If Duke Energy's safetyThe performance duringshares provide for continued vesting upon retirement of a NEO after having attained at least age 60 and completing at least five years of service. This enhanced vesting provision applies only if the 2017-2019 period is betweenretiring executive remains employed, at a minimum, for at least the minimum and target level, or between the target and maximum level, the payout for the portionfirst year of the performance period and remains in compliance with restrictive covenants, such as non-competition and non-solicitation provisions. The performance shares relatedremain subject to thisthe achievement of actual performance measure is interpolated on a straight-line basis.
results.
Performance-Based Retention Awards
As described on page 40, the Compensation Committee provided performance-based retention grants to Ms. Good ($7,000,000), Mr. Young ($250,000), Mr. Jamil ($1,000,000) and Ms. Janson ($750,000) to mitigate retention risk.
| Cumulative Adjusted EPS | | | Percent Payout of Target 2019 – 2021 Performance Shares | | | Result | | | Payout of Target | | |||||||||
| $16.25 or Higher | | | | | 200% | | | | | | | | | | | | | | |
| $15.65 (Target) | | | | | 100% | | | | | $ | 15.67 | | | | | | 103.33% | | |
| $15.05 | | | | | 50% | | | | | | | | | | | | | | |
| Lower than $15.05 | | | | | 0% | | | | | | | | | | | | | | |
| Relative TSR Performance Percentile | | | Percent Payout of Target 2019 – 2021 Performance Shares | | | Result | | | Payout of Target* | | ||||||
| 90th or Higher | | | | | 200% | | | | | | | | | | | |
| 55th (Target) | | | | | 100% | | | | | | | | | | | |
| 25th | | | | | 50% | | | | 41.2nd Percentile | | | | | 76.96% | | |
| Below 25th | | | | | 0% | | | | | | | | | | | |
Relative TSR Performance Percentile | | Percent Payout of Target 2015-2017 Performance Shares | | Result | | Payout of Target | | | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | ||||||
90th or Higher | | | 200 | % | | | | | | | | |||
50th (Target) | | | 100 | % | | | | | | |||||
25th | | | 30 | % | | 33.3rd Percentile | | | 53.2 | % | | |||
Below 25th | | | 0 | % | | | | | | |||||
| | | | | | | | |
| BUILDING A | | | DUKE ENERGY 2022 PROXY STATEMENT 53 | |
| TICR for Employees | | | Percent Payout of Target 2019 – 2021 Performance Shares | | | Result | | | Payout of Target | | ||||||
| Top Company | | | | | 200% | | | | 0.36 | | | | | 200% | | |
| 90th (Target) | | | | | 100% | | | | | | | | | | | |
| 75th | | | | | 50% | | | | | | | | | | | |
| Below 75th | | | | | 0% | | | | | | | | | | | |
| Name | | | 2019 – 2021 Target Shares | | | Overall Achievement as a % of Target | | | 2019 – 2021 Performance Shares Earned | | |||||||||
| Lynn J. Good | | | | | 81,767 | | | | | | 120.91% | | | | | | 98,864 | | |
| Steven K. Young | | | | | 14,480 | | | | | | 120.91% | | | | | | 17,508 | | |
| Dhiaa M. Jamil | | | | | 19,746 | | | | | | 120.91% | | | | | | 23,875 | | |
| Julia S. Janson | | | | | 13,059 | | | | | | 120.91% | | | | | | 15,790 | | |
| Kodwo Ghartey-Tagoe | | | | | 2,089 | | | | | | 120.91% | | | | | | 2,526 | | |
In addition, we occasionally provide our NEOs with tickets to athletic and cultural events for personal use.
48 DUKE ENERGY – 2018 Proxy Statement
| 54 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 55 | |
The Compensation and People Development Committee has engaged FW Cook to report directly to the Compensation and People Development Committee as its independent compensation consultant.
DUKE ENERGY – 2018 Proxy Statement 49
COMPENSATION DISCUSSION AND ANALYSIS
Energy other than at the direction of the Compensation and People Development Committee. With the consent of the Chair of the Compensation and People Development Committee, the consultant may meet with management to discuss strategic issues with respect to executive compensation andthat will assist the consultant in its engagement with the Compensation and People Development Committee.
Compensation Peer Group |
One of our core compensation objectives is to attract and retain talented executive officers throughby providing a total compensation package that generally is competitive with that of other executives and key employees of similarly-sizedsimilarly sized companies with similar complexity, whether within or outside of the utility sector.
| |||||||||||||||
Compensation Peer Group | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |||||||||||||||
| 3M | | | Dominion Resources* | | FirstEnergy* | | Medtronic | | ||||||
| American Electric Power* | | Eaton Corporation | | |||||||||||
| General Dynamics | | NextEra Energy* | | |||||||||||
| Colgate-Palmolive | | Edison International* | | | International Paper | | PG&E Corp.* | | ||||||
| Consolidated Edison* | | Exelon* | | | Lockheed Martin | | The Southern Co.* | | ||||||
| Deere & Co. | | | ||||||||||||
| | Lumen Technologies | | | UPS | |
The CompensationPeople Development Committee also reviews executive compensation levels against a subset of the customized peer group consisting of nine companies in
50 DUKE ENERGY – 2018 Proxy Statement
| 56 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
Following
| | | Description | | ||||||||||||||||
| | | ||||||||||||||||||
| ||||||||||||||||||||
| | | | | | | Leadership Position | | | Value of Shares | | | | | ||||||
|
|
|
| |||||||||||||||||
| |
| | | | CEO | | | 6x Base Salary | | | | | |||||||
| | | | | | | Other NEOs | | | 3x Base Salary | | | | | ||||||
| | | | |||||||||||||||||
| ||||||||||||||||||||
| Clawback policy | | | We maintain a | | |||||||||||||||
| Hedging or pledging policy | | | We have a policy that prohibits employees (including | ||||||||||||||||
| ||||||||||||||||||||
| ||||||||||||||||||||
| Equity award grant policy | | | |||||||||||||||||
In recognition of the importance of adhering to specific practices and procedures in the granting of equity awards, the Compensation and People Development Committee has adopted a policy that applies to the granting of equity awards. Under this policy, annual grants to | |
DUKE ENERGY – 2018 Proxy Statement 51
COMPENSATION DISCUSSION AND ANALYSIS
| | | ||||||||||||||||||
In consultation with the Compensation and People Development Committee, members of management from Duke | | |||||||||||||||||||
| Shareholder approval policy for severance | | | We have a policy, generally, to seek shareholder approval for any | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 57 | |
The Compensation and People Development Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code, which provides that Duke Energy generally may not deduct, for federal income tax purposes, annual compensation in excess of $1 million paid to certain employees. Performance-basedPrior to 2018, performance-based compensation paid pursuant to shareholder approved plans iswas not subject to the deduction limit as long as such compensation iswas approved by "outside directors"“outside directors” within the meaning of Section 162(m) of the Internal Revenue Code and certain other requirements arewere satisfied.
For example, in order
that it exceeds $1 million.
The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, includes a number of significant changes to Section 162(m), such as the repeal of the performance-based compensation exemption and the expansion of the definition of "covered employees" (for example, by including the Chief Financial Officer and certain former NEOs as covered employees). As a result of these changes, except as otherwise provided in the transition relief provisions of the Tax Cuts and Jobs Act, compensation paid to any of our covered employees generally will not be deductible in 2018 or future years, to the extent that it exceeds $1 million.
In response, the Compensation Committee has taken steps that it deemed appropriate with the intention of preserving the deductibility of certain of our compensation arrangements that were in effect on the date of enactment of the Tax Cuts and Jobs Act. Due to uncertainties regarding the scope of transition relief under the Tax Cuts and Jobs Act, however, there can be no guarantee that any compensation paid to our covered employees will be or remain exempt from Section 162(m). The CompensationPeople Development Committee will continue to consider thesetax implications (including the potential lack of deductibility under Section 162(m)) when making compensation decisions, but reserves the right to make compensation decisions based on other factors believed to be in the best interests of Duke Energy and our shareholders.
52 DUKE ENERGY – 2018 Proxy Statement
COMPENSATION DISCUSSION AND ANALYSIS
|
|
| 58 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
Duke Energy's adjusted earningsEnergy Progress coal ash settlement, and the partial settlements in the 2019 North Carolina rate cases.
DUKE ENERGY – 2018 Proxy Statement 53
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 59 | |
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($)(1) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compensation ($)(2) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) | | | All Other Compensation ($)(4) | | | Total ($) | | ||||||||||||||||||||||||
Lynn J. Good Chair, President and CEO | | | | | 2021 | | | | | | 1,390,500 | | | | 0 | | | | | 11,196,187 | | | | | | 0 | | | | | | 3,288,915 | | | | | | 277,111 | | | | | | 298,523 | | | | | | 16,451,236 | | |
| | | 2020 | | | | | | 1,390,500 | | | | 0 | | | | | 11,431,738 | | | | | | 0 | | | | | | 1,169,578 | | | | | | 246,046 | | | | | | 306,536 | | | | | | 14,544,398 | | | ||
| | | 2019 | | | | | | 1,383,750 | | | | 0 | | | | | 10,122,579 | | | | | | 0 | | | | | | 2,793,389 | | | | | | 355,908 | | | | | | 373,810 | | | | | | 15,029,436 | | | ||
Steven K. Young Executive Vice President and CFO | | | | | 2021 | | | | | | 775,675 | | | | 0 | | | | | 2,342,106 | | | | | | 0 | | | | | | 1,000,737 | | | | | | 77,252 | | | | | | 169,118 | | | | | | 4,364,888 | | |
| | | 2020 | | | | | | 769,519 | | | | 0 | | | | | 2,391,345 | | | | | | 0 | | | | | | 353,050 | | | | | | 261,816 | | | | | | 125,879 | | | | | | 3,901,609 | | | ||
| | | 2019 | | | | | | 734,003 | | | | 0 | | | | | 1,792,619 | | | | | | 0 | | | | | | 868,773 | | | | | | 280,504 | | | | | | 104,100 | | | | | | 3,779,999 | | | ||
Dhiaa M. Jamil Executive Vice President and COO | | | | | 2021 | | | | | | 873,055 | | | | 0 | | | | | 2,855,835 | | | | | | 0 | | | | | | 1,071,369 | | | | | | 111,034 | | | | | | 187,276 | | | | | | 5,098,569 | | |
| | | 2020 | | | | | | 867,458 | | | | 0 | | | | | 2,915,910 | | | | | | 0 | | | | | | 397,984 | | | | | | 267,957 | | | | | | 138,391 | | | | | | 4,587,700 | | | ||
| | | 2019 | | | | | | 834,094 | | | | 0 | | | | | 2,444,461 | | | | | | 0 | | | | | | 987,243 | | | | | | 294,809 | | | | | | 97,707 | | | | | | 4,658,314 | | | ||
Julia S. Janson Executive Vice President and CEO, Duke Energy Carolinas | | | | | 2021 | | | | | | 750,750 | | | | 0 | | | | | 2,766,855 | | | | | | 0 | | | | | | 968,580 | | | | | | 0 | | | | | | 162,015 | | | | | | 4,648,200 | | |
| | | 2020 | | | | | | 744,792 | | | | 0 | | | | | 2,314,530 | | | | | | 0 | | | | | | 341,705 | | | | | | 522,811 | | | | | | 125,010 | | | | | | 4,048,848 | | | ||
| | | 2019 | | | | | | 674,167 | | | | 0 | | | | | 1,616,702 | | | | | | 0 | | | | | | 797,951 | | | | | | 772,885 | | | | | | 93,652 | | | | | | 3,955,357 | | | ||
Kodwo Ghartey-Tagoe Executive Vice President, Chief Legal Officer and Corporate Secretary | | | | | 2021 | | | | | | 595,833 | | | | 200,000(5) | | | | | 1,674,540 | | | | | | 0 | | | | | | 659,468 | | | | | | 34,498 | | | | | | 115,386 | | | | | | 3,279,725 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($) | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | | | | | | | | |
Lynn J. Good | | 2017 | | 1,341,667 | 0 | | 17,244,803 | 0 | 2,110,736 | 308,336 | 410,394 | | 21,415,936 | ||||||||||
Chairman, President | | 2016 | | 1,291,667 | 0 | | 9,128,876 | 0 | 2,676,465 | 334,612 | 361,974 | | 13,793,594 | ||||||||||
and Chief Executive Officer | | 2015 | | 1,225,758 | 0 | | 7,565,830 | 0 | 1,572,161 | 149,884 | 312,198 | | 10,825,831 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Steven K. Young | 2017 | 682,500 | 0 | 1,827,744 | 0 | 557,291 | 231,604 | 99,570 | 3,398,709 | ||||||||||||||
Executive Vice President | 2016 | 625,000 | 0 | 1,672,064 | 0 | 665,742 | 192,600 | 84,964 | 3,240,370 | ||||||||||||||
and Chief Financial Officer | 2015 | 591,667 | 0 | 1,373,846 | 0 | 445,068 | 111,329 | 73,223 | 2,595,133 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Dhiaa M. Jamil | | 2017 | | 781,250 | 0 | | 3,191,191 | 0 | 643,863 | 270,064 | 101,834 | | 4,988,202 | ||||||||||
Executive Vice President | | 2016 | | 737,500 | 0 | | 3,069,081 | 0 | 832,658 | 224,991 | 81,218 | | 4,945,448 | ||||||||||
and Chief Operating Officer | | 2015 | | 670,833 | 0 | | 1,717,248 | 0 | 532,795 | 143,014 | 83,508 | | 3,147,398 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Julia S. Janson(1) | 2017 | 608,333 | 0 | 2,172,889 | 0 | 496,731 | 404,315 | 76,282 | 3,758,550 | ||||||||||||||
Executive Vice President | 2016 | 520,833 | 0 | 1,434,996 | 0 | 588,035 | 832,261 | 55,873 | 3,431,998 | ||||||||||||||
External Affairs, Chief Legal Officer and Corporate Secretary | 2015 | 500,000 | 0 | 1,017,661 | 0 | 388,714 | 484,163 | 62,358 | 2,452,896 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
Lloyd M. Yates | | 2017 | | 683,419 | 0 | | 1,563,447 | 0 | 532,072 | 751,046 | 136,604 | | 3,666,588 | ||||||||||
Executive Vice President | | 2016 | | 661,458 | 0 | | 2,254,988 | 0 | 680,129 | 478,811 | 112,466 | | 4,187,852 | ||||||||||
Customer and Delivery Operations and President, Carolinas Region | | 2015 | | 631,667 | 0 | | 1,453,927 | 0 | 480,464 | 0 | 159,539 | | 2,725,597 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | Good ($) | | | Young ($) | | | Jamil ($) | | | Janson ($) | | | Ghartey- Tagoe ($) | | |||||||||||||||
| Change in Actuarial Present Value of Accumulated Benefit Under: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| RCBP | | | | | 42,364 | | | | | | 45,754 | | | | | | 54,068 | | | | | | (7,186) | | | | | | 31,523 | | |
| ECBP | | | | | 234,747 | | | | | | 31,498 | | | | | | 56,966 | | | | | | (65,279) | | | | | | 2,975 | | |
| Total | | | | | 277,111 | | | | | | 77,252 | | | | | | 111,034 | | | | | | (72,465)* | | | | | | 34,498 | | |
| 60 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
| Good ($) | Young ($) | Jamil ($) | Janson ($) | Yates ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | |
Change in Actuarial Present Value of Accumulated Benefit Under: | | | | | | |||||||||||
Duke Energy Retirement Cash Balance Plan | 40,408 | 63,353 | 61,006 | 105,609 | 82,917 | |||||||||||
Duke Energy Executive Cash Balance Plan | | 267,928 | | 168,251 | | 209,058 | | 298,706 | | 668,129 | ||||||
| | | | | | | | | | | | | | | | |
Total | 308,336 | 231,604 | 270,064 | 404,315 | 751,046 | |||||||||||
| | | | | | | | | | | | | | | | |
54 DUKE ENERGY – 2018 Proxy Statement
| | | | Good ($) | | | Young ($) | | | Jamil ($) | | | Janson ($) | | | Ghartey- Tagoe ($) | | |||||||||||||||
| Matching and Employer Retirement Contributions Under the Retirement Savings Plan | | | | | 17,400 | | | | | | 17,400 | | | | | | 17,400 | | | | | | 17,400 | | | | | | 17,400 | | |
| Make-Whole Matching, Cash Balance Contribution Credits and Employer Retirement Contributions Under the Executive Savings Plan | | | | | 243,969 | | | | | | 142,583 | | | | | | 166,776 | | | | | | 136,417 | | | | | | 87,294 | | |
| Personal Use of the Corporate Aircraft* | | | | | 30,525 | | | | | | 0 | | | | | | 0 | | | | | | 1,282 | | | | | | 4,487 | | |
| Charitable Contributions Made in the Name of the Executive | | | | | 2,500 | | | | | | 2,500 | | | | | | 2,500 | | | | | | 2,500 | | | | | | 2,500 | | |
| Financial Planning Program | | | | | 0 | | | | | | 3,075 | | | | | | 0 | | | | | | 3,685 | | | | | | 1,125 | | |
| Relocation Expenses | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 2,030 | | |
| Other** | | | | | 4,129 | | | | | | 3,560 | | | | | | 600 | | | | | | 731 | | | | | | 550 | | |
| Total | | | | | 298,523 | | | | | | 169,118 | | | | | | 187,276 | | | | | | 162,015 | | | | | | 115,386 | | |
| Good ($) | Young ($) | Jamil ($) | Janson ($) | Yates ($) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | |
Matching Contributions Under the Duke Energy Retirement Savings Plan | | 16,200 | | 16,200 | | 16,200 | | 16,200 | | 16,200 | ||||||
Make-Whole Matching Contribution Credits Under the Executive Savings Plan | 224,888 | 64,695 | 80,634 | 55,582 | 62,474 | |||||||||||
Personal Use of Airplane* | | 160,656 | | 5,537 | | 0 | | 0 | | 51,430 | ||||||
Airline Membership | 0 | 0 | 0 | 0 | 0 | |||||||||||
Charitable Contributions Made in the Name of the Executive** | | 5,000 | | 5,000 | | 5,000 | | 4,500 | | 0 | ||||||
Executive Physical Exam Program | 2,500 | 0 | 0 | 0 | 2,500 | |||||||||||
Financial Planning Program | | 1,150 | | 8,138 | | 0 | | 0 | | 4,000 | ||||||
| | | | | | | | | | | | | | | | |
Total | 410,394 | 99,570 | 101,834 | 76,282 | 136,604 | |||||||||||
| | | | | | | | | | | | | | | | |
DUKE ENERGY – 2018 Proxy Statement 55
Tableoccasional personal use of Contentstickets to athletic and cultural events.
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 61 | |
| | | | | | | | | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | | Grant Date Fair Value of Stock Awards ($)(4) | | ||||||||||||||||||||||||||||||||||||
| Name | | | Grant Type | | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | |||||||||||||||||||||||||||||||||
| Lynn J. Good | | | Cash STI(1) | | | | | | | | | | | 573,581 | | | | | | 2,294,325 | | | | | | 4,301,859 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | LTI Perf. Shares(2) | | | | | 2/24/2021 | | | | | | | | | | | | | | | | | | | | | | | | 40,120 | | | | | | 89,155 | | | | | | 178,310 | | | | | | | | | | | | 7,859,013 | | |
| | | | RSUs(3) | | | | | 2/24/2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 38,209 | | | | | | 3,337,174 | | |
| Steven K. Young | | | Cash STI(1) | | | | | | | | | | | 174,527 | | | | | | 698,107 | | | | | | 1,308,952 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | LTI Perf. Shares(2) | | | | | 2/24/2021 | | | | | | | | | | | | | | | | | | | | | | | | 8,393 | | | | | | 18,650 | | | | | | 37,300 | | | | | | | | | | | | 1,643,997 | | |
| | | | RSUs(3) | | | | | 2/24/2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,993 | | | | | | 698,109 | | |
| Dhiaa M. Jamil | | | Cash STI(1) | | | | | | | | | | | 196,437 | | | | | | 785,749 | | | | | | 1,473,280 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | LTI Perf. Shares(2) | | | | | 2/24/2021 | | | | | | | | | | | | | | | | | | | | | | | | 10,233 | | | | | | 22,741 | | | | | | 45,482 | | | | | | | | | | | | 2,004,619 | | |
| | | | RSUs(3) | | | | | 2/24/2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,746 | | | | | | 851,216 | | |
| Julia S. Janson | | | Cash STI(1) | | | | | | | | | | | 168,919 | | | | | | 675,675 | | | | | | 1,266,891 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | LTI Perf. Shares(2) | | | | | 2/24/2021 | | | | | | | | | | | | | | | | | | | | | | | | 8,123 | | | | | | 18,051 | | | | | | 36,102 | | | | | | | | | | | | 1,591,196 | | |
| | | | RSUs(3) | | | | | 2/24/2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,736 | | | | | | 675,662 | | |
| | | | RSUs(3) | | | | | 12/15/2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,816 | | | | | | 499,997 | | |
| Kodwo | | | Cash STI(1) | | | | | | | | | | | 119,167 | | | | | | 476,667 | | | | | | 893,750 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ghartey-Tagoe | | | LTI Perf. Shares(2) | | | | | 2/24/2021 | | | | | | | | | | | | | | | | | | | | | | | | 6,000 | | | | | | 13,334 | | | | | | 26,668 | | | | | | | | | | | | 1,175,392 | | |
| | | | RSUs(3) | | | | | 2/24/2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,715 | | | | | | 499,148 | | |
| | | | | | | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | Grant Date Fair Value of Stock Awards ($)(5) | ||||||||||||||||||||||||
Name | Grant Type | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lynn J. Good | Cash STI(1) | | | 987,802 | | 2,079,583 | | 3,821,234 | | | | | | | | | | | |||||||||||
LTI Perf. Shares(2) | 2/22/2017 | 44,369 | 88,738 | 177,476 | 7,207,300 | ||||||||||||||||||||||||
| Performance-Based Retention Award(3) | 2/22/2017 | | | | | | | | | | 87,642 | | | | | | 6,999,967 | |||||||||||
Restricted Stock Units(4) | 2/22/2017 | 38,031 | 3,037,536 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Steven K. Young | Cash STI(1) | | | 259,350 | | 546,000 | | 1,003,275 | | | | | | | | | | | |||||||||||
LTI Perf. Shares(2) | 2/22/2017 | 6,833 | 13,666 | 27,332 | 1,109,952 | ||||||||||||||||||||||||
| Performance-Based Retention Award(3) | 2/22/2017 | | | | | | | | | | 3,130 | | | | | | 249,993 | |||||||||||
Restricted Stock Units(4) | 2/22/2017 | 5,857 | 467,799 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dhiaa M. Jamil | Cash STI(1) | | | 296,875 | | 625,000 | | 1,148,438 | | | | | | | | | | | |||||||||||
LTI Perf. Shares(2) | 2/22/2017 | 9,490 | 18,980 | 37,960 | 1,541,556 | ||||||||||||||||||||||||
| Performance-Based Retention Award(3) | 2/22/2017 | | | | | | | | | | 12,520 | | | | | | 999,972 | |||||||||||
Restricted Stock Units(4) | 2/22/2017 | 8,134 | 649,663 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Julia S. Janson | Cash STI(1) | | | 231,167 | | 486,667 | | 894,250 | | | | | | | | | | | |||||||||||
LTI Perf. Shares(2) | 2/22/2017 | 6,163 | 12,325 | 24,650 | 1,001,037 | ||||||||||||||||||||||||
| Performance-Based Retention Award(3) | 2/22/2017 | | | | | | | | | | 9,390 | | | | | | 749,979 | |||||||||||
Restricted Stock Units(4) | 2/22/2017 | 5,282 | 421,873 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lloyd M. Yates | Cash STI(1) | | | 259,699 | | 546,735 | | 1,004,626 | | | | | | | | | | | |||||||||||
LTI Perf. Shares(2) | 2/22/2017 | 6,771 | 13,542 | 27,084 | 1,099,881 | ||||||||||||||||||||||||
| Restricted Stock Units(4) | 2/22/2017 | | | | | | | | | | | | | | 5,804 | | 463,566 | |||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
56 DUKE ENERGY – 2018 Proxy Statement
| 62 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
| | | | | | | Stock Awards | | |||||||||||||||||||||
| Name | | | Grant Type | | | Number of Shares or Units of Stock That Have Not Vested (#)(1) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | ||||||||||||
| Lynn J. Good | | | RSUs | | | | | 71,827 | | | | | | 7,534,652 | | | | | | | | | | | | | | |
| | | | Performance Shares (2020 – 2022) | | | | | | | | | | | | | | | | | 153,556 | | | | | | 16,108,024 | | |
| | | | Performance Shares (2021 – 2023) | | | | | | | | | | | | | | | | | 178,310 | | | | | | 18,704,719 | | |
| Steven K. Young | | | RSUs | | | | | 14,651 | | | | | | 1,536,890 | | | | | | | | | | | | | | |
| | | | Performance Shares (2020 – 2022) | | | | | | | | | | | | | | | | | 32,122 | | | | | | 3,369,598 | | |
| | | | Performance Shares (2021 – 2023) | | | | | | | | | | | | | | | | | 37,300 | | | | | | 3,912,770 | | |
| Dhiaa M. Jamil | | | RSUs | | | | | 18,163 | | | | | | 1,905,299 | | | | | | | | | | | | | | |
| | | | Performance Shares (2020 – 2022) | | | | | | | | | | | | | | | | | 39,168 | | | | | | 4,108,723 | | |
| | | | Performance Shares (2021 – 2023) | | | | | | | | | | | | | | | | | 45,482 | | | | | | 4,771,062 | | |
| Julia S. Janson | | | RSUs | | | | | 18,860 | | | | | | 1,978,414 | | | | | | | | | | | | | | |
| | | | Performance Shares (2020 – 2022) | | | | | | | | | | | | | | | | | 31,090 | | | | | | 3,261,341 | | |
| | | | Performance Shares (2021 – 2023) | | | | | | | | | | | | | | | | | 36,102 | | | | | | 3,787,100 | | |
| Kodwo Ghartey-Tagoe | | | RSUs | | | | | 8,726 | | | | | | 915,357 | | | | | | | | | | | | | | |
| | | | Performance Shares (2020 – 2022) | | | | | | | | | | | | | | | | | 18,980 | | | | | | 1,991,002 | | |
| | | | Performance Shares (2021 – 2023) | | | | | | | | | | | | | | | | | 26,668 | | | | | | 2,797,473 | | |
| | | | Stock Awards | | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | | Grant Type | | Number of Shares or Units of Stock That Have Not Vested (#)(1) | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | ||||||||||||
| | | | | | | | | | | | ||||||||||||
Lynn J. Good | | Restricted Stock Units | | | 71,807 | | | | 6,039,687 | | | | | | | | | | | ||||
| Performance Shares (2016-2018) | | | | | | | | | 169,980 | | | | 14,297,018 | | | |||||||
| | Performance Shares (2017-2019) | | | | | | | | | | | 177,476 | | | | 14,927,506 | | | ||||
| Performance-Based Retention Award | | | | | | | | | 87,642 | | | | 7,371,569 | | | |||||||
| | | | | | | | | | | | ||||||||||||
Steven K. Young | | Restricted Stock Units | | | 14,685 | | | | 1,235,155 | | | | | | | | | | | ||||
| Performance Shares (2016-2018) | | | | | | | | | 26,478 | | | | 2,227,065 | | | |||||||
| | Performance Shares (2017-2019) | | | | | | | | | | | 27,332 | | | | 2,298,895 | | | ||||
| Performance-Based Retention Award | | | | | | | | | 3,130 | | | | 263,264 | | | |||||||
| | | | | | | | | | | | ||||||||||||
Dhiaa M. Jamil | | Restricted Stock Units | | | 29,116 | | | | 2,448,947 | | | | | | | | | | | ||||
| Performance Shares (2016-2018) | | | | | | | | | 38,526 | | | | 3,240,422 | | | |||||||
| | Performance Shares (2017-2019) | | | | | | | | | | | 37,960 | | | | 3,192,816 | | | ||||
| Performance-Based Retention Award | | | | | | | | | 12,520 | | | | 1,053,057 | | | |||||||
| | | | | | | | | | | | ||||||||||||
Julia S. Janson | | Restricted Stock Units | | | 13,036 | | | | 1,096,458 | | | | | | | | | | | ||||
| Performance Shares (2016-2018) | | | | | | | | | 22,064 | | | | 1,855,803 | | | |||||||
| | Performance Shares (2017-2019) | | | | | | | | | | | 24,650 | | | | 2,073,312 | | | ||||
| Performance-Based Retention Award | | | | | | | | | 9,390 | | | | 789,793 | | | |||||||
| | | | | | | | | | | | ||||||||||||
Lloyd M. Yates | | Restricted Stock Units | | | 21,624 | | | | 1,818,795 | | | | | | | | | | | ||||
| Performance Shares (2016-2018) | | | | | | | | | 28,022 | | | | 2,356,930 | | | |||||||
| | Performance Shares (2017-2019) | | | | | | | | | | | 27,084 | | | | 2,278,035 | | | ||||
| | | | | | | | | | | |
DUKE ENERGY – 2018 Proxy Statement 57
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 63 | |
| | | | Stock Awards | | |||||||||
| Name | | | Number of Shares Acquired on Vesting (#)(1) | | | Value Realized on Vesting ($)(2) | | ||||||
| Lynn J. Good | | | | | 134,952 | | | | | | 14,532,534 | | |
| Steven K. Young | | | | | 23,993 | | | | | | 2,582,646 | | |
| Dhiaa M. Jamil | | | | | 32,440 | | | | | | 3,497,092 | | |
| Julia S. Janson | | | | | 21,790 | | | | | | 2,342,603 | | |
| Kodwo Ghartey-Tagoe | | | | | 4,519 | | | | | | 466,024 | | |
| | Stock Awards | | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Name | | Number of Shares Acquired on Vesting (#)(1) | | Value Realized on Vesting ($)(2) | | ||||||
| | | | | | ||||||
Lynn J. Good | | | 64,587 | | | | 5,690,262 | | | ||
Steven K. Young | | | 11,073 | | | | 980,379 | | | ||
Dhiaa M. Jamil | | | 14,673 | | | | 1,293,633 | | | ||
Julia S. Janson | | | 8,528 | | | | 752,907 | | | ||
Lloyd M. Yates | | | 12,135 | | | | 1,071,667 | | | ||
| | | | | |
| Name | | | Plan Name | | | Number of Years Credited Service (#) | | | Present Value of Accumulated Benefit ($) | | | Payments During Last Fiscal Year ($) | | |||||||||
| Lynn J. Good | | | RCBP | | | | | 18.67 | | | | | | 492,998 | | | | | | 0 | | |
| | | | ECBP | | | | | 18.42 | | | | | | 6,891,127 | | | | | | 0 | | |
| Steven K. Young | | | RCBP | | | | | 41.51 | | | | | | 991,489 | | | | | | 0 | | |
| | | | ECBP | | | | | 41.26 | | | | | | 1,481,730 | | | | | | 0 | | |
| Dhiaa M. Jamil | | | RCBP | | | | | 40.34 | | | | | | 1,015,131 | | | | | | 0 | | |
| | | | ECBP | | | | | 40.09 | | | | | | 1,918,663 | | | | | | 0 | | |
| Julia S. Janson | | | RCBP | | | | | 34.00 | | | | | | 1,795,128 | | | | | | 0 | | |
| | | | ECBP | | | | | 33.75 | | | | | | 4,457,807 | | | | | | 0 | | |
| Kodwo Ghartey-Tagoe | | | RCBP | | | | | 19.58 | | | | | | 624,303 | | | | | | 0 | | |
| | | | ECBP | | | | | 19.33 | | | | | | 449,154 | | | | | | 0 | | |
Name | | Plan Name | | Number of Years Credited Service (#) | | Present Value of Accumulated Benefit ($) | | Payments During Last Fiscal Year ($) | | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | |||||||||
Lynn J. Good | | Duke Energy Retirement Cash Balance Plan | | | 14.67 | | | | 329,168 | | | | 0 | | | |||
| Duke Energy Corporation Executive Cash Balance Plan | | | 14.67 | | | | 5,987,299 | | | | 0 | | | ||||
| | | | | | | | | | |||||||||
Steven K. Young | | Duke Energy Retirement Cash Balance Plan | | | 37.51 | | | | 755,434 | | | | 0 | | | |||
| Duke Energy Corporation Executive Cash Balance Plan | | | 37.51 | | | | 936,877 | | | | 0 | | | ||||
| | | | | | | | | | |||||||||
Dhiaa M. Jamil | | Duke Energy Retirement Cash Balance Plan | | | 36.34 | | | | 784,049 | | | | 0 | | | |||
| Duke Energy Corporation Executive Cash Balance Plan | | | 36.34 | | | | 1,270,872 | | | | 0 | | | ||||
| | | | | | | | | | |||||||||
Julia S. Janson | | Duke Energy Retirement Cash Balance Plan | | | 30.00 | | | | 1,466,987 | | | | 0 | | | |||
| Duke Energy Corporation Executive Cash Balance Plan | | | 30.00 | | | | 3,581,196 | | | | 0 | | | ||||
| | | | | | | | | | |||||||||
Lloyd M. Yates | | Duke Energy Retirement Cash Balance Plan | | | 19.03 | | | | 556,950 | | | | 0 | | | |||
| Duke Energy Corporation Executive Cash Balance Plan | | | 19.03 | | | | 4,486,858 | | | | 0 | | | ||||
| | | | | | | | | |
Duke Energy provides pension benefits that are intended to assist our retirees with their retirement income needs. A more detailed description of the plans that comprise Duke Energy'sEnergy’s pension program follows.
58 DUKE ENERGY – 2018 Proxy Statement
EXECUTIVE COMPENSATION
| 64 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
DUKE ENERGY – 2018 Proxy Statement 59
EXECUTIVE COMPENSATION
recognition pay, holiday premiums, retirement bank vacation pay, performance lump-sum pay, annual cash incentive plan awards, and annual performance cash awards. Total pay does not include reimbursements or other expense allowances, imputed income, fringe benefits, moving and relocation expenses, deferred compensation, welfare benefits, long-term performance awards, and executive individual incentive awards. The benefit under the Traditional Program is limited by maximum benefits and compensation limits under the Internal Revenue Code.
Effective at the end of 2015, the Progress Energy Pension Plan ("Progress Plan") was merged into the RCBP. The balance that Mr. Yates had under the Progress Plan's "cash balance account" formula at the end of 2015 was credited to his hypothetical account under the RCBP. After 2013, the Progress Plan provided for cash balance benefits under the same formula as the RCBP. Prior to 2014, pay credits ranged from 3% to 7% depending on the participant's age at the beginning of each plan year, plus an additional similar credit on eligible pay above 80% of the Social Security wage base. Interest credits for benefits accrued before 2014 are based on an annual interest credit rate of 4% and are added to cash balance accounts on December 31 of each year based on account balances as of January 1. At benefit commencement, an employee has several lump-sum and annuity payment options.
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 65 | |
Effective as of July 2, 2012, (i.e., the closing of the Duke Energy/Progress Energy merger), the portion of the Supplemental Senior Executive Retirement Plan of Progress Energy, Inc. ("Progress Energy Supplemental Plan") relatingEnergy. Upon reaching this threshold in April 2021, Ms. Good became eligible to the 10 active participants in the Progress Energy Supplemental Plan, including Mr. Yates, was merged into the ECBP, resulting in the nonqualified retirement benefits that were originally to be provided to the Progress Energy participantsreceive monthly company cash balance contributions under the Progress Energy SupplementalExecutive Savings Plan to be instead provided pursuant to the ECBP. The ECBP provides that Mr. Yates will participate in the ECBP and, subject to the terms and conditions of the ECBP, be entitled to nonqualified retirement benefits equal to the greater of:
Mr. Yates participates in the Progress Energy Supplemental Plan formula of the ECBP and is fully vested in his benefit. Payments attributable to the Progress Energy Supplemental Plan formula generally are made in the form of an annuity, payable at age 65. The monthly payment is calculated using a formula that equates to 4% per year of service (capped at 62%) multiplied by the average monthly eligible pay (annual base salary and annual cash incentive award) for the highest completed 36 months of eligible pay within the preceding 120-month period. Benefits under the Progress Energy Supplemental Plan formula are fully offset by Social Security benefits and by benefits paid under the RCBP. An executive officer who is age 55 or older with at least 15 years of service (including Mr. Yates, who has attained age 55 with at least 15 years of service) may elect to retire prior to age 65 and his or her benefit generally will commence within 60 days of the first calendar month following retirement. The early retirement benefit will be reduced by 2.5% for each year the participant receives the benefit prior to reaching age 65. All service with Duke Energy and our affiliates is treated as eligible service for purposes of meeting the Progress Energy Supplemental Plan's eligibility requirements.
previously described).
60 DUKE ENERGY – 2018 Proxy Statement
EXECUTIVE COMPENSATION
used in Duke Energy'sour 2021 Form 10-K. Benefits are assumed to commence at age 55 for Ms. Janson, age 62 for Ms. Good, and at age 65 for Mr. Young, Mr. Jamil, and Mr. Yates,Ghartey-Tagoe, or the NEO'sNEO’s current age (if later), and each named executive officerNEO is assumed to remain employed until that age.
| Name | | | Executive Contributions in Last FY ($)(1) | | | Registrant Contributions in Last FY ($)(2) | | | Aggregate Earnings in Last FY ($) | | | Aggregate Withdrawals/ Distributions ($) | | | Aggregate Balance at Last FYE ($)(3) | | |||||||||||||||
| Lynn J. Good | | | | | 280,765 | | | | | | 243,969 | | | | | | 323,893 | | | | | | 0 | | | | | | 5,269,971 | | |
| Executive Savings Plan | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Steven K. Young | | | | | 106,585 | | | | | | 142,583 | | | | | | 439,324 | | | | | | 0 | | | | | | 2,724,250 | | |
| Executive Savings Plan | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dhiaa M. Jamil | | | | | 267,842 | | | | | | 166,776 | | | | | | 567,967 | | | | | | 0 | | | | | | 6,283,599 | | |
| Executive Savings Plan | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Julia S. Janson | | | | | 141,903 | | | | | | 136,417 | | | | | | 427,462 | | | | | | 0 | | | | | | 2,687,589 | | |
| Executive Savings Plan | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Kodwo Ghartey-Tagoe | | | | | 84,458 | | | | | | 87,294 | | | | | | 120,977 | | | | | | 0 | | | | | | 892,170 | | |
| Executive Savings Plan | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Executive Contributions in Last FY ($)(1) | | Registrant Contributions in Last FY ($)(2) | | Aggregate Earnings in Last FY ($) | | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at Last FYE ($)(3) | | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | |||||||||||||||
Lynn J. Good | | | 207,144 | | | | 224,888 | | | | 205,116 | | | | 0 | | | | 2,554,910 | | | |||||
Executive Savings Plan | | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | |||||||||||||||
Steven K. Young | | | 56,417 | | | | 64,695 | | | | 145,168 | | | | 0 | | | | 1,146,309 | | | |||||
Executive Savings Plan | | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | |||||||||||||||
Dhiaa M. Jamil | | | 160,966 | | | | 80,634 | | | | 392,673 | | | | 0 | | | | 3,464,282 | | | |||||
Executive Savings Plan | | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | |||||||||||||||
Julia S. Janson | | | 66,304 | | | | 55,582 | | | | 189,329 | | | | 0 | | | | 1,109,618 | | | |||||
Executive Savings Plan | | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | |||||||||||||||
Lloyd M. Yates | | | 54,674 | | | | 62,474 | | | | 366,289 | | | | 0 | | | | 3,144,020 | | | |||||
Executive Savings Plan | | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | |
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DUKE ENERGY – 2018 Proxy Statement 61
EXECUTIVE COMPENSATION
Duke Energy Corporation Executive Savings Plan
Under the
Effective October 1, 2020, participants also became eligible to receive monthly company cash balance contributions to the Executive Savings Plan in excess of the contribution limits prescribed by the Internal Revenue Code under the RCBP, which is the pension plan in which the NEOs participate.** Similar make-whole cash balance contribution credits were provided, prior to October 1, 2020, under the ECBP, as described on page 66 of this proxy statement. The amendments to the Executive Savings Plan and ECBP, effective as of October 1, 2020, streamline the administration of the plans and do not change the contribution formula used to calculate benefits.
Mr. Yates previously participated in the Progress Energy, Inc. Management Deferred Compensation Plan ("MDCP"), the Progress Energy, Inc. Management Incentive Compensation Plan ("MICP") and the Progress Energy, Inc. Performance Share Sub-Plan ("PSSP"), each of which permitted voluntary deferrals and was merged with and into the Executive Savings Plan effective as of the end of 2013. In addition to voluntary deferrals, the MDCP also provided for employer contributions of 6% of base salary over the limits prescribed by the Internal Revenue Code under the Progress Energy 401(k) Savings and Stock Ownership Plan. With respect to the plans that were merged into the Executive Savings Plan, participants are entitled to the same benefits, distribution timing and forms of benefit that were provided by the MDCP, MICP and PSSP immediately prior to January 1, 2014. These pre-2014 benefits generally are payable following termination of employment or, in certain cases, on a date previously specified by the participant, in the form of a lump sum or installments, as selected by the participant.
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DUKE ENERGY – 2018 Proxy Statement 63
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
reduction similarly affecting substantially all similarly situated employees); or (ii) a material diminution in Ms. Good's Good’s
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64 DUKE ENERGY – 2018 Proxy Statement
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
payments and benefits under the Executive Severance Plan, he or she would be subject to certain restrictive covenants, including those related to noncompetition, nonsolicitation, and confidentiality.
| ||||||||
| | Event | | | Consequences | | ||
| RSUs | | | Retirement* | | | Unvested RSUs | |
| Voluntary termination** | | | Unvested RSUs are forfeited | | |||
| Death or disability | | | Unvested RSUs immediately vest | | |||
| Change in control | | | No impact absent termination | | |||
| Performance Awards | | | Retirement* Death & Disability | | | Prorated portion | |
| Voluntary termination** |
| | Award is forfeited | | |||
| Change in Control | | | No impact absent termination |
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| Name and Triggering Event | | | Cash Severance Payment ($)(1) | | | Incremental Retirement Plan Benefit ($)(2) | | | Welfare and Other Benefits ($)(3) | | | Stock Awards ($) | | ||||||||||||
| Lynn J. Good | | | | | | | | | | | | | | | | | | | | | | | | | |
| • Voluntary termination without good reason | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 22,556,442 | | |
| • Involuntary or good reason termination under Employment Agreement | | | | | 11,017,627 | | | | | | 0 | | | | | | 62,485 | | | | | | 26,998,000 | | |
| • Involuntary or good reason termination after a change in control | | | | | 11,017,627 | | | | | | 1,854,853 | | | | | | 62,485 | | | | | | 26,156,397 | | |
| • Death or Disability(4) | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 16,973,712 | | |
| Steven K. Young | | | | | | | | | | | | | | | | | | | | | | | | | |
| • Voluntary termination without good reason | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 4,685,007 | | |
| • Involuntary or good reason termination under Executive Severance Plan | | | | | 2,947,565 | | | | | | 0 | | | | | | 36,454 | | | | | | 5,565,891 | | |
| • Involuntary or good reason termination after a change in control | | | | | 2,947,565 | | | | | | 489,158 | | | | | | 41,074 | | | | | | 5,431,946 | | |
| • Death or Disability(4) | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 3,511,433 | | |
| Dhiaa M. Jamil | | | | | | | | | | | | | | | | | | | | | | | | | |
| • Voluntary termination without good reason | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 5,739,448 | | |
| • Involuntary or good reason termination under Executive Severance Plan | | | | | 3,317,607 | | | | | | 0 | | | | | | 17,280 | | | | | | 6,818,310 | | |
| • Involuntary or good reason termination after a change in control | | | | | 3,317,607 | | | | | | 552,065 | | | | | | 19,012 | | | | | | 6,655,044 | | |
| • Death or Disability(4) | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 4,312,914 | | |
| Julia S. Janson | | | | | | | | | | | | | | | | | | | | | | | | | |
| • Voluntary termination without good reason | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 2,538,364 | | |
| • Involuntary or good reason termination under Executive Severance Plan | | | | | 2,852,850 | | | | | | 0 | | | | | | 39,662 | | | | | | 5,887,277 | | |
| • Involuntary or good reason termination after a change in control | | | | | 2,852,850 | | | | | | 473,057 | | | | | | 45,498 | | | | | | 5,757,704 | | |
| • Death or Disability(4) | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 3,889,507 | | |
| Kodwo Ghartey-Tagoe | | | | | | | | | | | | | | | | | | | | | | | | | |
| • Voluntary termination without good reason | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 1,579,865 | | |
| • Involuntary or good reason termination under Executive Severance Plan | | | | | 2,178,000 | | | | | | 0 | | | | | | 39,194 | | | | | | 3,561,515 | | |
| • Involuntary or good reason termination after a change in control | | | | | 2,178,000 | | | | | | 358,332 | | | | | | 45,030 | | | | | | 3,471,672 | | |
| • Death or Disability(4) | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 2,172,167 | | |
|
Name and Triggering Event | Cash Severance Payment ($)(1) | Incremental Retirement Plan Benefit ($)(2) | Welfare and Other Benefits ($)(3) | Stock Awards ($) | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | |
Lynn J. Good | | | | | |||||||||
• Voluntary termination without good reason | 0 | 0 | 0 | 10,654,308 | |||||||||
• Involuntary or good reason termination under Employment Agreement | | 10,293,075 | | 0 | | 62,814 | | 30,888,632 | |||||
• Involuntary or good reason termination after a change in control | 10,293,075 | 696,498 | 62,814 | 29,194,420 | |||||||||
• Death or Disability(4) | | 0 | | 0 | | 0 | | 21,962,598 | |||||
| | | | | | | | | | | | | |
Steven K. Young | |||||||||||||
• Voluntary termination without good reason | | 0 | | 0 | | 0 | | 1,669,695 | |||||
• Involuntary or good reason termination under Executive Severance Plan | 2,494,800 | 0 | 33,016 | 4,062,073 | |||||||||
• Involuntary or good reason termination after a change in control | | 2,494,800 | | 413,796 | | 37,054 | | 3,946,891 | |||||
• Death or Disability(4) | 0 | 0 | 0 | 2,779,033 | |||||||||
| | | | | | | | | | | | | |
Dhiaa M. Jamil | | | | | |||||||||
• Voluntary termination without good reason | 0 | 0 | 0 | 2,366,138 | |||||||||
• Involuntary or good reason termination under Executive Severance Plan | | 2,835,000 | | 0 | | 32,202 | | 7,211,250 | |||||
• Involuntary or good reason termination after a change in control | 2,835,000 | 471,630 | 41,360 | 7,000,434 | |||||||||
• Death or Disability(4) | | 0 | | 0 | | 0 | | 5,372,023 | |||||
| | | | | | | | | | | | | |
Julia S. Janson | |||||||||||||
• Voluntary termination without good reason | | 0 | | 0 | | 0 | | 0 | |||||
• Involuntary or good reason termination under Executive Severance Plan | 2,250,000 | 0 | 35,878 | 4,152,813 | |||||||||
• Involuntary or good reason termination after a change in control | | 2,250,000 | | 372,180 | | 41,054 | | 4,012,410 | |||||
• Death or Disability(4) | 0 | 0 | 0 | 3,012,918 | |||||||||
| | | | | | | | | | | | | |
Lloyd M. Yates | | | | | |||||||||
• Voluntary termination without good reason | 0 | 0 | 0 | 1,728,461 | |||||||||
• Involuntary or good reason termination under Executive Severance Plan | | 2,472,311 | | 0 | | 32,148 | | 4,436,869 | |||||
• Involuntary or good reason termination after a change in control | 2,472,311 | 409,973 | 51,396 | 4,338,798 | |||||||||
• Death or Disability(4) | | 0 | | 0 | | 0 | | 3,130,416 | |||||
| | | | | | | | | | | | | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 71 | |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
apply.
Other than as described below, the occurrence of a change in control of Duke Energy would not trigger the payment of benefits to the NEOs absent a termination of employment. If a change in control of Duke Energy occurred on December 31, 2017, with respect to each named executive officer, the outstanding performance share awards granted by Duke Energy, including dividend equivalents, would be paid on a prorated basis assuming target performance. As of December 31, 2017, the prorated performance shares that would be paid as a result of these accelerated vesting provisions, including dividend equivalents, would have had a value of $7,828,775, $1,214,841, $1,741,022, $1,039,971 and $1,258,548, for Ms. Good, Mr. Young, Mr. Jamil, Ms. Janson and Mr. Yates, respectively.
median employee.
DUKE ENERGY – 2018 Proxy Statement 67
60.
68 DUKE ENERGY – 2018 Proxy Statement
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PROPOSAL 4: AMENDMENT TO THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF DUKE ENERGY CORPORATION TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS
The Board has unanimously approved, and recommends that shareholders approve, an amendment to the Corporation's Amended and Restated Certificate of Incorporation (the "Certificate"), substantially in the form attached to this proxy statement as Appendix A, to eliminate the current requirement in the Certificate for an affirmative vote of the combined voting power of 80% of the outstanding shares of all classes of Duke Energy entitled to vote in the election of directors to approve certain actions.
Background. At the 2016 Annual Meeting, Duke Energy's shareholders voted on a shareholder proposal requesting that our Board take the steps necessary to eliminate the supermajority requirements in Duke Energy's Certificate. The shareholder proposal was approved by approximately 53% of the votes cast. After discussions with shareholders prior to the 2017 Annual Meeting, the Corporate Governance Committee and the Board recommended at the 2017 Annual Meeting that shareholders vote for an amendment to our Certificate to reduce the voting requirements for the actions described below from 80% of the outstanding shares of all classes of Duke Energy stock to a majority of the outstanding shares of all classes of Duke Energy stock.
At the 2017 Annual Meeting, the proposal recommended by the Board received 96% support of the shares that were voted at the Annual Meeting. However, in order to pass, the amendment to the Certificate requires the affirmative vote of the combined voting power of 80% of the outstanding shares and only 59% of the outstanding shares of the Corporation voted in favor of the amendment.
The Board has once again decided to propose this amendment in the hopes that it will receive the affirmative vote of the combined voting power of 80% of the outstanding shares at the 2018 Annual Meeting.
Rationale. The Board recognizes that supermajority requirements are viewed by many corporate governance experts as overly burdensome and not in line with the best principles in corporate governance.
The proposed amendment to the Certificate to eliminate these supermajority requirements is described in more detail below. A draft Certificate containing the text of the proposed amendment is set forth in Appendix A attached hereto.
Certificate of Incorporation. Article Seventh of the Certificate currently requires the affirmative vote of the combined voting power of 80% of the outstanding shares of all classes of Duke Energy to approve, among other things, the following actions:
Upon the approval by our shareholders of the proposed amendment, Article Seventh of our Certificate would be amended as follows, with the proposed deletion stricken through and proposed addition underlined:
"The Corporation reserves the right to supplement, amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by the laws of the State of Delaware and this Certificate of Incorporation, and all rights conferred upon stockholders, directors and officers herein are granted subject to this reservation. Notwithstanding the foregoing, this ARTICLE SEVENTH and sections (b) and (d) of ARTICLE FIFTH may not be supplemented, amended, altered, changed, or repealed in any respect, nor may any provision inconsistent therewith be adopted, unless such supplement, amendment, alteration, change or repeal is approved by the affirmative vote of the holders of a majority of the combined voting power of the then outstanding shares of stock of all classes of the Corporation entitled to vote generally in the election of directors, voting together as a single class."
The affirmative vote of holders of at least 80% of the outstanding shares of Duke Energy common stock, the only class of stock outstanding and entitled to vote in the election of directors, is required to approve the amendment to our Certificate described herein. The Board recommends that all shareholders vote in favor of this amendment.
For the Above Reasons the Board of Directors Recommends a Vote "FOR" This Proposal.
DUKE ENERGY – 2018 Proxy Statement 69
“AGAINST” proposal 4.
National Center For Public Policy Research, 20 F Street, NW, Suite 700, Washington, DC 20001, owner of 69 shares,
Resolved, the shareowners of Duke Energy Corporation ("Duke Energy") request the preparation of a report, updated annually, disclosing:
For purposes of this proposal, a "grassroots lobbying communication" is a communication directedproblems to the general publicattention of management and all shareholders.
Both "direct and indirect lobbying" and "grassroots lobbying communications" include efforts at the local, state and federal levels.
The report shall be presented to all relevant oversight committees and posted on Duke Energy's website.
As shareowners, we encourage transparency and accountability in our Company's use of corporate funds to influence legislation and regulation.
The Company lobbiesshareholder engagement like asking shareholder input on a broad array of issues and workstopic after introducing the topic with groupsoverwhelming negative comments.
The Company should takespecial shareholder meeting will help ensure that management engages with shareholders in good faith because shareholders will have a viable Plan B as an active role in combating this narrative and attacks on its freedom of association rights.
The Company should be proud of its memberships in trade associations and non-profits groups that promote pro-business, pro-growth initiatives.
For example, the Company's membership in groups such as the American Legislative Exchange Council (ALEC) should be applauded and endorsed by shareholders. ALEC advances initiatives that are designed to unburden corporations such as Duke Energy, allowing them the freedom to create jobs and economic prosperity in the United States. The same can be said of the Company's affiliation with the Business Roundtable.
Rather than letting outside agitators set the message that these relationships are somehow nefarious, the Company should explain the benefits of its involvement with groups that advocate for smaller government, lower taxes and free-market reforms. The Company should show how these relationships benefit shareholders, increase jobs and wages, help local communities and generally advance the Company's interests.
The proponents supports the Company's free speech rights and freedom to associate with groups that advance economic liberty. The Company should stand up for those rights.
70 DUKE ENERGY
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SHAREHOLDER RIGHT TO CALL FOR A SPECIAL
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Disclosure of Duke Energy Policy and Procedures Over Lobbying.The proposal requests that the Corporation disclose our policy and procedures over lobbying. The Corporation has long had a Political Expenditures Policy that governs its lobbying activities and political expenditures. The Political Expenditures Policy is disclosed on the Corporate Governance page of our website at duke-energy.com/our-company/investors/corporate-governance/political-expenditures-policy. Additional information regarding the ultimate oversight of the Corporation's policies, practices and strategy with respect to political expenditures by the Corporate Governance Committee is discussed in the Charter of the Corporate Governance Committee, also disclosed on the Corporate Governance page of our website at duke-energy.com/our-company/investors/corporate-governance/board-committee-charters/corporate-governance.
Disclosure of Corporate Political Contributions and Lobbying Activities.The proposal also seeks disclosures about the Corporation's lobbying expenditures. The Corporation's corporate political contributions and lobbying activities are subject to regulation by the state and federal government, including requirements to provide disclosures of federal and state lobbying expenses. These disclosures are publicly available and linked to our website. Duke Energy is fully compliant with all federal and state laws governing corporate political contributions and lobbying activities. As a result of the feedback we have received from our shareholders during our corporate governance engagements in recent years on this topic, Duke Energy discloses all corporate contributions in excess of $1,000, the federal lobbying portion of trade association dues for trade associations with dues over $50,000 during the reporting period and all DUKEPAC contributions, each in the aggregate on a semi-annual report that is posted directly on our website at duke-energy.com/our-company/investors/corporate-governance/political-expenditures-policy.Disclosing this information on one report allows the information to be more easily accessed and viewed by ourCompany’s shareholders. All such semi-annual reports remain available on Duke Energy's website for historical comparison purposes. The Corporation's lobbying activities and expenditures are also discussed in our annual Sustainability Report, available at duke-energy.com/our-company/sustainability/reports.
Description of Board and Management Oversight. As discussed above, the Corporation's governance over political expenditures is disclosed in the Political Expenditures Policy and overseen by the Corporate Governance Committee. In 2015, Duke Energy updated its Political Expenditures Policy and enhanced the governance around the Corporation's lobbying activities and political expenditures. These changes were a direct result of discussions with our shareholders during our corporate governance engagements with them. The Corporation's governance includes a tiered approval process that requires increasing levels of authority within the Corporation depending on the dollar amounts of the lobbying or other political expenditure being proposed. A Political Expenditures Committee, comprised of senior executives from each of the states in which we operate, reviews and provides a Corporation political expenditure strategy and monitors and tracks corporate political expenditures (the "Political Expenditures Program"). The ultimate approval of the strategy, policies and practices of the corporate Political Expenditures Program is the discretion of the Corporate Governance Committee during its biennial review.
Conclusion. Accordingly, because the Corporation already provides robust disclosure concerning our policies and procedures governing lobbying, a semi-annual report detailing our actual political contributions and lobbying activities and a description of the Board oversight of such activities and procedures, the Board believes that the additional report requested in the proposal would result in an unnecessary and unproductive use of the Corporation's resources.
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800.289.0720, confirmation code 6176182.
Why are you holding the Annual Meeting via live webcast?
We held our first Annual Meeting exclusively via live webcast in 2017. We received positive feedback from shareholders after the 2017 Annual Meeting and greater participation than at previous annual meetings because shareholders can participate from any location around the world via live webcast without prohibitive cost or inconvenience. By holding the Annual Meeting via live webcast, shareholders not only have the same opportunity to vote and ask questions that they would have had at an in-person meeting, but also have the ability to submit questions in advance of the Annual Meeting. As a result, the Board has once again elected to hold the Annual Meeting via live webcast.
| | | | | | | More information | | |
| PROPOSAL 1 | | | Election of directors | | | Page | | |
| PROPOSAL 2 | | | Ratification of Deloitte & Touche LLP as Duke | | | Page | | |
| PROPOSAL 3 | | | Advisory vote to approve Duke | | | Page | ||
| | | Shareholder proposal regarding shareholder right to call for a special shareholder meeting | | | Page 73 | |
72 DUKE ENERGY – 2018 Proxy Statement
FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
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| By Internet | | | By Phone | | | By Mailing Your Proxy Card | |
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Visit 24/7 proxyvote.com | | | Call toll-free 24/7800.690.6903 or by calling the number provided by your broker, bank, or other nominee if your shares are not registered in your name | | | Vote, sign your proxy card, and | |
Notice.
proposal 4.
.
DUKE ENERGY – 2018 Proxy Statement 73
FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
you provide a proxy or vote online during the Annual Meeting prior to the closing of the polls.
poll. Brokerage firms generally have the authority to vote their customers'customers’ unvoted shares on certain "routine"“routine” matters. If your shares are held in the name
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 77 | |
time.
74 DUKE ENERGY – 2018 Proxy Statement
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Related Person Transactions |
Related Person Transaction Policy. The Corporate Governance Committee adopted a Related Person Transaction Policy that sets forth ourDuke Energy’s procedures for the identification, review, consideration, and approval or ratificationprohibition of "related“related person transactions."” For purposes of our policy only, a "related“related person transaction"transaction” is a transaction, arrangement, or relationship (or any series of similar transactions, arrangements or relationships) in which we and any "related person"“related person” are, were, or will be participants and where the related person has a direct or indirect material interest in which the amount involved exceeds $120,000.transaction. Transactions involving compensation for services provided to us as an employee or director are not covered by this policy. A "related person"“related person” is any executive officer, director, or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by such persons. In the ordinary course of business, in 2021, some of our directors and executive officers, their family members, and affiliated entities received electric and natural gas services on the same terms and conditions provided to other customers. In addition, the affiliated entities of some of our directors were involved in transactions that were immaterial to the Company. None of these transactions were directly or indirectly material to the associated director or affiliated entity. As a result, none of our executive officers or directors had a related person transaction.
DUKE ENERGY – 2018 Proxy Statement 75
OTHER INFORMATION
inconsistent with, our best interests and those of our shareholders, as our Corporate Governance Committee (or Board) determines in the good faith exercise of its judgment.
For Mr. Webster, the Board considered a relationship between the Corporation and PwC, a firm that provides professional tax and other services from time to time to the Corporation and at which Mr. Webster's brother-in-law was a partner for the majority of 2017. In 2017, the Corporation paid approximately $17 million to PwC for tax, merger integration services in connection with the acquisition of Piedmont Natural Gas and the sale of the Corporation's Latin American Generation business, and various other services. The Board determined that Mr. Webster had no material interest in the transactions between the Corporation and PwC and that the transactions were in the best interests of the shareholders of the Corporation. The Board reviewed and approved the transactions in advance and the relationship with PwC was deemed by the Board not to impair Mr. Webster's independence. Because Mr. Webster's brother-in-law left PwC in December 2017, there is no longer a related person transaction for Mr. Webster.
| BUILDING A | | | DUKE ENERGY 2022 PROXY STATEMENT 79 | |
21, 2022.
Householding Information |
Duke Energy has adopted a procedure called "householding,"“householding,” which has been approved by the SEC. Under this procedure, a single copy of the annual report and proxy statement is sent to any household at which two or more shareholders reside, unless one of the shareholders at that address notifies us that they wish to receive individual copies. Each shareholder will continue to receive separate proxy cards, and householding will not affect dividend check mailings or InvestorDirect Choice Plan statement mailings in any way.
A number of
Electronic Delivery of the Annual Report and Proxy Materials |
If you received a paper version of this year's Proxy Materials,year’s proxy materials, please consider signing up for electronic delivery of next year'syear’s proxy materials. Electronic delivery significantly reduces Duke Energy'sEnergy’s printing and postage costs and also reduces our consumption of natural resources. You will be notified immediately by email when next year'syear’s annual report and Proxy Materialsproxy materials are available. Electronic delivery also makes it more convenient for shareholders to cast their votesvote on issues that affect Duke Energy.
| 80 DUKE ENERGY 2022 PROXY STATEMENT | | | BUILDING A SMARTER ENERGY FUTURE® | |
| | 2021 Form 10-K | | | | Annual Report on Form 10-K for the year ended December 31, 2021 | | |
| | Annual Meeting | | | | Annual Meeting of Shareholders | | |
| | Board | | | | Board of Directors | | |
| | CEO | | | | Chief Executive Officer | | |
| | CERT | | | | Community Emergency Response Team | | |
| | CFO | | | | Chief Financial Officer | | |
| | COO | | | | Chief Operating Officer | | |
| | Cinergy Plan | | | | Cinergy Corp. Non-Union Employees’ Pension Plan | | |
| | Deloitte | | | | Deloitte & Touche LLP | | |
| | Directors’ Savings Plan | | | | Duke Energy Corporation Directors’ Savings Plan | | |
| | Duke Energy or the Company | | | | Duke Energy Corporation | | |
| | ECBP | | | | Duke Energy Executive Cash Balance Plan | | |
| | EEO | | | | Equal Employment Opportunity | | |
| | ESCC | | | | Electricity Subsector Coordinating Council | | |
| | EPS | | | | Earnings Per Share | | |
| | ESG | | | | Environmental, social, and governance | | |
| | Exchange Act | | | | Securities Exchange Act of 1934, as amended | | |
| | Executive Savings Plan | | | | Duke Energy Corporation Executive Savings Plan | | |
| | FAP | | | | Final Average Monthly Pay | | |
| | GAAP | | | | Generally Accepted Accounting Principles in the United States | | |
| | HBCU | | | | Historically black colleges and universities | | |
| | Internal Revenue Code | | | | Internal Revenue Code of 1986 | | |
| | INPO | | | | Institute of Nuclear Power Operations | | |
| | IRP | | | | Integrated Resource Plan | | |
| | LTI | | | | Long-Term Incentive | | |
| | MW | | | | Megawatt | | |
| | NEO | | | | Named Executive Officer | | |
| | Notice | | | | Notice Regarding the Availability of Proxy Materials | | |
| | NRC | | | | Nuclear Regulatory Commission | | |
| | NYSE | | | | New York Stock Exchange | | |
| | O&M | | | | Operations and Maintenance | | |
| | OSHA | | | | Occupational Safety and Health Administration | | |
| | pandemic | | | | COVID-19 pandemic | | |
| | Piedmont | | | | Piedmont Natural Gas Company, Inc. | | |
| | PwC | | | | PricewaterhouseCoopers, LLC | | |
| | RCBP | | | | Duke Energy Retirement Cash Balance Plan | | |
| | Retirement Savings Plan | | | | Duke Energy Retirement Savings Plan | | |
| | RSU | | | | Restricted Stock Unit | | |
| | SASB | | | | Sustainability Accounting Standards Board | | |
| | SEC | | | | Securities and Exchange Commission | | |
| | Securities Act | | | | Securities Act of 1933, as amended | | |
| | STI | | | | Short-Term Incentive | | |
| | Tax Act | | | | The Tax Cuts and Jobs Act | | |
| | TCFD | | | | Task Force for Climate-related Disclosures | | |
| | TDC | | | | Total Direct Compensation | | |
| | TICR | | | | Total Incident Case Rate | | |
| | TSR | | | | Total Shareholder Return | | |
| | Traditional Program | | | | Cinergy Plan’s Traditional Program | | |
| | UTY | | | | Philadelphia Utility Index | | |
| BUILDING A SMARTER ENERGY FUTURE® | | | DUKE ENERGY 2022 PROXY STATEMENT 81 | |
DUKE ENERGY CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY AS FOLLOWS:
1. The name of the corporation is Duke Energy Corporation. The name under which the corporation was originally incorporated was Deer Holding Corp. The name of the corporation was changed to Duke Energy Holding Corp. on June 21, 2005. The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on May 3, 2005.
2. This Amended and Restated Certificate of Incorporation, having been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the "DGCL") and by the approval of the stockholders of the Corporation in accordance with Section 211 of the DGCL, restates and integrates and further amends the provisions of the Amended and Restated Certificate of Incorporation as amended or supplemented heretofore. As so restated and integrated and further amended, the Amended and Restated Certificate of Incorporation (hereinafter, this "Certificate of Incorporation") reads as follows:
The name of the corporation is Duke Energy Corporation.
ARTICLE SECONDRegistered Office
The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle. The name of the registered agent of the Corporation at such address is The Corporation Trust Company.
The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the DGCL.
(a) The aggregate number of shares of stock that the Corporation shall have authority to issue is two billion forty-four million (2,044,000,000) shares, consisting of two billion (2,000,000,000) shares of Common Stock, par value $0.001 per share (the "Common Stock"), and forty-four million (44,000,000) shares of Preferred Stock, par value $0.001 per share (the "Preferred Stock").
(b) The Board of Directors of the Corporation shall have the full authority permitted by law, at any time and from time to time, to divide the authorized and unissued shares of Preferred Stock into one or more classes or series and, with respect to each such class or series, to determine by resolution or resolutions the number of shares constituting such class or series and the designation of such class or series, the voting powers, if any, of the shares of such class or series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of any such class or series of Preferred Stock to the full extent now or hereafter permitted by the law of the State of Delaware. The powers, preferences and relative, participating, optional and other special rights of each class or series of Preferred Stock and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other classes or series at any time outstanding.
(c) Subject to applicable law and the rights, if any, of the holders of any class or series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Common Stock with respect to the payment of dividends, dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board of Directors of the Corporation in its discretion shall determine. Nothing in this ARTICLE FOURTH shall limit the power of the Board of Directors to create a class or series of Preferred Stock with dividends the rate of which is calculated by reference to, and the payment of which is concurrent with, dividends on shares of Common Stock.
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(d) In the event of the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, subject to the rights of the holders of any class or series of the Preferred Stock, the net assets of the Corporation available for distribution to stockholders of the Corporation shall be distributedprorata to the holders of the Common Stock in accordance with their respective rights and interests. If the assets of the Corporation are not sufficient to pay the amounts, if any, owing to holders of shares of Preferred Stock in full, holders of all shares of Preferred Stock will participate in the distribution of assets ratably in proportion to the full amounts to which they are entitled or in such order or priority, if any, as will have been fixed in the resolution or resolutions providing for the issue of the class or series of Preferred Stock. Neither the merger or consolidation of the Corporation into or with any other corporation, nor a sale, transfer or lease of all or part of its assets, will be deemed a liquidation, dissolution or winding up of the Corporation within the meaning of this paragraph, except to the extent specifically provided in any certificate of designation for any class or series of Preferred Stock. Nothing in this ARTICLE FOURTH shall limit the power of the Board of Directors to create a class or series of Preferred Stock for which the amount to be distributed upon any liquidation, dissolution or winding up of the Corporation is calculated by reference to, and the payment of which is concurrent with, the amount to be distributed to the holders of shares of Common Stock.
(e) Except as otherwise required by law, as otherwise provided herein or as otherwise determined by the Board of Directors as to the shares of any class or series of Preferred Stock, the holders of Preferred Stock shall have no voting rights and shall not be entitled to any notice of meetings of stockholders.
(f) Except as otherwise required by law and subject to the rights of the holders of any class or series of Preferred Stock, with respect to all matters upon which stockholders are entitled to vote or to which stockholders are entitled to give consent, the holders of any outstanding shares of Common Stock shall vote together as a class, and every holder of Common Stock shall be entitled to cast thereon one vote in person or by proxy for each share of Common Stock standing in such holder's name on the books of the Corporation;provided,however, that, except as otherwise required by law, or unless provided in any certificate of designation for any class or series of Preferred Stock, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any certificate of designations relating to any class or series of Preferred Stock) that relates solely to the terms of one or more outstanding classes or series of Preferred Stock if the holders of such affected class or series are entitled, either separately or together with the holders of one or more other such classes or series, to vote thereon pursuant to this Certificate of Incorporation (including any certificate of designations relating to any class or series of Preferred Stock) or pursuant to applicable law. Subject to the rights of the holders of any class or series of Preferred Stock, stockholders of the Corporation shall not have any preemptive rights to subscribe for additional issues of stock of the Corporation and no stockholder will be permitted to cumulate votes at any election of directors.
ARTICLE FIFTHBoard of Directors
(a) The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
(b) Except as otherwise fixed by or pursuant to provisions of ARTICLE FOURTH relating to the rights of the holders of any series of Preferred Stock, the number of directors of the Corporation shall not be less than nine (9) nor more than eighteen (18), as may be fixed from time to time by the Board of Directors.
(c) A director may be removed from office with or without cause;provided,however, that, subject to applicable law, any director elected by the holders of any series of Preferred Stock may be removed without cause only by the holders of a majority of the shares of such series of Preferred Stock.
(d) Except as otherwise fixed by or pursuant to provisions of ARTICLE FOURTH relating to the rights of the holders of any series of Preferred Stock, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled only by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall hold office until the next succeeding annual meeting of stockholders and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
(e) Except as otherwise fixed by or pursuant to provisions of ARTICLE FOURTH relating to the rights of the holders of any series of Preferred Stock, the directors shall be elected by the holders of voting stock and shall hold office until the next annual meeting of stockholders and until their respective successors shall have been duly elected and qualified, subject, however, to prior death, resignation, retirement, disqualification or removal from office.
(f) Election of directors need not be by written ballot unless the By-Laws so provide.
(g) In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject,
78 DUKE ENERGY – 2018 Proxy Statement
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nevertheless, to the provisions of the DGCL, this Certificate of Incorporation, and any By-Laws adopted by the stockholders; provided, however, that no By-Laws hereafter adopted by the stockholders shall invalidate any prior act of the directors which would have been valid if such By-Laws had not been adopted.
ARTICLE SIXTHAction by Stockholders; Books of the Corporation
(a) Meetings of stockholders may be held within or without the State of Delaware, as the By-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the DGCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
(b) Written Consent. Certain actions required or permitted to be taken by the stockholders of the Corporation at an annual or special meeting of the stockholders may be effected without a meeting by the written consent of the holders of common stock of the Corporation (a "Consent"), but only if such action is taken in accordance with the provisions of this Article Sixth, the Corporation's By-laws and applicable law.
DUKE ENERGY – 2018 Proxy Statement 79
APPENDIX A
beneficial ownership of such shares by the beneficial owner on whose behalf the request was made) after the date of the request, shall be deemed a revocation of the request with respect to such shares, and each requesting stockholder and the applicable beneficial owner shall certify to the secretary of the Corporation on the day prior to the record date set for the action by written consent as to whether any such disposition has occurred. If the unrevoked requests represent in the aggregate less than 20% of the outstanding shares of common stock of the Corporation, the Board of Directors, in its discretion, may cancel the action by written consent.
80 DUKE ENERGY – 2018 Proxy Statement
APPENDIX A
Sixth,represent at least the minimum number of votes that would be necessary to take the corporate action at a meeting at which all shares entitled to vote thereon were present and voted, in accordance with Delaware law and this Certificate of Incorporation.
ARTICLE SEVENTHAmendment of Certificate of Incorporation
The Corporation reserves the right to supplement, amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by the laws of the State of Delaware and this Certificate of Incorporation, and all rights conferred upon stockholders, directors and officers herein are granted subject to this reservation. Notwithstanding the foregoing, this ARTICLE SEVENTH and sections (b) and (d) of ARTICLE FIFTH may not be supplemented, amended, altered, changed, or repealed in any respect, nor may any provision inconsistent therewith be adopted, unless such supplement, amendment, alteration, change or repeal is approved by the affirmative vote of the holders ofa majority of the combined voting power of the then outstanding shares of stock of all classes of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
ARTICLE EIGHTHAmendment of By-Laws
In furtherance and not in limitation of the powers conferred upon it by law, the Board of Directors of the Corporation is expressly authorized to adopt, repeal, alter or amend the By-Laws of the Corporation. No By-Laws may be adopted, repealed, altered or amended in any manner that would be inconsistent with this Amended and Restated Certificate of Incorporation (as it may be adopted, repealed, altered or amended from time to time in accordance with ARTICLE SEVENTH).
ARTICLE NINTHLimitation of Liability
Except to the extent elimination or limitation of liability is not permitted by applicable law, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty in such capacity. Any repeal or modification of this ARTICLE NINTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.
ARTICLE TENTHLiability of Stockholders
The holders of the capital stock of the Corporation shall not be personally liable for the payment of the Corporation's debts, and the private property of the holders of the capital stock of the Corporation shall not be subject to the payment of debts of the Corporation to any extent whatsoever.
This Amended and Restated Certificate of Incorporation is to become effective at [·].
DUKE ENERGY – 2018 Proxy Statement 81
APPENDIX B
Cautionary Note Regarding Forward-Looking Information
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CORPORATION 526 SOUTH CHURCH STREET CHARLOTTE, NC 28202 VOTE BY INTERNET BeforeINTERNETBefore the Annual Meeting of Shareholders ("Annual Meeting")(Annual Meeting) - Go to proxyvote.com Usewww.proxyvote.com or scan the QR Barcode aboveUse the Internet to transmit your voting instructions up until 11:59 p.m. Eastern Timetime on May 2, 2018.4, 2022. Have your proxy card in handavailable when you access the website and follow the instructions to obtain your records and to create a voting instruction form. DUKE ENERGY CORPORATION 550 SOUTH TRYON STREET CHARLOTTE, NC 28202 Duringform.During the Annual Meeting - Go to duke-energy.onlineshareholdermeeting.com Youduke-energy.onlineshareholdermeeting.comYou may participate in the Annual Meeting via live webcast and cast your vote online during the Annual Meeting.meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTEinstructions.VOTE BY PHONE - 1.800.690.6903 Use1.800.690.6903Use any touch-tone phone to transmit your voting instructions up until 11:59 p.m. Eastern Timetime on May 2, 2018.4, 2022. Have your proxy card in handavailable when you call and then follow the instructions. VOTEinstructions.VOTE BY MAIL Mark,MAILMark, sign, and date this proxy card, and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.11717.ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSIf you would like to reduce the costs incurred by our Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards, and annual reports electronically via email or the Internet. To sign-up for electronic delivery, please follow the instructions above to vote by Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E37697-P02077-Z71749INK: D70471-P68932-Z82012 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY DUKE ENERGY CORPORATION TheCORPORATIONThe Board of Directors recommends a vote "FOR" Director nominees. For Withhold AllAll For All AllAllExceptExcept To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. ! ! ! 1. Election1.Election of directors:Nominees:01) 02) 03) 04) 05) 06) 07) Michael G. Browning Derrick Burks02)Annette K. Clayton03)Theodore F. Craver, Jr. Jr.04)Robert M. Davis Daniel R. DiMicco John H. Forsgren Davis05)Caroline Dorsa06)W. Roy Dunbar07)Nicholas C. Fanandakis 08)Lynn J. Good Good09)John T. Herron 08) 09) 10) 11) 12) 13) 14) James B. Hyler, Jr. William E. Kennard Herron10)Idalene F. Kesner11)E. Marie McKee Charles W. Moorman IV Carlos A. Saladrigas McKee12)Michael J. Pacilio13)Thomas E. Skains Skains14)William E. Webster, Jr. For Against Abstain The Board of Directors recommends a vote "FOR" Proposal 4. 4. Amendment to the Amended and Restated Certificate of Incorporation of Duke Energy Corporation to eliminate supermajority voting requirements !!! ! ! The Board of Directors recommends a vote "AGAINST" Proposal 5. For Against Abstain The Board of Directors recommends a vote "FOR" Proposals 2 and 3. ! ! ! ! ! ! 2. Ratification3.2.Ratification of Deloitte & Touche LLP as Duke Energy Corporation'sEnergy's independent registered