UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

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¨ Soliciting Materials under §240.14a-12



Black Hills Corporation
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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~~BLACK HILLS CORPORATION~~

~~Notice of 2018~~

~~Annual Meeting of Shareholders~~

~~and Proxy Statement~~

~~(This page left blank intentionally.)~~

~~BLACK HILLS CORPORATION~~

~~NOTICE OF ANNUAL MEETING OF SHAREHOLDERS~~



~~WHEN:~~			~~WHERE:~~

			~~Horizon Point~~
~~Tuesday, April 24, 2018~~			~~Company's Corporate Headquarters~~
~~9:30 a.m., local time~~			~~7001 Mount Rushmore Road~~
			~~Rapid City, South Dakota 57702~~

~~We are pleased to invite you to attend the annual meeting of shareholders of Black Hills Corporation.~~

~~Proposals:~~


1.	~~Election of three directors in Class III: Michael H. Madison, Linda K. Massman and Steven R. Mills.~~


2.	~~Ratification of Deloitte & Touche LLP to serve as our independent registered public accounting firm for 2018.~~


3.	~~Adoption of an advisory, non-binding resolution to approve our executive compensation.~~


4.	~~Any other business that properly comes before the annual meeting.~~

~~Record Date:~~

The Board of Directors set March 5, 2018 as the record date for the meeting. This means that our shareholders as of the close of business on that date are entitled to receive this notice of the meeting and vote at the meeting and any adjournments or postponements of the meeting.

~~How to Vote:~~

Your vote is very important. You may vote your shares by telephone, by the Internet or by returning the enclosed proxy. If you own shares of common stock other than the shares shown on the enclosed proxy, you will receive a proxy in a separate envelope for each such holding. Please vote each proxy received. To make sure that your vote is counted if voting by mail, you should allow enough time for the postal service to deliver your proxy before the meeting.

~~Sincerely,~~

~~ROXANN R. BASHAM~~

~~Vice President – Governance and Corporate Secretary~~

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BLACK HILLS CORPORATION

Notice of 2020

Annual Meeting of Shareholders

and Proxy Statement

(This page left blank intentionally.)

BLACK HILLS CORPORATION

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS



WHEN:			WHERE:

			Horizon Point
Tuesday, April 28, 2020			Company’s Corporate Headquarters
9:30 a.m., local time			7001 Mount Rushmore Road
			Rapid City, South Dakota 57702

We are pleased to invite you to attend the annual meeting of shareholders of Black Hills Corporation.

Proposals:


1.	Election of one director in Class I: Kathleen S. McAllister; three directors in Class II: Rebecca B. Roberts, Teresa A. Taylor, and John B. Vering; and one director in Class III: Tony A. Jensen.


2.	Ratification of Deloitte & Touche LLP to serve as our independent registered public accounting firm for 2020.


3.	Adoption of an advisory, non-binding resolution to approve our executive compensation.


4.	Any other business that properly comes before the annual meeting.

Record Date:

The Board of Directors set March 2, 2020 as the record date for the meeting. This means that our shareholders as of the close of business on that date are entitled to receive this notice of the meeting and vote at the meeting and any adjournments or postponements of the meeting.

How to Vote:

Sincerely,

/s/ Amy K. Koenig

AMY K. KOENIG

Vice President - Governance, Corporate Secretary and Deputy General Counsel

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BLACK HILLS CORPORATION

7001 Mount Rushmore Road

Rapid City, South Dakota 57702



PROXY STATEMENT

ü	A proxy in the accompanying form is solicited by the Board of Directors of Black Hills Corporation, a South Dakota corporation, to be voted at the annual meeting of our shareholders to be held Tuesday, April ~~24, 2018,~~28, 2020, and at any adjournment of the annual meeting.

ü	The enclosed form of proxy, when executed and returned, will be voted as set forth in the proxy. Any shareholder signing a proxy has the power to revoke the proxy in writing, addressed to our secretary, or in person at the meeting at any time before the proxy is exercised.

ü	We will bear all costs of the solicitation. In addition to solicitation by mail, our officers and employees may solicit proxies by telephone, fax, or in person. We have retained Georgeson LLC to assist us in the solicitation of proxies at an anticipated cost of ~~$8,000,~~$8,500, plus out-of-pocket expenses. Also, we will, upon request, reimburse brokers or other persons holding stock in their names or in the names of their nominees for reasonable expenses in forwarding proxies and proxy materials to the beneficial owners of stock.

ü	This proxy statement and the accompanying form of proxy are to be first mailed on or about March ~~15, 2018.~~13, 2020. Our ~~2017~~2019 annual report to shareholders is being mailed to shareholders with this proxy statement.



VOTING RIGHTS AND PRINCIPAL HOLDERS

ü	Only our shareholders of record at the close of business on March ~~5, 2018~~2, 2020 are entitled to vote at the meeting. Our outstanding voting stock as of the record date consisted of ~~53,596,032~~62,750,615 shares of our common stock.

ü	Each outstanding share of our common stock is entitled to one vote. Cumulative voting is permitted in the election of ~~our Board of Directors. Each share is entitled to three votes, one each for~~directors in the ~~election of three directors, and the three votes may be cast for a single nominee or may be distributed among the three nominees.~~same class.

TABLE OF CONTENTS




Commonly Asked Questions and Answers About the Annual Meeting Process	1
Proposal 1 - Election of Directors	4
Corporate Governance	89
Meetings and Committees of the Board	1213
Director Compensation	1516
Security Ownership of Management and Principal Shareholders	1718
Proposal 2 - Ratification of Appointment of Independent Registered Public Accounting Firm	1920
Fees Paid to the Independent Registered Public Accounting Firm	2021
Audit Committee Report	2122
Executive Compensation	2223
Compensation Discussion and Analysis	2223
Report of the Compensation Committee	3738
Summary Compensation Table	3839
Grants of Plan Based Awards in ~~2017~~2019	4041
Outstanding Equity Awards at Fiscal Year-End ~~2017~~2019	4142
Option Exercises and Stock Vested During ~~2017~~2019	4344
Pension Benefits for ~~2017~~2019	4445
Nonqualified Deferred Compensation for ~~2017~~2019	4748
Potential Payments Upon Termination or Change in Control	4849
Pay Ratio for ~~2017~~2019	5354
Proposal 3 - Advisory Vote on Our Executive Compensation	5455
Transaction of Other Business	5556
Shareholder Proposals for ~~2019~~2021 Annual Meeting	5556
Shared Address Shareholders	5556
Annual Report on Form 10-K	5657
Notice Regarding Availability of Proxy Materials	5657
Appendix A - Reconciliation of Non-GAAP Financial Measures	-A

COMMONLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING PROCESS

Who is soliciting my proxy?

The Board of Directors of Black Hills Corporation is soliciting your proxy.

Where and when is the annual meeting?

The annual meeting is at 9:30 a.m., local time, April ~~24, 2018~~28, 2020 at Horizon Point, the ~~Company's~~Company’s corporate headquarters, 7001 Mount Rushmore Road, Rapid City, South Dakota.

Who can vote?

Holders of our common stock as of the close of business on the record date, March ~~5, 2018,~~2, 2020, can vote at our annual meeting. Each share of our common stock has one vote for Proposals 2 and 3. ~~Cumulative~~Related to Proposal 1, Election of Directors, cumulative voting is permitted in the election of ~~directors. Each share is entitled to three votes for~~directors in the ~~election of directors, one each for the election of three directors, and the three votes may be cast for a single person or may be distributed among the three nominees.~~same class.

How do I vote?

There are three ways to vote by proxy:

by calling the toll free telephone number on the enclosed proxy;

by using the Internet by going to the website identified on the enclosed proxy; or

by returning the enclosed proxy in the envelope provided.

You may be able to vote by telephone or the Internet if your shares are held in the name of a bank or broker. If this is the case, you will need to follow their instructions.

What constitutes a quorum?

Shareholders representing at least 50 percent of our common stock issued and outstanding as of the record date must be present at the annual meeting, either in person or by proxy, for there to be a quorum. Abstentions and broker non-votes are counted as present for establishing a quorum. A broker non-vote occurs when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or nominee does not have discretionary voting power and has not received instructions from the beneficial owner.

What am I voting on and what is the required vote for the proposals to be adopted?

The required vote and method of counting votes for the various business matters to be considered at the annual meeting are described in the table below. If you sign and return your proxy card without indicating your vote, your shares will be voted in accordance with the Board recommendations as set forth below.



Item of Business	Board Recommendation	Voting Approval Standard	Effect of Abstention	Effect of Broker Non-Vote
Proposal 1:	FOR election of each director nominee	The ~~three~~five nominees with the most "FOR" votes are ~~elected.~~elected to their respective classes.	No effect	No effect

Election of Directors
		If a nominee receives more "WITHHOLD AUTHORITY" votes than "FOR" votes, the nominee must submit a resignation for consideration by the Governance Committee and final Board decision.
Proposal 2:	FOR	The majority of votes present in person or represented by proxy and entitled to vote.	No effect	Not applicable; broker may vote shares without instruction

Ratification of Appointment of Independent Registered Public Accounting Firm

Proposal 3:	FOR	The majority of votes present in person or represented by proxy and entitled to vote.	No effect	No effect
Advisory Vote to Approve Executive Compensation
		This advisory vote is not binding on the Board, but the Board will consider the vote results when making future executive compensation decisions.

Is cumulative voting permitted for the election of directors?

In the election of directors, you may cumulate your vote. Cumulative voting allows you to allocate among the director nominees in the same class, as you see fit, the total number of votes equal to the number of director positions to be filled multiplied by the number of shares you hold. For example, if you own 100 shares of stock, and there are three directors to be elected in a class at the annual meeting, you could allocate 300 “For” votes (three times 100) among as few or as many of the three nominees to be voted on at the annual meeting as you choose.

If you choose to cumulate your votes, you will need to submit a proxy card or a ballot and make an explicit statement of your intent to cumulate your votes, either by indicating in writing on the proxy card or by indicating in writing on your ballot when voting at the annual meeting. If you hold shares beneficially in street name and wish to cumulate votes, you should contact your broker, trustee or nominee.

How will my shares be voted if they are held in a broker’s name?

If you hold your shares through an account with a bank or broker, the bank or broker may vote your shares on some matters even if you do not provide voting instructions. Brokerage firms have the authority under the New York Stock Exchange ("NYSE") rules to vote shares on certain matters (such as the ratification of auditors) when their customers do not provide voting instructions. However, on most other matters when the brokerage firm has not received voting instructions from its customers, the brokerage firm cannot vote the shares on that matter and a “broker non-vote” occurs. This means that brokers may not vote your shares on the election of directors or on the “say on pay” advisory vote if you have not given your broker specific instructions as to how to vote. Please be sure to give specific voting instructions to your broker so that your vote can be counted.

What should I do now?

You should vote your shares by telephone, by the Internet or by returning your signed and dated proxy card in the enclosed envelope as soon as possible so that your shares will be represented at the annual meeting.

Who will count the vote?

Representatives of our transfer agent, Equiniti Trust Company, ~~(previously Wells Fargo Bank, N.A.),~~ will count the votes and serve as judges of the election. On February 1, 2018, the shareowner services business of Wells Fargo Bank, N.A. was acquired by Equiniti Group plc and Wells Fargo Shareowner Services, our transfer agent, became EQ Shareowner Services.

Who conducts the proxy solicitation and how much will it cost?

We are asking for your proxy for the annual meeting and will pay all the costs of asking for shareholder proxies. We have hired Georgeson LLC to help us send out the proxy materials and ask for proxies. Georgeson ~~LLC's~~LLC’s fee for these services is anticipated to be ~~$8,000~~$8,500 plus out-of-pocket expenses. We can ask for proxies through the mail or by telephone, fax, or in person. We can use our directors, officers and employees to ask for proxies. These people do not receive additional compensation for these services. We will reimburse brokers and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding solicitation material to the beneficial owners of our common stock.

Can I revoke my proxy?

Yes. You can change your vote in one of four ways at any time before your proxy is used. First, you can enter a new vote by telephone or Internet. Second, you can revoke your proxy by written notice. Third, you can send a later dated proxy changing your vote. Fourth, you can attend the meeting and vote in person.

Who should I call with questions?

If you have questions about the annual meeting, you should call ~~Roxann R. Basham,~~Amy K. Koenig, Vice President –- Governance, ~~and~~ Corporate Secretary and Deputy General Counsel at (605) 721-1700.

When are the shareholder proposals due for the ~~2019~~2021 annual meeting?

In order to be considered for inclusion in our proxy materials, you must submit proposals for next year’s annual meeting in writing to our Corporate Secretary at our ~~executive offices~~corporate headquarters at 7001 Mount Rushmore Road, P.O. Box 1400, Rapid City, South Dakota 57709, on or prior to November ~~15, 2018.~~13, 2020.

A shareholder who intends to submit a proposal for consideration, but not for inclusion in our proxy materials, must provide written notice to our Corporate Secretary in accordance with Article I, Section 9 of our Bylaws. In general, our Bylaws provide that the written notice must be delivered not less than 90 days nor more than 120 days prior to the first anniversary date of the immediately preceding annual meeting of shareholders. Our ~~2018~~2020 annual meeting is scheduled for April ~~24, 2018.~~28, 2020. Ninety days prior to the first anniversary of this date will be January ~~24, 2019,~~28, 2021, and 120 days prior to the first anniversary of this date will be December ~~25, 2018.~~29, 2020.



PROPOSAL 1	ELECTION OF DIRECTORS

Our Board is nominating ~~three~~five individuals for election as directors at this annual meeting. All of the nominees are currently serving as our directors. In accordance with our Bylaws and Article VI of our Articles of Incorporation, members of our Board of Directors are elected to three classes of staggered terms consisting of three years each, and until their successors are duly elected and qualified. At this annual meeting, one director will be elected to Class I for a term of two years until our annual meeting in 2022, three directors will be elected to Class ~~III~~II for a term of three years until our annual meeting in 2023, and one director will be elected to Class III to complete the remainder of the term expiring at our annual meeting in 2021.

Nominees for director at the annual meeting are ~~Michael H. Madison, Linda K. Massman~~Tony A. Jensen, Kathleen S. McAllister, Rebecca B. Roberts, Teresa A. Taylor and ~~Steven R. Mills.~~John B. Vering. Our Bylaws require a minimum of nine directors. The Board has set the size of the ~~current board~~Board at 10 ~~directors.~~ directors effective at the annual meeting in connection with two director retirements occurring at that time.

Pursuant to our Bylaws, directors must resign from the Board at the annual meeting following attaining 72 years of age. Accordingly, Mr. Zeller, who turned 72 in 2020, will resign effective at our annual meeting. We expect Mr. Madison, who will turn 72 prior to our 2021 annual meeting, will resign effective at that annual meeting and therefore serve his three-year term. Additionally, we expect Mr. Vering, who will turn 72 prior to our 2022 annual meeting, will resign effective at that annual meeting and therefore serve only two years of his term. As previously announced, Mr. Emery is not standing for re-election and plans to retire as an officer and employee of the company effective May 1, 2020.

If, at the time of the annual meeting, any of such nominees are unable to stand for election, the Board of Directors may designate a substitute or reduce the number of directors to nine. In that case, shares represented by proxies may be voted for a substitute ~~director.~~director nominated by the Board. We do not expect that any nominee will be unavailable or unable to serve.

The Board and the Governance Committee believe that the combination of the various qualifications, skills and experiences of the directors contribute to an effective and well-functioning Board, and that, individually and as a whole, the directors possess the necessary qualifications to provide effective oversight of the business and quality advice to the Company’s management. Included in each director’s biography below is an assessment of the specific qualifications, attributes, skills and experience that have led to the conclusion that each individual should serve as a director in light of our current business and structure.

The Board of Directors recommends a vote FOR the election of the following nominees:



Director Nominee	Class	Year Term Expiring
~~Michael H. Madison~~Tony A. Jensen	III	2021
~~Linda K. Massman~~Kathleen S. McAllister	~~III~~I	~~2021~~2022
~~Steven R. Mills~~Rebecca B. Roberts	~~III~~II	~~2021~~2023
Teresa A. Taylor	II	2023
John B. Vering	II	2023

DIRECTOR BIOGRAPHIES



Average Tenure	Average Age	Diversity
85 Years	6162	30% Women

~~10% Ethnic~~



Linden R. Evans	President and Chief Executive Officer of the Company since January 1, 2019, President and Chief Operating Officer from 2016 through 2018, and President and Chief Operating Officer - Utilities from 2004 through 2015.
Director since November 2018	Specific Qualifications, Attributes, Skills and Experience:
Director Class III Term Expiring 2021 Age 57 Board Committees None Other Public Company Boards None	Broad Range of Experience Broad range of experience in his career in areas of utility management, strategic planning and execution, telecommunications, corporate legal and environmental matters.
	Relevant Senior Leadership Experience Currently President and Chief Executive Officer of the Company. Previously served as President and Chief Operating Officer from 2016 through 2018 and in various other leadership roles with the Company.
	Extensive Knowledge of the Company’s Business and/or Industry 18 years of experience with the Company. Prior to joining the Company, he was a mining engineer and an attorney specializing in environmental and corporate legal matters. Serves on many industry association boards and advisory committees for large publicly traded mining companies.



~~David R. Emery~~Tony A. Jensen	~~Chairman and Chief Executive Officer of Black Hills Corporation since January 1, 2016, and Chairman,~~Retired. Former President and Chief Executive Officer and Director of Royal Gold, Inc., a public precious metals company, from ~~2005 through 2015.~~2006 to 2019.
Director since ~~2004~~2019	Specific Qualifications, Attributes, Skills and Experience:
Director Class IIIII Term Expiring ~~2020~~2021 Age 5558 Board Committees None Other Public Company Boards None ~~Ethnic Diversity~~ ~~Enrolled member of Cheyenne River Sioux Tribe~~	High Level of Financial Expertise ~~Oversees~~Oversaw financial matters in his role as ~~Chairman of the Board and~~ Chief Executive Officer and Director of ~~the Company. Led the Company through several successful acquisitions. Served as Interim Chief Financial Officer in 2008.~~a public company.
	Relevant Senior Leadership Experience ~~Currently Chairman and~~Served as Chief Executive Officer and Director of ~~the Company. Previously served in various leadership roles with the Company, including Chairman, President~~Royal Gold, Inc. from 2006 to 2019 and ~~Chief Executive Officer,~~ President and Chief Operating Officer ~~- Retail Business Segment~~from 2003 to 2006. He also served as a director of several industry and ~~Vice President - Fuel Resources.~~public boards.
	Extensive Knowledge of the Company’s Business and/or Industry 28Over 35 years of experience ~~with~~in the ~~Company, including 14 years on the Board. Prior to joining the Company,~~mining and mining finance industries where he ~~served as a petroleum engineer for a large independent oil~~held progressively more responsible roles in engineering, finance, strategic growth, safety, environmental excellence, and ~~gas company. Serves on many industry association boards and advisory committees.~~operational efficiency.



Michael H. Madison	Retired. Former President and Chief Executive Officer and Director of Cleco Corporation, a public utility holding company, from 2005 to 2011.
Director since 2012	Specific Qualifications, Attributes, Skills and Experience:
Director ~~Nominee~~ Class III Term Expiring 2021 Age 6971 Board Committees Compensation (Chair) Governance Other Public Company Boards None	High Level of Financial Expertise Oversaw financial matters in his role as Chief Executive Officer and Director of a public company. Previously served on our Audit Committee.
	Relevant Senior Leadership Experience Served as Chief Executive Officer and Director of Cleco Corporation from 2005 to 2011, and President and Chief Operating Officer of Cleco Power, LLC from 2003 to 2005. He was State President, Louisiana-Arkansas with American Electric Power from 2000 to 2003.
	Extensive Knowledge of the Company’s Business and/or Industry More than 40 years of utility industry experience in various positions of increasing responsibility, including president, director, vice president of operations, engineering and production and vice president of corporate services. Served on many industry association boards and advisory committees.



~~Linda K. Massman~~Kathleen S. McAllister	Retired. Former President and Chief Executive Officer and Director of ~~Clearwater Paper Corporation,~~Transocean Partners LLC, a ~~premier supplier~~growth-oriented public company and subsidiary of ~~private label tissue~~Transocean Ltd., an international provider of offshore contract drilling services for oil and gas wells, from 2014 to ~~major retailers and a producer of bleached paperboard, since 2013. Previously, she served as Clearwater’s President~~2016, and Chief ~~Operating~~Financial Officer ~~from 2011 to 2013.~~in 2016.
Director since ~~2015~~2019	Specific Qualifications, Attributes, Skills and Experience:
Director ~~Nominee~~ Class ~~III~~I Term Expiring ~~2021~~2022 Age 5155 Board Committees ~~Compensation~~None Other Public Company Boards ~~Clearwater Paper Corporation~~Hoegh LNG Partners LP (since 2017) ~~(since 2013)~~ ~~Tree House Foods, Inc.~~ ~~(since July 2016)~~Maersk Drilling (since 2019) Gender Diversity	High Level of Financial Expertise ~~Oversees~~Oversaw financial matters in her ~~role~~roles as Chief Executive Officer and ~~board member~~Chief Financial Officer of a public company. ~~More than 28 years of experience in the fields of finance, corporate planning and business strategy. Served as Chief Financial Officer of Clearwater Paper Corporation from 2008 to 2011.~~
	Relevant Senior Leadership Experience ~~Currently~~Served as Chief Executive Officer and Director of ~~a public company. Previously served~~Transocean Partners LLC, from 2014 to 2016, and Chief Financial Officer in ~~various other leadership roles with Clearwater Paper.~~2016. Served as Vice President and Treasurer of Transocean Ltd. from 2011 to 2014. She has also served ~~as Group Vice President of Finance~~on several corporate and ~~Corporate Planning for SUPERVALU Inc. and a business strategy consultant for Accenture.~~non-profit boards in addition to the boards identified at the left.
	~~Risk Oversight/Management Expertise~~Extensive Knowledge of the Company’s Business and/or Industry ~~Significant risk oversight/management~~Over 30 years of experience ~~throughout her career~~with diverse leadership roles in global, capital intensive companies in the energy value chain, including various ~~executive leadership,~~roles of increasing responsibility in information technology, tax, treasury, and finance ~~and business consulting positions, including Chief Financial Officer of a public company.~~functions.



Steven R. Mills	~~Financial~~ Consultant and Advisor to ~~clients in the~~Naxos Capital Partners, a European-based private equity ~~agribusiness, renewable products and financial services fields, since 2013.~~company. Served as Chief Financial Officer of Amyris, Inc., ~~an integrated~~a renewable products company, from 2012 to 2013. Also served as Senior Executive Vice President Performance and Growth of Archer Daniels Midland Company, ~~a processor, transporter, buyer~~one of the world’s largest agricultural processors and ~~marketer of agricultural products,~~food ingredient providers, from 2010 to 2012.
Director since 2011	Specific Qualifications, Attributes, Skills and Experience:
Director ~~Nominee~~ Class III Term Expiring 2021 Age 6264 Board Committees Lead Director Audit ~~(Chair)~~ Governance Other Public Company Boards ~~None~~Amyris, Inc. (since 2018)	High Level of Financial Expertise Oversaw financial matters in his role as Chief Financial Officer at public companies. ~~More than 35 years of experience in the fields of accounting, corporate finance, strategic planning, and mergers and acquisitions. Served~~Has served on our Audit Committee for 79 years, including ~~the past 3~~4 previous years as Audit Chair.
	Relevant Senior Leadership Experience Serves as our Lead Director since April 2019. Served in several leadership positions with public companies including, Chief Financial Officer, Controller, Senior Executive Vice President Performance and Growth and Senior Vice President Strategic Planning. He has also served as a director and board committee chair of several public and privately-owned companies, in addition to Amyris, Inc., providing governance and oversight experience.
	Risk Oversight/Management Expertise More than 40 years of experience in the fields of accounting, corporate finance, strategic planning, risk management, and mergers and acquisitions. Significant risk oversight/management experience throughout his career in various executive leadership and finance ~~and business consulting positions, including Chief Financial Officer at public companies.~~positions.



Robert P. Otto	Owner of Bob Otto Consulting LLC, providing strategic planning and services in cyber security, intelligence, and reconnaissance since 2017. He retired from the U.S. Air Force in 2016 as a lieutenant general. He served as a general officer since 2008, culminating as the Air Force Deputy Chief of Staff for Intelligence, Surveillance and Reconnaissance.
Director since ~~January~~ 2017	Specific Qualifications, Attributes, Skills and Experience:
Director Class I Term Expiring ~~2019~~2022 Age 5860 Board Committees Audit Other Public Company Boards None	Financially Literate Vast experience in areas spanning cyber security, strategic planning, and financial management from his military career. Serves on our Audit Committee.
	Relevant Senior Leadership Experience Commanded some of the Air ~~Force's~~Force’s largest organizations with thousands of employees and billion-dollar budgets. Intelligence and cyber security expert with a proven record of success executing cost-effective, cutting-edge initiatives. Extensive background in operations, financial management, policy development, restructuring, and systems implementation.
	Risk Oversight/Management Expertise Significant risk oversight/management experience throughout his military career. As the Air ~~Force's~~Force’s senior-most intelligence officer, he was directly responsible for policy planning, evaluation, oversight and leadership of ~~Air Force intelligence, surveillance and reconnaissance capabilities.~~a workforce of 27,000.



Rebecca B. Roberts	Retired. Former President of Chevron Pipe Line Company, a pipeline company transporting crude oil, refined petroleum products, liquefied petroleum gas, natural gas and chemicals within the United States, from 2006 to 2011. President of Chevron Global Power Generation from 2003 to 2006.
Director since 2011	Specific Qualifications, Attributes, Skills and Experience:
Director Nominee Class II Term Expiring ~~2020~~2023 Age 6567 Board Committees Compensation Governance (Chair) Other Public Company Boards ~~Enbridge,~~AbbVie, Inc. (since ~~2015)~~2018) MSA Safety, Inc. (since 2013) Gender Diversity	Financially Literate Operational and financial experience as a president of large public company subsidiaries and serving on public company boards.
	Relevant Senior Leadership Experience Served as President of Chevron Pipe Line Company from 2006 to 2011, and President of Chevron Global Power Generation from 2003 to 2006. She has also served on several public company and non-profit boards in addition to the ones identified at the ~~left.~~left, including the board of Enbridge, Inc., from 2015 through May 2018.
	Extensive Knowledge of the Company’s Business and/or Industry Over 35 years of experience in the energy industry, including managing pipelines in North America and global pipeline projects, and managing a portfolio of power plants in the United States, Asia and the Middle East. She also worked as a vice president, chemist, scientist and trader in the oil and gas sectors.



Mark A. Schober	Retired. Former Senior Vice President and Chief Financial Officer of ALLETE, Inc., a public ~~energy~~utility company, from 2006 to 2014.
Director since 2015	Specific Qualifications, Attributes, Skills and Experience:
Director Class I Term Expiring ~~2019~~2022 Age 6264 Board Committees Audit (Chair) Other Public Company Boards None	High Level of Financial Expertise Oversaw financial matters in his role as Chief Financial Officer of a public utility company. More than 35 years of experience in the fields of finance and accounting. Serves on our Audit ~~Committee.~~Committee, and as Chair since April of 2019.
	Relevant Senior Leadership Experience Served as Chief Financial Officer of ALLETE, Inc., a public utility company, from 2006 to 2014.
	Extensive Knowledge of the Company’s Business and/or Industry More than 35 years of experience in the utility and energy industry, including an understanding of the regulated business model and unique challenges of the geographic and regulatory environment in which we operate.



Teresa A. Taylor	Chief Executive Officer of Blue Valley Advisors, LLC, an advisory firm, since 2011. Former Chief Operating Officer of Qwest Communications, Inc., a telecommunications carrier, from 2009 to 2011.
Director since 2016	Specific Qualifications, Attributes, Skills and Experience:
Director Nominee Class II Term Expiring ~~2020~~2023 Age 5456 Board Committees Compensation Other Public Company Boards T-Mobile USA, Inc. (since 2013) ~~First Interstate BancSystem, Inc. (since 2012)~~ Gender Diversity	Broad Range of Experience Gained a broad range of experience in her career in areas of strategic planning and execution, technology development, human resources, labor relations and corporate communications.
	Relevant Senior Leadership Experience Served as Chief Operating Officer of Qwest Communications, Inc. where she led the daily operations and a senior management team responsible for 30,000 employees in field support, technical development, sales, marketing, customer support and IT systems. She has also served on several public company and non-profit boards in addition to the ones identified at the left.
	Extensive Knowledge of the Company’s Business and/or Industry Over 2930 years of experience in technology, media and the telecom sector. Served on the Board of NiSource, a public utility company, from 2012 to 2015, ~~and~~ Columbia Pipeline Group, Inc. from 2015 to July ~~2016.~~2016, and First Interstate BancSystem, Inc. from 2012 to 2020.



John B. Vering	Retired. Former Managing Director of Lone Mountain Investments, Inc., oil and gas investments, ~~since 2002.~~from 2002 to 2019. Partner in Vering Feed Yards LLC, a privately owned agricultural company, since 2010.
Director since 2005	Specific Qualifications, Attributes, Skills and Experience:
Director Nominee Class II Term Expiring ~~2020~~2023 Age 6870 Board Committees ~~Lead Director~~ Audit Governance Other Public Company Boards None	High Level of Financial Expertise Has gained a high level of financial expertise as Managing Director of an entity making oil and gas investments. Has served on our Audit Committee for 89 years.
	Relevant Senior Leadership Experience ~~Serves~~Served as our Lead ~~Director.~~Director from March 2016 through April 2, 2019. Had a 23-year career with Union Pacific Resources Company in several positions of increasing responsibilities, including Vice President of Canadian Operations.
	Extensive Knowledge of the Company’s Business and/or Industry Over 30 years of experience in the oil and gas industry, including direct operating experience in oil and gas transportation, marketing, exploration and production, and an understanding of the trans-national oil and gas business. He has served on our Board for ~~13 years and as our Lead Director since March 2016.~~15 years.



~~Thomas J. Zeller~~	Retired. Former Chief Executive Officer of RESPEC, a technical consulting and services firm with expertise in engineering, information technologies, and water and natural resources specializing in emerging environmental protection protocols, in 2011 and served as President from 1995 to 2011.
~~Director since~~ ~~1997~~	~~Specific Qualifications, Attributes, Skills and Experience:~~
~~Director~~ ~~Class I Term Expiring 2019~~ ~~Age~~ 70 ~~Board Committees~~ ~~Compensation~~ ~~Governance~~ ~~Other Public Company Boards~~ ~~None~~	~~High Level of Financial Expertise~~ Oversaw financial matters in his roles as Chief Executive Officer, President and Vice President of Finance for a large technical consulting and services firm. He served on our Audit Committee for 11 years, including serving as the Audit Committee Chair for 4 years.
	~~Relevant Senior Leadership Experience~~ ~~Previously served as our Lead Director from 2010 to February 2016. Executive leader at a global technical consulting firm. He has served on several non-profit boards.~~
	~~Extensive Knowledge of the Company’s Business and/or Industry~~ Experience gained at RESPEC relates to many of our Company’s activities concerning technology, engineering and environmental. With his long tenure on our Board, he has developed an extensive knowledge of the utility industry.

CORPORATE GOVERNANCE

Corporate Governance Guidelines

Our Board of Directors has adopted corporate governance guidelines titled “Corporate Governance Guidelines of the Board of Directors,” which guide the operation of our Board and assist the Board in fulfilling its obligations to shareholders and other constituencies. The guidelines lay the foundation for the Board’s responsibilities, operations, leadership, organization and committee matters. The Governance Committee reviews the guidelines annually, and the guidelines may be amended at any time, upon recommendation by the Governance Committee and approval of the Board. These guidelines can be found in the “Governance” section of our website (www.blackhillscorp.com/investor-relations/corporate-governance).

Board Independence

In accordance with NYSE rules, the Board of Directors through its Governance Committee, affirmatively determines the independence of each director and director nominee in accordance with guidelines it has adopted, which include all elements of independence set forth in the NYSE listing standards. These guidelines are contained in our Policy for Director Independence, which can be found in the “Governance” section of our website (www.blackhillscorp.com/investor-relations/corporate-governance). Based on these standards, the Governance Committee determined that each of the following non-employee directors is independent and has no relationship with us, except as a director and shareholder:



Tony A. Jensen		Rebecca B. Roberts
Michael H. Madison	~~90%~~83% INDEPENDENT	Mark A. Schober
~~Linda K. Massman~~Kathleen S. McAllister		Teresa A. Taylor
Steven R. Mills		John B. Vering
Robert P. Otto		Thomas J. Zeller
~~Rebecca B. Roberts~~

In addition, based on such standards, the Governance Committee determined that ~~Mr.~~Messers. Emery isand Evans are not independent because ~~he is our Chairman and Chief Executive Officer (“CEO”).~~they are Officers of the Company.

Board Leadership Structure

As part of a planned leadership transition, Mr. Emery, ~~has served~~after 14 years as ~~our~~Chairman and CEO, was appointed Executive Chairman of the Board of Directors, effective January 1, 2019. Mr. Evans, who had been President and Chief Operating Officer since 2016, was named President and CEO since 2005 and has been a member of our Board since 2004. Mr. Emery provides strategic, operational, and technical expertise and context for the matters considered by our Board. After considering alternative board leadership structures, our Board chose to retain the ability to balance an independent Board structure with the designation of an independent Lead Director and to appoint as Chairman a CEO-Director with knowledge of and experience in the operations of our Company. At this time, our Board believes that having a single person serve as Chairman and CEO provides unified and responsible leadership for our Company and, in conjunction with the Lead Director, provides the proper balance to ensure the Board receives the information, experience and direction it needs to effectively govern.effective January 1, 2019.

Our Board has and continues to value a high degree of Board independence. As a result, our corporate governance structure and practices promote a strong, independent Board and include several independent oversight mechanisms. Only independent directors serve on our Audit, Compensation and Governance Committees. Our Board believes these practices ensure that experienced and independent directors will continue to effectively oversee management and critical issues related to financial and operating plans, long-range strategic issues, enterprise risk and corporate integrity. All of our Board committees may seek legal, financial or other expert advice from a source independent of management.

~~Our~~As provided in our Corporate Governance Guidelines of the Board of Directors, because our Executive Chairman is not independent, our Board annually appoints an independent Lead ~~Director. John B. Vering~~Director, and has done so since 2001. Steven R. Mills is our current Lead Director and has served in this role since ~~March 2016. The responsibilities of Lead Director, as~~May 2019. As provided in the Corporate Governance Guidelines, the primary responsibilities of the ~~Board of Directors,~~Lead Director are to chair executive sessions of the independent directors, and in conjunction with the Executive Chairman, communicate the Board’s annual evaluation of the CEO. The Lead Director, together with the independent directors, establishes the agenda for executive sessions, which are held at each regular Board meeting. The Lead Director serves as a liaison between the independent members of the Board, the Executive Chairman, and the CEO, and discusses, to the extent appropriate, matters raised by the independent directors in executive session. The Lead Director also consults with the Executive Chairman, and the CEO, as appropriate, regarding meeting agendas and presides over regular meetings of the Board in the

absence of the Executive Chairman. This leadership structure provides consistent and effective oversight of our management and our Company.

The Board Role in Risk Oversight

Our Board oversees an enterprise approach to risk management that supports our operational and strategic objectives. The Corporate Governance Guidelines of the Board of Directors provide that the Board will review major risks facing our Company and the options for risk mitigation presented by management. Our Board delegates oversight of certain risk considerations to its committees within each of their respective areas of responsibility; however, the full Board monitors risk relating to strategic planning and execution, as well as executive succession. Financial risk oversight falls within the purview of our Audit Committee. Our Compensation Committee oversees compensation and benefit plan risks. Each committee reports to the full Board.

Our Board reviews any material changes in our key enterprise risk management ("ERM") issues, including cyber security, with management at each quarterly Board ~~meeting in conjunction with the presentation of quarterly financial results.~~meeting. In addition, the Board ~~will review~~reviews a deep dive enterprise risk topic with our Chief Risk Officer at most quarterly meetings. In so doing, our Board seeks to ensure appropriate risk mitigation strategies are implemented by management on an ongoing basis. Operational and strategic plan presentations by management to our Board include consideration of the challenges and risks to our business. Our Board and management actively engage in discussions of these topics and utilize outside consultants as needed. Our Board oversees the assessment of our strategic plan risks as part of our strategic planning process. In addition, our Board periodically receives safety performance, operations, environmental, regulatory, legal and compliance reports.

Our Audit Committee oversees management’s strategy and performance relative to our significant financial risks. In consultation with management, the independent auditors and the internal auditors, the Audit Committee discusses our risk assessment, risk management and credit policies and reviews significant financial risk exposures, along with steps management has taken to monitor, mitigate and report such exposures. At least twice a year, our Chief Risk Officer provides a Risk Report and our Treasurer provides a Credit Report to the Audit Committee. We ~~adopted~~have a Credit Policy that establishes guidelines, controls and limits to manage and mitigate credit risk within established risk tolerances.

Our Compensation Committee ~~adopted~~has an executive compensation philosophy that provides the foundation for our executive compensation program. The executive compensation philosophy states that the executive pay program should be market-based and maintain an appropriate and competitive balance between fixed and variable pay elements, short-term and long-term compensation and cash and stock-based compensation. The Compensation Committee establishes company-specific performance goals with potential incentive payouts for our executive officers to motivate and reward performance, consistent with our long-term success. The target compensation for our senior officers is ~~heavily~~ weighted in favor of long-term incentives, aligning performance incentives with long-term results for our shareholders. Our Compensation Committee also sets minimum performance thresholds and maximum payouts in the incentive programs and maintains the discretion to reduce awards if excessive risk is taken. Stock ownership guidelines established for all of our officers require our executives to hold 100 percent of all shares awarded to them (net of share withholding for taxes and, in the case of cashless stock option exercises, net of the exercise price and withholding for taxes) until ~~the~~ established stock ownership guidelines are ~~achieved.~~achieved, and the Company prohibits hedging or pledging of stock Our Compensation Committee also ~~instituted~~includes “clawback” provisions in our incentive plans, which may require an executive to return incentives received, if the Compensation Committee determines, in its discretion, that the executive engaged in specified misconduct or wrongdoing or in the event of certain financial restatements.

In addition, ~~in 2017~~ management ~~conducted~~periodically conducts, and our Compensation Committee ~~reviewed~~reviews, a risk assessment of the Company’s compensation policies and practices for all employees. This was last done in December 2017 and there have been no material changes in our policies and practices since that time. Key members of human resources, legal, risk, finance, audit and operations departments were included in the review to ensure accuracy and completeness of the scope and findings. The assessment demonstrated that our compensation programs are designed to minimize financial and reputational risks and do not create risks that are reasonably likely to have a material adverse effect on the Company.

Our management is responsible for day-to-day risk management and operates under an ERM program that addresses strategic, operational, financial and compliance risks. The ERM program includes practices to identify risks, assesses the impact and probability of occurrence, and develops action plans to prevent the occurrence or mitigate the impact of the risk. The ERM program includes regular reporting to our senior management team and includes monitoring and testing by the Chief Risk Officer and Risk Management, Compliance and Internal Audit groups. The Chief Risk Officer reviews the overall ERM program ~~is reviewed~~ with the Board of Directors on a regular basis.

We believe the division of risk management responsibilities described above is an effective approach for addressing the risks facing our Company.

Director Nominees

The Governance Committee uses a variety of methods for identifying and evaluating nominees for director. The Governance Committee regularly assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. In the event vacancies are anticipated, or otherwise arise, the Governance Committee considers various potential candidates for director. Board candidates are considered based upon various criteria, including ~~diverse~~diversity; business, administrative and professional skills or experiences; an understanding of relevant industries, technologies and markets; financial literacy; independence status; the ability and willingness to contribute time and special competence to Board activities; personal integrity and independent judgment; and a commitment to enhancing shareholder value. The Governance Committee considers these and other factors as it deems appropriate, given the needs of the Board. Our goal is a balanced and diverse Board, with members whose skills, background and experience are complementary and, together, cover the spectrum of areas that impact our ~~business.~~business currently and in the future. The Governance Committee considers candidates for Board membership suggested by a variety of sources, including current or past Board members, the use of third-party executive search firms, members of management and shareholders. Any shareholder may make recommendations for consideration by the Governance Committee for membership on the Board by sending a written statement of the qualifications of the recommended individual to the Corporate Secretary. There are no differences in the manner by which the Committee evaluates director candidates recommended by shareholders from those recommended by other sources.

Ms. McAllister and Mr. Jensen are standing for election by shareholders for the first time at this annual meeting. Both director nominees were identified as candidates by a third-party search firm. The firm was engaged to assist in the identification and assessment of director candidates based on criteria developed by the Governance Committee.

Shareholders who intend to nominate persons for election to the Board of Directors must provide timely written notice of the nomination in accordance with Article I, Section 9 of our Bylaws. Generally, our Corporate Secretary must receive the written notice at our executive offices at 7001 Mount Rushmore Road, P.O. Box 1400, Rapid City, South Dakota 57709, not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of shareholders. For the ~~2019~~2021 shareholder meeting, those dates are January ~~24, 2019~~28, 2021 and December ~~25, 2018.~~29, 2020. The notice must set forth at a minimum the information set forth in Article I, Section 9 of our Bylaws, including the shareholder’s identity and status, contingent ownership interests, description of any agreement made with others acting in concert with respect to the nomination, specific information about the nominee and certain representations by the nominee to us.

~~Communications with the Board~~

~~Shareholders and others interested in communicating directly with the Lead~~ Director with the independent directors as a group, or the Board of Directors may do so in writing to the Lead Director, Black Hills Corporation, 7001 Mount Rushmore Road, P.O. Box 1400, Rapid City, South Dakota 57709.

~~Corporate Governance Documents~~

The charters of the Audit, Compensation and Governance Committees, as well as the Corporate Governance Guidelines of the Board of Directors, Policy for Director Independence, Code of Business Conduct and the Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer, Corporate Controller, and certain other persons performing similar functions can be found in the “Governance” section of our website (~~www.blackhillscorp.com/investor-relations/corporate-governance~~). We intend to disclose any amendments to, or waivers of, the Code of Ethics on our website. Please note that none of the information contained on our website is incorporated by reference in this proxy statement.Resignation Policies

The Corporate Governance Guidelines require members of the Board to submit a letter of resignation for consideration by the Board in certain circumstances. The Guidelines include a plurality plus voting policy. Pursuant to the policy, any nominee for election as a director in an uncontested election who receives a greater number of votes “Withheld” from his or her election than votes “For” his or her election will promptly tender his or her resignation as a director to the Chairman of the Board following certification of the election results. Broker non-votes will not be deemed to be votes “For” or “Withheld” from a director’s election for purposes of the policy. The Governance Committee (without the participation of the affected director) will consider each resignation tendered under the policy and recommend to the Board whether to accept or reject it. The Board will then take the appropriate action on each tendered resignation, taking into account the Governance Committee’s recommendation. The Governance Committee in making its recommendation, and the Board in making its decision, may consider any factors or other information that it considers appropriate, including the reasons why the Governance Committee believes shareholders “Withheld” votes for election from such director and any other circumstances surrounding the “Withheld” votes, any alternatives for curing the underlying cause of the “Withheld” votes, the qualifications of the tendering director, his or her past and expected future contributions to us and the Board, and the overall composition of the Board, including whether accepting the resignation would cause us to fail to meet any applicable SEC or NYSE requirements. The Board will publicly disclose by filing with the SEC on Form 8-K its decision and, if applicable, its rationale within 90 days after receipt of the tendered resignation.

The Corporate Governance Guidelines also require members of the Board to tender a letter of resignation in the event of a change in professional responsibilities that may directly or indirectly impact that board member’s ability to fulfill directorship obligations. The Board is not obligated to accept such resignation. The Governance Committee will review the affected member’s service and qualifications and recommend to the Board the continued appropriateness of Board membership under the circumstances.

In conformance with the Corporate Governance Guidelines, Mr. Vering provided notice that he would retire from his position as Managing Director of Lone Mountain Investments, Inc., effective December 31, 2019, and submitted a letter of resignation

to the Board. The Governance Committee determined Mr. Vering’s change in employment status would not impact his ability to perform his duties as a director and recommended the Board not accept his tendered resignation. Acting on the Committee’s recommendation, the Board declined to accept Mr. Vering’s resignation.

Corporate Governance Documents

In addition to the Corporate Governance Guidelines, Committee Charters, and the Policy for Director Independence, the Code of Business Conduct and the Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer, Corporate Controller, and certain other persons performing similar functions can be found in the “Governance” section of our website (www.blackhillscorp.com/investor-relations/corporate-governance). We intend to disclose any amendments to, or waivers of, the Code of Ethics on our website. Please note that none of the information contained on our website is incorporated by reference in this proxy statement.

Certain Relationships and Related Party Transactions

We recognize related party transactions can present potential or actual conflicts of interest and create the appearance that decisions are based on considerations other than the best interests of us and our shareholders. Accordingly, as a general matter, it is our preference to avoid related party transactions. Nevertheless, we recognize that there are situations where related party transactions may be in, or may not be inconsistent with, the best interests of us and our shareholders, including but not limited to situations where we may obtain products or services of a nature, quantity or quality, or on other terms, that are not readily available from alternative sources or when we provide products or services to related parties on an arm’s length basis on terms comparable to those provided to unrelated third parties or on terms comparable to those provided to employees generally. Therefore, our Board of Directors has adopted a policy for the review of related party transactions. This policy requires directors and officers to promptly report to our ~~Vice President – Governance~~General Counsel all proposed or existing transactions in which the Company and they, or persons related to them, are parties or participants. Our ~~Vice President – Governance~~General Counsel presents to our Governance Committee those transactions that may require disclosure pursuant to Item 404 of Regulation S-K (typically, those transactions that exceed $120,000). Our Governance Committee reviews the material facts presented and either approves or disapproves entry into the transaction. In reviewing the transaction, the Governance Committee considers the following factors, among other factors it deems appropriate: (i) whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; (ii) the extent of the related party’s interest in the transaction; and (iii) the impact on a director’s independence in the event the related party is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer. There were no reportable related party transactions in 2019.

Delinquent Section 16(a) ~~Beneficial Ownership Reporting Compliance~~Reports

Based solely upon a review of our records and ~~copies of~~ reports on Form 3, 4 and 5 ~~furnished to us,~~filed with the SEC, we believe that during and with respect to ~~2017,~~2019, all persons subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended, filed the required reports on a timely ~~basis.~~basis, except for a Form 4 for Mr. Mills related to an August 2019 transaction that was reported in December of 2019 and initial reports on Form 3 for Tony A. Jensen and Kathleen S. McAllister for November 1, 2019, the date they both became directors. At the time the Form 3 reports were due, Mr. Jensen and Ms. McAllister did not own any stock in our Company.

Communications with the Board

Shareholders and others interested in communicating directly with the Lead Director, with the independent directors as a group, or the Board of Directors may do so in writing to the Lead Director, Black Hills Corporation, 7001 Mount Rushmore Road, P.O. Box 1400, Rapid City, South Dakota 57709.

MEETINGS AND COMMITTEES OF THE BOARD

THE BOARD OF DIRECTORS

Our directors review and approve our strategic plan and oversee our management. Our Board of Directors held four in-person meetings and noone telephonic ~~meetings~~meeting during ~~2017.~~2019. Each regularly scheduled meeting of the Board includes an executive session of only independent directors. We encourage our directors to attend the annual shareholders’ meeting. During ~~2017, every~~2019, each current director attended at least 75 percent of the combined total of Board meetings and Committee meetings on which the director served and all directors then serving attended the ~~2017~~2019 annual meeting of shareholders.

COMMITTEES OF THE BOARD

Our Board has three standing committees to facilitate and assist the Board in the execution of its responsibilities. The committees are currently the Audit Committee, the Compensation Committee and the Governance Committee. In accordance with the NYSE listing standards and our Corporate Governance Guidelines, the Audit, Compensation and Governance Committees are comprised solely of independent directors. Each committee operates under a charter, which is available on our website at www.blackhillscorp.com/investor-relations/corporate-governance and is also available in print to any shareholder who requests it. In addition, our Board creates special committees from time to time for specific purposes. Members of the committees are designated by our Board upon recommendation of the Governance Committee.

AUDIT COMMITTEE

Committee Chair:

Steven R. Mills

Total Meetings Held

Mark A. Schober

Total Meetings Held

Additional Committee Members:

In-Person

Telephonic

Additional Committee Members:

In-Person

Telephonic

Robert P. Otto, Mark A. Schober, John B. Vering

Steven R. Mills, Robert P. Otto, John B. Vering

Primary Responsibilities

assist the Board in fulfilling its oversight responsibility to our shareholders relating to the quality and integrity of our accounting, auditing and financial reporting practices;

oversee the integrity of our financial statements, financial reporting process, systems of internal controls and disclosure controls regarding finance, accounting and legal compliance;

review areas of potential significant financial risk to us;

review consolidated financial statements and disclosures;

appoint an independent registered public accounting firm for ratification by our shareholders;

monitor the independence and performance of our independent registered public accountants and internal auditing department;

pre-approve all audit and non-audit services provided by our independent registered public accountants;

review the scope and results of the annual audit, including reports and recommendations of our independent registered public accountants;

review the internal audit plan, results of internal audit work and our process for monitoring compliance with our Code of Business Conduct and other policies and practices established to ensure compliance with legal and regulatory requirements; and

periodically meet, in private sessions, with our internal audit group, Chief Financial Officer, Chief Compliance Officer, other management, and our independent registered public accounting firm.

periodically meet, in private sessions, with our Chief Auditor, Chief Financial Officer, Chief Compliance Officer, other management, and our independent registered public accounting firm.

In accordance with the rules of the NYSE, all of the members of the Audit Committee are financially literate. In addition, the Board determined that Messrs. Mills, Schober and Vering have the requisite attributes of an “audit committee financial expert” as provided in regulations promulgated by the SEC, and that such attributes were acquired through relevant education and/or experience.

The Compensation Committee has authority under its charter to retain and terminate compensation consultants, outside counsel and other advisors as the Committee may deem appropriate in its sole discretion. The Committee has sole authority to approve related fees and retention terms and may delegate any of its responsibilities to subcommittees as the Committee may deem appropriate. In addition, pursuant to SEC rules and NYSE listing standards regarding the independence of compensation committee advisors, the Committee has the responsibility to consider the independence of any compensation advisor before engaging the advisor.

~~The Committee~~ engaged Willis Towers Watson, an independent consulting firm, to conduct an annual review of our ~~2017~~2019 total compensation program for executive officers and directors. The Committee reviewed the independence of Willis Towers Watson and the individual representative of Willis Towers Watson who serves as a consultant to the Committee, in accordance with the SEC and NYSE requirements and the specific factors that the requirements cite. The Compensation Committee concluded that Willis Towers Watson is independent and Willis Towers ~~Watson's~~Watson’s performance of services raises no conflict of interest. The ~~Committee's~~Committee’s conclusion was based in part on a report that Willis Towers Watson provided to the Committee intended to reveal any potential conflicts of interest and a schedule provided by management of the type and amount of non-executive compensation services provided by Willis Towers Watson to the Company. During ~~2017,~~2019, the cost of these non-executive compensation services was less than $25,000.

~~The~~Compensation Committee annually evaluates the CEO’s performance against Board-established goals and objectives, with input from the other independent directors. Based upon the Committee’s evaluation and recommendation, the independent directors of the Board set the CEO’s annual compensation, including salary, bonus, incentive and equity compensation.

~~The CEO annually reviews the performance of each~~Interlocks. None of our executive officers ~~and presents~~serve as a ~~summary~~member of ~~his evaluations to the Committee. Based upon these performance reviews, market analysis conducted by the~~a board of directors or compensation ~~consultant and discussions with our Sr. Vice President, Chief Human Resources Officer, the CEO recommends the compensation~~committee of ~~the~~any entity that has one or more executive officers ~~to the~~who serve on our Board or on our Compensation Committee. ~~The Committee may exercise its discretion in modifying any of the recommended compensation and award levels in its review and approval process.~~

~~More information describing~~



GOVERNANCE COMMITTEE
Committee Chair:
Rebecca B. Roberts		Total Meetings Held
Additional Committee Members:		In-Person	Telephonic
Michael H. Madison, Steven R. Mills, John B. Vering, Thomas J. Zeller		3	1

Primary Responsibilities

©	assess the size of the Board and membership needs and qualifications for Board membership;

©	identify and recommend prospective directors to the Board to fill vacancies;

©	review and evaluate director nominations submitted by shareholders, including reviewing the qualifications and independence of shareholder nominees;

©	consider and recommend existing Board members to be renominated at our annual meeting of shareholders;

©	consider the resignation of an incumbent director who makes a principal occupation change (including retirement) or who receives a greater number of votes "Withheld" than votes "For" in an uncontested election of directors and recommend to the Board whether to accept or reject the resignation;

©	establish and review guidelines for corporate governance;

©	recommend to the Board for approval committee membership and chairs of the committees;

©	recommend to the Board for approval an independent director to serve as a Lead Director;

©	review the independence of each director and director nominee;

©	administer an annual evaluation of the performance of the Board and each Committee and a biennial evaluation of each individual director; and

©	ensure that the Board oversees the evaluation and succession planning of management.

DIRECTOR COMPENSATION

Compensation to our non-employee directors consists of cash retainers for Board members, Committee members, the ~~Compensation Committee’s processes~~Lead Director and ~~procedures for considering and determining executive compensation, including~~Committee Chairs. In addition, the ~~role of our CEO and consultants in determining or recommending~~Board members receive common stock equivalents that are deferred until after they leave the ~~amount or form of executive compensation, is included in~~Board. Dividend equivalents accrue on the ~~Compensation Discussion and Analysis.~~

common stock equivalents. We do not pay meeting fees.

In setting non-employee director compensation, the Compensation Committee recommends the form and amount of compensation to the Board of Directors, which makes the final determination. In considering and recommending the compensation of non-employee directors, the Compensation Committee considers such factors as it deems appropriate, including historical compensation information, level of compensation necessary to attract and retain non-employee directors meeting our desired qualifications and market data. In the review of director compensation in ~~2017,~~2019, the Compensation Committee reviewed the NACD ~~2016-2017~~2018-2019 Director Compensation Report and proxy peer group data to provide market information on non-employee director compensation including compensation structure, annual board and committee retainers, committee chair fees, and stock-based compensation.

~~Compensation Committee Interlocks and Insider Participation~~. The Compensation Committee is comprised entirely of independent directors. In addition, none of our executive officers serve as a member of a board of directors or compensation committee of any entity that has one or more executive officers who serve on our Board or on our Compensation Committee.

GOVERNANCE COMMITTEE
Committee Chair:
Rebecca B. Roberts Total Meetings Held
Additional Committee Members: In-Person Telephonic
Michael H. Madison, John B. Vering, Thomas J. Zeller 4 0

Primary Responsibilities

© assess the size of the Board and membership needs and qualifications for Board membership;

© identify and recommend prospective directors to the Board to fill vacancies;

© review and evaluate director nominations submitted by shareholders, including reviewing the qualifications and independence of shareholder nominees;

© consider and recommend existing Board members to be renominated at our annual meeting of shareholders;

© consider the resignation of an incumbent director who makes a principal occupation change (including retirement) or who receives a greater number of votes "Withheld" than votes "For" in an uncontested election of directors and recommend to the Board whether to accept or reject the resignation;

© establish and review guidelines for corporate governance;

© recommend to the Board for approval committee membership and chairs of the committees;

© recommend to the Board for approval an independent director to serve as a Lead Director;

© review the independence of each director and director nominee;

© administer an annual evaluation of the performance of the Board and facilitate an annual assessment of each committee; and

© ensure that the Board oversees the evaluation and succession planning of management.

~~DIRECTOR COMPENSATION~~

Compensation to our non-employee directors consists of cash retainers for Board members, Committee members, the Lead Director and Committee Chairs. In addition, the Board members receive common stock equivalents that are deferred until after they leave the Board. Dividend equivalents accrue on the common stock equivalents. We do not pay meeting fees.

~~In 2017, the Compensation Committee performed a review of our peer companies' director fees.~~ Based on this review, the ~~Lead Director~~cash retainer ~~and the equity component of the directors' fees were~~was increased ~~modestly~~ effective January 1, ~~2018.~~2020 to more closely align with the median director compensation for our peer utility companies. The fee structure for director fees in ~~2017~~2019 and the new fees effective January 1, ~~2018 is~~2020 are as follows:

DIRECTOR COMPENSATION FOR ~~2017~~2019 AND COMMON STOCK ~~EQUILAVENTS~~EQUIVALENTS OUTSTANDING AS OF DECEMBER 31, ~~2017~~2019⁽¹⁾

Stock Awards⁽³⁾

Number of Common Stock Equivalents Outstanding at December 31, 2017⁽⁴⁾

Stock Awards⁽³⁾

Number of Common Stock Equivalents Outstanding at December 31, 2019⁽⁴⁾

Tony A. Jensen⁽⁵⁾

Kathleen A. McAllister ⁽⁵⁾

_____________________

DIRECTOR STOCK OWNERSHIP GUIDELINES

Each member of our Board of Directors is required to apply at least 50 percent of his or her annual cash retainer toward the purchase of shares of common stock until the director has accumulated shares of common stock or common stock equivalents equal to five times the annual cash Board retainer. ~~The ownership guidelines were recently changed from a fixed number of shares to a multiple of base pay to better align our guidelines with market practices.~~ Currently, all of our directors have met the stock ownership guideline except for Mr. Jensen and Ms. ~~Taylor and Messrs. Otto and Schober,~~McAllister, who have been on the Board for less than ~~2.5 years.~~a year.

SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS

The following tables set forth the beneficial ownership of our common stock as of ~~March 1, 2018~~February 25, 2020 for each director, each executive officer named in the Summary Compensation Table, all of our directors and executive officers as a group and each person or entity known by us to beneficially own more than five percent of our outstanding shares of common stock. Beneficial ownership includes shares a director or executive officer has or shares the power to vote or transfer. There were no stock options outstanding for any of our directors or executive officers as of ~~March 1, 2018.~~

~~Our directors and executive officers are prohibited from hedging and pledging our stock or holding our stock in a margin account.~~February 25, 2020.

Except as otherwise indicated by footnote below, we believe that each individual or entity named has sole investment and voting power with respect to the shares of common stock indicated as beneficially owned by that individual or entity.

Name of Beneficial Owner⁽¹⁾

PRINCIPAL SHAREHOLDERS

Set forth in the table below is information about the number of shares held by persons we know to be the beneficial owners of more than 5% of the issued and outstanding Common Stock.

BlackRock, Inc.⁽¹⁾

State Street Corporation⁽²⁾

The Vanguard Group Inc.⁽²⁾

State Street Corporation⁽³⁾

The Vanguard Group Inc.⁽³⁾

Wellington Management Group LLP⁽⁴⁾



PROPOSAL 2	RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The firm of Deloitte & Touche LLP, independent registered public accountants, conducted the audit of Black Hills Corporation and its subsidiaries for ~~2017.~~2019. Representatives of Deloitte & Touche LLP will be present at our annual meeting and will have the opportunity to make a statement, if they desire to do so, and to respond to appropriate questions.

Our Audit Committee has appointed Deloitte & Touche LLP to perform an audit of our consolidated financial statements and those of our subsidiaries for ~~2018~~2020 and to render their reports. In determining whether to recommend to the full Board the reappointment of Deloitte & Touche LLP as our independent auditor, the Audit Committee considered the following:

The Board of Directors recommends ratification of the Audit Committee’s appointment of Deloitte & Touche LLP. The appointment of Deloitte & Touche LLP as our independent registered public accounting firm for ~~2018~~2020 will be ratified if the votes cast “For” exceed the votes cast “Against.” Abstentions will have no effect on such vote. If shareholder approval for the appointment of Deloitte & Touche LLP is not obtained, the Audit Committee will reconsider the appointment.

The Board of Directors recommends a vote FOR ratification of the appointment of Deloitte & Touche LLP

to serve as our independent registered public accounting firm for ~~2018.~~2020.

FEES PAID TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The following chart sets forth the aggregate fees for services provided to us for the years ended December 31, ~~2017~~2019 and ~~2016~~2018 by our independent registered public accounting firm, Deloitte & Touche LLP:

Fees for professional services rendered for the audits of our financial statements, review of the interim financial statements included in quarterly reports, opinions on the effectiveness of our internal control over financial reporting, and services that generally only the independent auditor can reasonably provide, such as comfort letters, statutory audits, consents and assistance with and review of documents filed with the SEC.

Fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include ~~internal control reviews; attest services that are not required by statute or regulation;~~ employee benefit plan ~~audits; due diligence, consultations~~audits and ~~audits related to mergers and acquisitions; and consultations concerning financial accounting and reporting standards.~~certain regulatory audits.

Fees for services related to federal and state tax compliance planning and advice and review of tax returns.

Tax Planning and Advisory Fees

Fees for planning and advisory services primarily related to partnership restructuring and jurisdictional simplification and consolidation related to prior acquisitions.

Fees for advising the Company as it ~~defines~~defined the Governance Risk and Compliance ("GRC") requirements for ~~selecting~~ a GRC software tool.

The services performed by Deloitte & Touche LLP were pre-approved in accordance with the Audit Committee’s pre-approval policy whereby the Audit Committee pre-approves all audit and permissible non-audit services provided by the independent registered public accountants. The Audit Committee will generally pre-approve a list of specific services and categories of services, including audit, audit-related, tax and other services, for the upcoming or current year, subject to a specified cost level. Any service that is not included in the approved list of services must be separately pre-approved by the Audit Committee.

AUDIT COMMITTEE REPORT

The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities to shareholders relating to the integrity of the ~~Company's~~Company’s financial statements, the ~~Company's~~Company’s compliance with legal and regulatory requirements regarding financial reporting, the independent ~~auditors'~~auditors’ qualifications and independence, and the performance of the ~~Company's~~Company’s internal and independent auditors.

Management has the primary responsibility for the completeness and accuracy of the ~~Company's~~Company’s financial statements and disclosures, the financial reporting process, and the effectiveness of the ~~Company's~~Company’s internal control over financial reporting.

Our independent auditors, Deloitte & Touche LLP, are responsible for auditing the Company’s consolidated financial statements and expressing an opinion as to whether they are presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States.

In fulfilling its oversight responsibilities ~~in 2017,~~for 2019, the Audit Committee, among other things:

Based upon the reviews and discussions referred to above, the Audit Committee recommended to the Board that our audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2019 filed with the SEC. The Audit Committee also recommended and the Board reappointed Deloitte & Touche LLP as our independent registered public accounting firm for ~~2018.~~2020. Shareholders are being asked to ratify that selection at the ~~2018~~2020 Annual Meeting.

~~Steven R. Mills,~~Mark A. Schober, Chair

~~Mark A. Schober~~Steven R. Mills

EXECUTIVE COMPENSATION

This Compensation Discussion and Analysis describes our overall executive compensation policies and practices and specifically explains the compensation-related actions taken with respect to ~~2017~~2019 compensation for our executive officers included in the Summary Compensation Table (our “Named Executive Officers”). Our Named Executive Officers, based on ~~2017~~2019 positions and compensation levels, are:



Name Executive Officers	Title	Reference

David R. Emery	Executive Chairman	Emery, Chair
Linden R. Evans	President and Chief Executive Officer	~~Emery,~~Evans, CEO
Richard W. Kinzley	Sr. Vice President and Chief Financial Officer	Kinzley, CFO
~~Linden R. Evans~~	~~President and Chief Operating Officer~~	~~Evans, COO~~
Brian G. Iverson	Sr. Vice President, ~~and~~ General Counsel and Chief Compliance Officer	Iverson, GC
Scott A. Buchholz	Sr. Vice President and Chief Information Officer	Buchholz, CIO

The Compensation Committee of the Board of Directors (the “Committee,” for purposes of this Compensation Discussion and Analysis) is composed entirely of independent directors and is responsible for approving and overseeing our executive compensation philosophy, policies and programs.



		~~Create~~Encourage operational excellence
Attract, motivate and retain highly talented professionals	ð	Provide reliable products and services	ð	Drive long-term success
		Invest wisely for present and future shareholder returns

EXECUTIVE COMPENSATION PROGRAM DESIGN OBJECTIVES



Attract, retain, motivate and encourage the development of highly qualified executives



Provide competitive compensation



Promote the relationship between pay and performance



Promote corporate performance that is linked to our ~~shareholders'~~shareholders’ interests



Recognize and reward individual performance



~~2017~~2019 ACCOMPLISHMENTS

~~Although 2017 presented some challenges for~~ Black Hills Corporation ~~substantial~~reported solid operational and financial performance in 2019. Substantial progress was made on our strategic initiatives and we continued to lay a solid foundation for strong future earnings growth. Significant accomplishments for the year included:

Ÿ	~~GAAP Income from continuing operations was $3.52 per diluted share in 2017 compared to $2.57 per diluted share in 2016, and earnings per share from continuing operations, as adjusted~~⁽¹⁾ ~~was $3.36 per diluted share in 2017 compared to $3.13 per share in 2016, primarily due to a full year of results from the SourceGas acquisition;~~
Ÿ	~~Achieved 7.3 percent growth in earnings per share from continuing operations, as adjusted~~⁽¹⁾;
Ÿ	Increased the annual dividend for the 4749^th consecutive year, one of the longest records in the utility sector;
Ÿ	~~Implemented a commercial paper program in late 2016, reducing short-term borrowing costs. Utilized the favorable short-term rates under this program in 2017 to repay $100~~Completed significant financing activity, including:
	*	Issued $400 million of ~~corporate term loan borrowings that were~~3.05 percent 10-year senior notes due ~~in 2019;~~2029 and $300 million of 3.875 percent 30-year senior notes due 2049;
	*	Issued 1.3 million shares of new common stock for net proceeds of $99 million under our at-the-market equity offering program;
	to accomplish our long-term objective of investing to meet the needs of our Customers;
Ÿ	Announced the divestiture of our oil and gas assets. As of January 31, 2018 we closed transactions or signed contracts to sell more than 90 percent of our oil and gas properties and plan to divest of all properties by mid-2018;
Ÿ	Expressed formal interest for our three electric regulated utilities, as members of the Mountain West Transmission Group, to join the Southwest Power Pool regional transmission organization. A decision will likely be made in 2018;Executed a successful CEO transition;
Ÿ	Invested in our utility infrastructure and systems:
	*	Deployed ~~over $322~~$850 million in ~~electric and gas utility~~ capital projects;
	*	Completed construction of the 60 MW Busch Ranch II wind project;
	*	Completed construction of the 12-inch 35-mile Natural Bridge pipeline that interconnects a supply point near Douglas, Wyoming to facilities near Casper, Wyoming;
	*	Completed the construction of the final ~~segment~~94 miles of a ~~144-mile~~175-mile 230 kV ~~electric~~ transmission line from ~~northeast Wyoming to~~ Rapid City, South ~~Dakota;~~ Dakota to Segall, Nebraska;
Ÿ	Executed a number of regulatory accomplishments;
	*	Successfully completed a rate review request for Wyoming Gas;
	*	Received approvals for South Dakota Electric’s and Wyoming Electric’s Renewable Ready Service Tariffs and the related jointly-filed certificate of public convenience and necessity to construct the Corriedale Wind Energy Project;
	*	Received approval ~~from~~to consolidate the ~~Colorado Public Utilities Commission~~rates, tariffs and services of Wyoming Gas’ four gas distribution territories;
	*	Received approval to legally consolidate Nebraska Gas’ two natural gas distribution companies;
	*	Filed a request with FERC for ~~the settlement~~approval of a new 20-year power purchase agreement ~~related to~~between Black Hills Wyoming and affiliate Wyoming Electric;
	*	Issued a request for proposals for Colorado Electric’s ~~electric resource plan, which provides for an additional 60 MW~~Renewable Advantage program, to potentially add up to 200 megawatts of renewable energy resources to ~~be in service by 2019;~~
Ÿ	~~Completed construction on a $70 million corporate headquarters in Rapid City, South Dakota, which will provide efficiencies and replace expenses associated with five existing facilities;~~
	*	~~Consolidated 600 employees from five different local sites into our new corporate headquarters;~~
Ÿ	~~Prepared and filed rate review requests for Arkansas Gas, Northwest Wyoming Gas and Rocky Mountain Natural Gas;~~its southern Colorado system;
Ÿ	Provided the safe and reliable service our communities and customers depend on and achieved several notable operations performance metrics:
	*	Earned 1st ~~Quartile~~quartile reliability ranking for our three electric utilities compared to industry averages;
	*	~~Safety~~Achieved a safety performance total case incident rate of ~~1.3~~1.25 compared to an industry average of ~~2.1;~~1.9;
	*	~~Power generation fleet availability~~Achieved a safety performance preventable motor vehicle incident rate of 90 percent for our coal-fired generation, 96 percent for our gas-fired generation, 99.5 percent for our diesel-fired generation and 94 percent for our wind-fired generation; all above industry averages with the exception of wind generation, which was slightly below the industry2.48 compared to an American Gas Association reported average of ~~96 percent;~~3.11;
	*	Achieved a 13 percent Net Promotor Score improvement over 2018;
	*	Recognized as a “Gold Leader” in Colorado for achieving significant goals in environmental improvement and sustainability;
	*	Received Star Worksite status, the highest OSHA Voluntary Protection Program status, for implementing and maintaining effective safety and health management systems at our Pueblo Airport Generating Station in Pueblo, Colorado; and
	*	~~Completed more than five years with no MSHA reportable injuries at our coal mine; received~~Received an award from the State of Wyoming for ~~eight~~ten years without a lost-time ~~accident; received the State Mine Inspector’s Award for the fourth year in a row for operating as the safest small mine;~~accident at our mine and received the Mine Safety and Health Administration’s Certificate of Achievement for no lost-time accidents.

⁽¹⁾~~Earnings per share from continuing operations, as adjusted, is a non-GAAP measure. See Appendix A for a reconciliation of the non-GAAP measure to our results as reported under the GAAP.~~

RETURN TO SHAREHOLDERS

The following chart shows how a $100 investment in the Company’s common stock on December 31, ~~2012~~2014 would have grown to ~~$193~~$172 on December 31, ~~2017,~~2019, with dividends reinvested. The chart also compares the total shareholder return on the Company’s common stock to the same investment in the S&P 500 Index and S&P 500 Utilities Index over the same period.

~~2017~~2019 PERFORMANCE RESULTS

Our corporate financial and safety performance goals are used as measures to determine awards under our variable pay programs. The following table summarizes our ~~2017~~2019 performance measures and results.



Pay Element	Performance Measure	~~2017~~2019 Results
			Short-term Incentive: Payout of 107% of Target
~~Short-term Incentive~~ 80 Percent	EPS from ongoing operations, as adjusted, target set at ~~$3.58;~~$3.44; threshold set at ~~$3.20~~$3.10	$~~3.31~~3.53 per share for incentive plan purposes ~~Payout of 62% of Target~~

10 Percent	Total Case Incident Rate (TCIR), target set at 1.1; threshold set at 1.3	TCIR 1.25

10 Percent	Preventable Motor Vehicle Incident (PMVI), target set at 1.7; threshold set at 2.0	PMVI: 2.45
Long-term ~~Incentive~~ - Incentive: Payout of 59% of Target
Performance Share Award	Total Shareholder Return (TSR) relative to our Performance Peer Group measured over a three-year period	TSR ~~21%~~ 11^th37%
Performance Share Award		36th Percentile Ranking in Performance Peer Group ~~No Payout~~

A key component of our executive compensation program is to link pay to performance.

The charts below illustrate the directional relationship between the compensation of our CEO (Mr. Emery for 2015 through 2018, and Mr. Evans for 2019), as reported in the Summary Compensation Table (excluding the change in pension value) and the growth in our Company for the last five years.

Since a large percentage of the CEO’s pay as reported in the Summary Compensation Table represents potential pay, we believe it is also important to look at pay actually realized each year. In addition, since over 50 percent of our CEO pay is tied to Company performance, it is important to look at his realized pay as it is impacted by Company performance. The following graphics show reported pay and realized pay over the last five years and realized pay as it correlates to the Company’s annualized 3-year total shareholder return, its long-term performance metric.

Reported pay includes base salary, actual annual incentive earned, the grant date fair value of long-term equity compensation and all other compensation, excluding the change in pension value, each as reported in the Summary Compensation Table.

Realized pay includes base salary, actual annual incentive earned and all other compensation, each as reported in the Summary Compensation Table, and the value of long-term performance compensation paid and stock awards ~~released~~vested in the applicable year.

KEY EXECUTIVE COMPENSATION OBJECTIVES ~~AND 2017 COMPENSATION DECISIONS~~

Overall, our goal is to target total direct compensation (the sum of base salary, short-term incentive at target and long-term incentive at target) at the median of the appropriate market when our operating results approximate average performance in relation to our peers.

Our executive compensation is designed to maintain an appropriate and competitive balance between fixed and variable compensation components, ~~short- and~~short-and long-term compensation, and cash and stock-based compensation.

(1) Mr. Emery’s compensation is excluded from the target pay mix as he was not eligible for incentive pay in 2019.

We believe that the performance basis for determining compensation should differ by each reward component – base salary, short-term incentive and long-term incentive. Incentive measures (short-term and long-term) should emphasize objective, quantitative operating measures. The performance measures for our incentive compensation plans are ~~as follows:~~discussed below.

~~Base Salary~~SETTING EXECUTIVE COMPENSATION

Based upon our compensation philosophy, the Committee structures our executive compensation to motivate our officers to achieve specified business goals and to reward them for achieving such goals. The key steps the Committee follows in setting executive compensation are to:



Analyze executive compensation market data to ensure market competitiveness



Review the components of executive compensation, including base salary, short-term incentive, long-term incentive, retirement and other benefits



Review total compensation mix and structure



Review executive officer performance, responsibilities, experience and other factors cited above to determine individual compensation levels

Market Compensation Analysis

The market for our ~~Named Executive Officers' base salary averaged 6.2 percent~~senior executive talent is national in ~~2017. The individual base salaries~~scope and is not focused on any one geographic location, area or region of the country. As such, our executive compensation should be competitive with the national market for senior executives. It should also reflect the ~~individual's performance, tenure, experience~~executive’s responsibilities and duties and align with the compensation of executives at companies or business units of comparable size and complexity. The Committee gathers market ~~compensation~~information for ~~comparable positions in~~ our corporate executives from the electric and gas utility industry and ~~peer group.~~also reviews general industry data as an additional reference.

~~Short-Term Incentive~~The Committee selects and retains the services of an independent consulting firm to periodically:



Provide information regarding practices and trends in compensation programs



Review and evaluate our compensation program as compared to compensation practices of other companies with similar characteristics, including size, complexity and type of business



Review and assist with the establishment of a peer group of companies



Provide a compensation analysis of the executive positions

The ~~short-term incentive is based on earnings per share targets. The~~ Committee ~~believes that this performance measure closely aligns~~used the ~~executives’ and our shareholders’ interests and fosters teamwork and cooperation.~~

services of Willis Towers Watson to evaluate 2019 compensation. Willis Towers Watson gathered data from nationally recognized survey providers, as well as specific peer companies through public filings, which included:

The 23 peer companies ranged in annual revenue size from approximately $563 million to $6.6 billion, with the median at $2.0 billion. The Company’s 2018 revenue was $1.7 billion. The survey data was adjusted for our relative revenue size using regression analysis. Our compensation peer companies included in the analysis for 2019 compensation decisions were:



*ALLETE Inc.	~~The Committee selected an earnings per share goal based on ongoing operations, as adjusted, of $3.58 as the 2017 corporate target goal.~~IDACORP Inc.	Pinnacle West Capital Corp.
Alliant Energy Corporation	MGE Energy Inc.	PNM Resources, Inc.
Ameren Corporation	New Jersey Resources Corp.	Portland General Electric Co.
Atmos Energy Corp.	NiSource, Inc.	SCANA Corp.
Avista Corp.	Northwest Natural Gas Co.	South Jersey Industries, Inc.
CMS Energy Corp.	NorthWestern Corp.	Spire, Inc.
El Paso Electric Co.	OGE Energy Corp.	Vectren Corp.
Hawaiian Electric Ind., Inc.	ONE Gas, Inc.

The above peer companies were chosen by the Compensation Committee as the Compensation Peer Group after engaging Willis Towers Watson to do an extensive review. Approximately 70 percent of the above companies are a subset of the Edison Electric Institute (EEI) Index, our Performance Peer Group, and were chosen because they were within our revenue range of 0.3x - 4.0x our size and market capitalization range of 0.40x - 2.5x our size. The EEI Index is comprised of electric utilities and combination gas and electric utilities. In addition, approximately 30 percent of the peer companies above were added to provide a mix of gas utilities.

The salary surveys are one of several factors the Committee uses in setting appropriate compensation levels. Other factors include Company performance, individual performance and experience, the level and nature of the executive’s responsibilities, internal equity considerations and discussions with the CEO related to the other senior executive officers.

Components of Executive Compensation

The components of our executive compensation program consist of a base salary, a short-term incentive plan, and long-term incentives. In addition, we provide retirement and other benefits.

An important component of the executives’ total compensation is derived from incentive compensation. Incentive compensation is intended to motivate and encourage our executives to drive performance and achieve superior results for our shareholders. The Committee periodically reviews information provided by the compensation consultant to determine the appropriate level and mix of incentive compensation. Actual income in the form of incentive compensation is realized by the executive as a result of achieving Company goals and overall stock performance. The Committee believes that a significant portion of total target compensation should be comprised of incentive compensation. In order to reward long-term growth while still encouraging short-term results, the Committee establishes incentive targets that emphasize long-term compensation at a greater level than short-term compensation.

The Committee reviews all components of each senior executive officer’s compensation, including salary, short-term incentive, equity and other long-term incentive compensation values granted, and the current and potential value of the executive officer’s total Black Hills Corporation equity holdings.

As noted previously, effective January 1, 2019 and related to a long-term executive succession plan, Mr. Emery was named Executive Chairman and Mr. Evans was named President and CEO. The changes in duties were reflected in corresponding changes in compensation.

Base Salary. Base salaries for all officers are reviewed annually. We also adjust the base salary of our executives at the time of a promotion or material change in job responsibility, as appropriate. Evaluation of 2019 base salary adjustments occurred in January 2019. The base salary component of each position was compared to the median of the market data provided by the compensation consultant. The market data indicated that although competitive positioning has decreased from the consultant’s previous analysis, the salaries generally aligned with the utility industry median and below comparable general industry levels. The actual base salary of each officer was determined by the executive’s performance, the experience level of the officer, the executive’s current position in a market-based salary range, and internal pay relationships. As Executive Chair, Mr. Emery no longer participates in new short or long-term incentive plans. His compensation is composed only of base salary.



	2018 Base Salary	2019 Base Salary

Emery, Chair	$820,000	$1,300,000
Evans, CEO	$530,000	$750,000
Kinzley, CFO	$381,000	$420,000
Iverson, GC	$350,000	$375,000
Buchholz, CIO	$320,000	$340,000

Short-Term Incentive. Our Short-Term Incentive Plan is designed to recognize and reward the contributions of individual executives as well as the contributions that group performance makes to overall corporate success. In 2019, the Committee recommended and the Board approved including safety performance metrics as components of the short-term incentive goals. The 2019 short-term incentive was based eighty percent on earnings per share targets and twenty percent on safety performance targets. The Committee believes that these performance measures closely align interests with shareholders and foster teamwork and cooperation within the officer team. The short-term incentive, after applicable tax withholding, is distributed to the officer in the form of 50 percent stock and 50 percent cash, unless the officer has met his or her stock ownership guideline, in which case he or she may elect to receive the total award in cash, after deductions and applicable tax withholding. Target award levels are established as a percentage of each participant’s base salary. A target award is typically comparable to the average short-term incentive target award of the Performance Peer Group at the 50^th percentile level. The actual payout will vary, based on attainment of pre-established performance goals, between 50 and 200 percent of the individual executive’s short-term incentive target award level.

The Committee approves the target level for each officer in January, which applies to performance in the upcoming plan year. Target levels are derived in part from competitive data provided by the compensation consultant and in part by the Committee’s judgment regarding internal equity, retention and an individual executive’s expected contribution to the achievement of our strategic objectives. As Executive Chairman, Mr. Emery does not participate in the Company’s Short-Term Incentive Plan. The target levels for the positions held by our other Named Executive Officers are shown below:



Short-Term Incentive Target
	2018		2019
	% Amount	$ Amount	% Amount	$ Amount
Emery, Chair	110%	$902,000	—	—
Evans, CEO	70%	$371,000	100%	$750,000
Kinzley, CFO	60%	$228,600	65%	$273,000
Iverson, GC	55%	$192,500	60%	$225,000
Buchholz, CIO	50%	$160,000	50%	$170,000

The threshold, target and maximum payout levels for our Named Executive Officers under the 2019 Short-Term Incentive Plan are shown in the Grants of Plan Based Awards in 2019 table on page 41, under the heading “Estimated Future Payouts Under Non-Equity Incentive Plan Awards.”

Early in the first quarter, the Committee evaluates actual performance in relation to the prior year’s targets and approves the actual payment of awards related to the prior plan year. The Committee reserves the discretion to adjust any award, and will review and take into account individual performance, level of contribution, and the accomplishment of specific project goals that were initiated throughout the plan year. The Committee also reserves discretion with respect to any payout related to safety goals if we experience an employee or contractor fatality during the plan period.

The Committee selected an earnings per share goal based on ongoing operations, as adjusted, for 2019, and two safety performance goals. These goals meet the objectives of the plan, including:



*					~~Our 2017 earnings for~~Align the ~~Short-Term Incentive Plan were $3.31 per share, which was 8 percent below our target earnings per share goal, resulting in~~interests of the plan participants and the shareholders with a ~~payout of 62 percent of target.~~corporate-wide component



Motivate employees and support the corporate compensation philosophy



Provide an incentive reflective of core operating performance by adjusting for unique one-time events



Ensure “buy-in” from participants with easily understood metrics



Meet the performance objectives of the plan to achieve over-time, an average payout equal to market competitive levels

The Committee has defined earnings per share from ongoing operations, as adjusted, to be GAAP earnings per share adjusted for unique one-time non-budgeted events (similar to those items adjusted for when reporting non-GAAP earnings for external purposes), including external acquisition costs, impairments, transaction financing costs, unique tax transactions, and other items the Committee deems not reflective of ongoing operations and the value created for shareholders.

The Committee approved the goals for 2019 for the senior officers as follows:



2019 Short-Term Incentive Metrics
		Guidelines
Incentive	Value	Threshold	Target	Maximum

EPS from ongoing operations, as adjusted	80%	$3.10	$3.44	$3.78

Total Case Incident Rate (TCIR)	10%	1.3	1.1	0.9

Preventable Motor Vehicle Incidents (PMVI)	10%	2.0	1.7	1.4

Payout percentage of target for each metric		50%	100%	200%

On January 28, 2020, the Committee approved a payout of 107 percent of target under the 2019 Short-Term Incentive Plan. The payout was based for incentive plan purposes on the attainment of the following:

Earnings from ongoing operations, as adjusted, for incentive plan purposes were the same as earnings per share from continuing operations, as adjusted, reported externally to our investors (and reconciled to GAAP earnings per share in Appendix A). For 2019, actual adjustments included impairment of an oil and gas investment, which is not indicative of ongoing performance and accordingly was reflected as an as-adjusted basis.

Payouts under the Short-Term Incentive Plan have varied over the last 10 years as shown in the graph below.

Actual awards made to each of our Named Executive Officers under the Short-Term Incentive Plan for 2019 are included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 39.

Long-Term Incentive. Long-term incentive compensation is comprised of grants made by the Committee under our 2015 Omnibus Incentive Plan. Long-term incentive compensation is intended to:



Promote corporate goals by linking the personal interests of participants to those of our shareholders



Provide participants with an incentive for excellence in individual performance



Promote teamwork among participants



Motivate, retain, and attract the services of participants who make significant contributions to our success by allowing participants to share in such success



Meet the performance objectives of the plan to achieve over-time, an average payout equal to market competitive levels

The Committee oversees the administration of the Omnibus Incentive Plans with full power and authority to determine when and to whom awards will be granted, along with the type, amount and other terms and conditions of each award. The long-term incentive compensation component is ~~delivered 50 percent in~~currently composed of performance shares and restricted stock. The Committee chose these components because linking executive compensation to stock price appreciation and total shareholder return is an effective way to align the interests of management with those of our shareholders. The Committee selected total shareholder return as the performance goal for the performance shares because it believes executive pay under a long-term, capital accumulation program should mirror our performance in shareholder return as compared to our Performance Peer Group of companies.

The value of long-term incentives awarded is based primarily on competitive market-based data presented by the compensation consultant to the Committee, the impact each position has on our shareholder return and internal pay relationships. The actual amount realized will vary from the awarded target amounts. The Committee approved the target long-term incentive compensation level for each officer in January 2019. As Executive Chair, Mr. Emery does not participate in our long-term incentive plan. The 2019 long-term incentive was adjusted for the balance of the Named Executive Officers to increase competitiveness within the market median compensation levels.



NEO Long-Term Incentive Target Compensation
	2018	2019
Emery, Chair	$1,900,000	—
Evans, CEO	$840,000	$1,500,000
Kinzley, CFO	$480,000	$510,000
Iverson, GC	$375,000	$390,000
Buchholz, CIO	$240,000	$240,000



2019 NEO Long-Term Incentive Compensation as a Percentage of Base Salary
	Emery, Chair	Evans, CEO	Kinzley, CFO	Iverson, GC	Buchholz, CIO
% of Base Salary	-	200%	121%	104%	71%

The variance in percentage of base salary for the long-term incentive value of our Named Executive Officers reflects our philosophy that certain officers should have more of their total compensation at risk because they hold positions that have a greater impact on our long-term results and is also consistent with market practice.

Performance shares are used to deliver 50 percent of the long-term incentive award amounts, with the remaining 50 percent delivered in the form of restricted stock that vests ratably over three years. The actual shares of performance shares and restricted stock granted in 2019 are reflected in the tables in the Performance Shares and Restricted Stock sections that follow.

Performance Shares. Participants are awarded a ~~three-year service~~target number of performance shares based upon the value of the individual performance share component approved by the Committee, divided by the Beginning Stock Price. The Beginning Stock Price is the average of the closing price of our common stock for the 20 trading days immediately preceding the beginning of the plan period. ~~Performance share awards are~~Entitlement to performance shares is based on our total shareholder return over designated performance periods, as measured against our Performance Peer Group. The final value of the performance shares is based upon the number of shares of common stock that are ultimately granted, based upon our performance in relation to the performance criteria.

The Committee, with the guidance of Willis Towers Watson, periodically conducts a ~~three-year~~review of the market competitiveness of our performance share plans. A summary of the performance criteria for each plan period ~~compared~~is summarized in the table below.



Performance Share Plans
Percentile Ranking for Threshold Payout of 25% of Target Shares	Percentile Ranking for Target Payout of 100% of Target Shares	Percentile Ranking for Maximum Payout Level	Possible Payout Range of Target

25^th percentile	50^th percentile	90^th percentile	0-200%

In addition, beginning with the 2017-2019 performance plan, our plans provide: (i) a threshold payout if relative TSR performance is below threshold but at 35 percent or higher; and (ii) the performance share plan payout is capped at 100 percent of target if TSR is negative. The additional provisions are intended to reduce the impact of one peer company’s performance on the relative TSR plan, and also increase accountability and expectations related to the Company’s performance.

The performance awards and dividend equivalents, if earned, are paid 50 percent in cash and 50 percent in common stock. All payroll deductions and applicable tax withholding related to the award are withheld from the cash portion. Performance share target grant values for new performance periods are approved in January of each year.

The Committee, with the guidance of Willis Towers Watson, periodically conducts a review of our ~~peer group. This~~Performance Peer Group to which we should be compared. Due to the extensive merger and acquisition activity in the industry and its contribution to relative performance ~~measure was chosen because it~~volatility, the Committee chose to use the companies in the EEI Index as the Performance Peer Group for financial performance tracking beginning with the 2017-2019 performance period.

Payouts under the Performance Share Plan have varied significantly over the last 10 years, as shown in the graph below.

~~mirrors~~Each performance share period extends for three years. For the ~~market~~recently completed performance period, January 1, 2017 to December 31, 2019, our total shareholder return ~~of our shareholders and compares our performance to that of our peer group. Target payout occurs if our performance is~~was 37 percent, which ranked at the 5036^th percentile of our ~~peer group.~~

*~~2017 Long-Term Incentive Value~~

~~The 2017 long-term target incentive was adjusted for all the Named Executive Officers reflecting the market median compensation level for the increased size of the Company.~~

*Performance ~~Share Plan Payment~~

~~Our total shareholder return under the performance plan criteria for the three-year period, January 1, 2015 through December 31, 2017, was 21 percent, which ranked below the threshold 30~~^th ~~percentile of our peer group~~Peer Group, resulting in ~~no payout.~~

*~~Restricted Stock Grant~~

a payout at 59 percent of target. Consistent with prior years, the Committee awarded 50 percent of the Named Executive Officers’ long-term incentive in restricted stock that ratably vests over three years.

Target shares for each of our Named Executive Officers for the outstanding performance periods are as follows:



	January 1, 2018 to December 31, 2020 Performance Period	January 1, 2019 to December 31, 2021 Performance Period
Emery, Chair	16,074	—
Evans, CEO	7,107	11,524
Kinzley, CFO	4,061	3,918
Iverson, GC	3,173	2,996
Buchholz, CIO	2,030	1,844

Actual payouts, if any, will be determined based upon our total shareholder return for the plan period in comparison to our Performance Peer Group.

Restricted Stock. Restricted stock awarded as long-term incentives vest one-third each year over a three-year period, and automatically vest in their entirety upon death, disability or a change in control. Dividends are paid on the restricted stock. Unvested restricted stock is forfeited if an officer’s employment is terminated for any reason other than death, disability or in the event of a change in control.

The number of shares of restricted stock awarded in 2019 for each of our Named Executive Officers is shown below and is included in the Grants of Plan Based Awards in 2019 table under the heading “All Other Stock Awards: Number of Shares of Stock or Units” and “Grant Date Fair Value of Stock Awards” on page 41.



	Long-Term Incentive
Emery, Chair	—
Evans, CEO	10,667
Kinzley, CFO	3,627
Iverson, GC	2,773
Buchholz, CIO	1,707

Performance Evaluation

Role of Executive Officers in Compensation Decisions. The CEO annually reviews the performance of each of our executive officers. Based upon these performance reviews, market analysis conducted by compensation consultants and discussions with our Senior Vice President - Chief Human Resources Officer, the CEO recommends the compensation for this group of officers to the Committee.

Role of the Committee and Board in Setting Executive Compensation. The Committee reviews and establishes the Company’s financial targets and the CEO’s goals and objectives for the year. After the end of each year, the Committee evaluates the CEO’s performance in light of established goals and objectives, with input from the other independent directors. Based upon the Committee’s evaluation and recommendation, the independent directors of the Board set the CEO’s annual compensation, including salary, short-term incentive, long-term incentive and equity compensation.

The Committee reviews the CEO’s recommended compensation levels for our senior officers. The Committee may approve the CEO’s compensation recommendations for this group of officers or exercise its discretion in modifying any of the recommended compensation and award levels in its review and approval process. The Committee is required to approve all decisions regarding equity awards to our officers.

Effective December 31, 2018, Mr. Emery retired as Chief Executive Officer and Mr. Evans was appointed President and Chief Executive Officer, effective January 1, 2019. Mr. Emery continues to serve the Company as Executive Chairman until May 1, 2020. This leadership change was the result of a comprehensive, multi-year, board-led succession planning process.

The Compensation Committee engaged its compensation consultant, Willis Towers Watson, to conduct an extensive study on market compensation for an incoming Chief Executive Officer and the transition role of an Executive Chairman. The compensation consultant provided the Committee a Chief Executive Officer benchmarking report that regressed the proxy data of our Compensation Peer Group. The compensation consultant also advised the Committee that pay for a new Chief Executive Officer normally starts at the lower end of the competitive range and increases to the middle of the range within a few years, depending on performance and experience; and Executive Chairman compensation should take into account the change in roles and responsibilities and the level of support expected to be provided to the new Chief Executive Officer, while also maintaining stability and consistency at the board level during the transition. The Committee recommended and the Board approved the following compensation packages, effective January 1, 2019:

Governance Best Practices

We have several governance programs in place to align our executive compensation with shareholder interests and to mitigate risks in our plans. These programs include stock ownership guidelines, clawback provisions in our short-term and long-term incentive award agreements, and the prohibition of hedging or pledging of Company stock.

In total, the Committee believes that the ~~2017~~2019 compensation actions, decisions and outcomes strongly reflect and reinforce our compensation philosophy and, in particular, ~~emphasizes~~emphasize the alignment between compensation and both performance and shareholder interests. At our ~~2017~~2019 annual meeting, shareholders owning 9497 percent of the shares voted on this matter and approved our executive compensation for ~~2016,~~2018, which we consider highly supportive of our current compensation philosophy. In connection with establishing the ~~2017~~2019 executive compensation program, the Board reviewed the results of the say on pay vote, as well as market data and performance indicators. ~~No significant design changes were made.~~

~~SETTING EXECUTIVE COMPENSATION~~



~~Analyze executive compensation market data to ensure market competitiveness~~



~~Review the components of executive compensation, including base salary, short-term incentive, long-term incentive, retirement and other benefits~~



~~Review total compensation mix and structure~~



~~Review executive officer performance, responsibilities, experience and other factors cited above to determine individual compensation levels~~

~~Market Compensation Analysis~~

The market for our senior executive talent is national in scope and is not focused on any one geographic location, area or region of the country. As such, our executive compensation should be competitive with the national market for senior executives. It should also reflect the executive’s responsibilities and duties and align with the compensation of executives at companies or business units of comparable size and complexity. The Committee gathers market information for our corporate executives from the electric and gas utility industry and also reviews general industry data as an additional reference.

~~The Committee selects and retains the services of an independent consulting firm to periodically:~~



~~Provide information regarding practices and trends in compensation programs~~



~~Review and evaluate our compensation program as compared to compensation practices of other companies with similar characteristics, including size, complexity and type of business~~



~~Review and assist with the establishment of a peer group of companies~~



~~Provide a compensation analysis of the executive positions~~

The Committee used the services of Willis Towers Watson to evaluate 2017 compensation. Willis Towers Watson gathered data from nationally recognized survey providers, as well as specific peer companies through public filings, which included:

The 23 peer companies ranged in annual revenue size from approximately $560 million to $6.5 billion, with the median at $1.9 billion. The survey data was adjusted for our relative revenue size using regression analysis. Our peer companies included in the analysis for 2017 compensation decisions were:



~~ALLETE Inc.~~	~~IDACORP Inc.~~	~~Pinnacle West Capital Corp.~~
~~Alliant Energy Corporation~~	~~MGE Energy Inc.~~	~~PNM Resources, Inc.~~
~~Ameren Corporation~~	~~New Jersey Resources Corp.~~	~~Portland General Electric Co.~~
~~Avista Corp.~~	~~NiSource, Inc.~~	~~South Jersey Industries, Inc.~~
~~Cleco Corporation~~	~~Northwest Natural Gas Co.~~	~~Spire, Inc.~~
~~CMS Energy~~	~~NorthWestern Corp.~~	~~Westar Energy Inc.~~
~~El Paso Electric Co.~~	~~OGE Energy Corp.~~	~~WGL Holdings Inc.~~
~~Great Plains Energy, Inc.~~	~~ONE Gas, Inc.~~

~~Components of Executive Compensation~~

The components of our executive compensation program consist of a base salary, a short-term incentive plan, and long-term incentives. In addition, we provide income for our officers' retirement and other benefits.

An important component of the executives' total compensation is derived from incentive compensation. Incentive compensation is intended to motivate and encourage our executives to drive performance and achieve superior results for our shareholders. The Committee periodically reviews information provided by the compensation consultant to determine the appropriate level and mix of incentive compensation. Actual income in the form of incentive compensation is realized by the executive as a result of achieving Company goals and overall stock performance. The Committee believes that a significant

portion of total target compensation should be comprised of incentive compensation. In order to reward long-term growth while still encouraging short-term results, the Committee establishes incentive targets that emphasize long-term compensation at a greater level than short-term compensation.

The Committee annually reviews all components of each senior executive officer’s compensation, including salary, short-term incentive, equity and other long-term incentive compensation values granted, and the current and potential value of the executive officer’s total Black Hills Corporation equity holdings.

~~Base Salary.~~ Base salaries for all officers are reviewed annually. We also adjust the base salary of our executives at the time of a promotion or change in job responsibility, as appropriate. Evaluation of 2017 base salary adjustments occurred in January 2017. The base salary component of each position was compared to the median of the market data provided by the compensation consultant. The market data indicated the salaries generally aligned with the utility industry median and below comparable general industry levels. The actual base salary of each officer was determined by the executive’s performance, the experience level of the officer, the executive’s current position in a market-based salary range, and internal pay relationships.

2016 Base Salary 2017 Base Salary

Emery, CEO $772,000 $820,000
Kinzley, CFO $363,000 $381,000
Evans, COO $490,000 $530,000
Iverson, GC $330,000 $350,000
Buchholz, CIO $305,000 $320,000

~~Short-Term Incentive.~~ Our Short-Term Incentive Plan is designed to recognize and reward the contributions of individual executives as well as the contributions that group performance makes to overall corporate success. The program’s goal for our corporate officers is based on an earnings per share target in order to closely align interests with shareholders and to foster teamwork and cooperation within the officer team. The short-term incentive, after applicable tax withholding, is distributed to the officer in the form of 50 percent stock and 50 percent cash, unless the officer has met his or her stock ownership guideline, in which case he or she may elect to receive the total award in cash, after deductions and applicable tax withholding. Target award levels are established as a percentage of each participant’s base salary. A target award is typically comparable to the average short-term incentive target award of the peer group at the 50^th ~~percentile level. The actual payout will vary, based on performance, between zero and 200 percent of the individual executive’s short-term incentive target award level.~~


		2017 Fees		Fees Effective January 1, 2018			2019 Fees		Fees Effective January 1, 2020
		Cash	Common Stock Equivalents	Cash	Common Stock Equivalents		Cash	Common Stock Equivalents	Cash	Common Stock Equivalents
Board Retainer	Board Retainer	$70,000	$90,000	$70,000	$92,500	Board Retainer	$80,000	$105,000	$85,000	$105,000
Lead Director Retainer	Lead Director Retainer	$20,000		$25,000		Lead Director Retainer	$25,000		$25,000
Committee Chair Retainer	Committee Chair Retainer					Committee Chair Retainer
	Audit Committee	$12,500		$12,500		Audit Committee	$15,000		$15,000
	Compensation Committee	$10,000		$10,000		Compensation Committee	$10,000		$10,000
	Governance Committee	$7,500		$7,500		Governance Committee	$7,500		$7,500
Committee Member Retainer	Committee Member Retainer					Committee Member Retainer
	Audit Committee	$10,000		$10,000		Audit Committee	$10,000		$10,000
	Compensation Committee	$7,500		$7,500		Compensation Committee	$7,500		$7,500
	Governance Committee	$7,500		$7,500		Governance Committee	$7,500		$7,500


Name⁽²⁾	Fees Earned or Paid in Cash		Stock Awards⁽³⁾		Total		Number of Common Stock Equivalents Outstanding at December 31, 2017⁽⁴⁾	Fees Earned or Paid in Cash		Stock Awards⁽³⁾		Total		Number of Common Stock Equivalents Outstanding at December 31, 2019⁽⁴⁾

Tony A. Jensen⁽⁵⁾									$13,333		$17,500		$30,833	115
Michael H. Madison		$92,500		$90,000		$182,500	9,082		$105,000		$105,000		$210,000	12,718
Linda K. Massman		$77,500		$90,000		$167,500	4,459
Kathleen A. McAllister ⁽⁵⁾									$13,333		$17,500		$30,833	115
Steven R. Mills		$92,500		$90,000		$182,500	10,388		$116,667		$105,000		$221,667	14,104
Robert P. Otto		$79,166		$90,000		$169,166	1,280		$90,000		$105,000		$195,000	4,431
Rebecca B. Roberts		$92,500		$90,000		$182,500	11,375		$102,500		$105,000		$207,500	15,152
Mark A. Schober		$80,000		$90,000		$170,000	3,317		$100,000		$105,000		$205,000	6,595
Teresa A. Taylor		$77,500		$90,000		$167,500	1,738		$87,500		$105,000		$192,500	4,918
John B. Vering		$107,500		$90,000		$197,500	23,478		$105,833		$105,000		$210,833	28,007
Thomas J. Zeller		$85,000		$90,000		$175,000	28,472		$95,000		$105,000		$200,000	33,310


Name of Beneficial Owner⁽¹⁾	Shares of Common Stock Beneficially Owned⁽²⁾	Directors Common Stock Equivalents⁽³⁾	Total	Percentage	Shares of Common Stock Beneficially Owned⁽²⁾	Directors Common Stock Equivalents⁽³⁾	Total	Percentage
Outside Directors
Tony A. Jensen					176	115	291	*
Michael H. Madison	13,790	9,622	23,412	*	15,506	12,718	28,224	*
Linda K. Massman	2,182	4,956	7,138	*
Kathleen S. McAllister					176	115	291	*
Steven R. Mills	13,102	10,940	24,042	*	13,127	14,104	27,231	*
Robert P. Otto	804	1,747	2,551	*	2,095	4,431	6,526	*
Rebecca B. Roberts	4,612	11,936	16,548	*	4,691	15,152	19,843	*
Mark A. Schober	1,816	3,803	5,619	*	3,241	6,595	9,836	*
Teresa A. Taylor	984	2,210	3,194	*	2,201	4,918	7,119	*
John B. Vering	10,971	24,152	35,123	*	11,022	28,007	39,029	*
Thomas J. Zeller	10,153	29,191	39,344	*	10,684	33,310	43,994	*

Named Executive Officers
Scott A. Buchholz	35,726	—	35,726	*	40,131		40,131	*
David R. Emery	225,880	—	225,880	*	101,346		101,346	*
Linden R. Evans	98,283	—	98,283	*	119,684		119,684	*
Brian G. Iverson	28,154	—	28,154	*	28,730		28,730	*
Richard W. Kinzley	41,819	—	41,819	*	44,365		44,365	*

All directors and executive officers as a group (15 persons)	497,360	98,557	595,917	1.1%
All directors and executive officers as a group (18 persons)					438,697	119,466	558,163	1.0%


Name and Address	Shares of Common Stock Beneficially Owned	Percentage	Shares of Common Stock Beneficially Owned	Percentage

BlackRock, Inc.⁽¹⁾
55 East 52nd Street	8,276,128	15.5%	8,582,829	14.0%
New York, NY 10055

State Street Corporation⁽²⁾
The Vanguard Group Inc.⁽²⁾			6,771,694	11.1%
100 Vanguard Blvd.
Malvern, PA 19355

State Street Corporation⁽³⁾			4,998,712	8.1%
State Street Financial Center	6,370,279	11.9%
One Lincoln Street
Boston, MA 02111

The Vanguard Group Inc.⁽³⁾
100 Vanguard Blvd.	5,400,878	10.1%
Malvern, PA 19355
Wellington Management Group LLP⁽⁴⁾
280 Congress Street			3,076,006	5.0%
Boston, MA 02210



~~Earnings per share from continuing operations, as adjusted~~	~~$3.36~~
~~Adjustments for discontinued operations:~~
~~Loss from discontinued operations~~	~~(0.25)~~
~~Adjust for:~~
~~Impairments, net of depletion benefits~~	~~0.17~~
~~Severance and retention~~	~~0.03~~
	~~(0.05)~~
~~Earnings per share from ongoing operations, as adjusted, for~~ ~~incentive plan purposes~~	~~$3.31~~


(1)	Our directors did not receive any stock option awards, non-equity incentive plan compensation, pension benefits or perquisites in ~~2017~~2019 and did not have any stock options outstanding at December 31, ~~2017.~~2019.


(3)	Each non-employee director, with the exception of Mr. Jensen and Ms. McAllister, received a quarterly award of common stock equivalents with a grant date fair value of ~~$22,500~~$26,250 per quarter, equivalent to ~~$90,000~~$105,000 per year. The grant date fair value of a common stock equivalent is the closing price of a share of our common stock on the grant date.


(4)	The common stock equivalents are fully vested in that they are not subject to forfeiture; however, the shares are not issued until after the director ends his or her service on the Board. The common stock equivalents are payable in stock or cash or can be deferred further at the election of the director.


(5)	Mr. Jensen and Ms. McAllister became members of our board effective November 1, 2019; consequently their fees earned and stock award fair values reflect a partial year of service.


*	Represents less than one percent of the common stock outstanding.


(1)	Beneficial ownership means the sole or shared power to vote, or to direct the voting of, a security or investment power with respect to a security.


(2)	Includes restricted stock held by the following executive officers for which they have voting power but not investment power: Mr. Buchholz ~~5,197~~3,323 shares; Mr. Emery ~~35,250~~6,042 shares; Mr. Evans ~~15,602~~20,291 shares; Mr. Iverson ~~7,297~~5,498 shares; Mr. Kinzley ~~9,322~~7,053 shares; and all directors and executive officers as a group ~~75,382~~52,130 shares.


(3)	Represents common stock allocated to the directors’ accounts in the directors’ stock-based compensation plan, of which there are no voting rights.


(1)	Information is as of December 31, ~~2017,~~2019, and is based on a Schedule ~~13G~~13G/A filed on February ~~8, 2018.~~4, 2020.


(2)	Information is as of ~~January~~December 31, ~~2018,~~2019, and is based on a Schedule ~~13G-A~~13G/A filed on February 12, ~~2018.~~2020.


(4)	Information is as of December 31, 2019, and is based on a Schedule 13G filed on January 28, 2020.


Variable	77	%	Variable	62	%	75	%	Variable	61	%
Linked to Share Value	52	%	Linked to Share Value	41	%	50	%	Linked to Share Value	38	%


*ii.	~~Based on~~23 peer companies representing the ~~attainment of pre-established performance goals, the actual payout can range from 50 percent to 200 percent of target.~~utility and energy industry.


i.	~~Willis Towers Watson’s 2016 Compensation Data Bank (energy services and general industry); and~~


~~ii.~~	~~23 peer companies representing the utility and energy industry.~~



	2016 Base Salary	2017 Base Salary

Emery, CEO	$772,000	$820,000
Kinzley, CFO	$363,000	$381,000
Evans, COO	$490,000	$530,000
Iverson, GC	$330,000	$350,000
Buchholz, CIO	$305,000	$320,000



Short-Term Incentive Target
	2016		2017
	% Amount	$ Amount	% Amount	$ Amount
Emery, CEO	100%	$772,000	110%	$902,000
Kinzley, CFO	60%	$217,800	60%	$228,600
Evans, COO	65%	$318,500	70%	$371,000
Iverson, GC	45%	$148,500	45%	$157,500
Buchholz, CIO	45%	$137,250	50%	$160,000



~~Aligns the interests of the plan participants and the shareholders with a corporate-wide component~~



~~Motivates employees and supports the corporate compensation philosophy~~



~~Provides an incentive reflective of core operating performance by adjusting for unique one-time events~~



~~Ensures “buy-in” from participants with easily understood metrics~~



~~Meets the performance objectives of the plan to achieve over-time, an average payout equal to market competitive levels~~



Threshold	Earnings Per Share from Ongoing Operations, as Adjusted	Payout % of Target
Minimum	$3.20	50%
Target	$3.58	100%
Maximum	$3.91	200%



~~Promote corporate goals by linking the personal interests of participants to those of our shareholders~~



~~Provide participants with an incentive for excellence in individual performance~~



~~Motivate, retain, and attract the services of participants who make significant contributions to our success by allowing participants to share in such success~~



~~Meet the performance objectives of the plan to achieve over-time, an average payout equal to market competitive levels~~



2017 NEO Long-Term Incentive Compensation as a Percentage of Base Salary
	Emery, CEO	Kinzley, CFO	Evans, COO	Iverson, GC	Buchholz, CIO
% of Base Salary	232%	119%	151%	100%	72%



~~2016-2018 and 2017-2019 Performance Share Plans~~
~~Percentile Ranking for Threshold Payout of 25% of Target Shares~~	~~Percentile Ranking for Target Payout of 100% of Target Shares~~	~~Percentile Ranking for Maximum Payout Level~~	~~Possible Payout Range of Target~~

25^th ~~percentile~~	50^th ~~percentile~~	90^th ~~percentile~~	~~0-200%~~



~~2015-2017 Performance Share Plan~~
~~Percentile Ranking for Threshold Payout of 50% of Target Shares~~	~~Percentile Ranking for Target Payout of 100% of Target Shares~~	~~Percentile Ranking for Maximum Payout Level~~	~~Possible Payout Range of Target~~

30^th ~~percentile~~	50^th ~~percentile~~	85^th ~~percentile~~	~~0-200%~~