» | Annual Board and its Committees.Code of Business Conduct
The Board has adopted a Code of Conduct that applies to all Directors, Officers and employees. This Code encompasses all areas of professional conduct, as well as strict adherence to all laws and regulations applicable to the conduct of our business. In addition, the Company has established an internal hotline where Code of Conduct violations may be reported by any employee or member of the general public.
The Company’s Code of Conduct, as well as the charters for the Audit, Compensation, Corporate Governance & Nominating, and Pension Committees, are available on our website www.MiddlesexWater.com under the heading Investor Relations – (Corporate Governance). We also make this information available in print to any shareholder upon request. Requests should be addressed to Corporate Secretary, Middlesex Water Company, 1500 Ronson Road, P.O. Box 1500, Iselin, New Jersey 08830-0452.
Director Independence
The Company’s Common Stock is listed on the Nasdaq Global Select Market. Nasdaq listing rules require that a majority of the Company’s Directors be “Independent Directors” as defined by Nasdaq corporate governance standards. “Independent Director” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which could interfere with the exercise of independent judgment in carrying out the responsibilities of a Director. For purposes of this rule, “Family Member” means a person’s spouse, parents, children and siblings, whether by blood, marriage or adoption, or anyone residing in such person’s home.
As defined by Nasdaq corporate governance requirements, a member of the Board is not independent if:
| · | The Director is, or at any time during the past three years, has been employed by the Company.Committee evaluations |
| · | The Director has accepted or has a family member that has accepted any compensation fromCode of Ethics and Corporate Governance Guidelines Management of the Company is under the general direction of the Board who are elected by the shareholders. The Company’s business is managed under the direction of the Board in accordance with the New Jersey Business Corporation Act and our Certificate of Incorporation and By-laws. Members of the Board are kept apprised of our business through discussions with the Chairman and Chief Executive Officer and other Company Officers, by reviewing briefing materials and other relevant information provided to them, and by participating in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence. |
| · | The Director is a family member of an individual who is, or at any time during the past three years was, employed by the Company as an officer. |
| · | The Director is, or has a family member who is, a partner in, or a controlling shareholder or an officer of, any organization to which the Company made, or from which the Company received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more. |
| · | The Director is, or has a family member who is, employed as an officer of any other entity where at any time during the past three years any of the officers of the Company serve on the compensation committee of such other independent entity. |
| · | The Director is, or has a family member who is, a current partner of the Company’s independent auditor, or was a partner or employee of the Company’s independent auditor who worked on the Company’s audit at any time during any of the past three years. |
With the exception of Mr. Doll, who is an Executive Officer of the Company, the Board has determined that each member of the Board is independent under the Nasdaq listing standards.
The Board based this determination primarily on a review of the responses of the Directors to a comprehensive annual questionnaire regarding employment and compensation history, affiliations, family and other relationships, together with an examination of those companies with whom the Company transacts business. The Directors certify individually as to their representations.
The Board reviewed related party transactions between Norris, McLaughlin & Marcus, P.A., and the Company. Mr. Reinhard retired from his status as a partner at Norris McLaughlin & Marcus on December 31, 2014. Effective January 1, 2015, he commenced service as “Of Counsel” to the firm. Mr. Reinhard currently serves as Chair of the Corporate Governance and Nominating Committee and is a member of the Pension Committee. The Company paid Norris, McLaughlin & Marcus, $23,000 for legal services during 2015. The amount paid represents less than 5% of Norris, McLaughlin & Marcus P.A. fee revenue. Mr. Reinhard is not a controlling shareholder of the firm. Based upon the foregoing, and in connection with the definition of “Independent Director” under the Nasdaq Listing Guidelines, the Board determined that Mr. Reinhard was an Independent Director in 2015.
Board Size
The Board shall consist of not less than five nor more than twelve members in accordance with the By-laws.
Board Meetings and Annual Meeting Attendance by Board Members
The frequency and length of Board meetings, as well as agenda items, is determined by the Chairman and Committee Chairs with input from all other Directors. Meeting schedules are approved by the full Board.
The Board holds monthly meetings and meets on other occasions when required. We expect our Directors to attend each meeting of the Board and of the committees on which he or she serves. We expect our Directors to attend our Annual Meeting of Shareholders. During 2015, the Board held twelve meetings and the Board Committees held seventeen meetings. In 2015, no member of the Board attended fewer than 96% of the total number of meetings of the Board and Committees on which each served. All of the Directors serving at the time of the Annual Meeting held in May 2015 attended that meeting.
Middlesex Water Company 10 2016 Proxy Statement
Board Leadership Structure
The Board does not have a formal policy on whether or not the role of the Chief Executive Officer and Chairman of the Board should be separate or, if it is to be separate, whether the Chairman should be selected from the independent Directors or be an employee. Currently, the Company operates with one individual, Mr. Doll, serving as Chairman of the Board as well as President and Chief Executive Officer, coupled with a strong independent Lead Director and independent standing Board committees. The Board believes that combining the Chairman of the Board and President and Chief Executive Officer roles is the appropriate corporate governance structure at this time because: a) it most effectively utilizes Mr. Doll’s extensive utility and management experience and knowledge regarding the Company, and b) it leverages his capabilities in effectively identifying strategic priorities and leading discussions on, and execution of, the Company’s strategy.
The Board has embedded in its culture, a philosophy of “constructive tension” whereby, the Board fulfills its mission to support the strategic direction of the Company while simultaneously fully representing the interests of our shareholders. The Board accomplishes this by challenging the President and Chief Executive Officer and the Company’s management on an ongoing basis.
Lead Director
In order to ensure the independent Directors play a leading role in our current leadership structure, the Board established the position of Lead Director in 2010 and named Jeffries Shein to the position. Mr. Shein, Director since 1990, serves on the Compensation, Corporate Governance & Nominating and Ad Hoc Pricing Committees.
Code of Business Conduct The Board has adopted a Code of Conduct that applies to all Directors, Officers and employees. This Code encompasses all areas of professional conduct, as well as strict adherence to all laws and regulations applicable to the conduct of our business. In addition, the Company has an internal Ethics Hotline where Code of Conduct violations may be reported by any employee or member of the general public. The Company’s Code of Conduct, as well as the charters for the Audit, Compensation, Corporate Governance & Nominating, and Pension Committees, are available on our website www.MiddlesexWater.com under the heading Investors - (Governance). We also make this information available in print to any shareholder upon request. Requests should be addressed to Corporate Secretary, Middlesex Water Company, 485C Route 1 South, Suite 400, Iselin, New Jersey 08830-0452. Board Leadership Structure The Board does not have a formal policy on whether or not the role of the Chief Executive Officer and Chairman of the Board should be separate or, if it is to be separate, whether the Chairman should be selected from the independent Directors or be an employee. Currently, the Company operates with one individual,Mr. Doll, serving as Chairman of the Board as well as President and Chief Executive Officer, coupled with a strong independent Lead Director and independent standing Board committees. The Board believes that combining the Chairman of the Board and President and Chief Executive Officer roles is the appropriate corporate governance structure at this time because: a) it most effectively utilizes Mr. Doll’s extensive utility and management experience and knowledge regarding the Company, and b) it leverages his capabilities in effectively identifying strategic priorities and leading discussions on, and execution of, the Company’s strategy. The Board has embedded in its culture, a philosophy of “constructive tension” whereby, the Board fulfills its mission to support the strategic direction of the Company while simultaneously fully representing the interests of our shareholders. The Board accomplishes this by challenging the President and Chief Executive Officer and the Company’s management on an ongoing basis. Lead Director In order to ensure that the independent Directors play a leading role in our current leadership structure, the Board maintains a Lead Director position. Mr. Walter Reinhard was named Lead Director at the May 2020 Board meeting replacing Jeffries Shein who retired from the Board in May 2020. Summary of Lead Director Responsibilities: | · | Advises the Chairman as to an appropriate schedule of Board meetings; |
| · | Provides the Chairman with input regarding the agenda for Board meetings; |
| · | Presides at all meetings at which the Chairman is not present, including executive sessions of the independent Directors, and apprises the Chairman of the issues considered; |
| · | Is available for consultation and direct communication with the Company’s shareholders and other members of the Board; |
| · | Calls meetings of the independent Directors when necessary and appropriate; |
| · | Performs such other duties as the Board may from time to time delegate. |
Advises the Chairman as to an appropriate schedule of Board meetings; Reviews and provides the Chairman with input regarding the agenda for Board meetings; Presides at all meetings at which the Chairman is not present, including executive sessions of the independent directors, and apprises the Chairman of the issues considered; Is available for consultation and direct communication with the Company’s shareholders and other members of the Board; Calls meetings of the independent Directors when necessary and appropriate; Performs such other duties as the Board may from time to time delegate. As part of our Board’s annual assessment process, the Board evaluates our Board leadership structure to ensure it remains appropriate. The Board recognizes there may be circumstances that would lead it to conclude that separate roles of Chief Executive Officer and Chairman of the Board may be appropriate, but believes that the absence of a formal policy requiring either the separation or combination of the roles of Chairman and Chief Executive Officer provides the flexibility to determine the most appropriate governance structure, as conditions potentially change in the future. Middlesex Water Company 11 2021 Proxy Statement
Board Role In Risk Oversight The Board as a whole plays an integral role in shaping Middlesex Water’s strategy, governance and culture. Another critical responsibility is overseeing our risk exposure as part of determining business strategy that generates long-term shareholder value. Risk Management oversight is a core responsibility of the Corporate Governance and Nominating Committee. Specifically, the Corporate Governance and Nominating Committee is responsible for overseeing the process by which significant business and operational risks (including information security risks and risks related to climate change) are identified throughout the enterprise and the strategies developed to mitigate any identified risks. This added oversight is reflected in the Corporate Governance and Nominating Committee’s Charter which was recently revised and approved by the Board, and is available in the Investors section of our website www.middlesexwater.com under Governance. The primary purpose of the Corporate Governance and Nominating Committee in fulfilling its risk management oversight responsibilities is accomplished by (i) assessing and reporting to the Board on the Company’s risk environment, including its material, strategic,and operational risks (including but not limited to the brand and reputation of the Company; the health and safety of the Company’s employees and the business operations of the enterprise); (ii) ensuring that management understands and accepts its responsibility for identifying, assessing, and managing risk; (iii) facilitating management’s strategic focus on the Company’s risk management vision and its evolution; (iv) verifying that the guidelines and policies governing the process by which risk assessment and management is undertaken are comprehensive and evolve commensurate with the risk profile of the Company;and (v) reviewing those risks that the Corporate Governance and Nominating Committee deems material to the Company’s shareholders. Management retains responsibility for all day-to-day activities of the Company, including administration of the Company’s formal Enterprise Risk Management program. The Corporate Governance and Nominating Committee updates the Board on risk management activities routinely throughout the year. Specifically as it relates to cyber security, our Board receives regular updates from the Vice President of Information Technology on cyber risks and ongoing policies and plans to assess the effectiveness of our information technology and data security processes. Committee | Primary Areas of Risk Oversight | Audit | Risks Related to Financial Reporting and Controls The Board as a whole is responsible
Reviews work performed by the independent registered public accounting firm Supervises our independent and confidential Ethics hotline reporting system which encourages and allows employees to raise concerns Oversees matters related to internal audit functions Reviews and approves related party transactions, if any | Compensation | Oversees human capital risks Risks related to compensation and benefits program for overseeing our risk exposure as part of determining business strategy that generates long-term shareholder value. Riskexecutive management oversight was formally added Risks related to the organizational development including recruitment, retention and engagement | Corporate Governance and Nominating Committee’s | Risks related to overall corporate governance, including our governance policies and practices Risks related to Board composition, Board structure and Board and executive officer succession planning Enterprise Risk management including operational, financial and brand risk Risks related to information technology and data security Risks related to corporate social responsibility and environmental, social and governance matters including climate related risks | | |
Middlesex Water Company 12 2021 Proxy Statement COMPANY RESPONSE TO COVID-19 Supporting Our People, Our Customers and Our Communities – Middlesex Water credits its dedicated employees, business continuity and crisis management planning to ensuring uninterrupted service delivery during one of the most serious public health crises of our time. As we continue to navigate the COVID-19 pandemic, we remain focused on the delivery of water and wastewater services essential to everyday quality of life. We thank our frontline employees – those essential workers responsible for the day to day operation of treatment plants, those who ensured water quality compliance and crews responsible for responding to water service emergencies These were some of the priorities that guided our Company’s response to COVID-19: Initiated our emergency response and business continuity plan early on to focus on our people, customers, operations, technology and finances and have adapted, as necessary, to address changing circumstances and remain resilient. The Board of Directors convened virtual meeting updates with management regarding the Company’s COVID-19 pandemic response including impact on the company’s employees, operations and customers and reviewed measures that were implemented to protect employee and customer health and safety. Informal interim calls were held to discuss progress on critical construction projects, risk management and legislative and regulatory impacts on the business. The Board was deeply involved in reviewing the Company’s strategic COVID-19 response and, at the February 11, 2021 board meeting, issued a resolution in tribute to employees for their dedicated service during the pandemic. Supported public health and the economic stability of our communities through the uninterrupted delivery of life sustaining services To prevent the spread of COVID-19 in our workplace and in our communities, we transitioned to a remote work status for about 35% of our workforce who were able to do so and employed measures to ensure essential employees felt safe in their work environments. Implemented extensive human resource actions including enhanced safety measures at all of our facilities to include new policies, process changes, signage, eliminating all business travel, providing masks and sanitizer, establishing strict social distancing guidelines, enhanced cleaning and sanitizing measures, requiring daily temperature checks reporting and digital COVID-19 questionnaire completion by all employees. Although walk-in customer payments and in-home service visits were suspended to limit exposure, ongoing customer service and consistent communications were maintained to address customer needs and keep them informed. To ensure public health and safety for all customers, we suspended water shutoffs for nonpayment and restored service to those whose service had been discontinued for non-payment. Provided education about available relief measures to our customers facing financial difficulties. Encouraging strong cybersecurity best practices became a critical aspect of business continuity. Information technology tools such as remote access applications, cloud services and virtual private networks helped the Company nimbly pivot to a remote work structure that is both supportable and sustainable. Implemented increased monitoring, security testing and training to balance the business continuity need against the information technology security risks involved in a remote workforce. Maintained consistent and regular engagement to remain connected with all stakeholders during this time of isolation and social distancing. Required adherence of our construction partners to all government safety protocols before moving forward with critical Company infrastructure investment projects. Collaborated regularly with regulatory, industry, and governmental representatives to coordinate efforts for appropriate COVID measures and programs. Modified and upgraded construction project programs to maintain schedules for needed construction projects upgrading aging water infrastructure throughout the distribution system. Responsibly supported the communities we serve with nearly $100,000 in donations from the Company and its employees to 20 local organizations to address short term needs related to the pandemic. Formally committed to employees early on there would be no COVID-19 related layoffs and no reduction in employee benefits through the public health crisis. Supported employees and their families during these unprecedented times with wellness information and an abundance of resources, flexible schedules for working parents with school age children, telehealth options, carry over vacation credits, and voluntarily extending benefits under the Families First Corona Virus Response Act until December 31, 2021. Middlesex Water Company 13 2021 Proxy Statement Director Independence The Company’s Common Stock is listed on the Nasdaq Global Select Market. Nasdaq listing rules require that a majority of the Company’s directors be “Independent Directors” as defined by Nasdaq corporate governance standards. “Independent Director” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, could interfere with the exercise of independent judgment in carrying out the responsibilities of a Director. For purposes of this rule, “Family Member” means a person’s spouse, parents, children and siblings, whether by blood, marriage or adoption, or anyone residing in such person’s home. As defined by Nasdaq corporate governance requirements, a member of the Board is not independent if the Director: ✔ | Is, or at any time during the past three years, has been employed by the Company. |
✔ | Has accepted, or has a family member that has accepted any compensation from the Company in 2012 and remains underexcess of $120,000 during any period of twelve consecutive months within the supervisionthree years preceding the determination of independence. |
✔ | Is a family member of an individual who is, or at any time during the past three years was, employed by the Company as an Executive Officer. |
✔ | Is, or has a family member who is, a partner in, or a controlling Shareholder or an Executive Officer of, any organization to which the Company made, or from which the Company received, payments for property or services in the current or any of the Corporate Governance and Nominating Committee.Specifically, the Committee is responsible for overseeing the process by which significant business risks are identified throughout the enterprise and the strategies developed to mitigate any identified risks. This oversight responsibility is reflected in the Corporate Governance and Nominating Committee’s Charter and is available in the Investor Relations section of our website www.MiddlesexWater.com under Corporate Governance. The primary purposepast three fiscal years that exceed 5% of the Committee in fulfilling its risk management oversight responsibilitiesrecipient’s consolidated gross revenues for that year, or $200,000, whichever is accomplished by (i) assessing and reporting tomore.
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✔ | Is, or has a family member who is, employed as an Executive Officer of any other entity where at any time during the Boardpast three years any of the officers of the Company serve on the compensation committee of such other entity. |
✔ | Is, or has a family member who is, a current partner of the Company’s independent auditor, or was a partner or employee of the Company’s independent auditor who worked on the Company’s risk environment, including its material, strategic, and operational risks (including but not limited to the brand and reputationaudit at any time during any of the Company; the health and safety of the Company’s employees and the business operations of the enterprise); (ii) ensuring that management understands and accepts its responsibility for identifying, assessing, and managing risk; (iii) facilitating management’s strategic focus on the Company’s risk management vision and its evolution; (iv) verifying that the guidelines and policies governing the process by which risk assessment and management is undertaken are comprehensive and evolve commensurate with the risk profile of the Company; and (v) reviewing those risks that the Committee deems material to the Company’s shareholders. Management retains responsibility for all day-to-day activities of the Company, including administration of the Company’s formal Enterprise Risk Management program. The Committee updates the Board on risk management activities routinely throughout the year.Executive Sessions
The independent Directors periodically meet without management in executive session. The Lead Director is designated to preside at these executive sessions.
Communications with the Board
Any shareholder wishing to communicate with a Director may do so by contacting the Company’s Corporate Secretary at 1500 Ronson Road, P.O. Box 1500, Iselin, New Jersey 08830, who will forward to the Director a written, email, or phone communication. The Corporate Secretary has been authorized by the Board to screen frivolous or unlawful communications or commercial advertisements.
Shareholder Proposals
In order to be eligible for inclusion in our proxy materials for our 2016 Annual Meeting, any shareholder proposal must have been received by the Secretary of the Company, 1500 Ronson Road, Iselin, New Jersey 08830 no later than December 9, 2015. No shareholder proposals were received by the Company for the 2016 Annual Meeting.
Advance Notice of Business to be Conducted at an Annual Meeting
Shareholders are entitled to submit proposals on matters appropriate for shareholder action consistent with regulations of the SEC. For business to be properly brought before an Annual Meeting by a shareholder, the business must be an appropriate matter to be voted by the shareholders at an Annual Meeting and the shareholder must have given proper and timely notice in writing to the Corporate Secretary of the Company at 1500 Ronson Road, P.O. Box 1500,past three years.
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With the exception of Mr. Doll, who is an Executive Officer of the Company, the Board has determined that each member of the Board is independent under the Nasdaq listing standards. The Board based this determination primarily on a review of the responses of the Directors to a comprehensive annual questionnaire regarding employment and compensation history, affiliations, family and other relationships, together with an examination of those companies with whom the Company transacts business. The Directors certify individually as to their representations. Board Size
The Board shall consist of not less than five nor more than twelve members in accordance with the By-laws. Board Meetings and Annual Meeting Attendance by Board Members The frequency and length of Board meetings, as well as agenda items, are determined by the Chairman and Committee Chairs with input from all other Directors. Meeting schedules are approved by the full Board. The Board holds regularly scheduled meetings and meets on other occasions when required. We expect our Directors to attend each meeting of the Board and of the committees on which they serve. We expect our Directors to attend our Annual Meeting of shareholders. During 2020, the Board held eight meetings and the Board Committees held thirteen meetings. In 2020, no member of the Board attended fewer than 81.3% of the total number of meetings of the Board and Committees on which each served. All of the Directors serving at the time of the Annual Meeting held in May 2020 attended that meeting. Executive Sessions The Independent Directors periodically meet without management in executive session. The Lead Director is designated to preside at these executive sessions. Communications with the Board Any shareholder wishing to communicate with a Director may do so by contacting the Company’s Corporate Secretary at: Middlesex Water Company 485C Route 1 South, Suite 400, Iselin, New Jersey 08830 The Corporate Secretary will forward to the Director a written, email or phone communication. The Corporate Secretary has been authorized by the Board to screen frivolous or unlawful communications or commercial advertisements. Shareholder Proposals In order to be eligible for inclusion in our proxy materials for our 2021 Annual Meeting, any shareholder proposal must have been received by the Corporate Secretary of the Company, 485C Route 1 South, Suite 400, Iselin, New Jersey 08830 no later than December 9, 2020. No shareholder proposals were received by the Company for the 2021 Annual Meeting. Advanced Notice of Business to be Conducted at the Annual Meeting Shareholders are entitled to submit proposals on matters appropriate for shareholder action consistent with regulations of the SEC. For business to be properly brought before an Annual Meeting by a shareholder, the business must be an appropriate matter to be voted by the shareholders at an Annual Meeting and the shareholder must have given proper and timely notice in writing to the Corporate Secretary of the Company at 485C Route 1 South, Suite 400, Iselin, New Jersey 08830-0452. A shareholder’s notice to the Corporate Secretary must set forth as to each matter the shareholder proposes to bring before the Annual Meeting: | (a) | a) a brief description of the matter desired to be brought before the Annual Meeting and reasons for conducting such business at the Annual Meeting, |
| (b) | the name and address, as they appear in the Company’s records, of the shareholder proposing such business, |
| (c) | the class and number of shares of the Company which are beneficially owned by the shareholder and |
| (d) | any material interest of the shareholder in such business. |
Middlesex Water Company 11 2016 Proxy Statement
Committees of the Board
The Board maintains a number of standing committees to assist with the performance of its responsibilities. The number, structure and function of Board Committees are reviewed periodically by the Corporate Governance and Nominating Committee. The Committees regularly report to the Board on their deliberations. The Committees also bring to the Board for consideration those matters and decisions which the Committees judge to be of special significance and which require full Board approval. The table shown provides information on current committee membership.
Board and Committee Self-Evaluation
The Board periodically evaluates its performance through a self-assessment questionnaire which is reviewed by the Corporate Governance & Nominating Committee. The Board conducts such evaluations as determined by the Corporate Governance & Nominating Committee.
Board Committee Membershipb) the name and address, as they appear in the Company’s records, of the shareholder proposing such business, c) the class and number of shares of the Company which are beneficially owned by the shareholder and d) any material interest of the shareholder in such business. Middlesex Water Company 14 2021 Proxy Statement Shareholder Engagement We welcome the opportunity to engage with our shareholders to share our perspectives on and obtain their feedback on matters of mutual interest. We engage with the shareholders throughout the year to: Provide visibility and transparency into our business, financial and operational performance. Learn from our shareholders what issues are most important to them and to hear our views on those issues. Share our perspective on Company and industry developments and regulatory impacts. Discuss and seek feedback on our corporate governance policies and practices as well as emerging trends. Share our Environmental, Social and Governance (ESG) strategy and progress. Seek feedback on our communications and disclosures to investors. How We Engage We approach shareholder engagement as an integrated, year-round process involving the Chief Executive Officer, the Chief Financial Officer and our Investor Relations team. Throughout the year, we had dialogue with analysts, institutional investors, Proxy advisory firms, ESG Ratings Firms and others to inform and share our perspective and to solicit their feedback on our performance. This includes participation in virtual investor conferences, group and one-on-one meetings as well as our virtual annual shareholder meeting. We also share information in our Annual Report and Proxy Statement, press releases, SEC filings, quarterly shareholder letters, on our corporate and transfer agent website as well as in our Corporate Sustainability Report. Key Themes Discussed in 2020 Risk Management: Managing operational risks including those related to emerging contaminants, cyber threats, climate change and human capital management is critical to business success. Succession Planning: Recruitment and retention of qualified personnel to staff key leadership and technical positions is a top priority. Environmental, Social and Governance: Enhanced disclosure on ESG related efforts that are improving the long term sustainability of the Company. Committees of the Board The Board maintains standing committees to assist with the performance of its responsibilities. The number, structure and function of Board Committees are reviewed periodically by the Corporate Governance and Nominating Committee. The Committees regularly report to the Board on their deliberations. The Committees also bring to the Board for consideration those matters and decisions which the Committees judge to be of significance and which require full Board approval. The table shown below provides information on board committee membership for the year 2021. Board and Committee Self-Evaluation The Board periodically evaluates its performance through a self-assessment questionnaire which is reviewed by the Corporate Governance & Nominating Committee. The Board conducts such evaluations as determined by the Corporate Governance & Nominating Committee. Middlesex Water Company 15 2021 Proxy Statement Audit Committee | Steven M. Klein, Audit Committee Chair | Name | Audit | Compensation | Corporate
Governance &
Nominating | Pension | Ad Hoc
Pricing | James F. Cosgrove, Jr. | | | Member | Chair | Member | John C. Cutting, Ph.D. (1) | Member | | | Chair | Member | Kim C. Hanemann (2) | Member | | | | | Steven M. Klein (3) | Chair | Member | | Member | | Amy B. Mansue | Member | Chair | Member | | | John R. Middleton, M.D. | Member | Member | Member | | | Walter G. Reinhard | | | Chair | Member | | Jeffries Shein | | Member | Member | | Member |
(1) Dr. Cutting served as chair of the Pension Committee and as a member of the Audit and Ad Hoc Pricing Committee prior to his retirement from the Board on May 19, 2015. Following his retirement, James Cosgrove, Jr. was appointed chair of the Pension Committee.
(2) Kim C. Hanemann was named to the Board on January 26, 2016.
(3) Director is an “Audit Committee Financial Expert” as defined by SEC Rules and Regulations.
Audit Committee | Steven M. Klein,Audit Committee Chair |
Audit Committee Members:Members in 2020: Kim C. Hanemann Steven M. Klein Amy B. Mansue John R. Middleton, M.D.Ann L. Noble
Independent Members:4 Meetings Held in 2015:2020:4 3 | Audit Committee Responsibilities The Audit Committee is responsible for oversight of the audit of the Company’s financial statements and internal controls over financial reporting. It is also assigned the responsibilities of (i) oversight of the Company’s internal audit functions; (ii) review of related party transactions with the Company; (iii) determining whether to grant waivers if any, with respect to the Company’s Code of Conduct; and (iv) investigation of “whistleblower” complaints. In all its actions, the Committee shall comply with the requirements, rules and regulations of the Sarbanes-Oxley Act of 2002, Nasdaq Global Select Marketplace listing standards and all other applicable federal and state laws, rules and regulations. In the course of performing its functions, the Audit Committee, as provided by the Audit Committee Charter: | · | Reviews with the independent registered public accounting firm the scope and results of the annual audit and quarterly reviews; |
| · | Receives and reviews the independent registered public accounting firm’s annual report; |
| · | Reviews the independence of the independent registered public accounting firm and services provided by them and their fees; |
| · | Recommends to the Board the inclusion of the audited financial statements in the Company’s Annual Report to the SEC on Form 10-K; |
| · | Is directly responsible for the annual appointment of an independent registered public accounting firm. |
• Reviews with the independent registered public accounting firm the scope and results of the annual audit and quarterly reviews; • Receives and reviews the independent registered public accounting firm’s annual report; • Reviews the independence of the independent registered public accounting firm and services provided by them and their fees; • Recommends to the Board the inclusion of the audited financial statements in the Company’s Annual Report to the SEC on Form 10-K; • Is directly responsible for the annual appointment of an independent registered public accounting firm. Independence The Board has determined that under current Nasdaq listing standards, all members of the Audit Committee are independent Directors.directors. The Audit Committee reports to the Board on its activities. Ms. Kim C. Hanemann, named toCommittee Charter
In February 2021, the Board in January 2016, was also appointed to serve on the Audit Committee. In March 2016, the Boardof Directors re-approved the written Charter for the Audit Committee which is available in the Investor RelationsInvestors section of our website www.MiddlesexWater.com under Corporate Governance. Please refer to this Charter for a full listing of Audit Committee responsibilities.responsibilities Middlesex Water Company 12 2016 Proxy Statement
| Table of ContentsCompensation CommitteeAmy B. Mansue, Compensation Committee Chair | Compensation Committee | Amy B. Mansue,Compensation Committee Chair | Compensation Committee Members:Members in 2020:
SteveJames F. Cosgrove, Jr.
Steven M. Klein John R. Middleton, M.D.Amy B. Mansue
Jeffries SheinShein* Independent Members:4 3 Meetings Held in 2015:2020:2 *Until his retirement in May 2020 | Compensation Committee Responsibilities The Compensation Committee has oversight of human capital risk and is focused on succession planning efforts at all levels of company management. The Committee is responsible for overseeing the development, implementation and effectiveness of the Company’s human capital management policies, programs, and initiatives and their alignment with the Company’s organizational needs. The Compensation Committee administers the compensation and benefits program for executive officers of the Company including the incentive compensation program for all participating employees.Company. In addition, the Committee administers the Compensation program relative to the Board in consultation with the Corporate Governance and Nominating Committee. In all its actions, the Committee shall comply with the requirements, rules and regulations of the Nasdaq Marketplace listing standards and all other applicable federal and state laws rules and regulations. Two meetings were held in 2020, and executive sessions were held with the full Board, absent Mr. Doll, regarding compensation matters. The Compensation Committee: • Reviews and makes recommendations to the Board as to the base salaries, benefits and incentive compensation of the Executive Officers; | · | Reviews and makes recommendations to the Board as to the base salaries, benefits and incentive compensation of the Executive Officers; |
| · | Meets with the Chief Executive Officer to evaluate the performance of the other executive officers. Executive Officer incentive compensation is awarded under the Restricted Stock Plan. (Please refer to page 19 for a description of how awards are granted under the Restricted Stock Plan.); |
| · | Evaluates the Compensation Discussion and Analysis and Report of the Compensation Committee for inclusion in the Proxy Statement. |
• Meets with the Chief Executive Officer to evaluate his performance and the performance of the other Executive Officers. Executive Officer incentive compensation is awarded under the Restricted Stock Plan. (Please refer to page 25 for a description of how awards are granted under the Restricted Stock Plan.); • Approves the Compensation, Discussion and Analysis and Report of the Compensation Committee for inclusion in the Proxy Statement. Independence The Board has determined that under current Nasdaq listing standards, all members of the Compensation Committee are independent Directors. The Compensation Committee reports to the Board on its activities. Committee Charter In February 2016,2021, the Board of Directors re-approved a written Charter for the Compensation Committee which is available in the Investor RelationsInvestors section of our website www.MiddlesexWater.com under Corporate Governance. Please refer to this Charter for a full listing of Compensation Committee responsibilities. Compensation Committee Interlocks and Insider Participation The members of the 20152020 Compensation Committee were Steven M. Klein, Amy B. Mansue John R. Middleton, M.D. and Jeffries Shein.Shein until his retirement from the Board in May 2020. Mr. James F. Cosgrove, Jr. was added to the Compensation Committee in 2020. During 2015,2020, no member of the Compensation Committee was at any time an officer or employee of the Company or its subsidiaries. No current member is related to any other member of the Compensation Committee, any other member of the Board or any executive officer of the Company. Middlesex Water Company 13 2016 Proxy Statement
Corporate Governance
and Nominating Committee |
Walter G. Reinhard,Corporate Governance and Nominating Committee Chair |
Middlesex Water Company 16 2021 Proxy Statement Corporate Governance and Nominating Committee | Walter G. Reinhard, Corporate Governance and Nominating Committee Chair | Corporate Governance and Nominating Committee
Members:Members in 2020: James F. Cosgrove Jr.
Amy B. Mansue John R. Middleton, M.D., Kim C. Hanemann
Walter G. Reinhard Jeffries SheinShein* Independent Members:5 4 Meetings Held in 2015:
Corporate Governance:2020:4 Nominating:2
*Until his retirement in May 2020 | Corporate Governance and Nominating Committee Responsibilities The
The Corporate Governance and Nominating Committee shall provide assistance to the Board in fulfilling the responsibility for matters relating to the organization of the Board; shall identify, evaluate and propose new nominees to the Board; and make recommendation to the Board on all such matters and for other issues, including risk management oversight, relating to the Company’s corporate governance. In so doing, the Corporate Governance and Nominating Committee shall maintain free and open means of communication between the Directors and executive officersExecutive Officers of the Company. In carrying out its responsibilities, the Corporate Governance and Nominating Committee strives to ensure to allthe Directors and shareholders that the corporate governance practices of the Company are in accordance with applicable laws and regulations and reflect the highest ethical standards. Among its various responsibilities, the Corporate Governance and Nominating Committee: | · | • Reviews and makes recommendations relating to the performance of the Board, committee structures, enterprise risk management and the composition of the Board; |
| · | Reviews and makes recommendations on matters related to Directors’ compensation; |
| · | Reviews and makes recommendations related to any management proposals to make significant organizational changes to the Company; |
| · | Seeks and identifies qualified candidates for Board membership and recommends to the Board candidates for nomination and election to the Board. In this capacity, the Committee focuses on the composition of the Board with respect to depth of experience, balance of professional interests, required expertise and other factors of diversity. Establishes and manages the process by which recommendations for Board membership are received and evaluated from shareholders and other sources; |
| · | Reviews and makes recommendations to the Board with respect to succession planning. |
In February 2016, the Board, approved a mergercommittee structures, risk management and the composition of the CorporateBoard;
• Reviews and makes recommendations on matters related to Directors’ compensation; • Reviews and makes recommendations related to any management proposals to make significant organizational changes to the Company; • Seeks and identifies qualified candidates for Board membership and recommends to the Board candidates for nomination and election to the Board. In this capacity, the Committee focuses on the composition of the Board with respect to depth of experience, balance of professional interests, required expertise and other factors of diversity , equity and inclusion; • Establishes and manages the process by which recommendations for Board membership are received and evaluated from shareholders and other sources; • Reviews and makes recommendations to the Board with respect to succession planning. • Oversees the Company’s efforts to implement, measure and report on Environmental, Social and Governance and Nominating Committees. (ESG) related initiatives. Independence The Board has determined that under current Nasdaq listing standards, all members of the Corporate Governance and Nominating Committee are independent Directors. Committee Charter A revised charter for the Corporate Governance and Nominating Committee was approved by the Board of Directors in February 2016,June 2020, and is available in the Investor RelationsInvestors section of our website www.MiddlesexWater.com under Corporate Governance. Please refer to this Charter for a full listing of Corporate Governance and Nominating Committee responsibilities. Process for Identifying and Evaluating Director Candidates The Corporate Governance and Nominating Committee periodically identifies Director nominees based onfrom a variety of sources which may include recommendations that may be received from management, Board members, shareholders and other sources. The Committee recommends to the Board nominees that are:that: | · | independent of management; |
| · | satisfy SEC and Nasdaq requirements; and |
| · | possess qualities such as personal and professional integrity, sound business judgment, and utility, technical or financial expertise. |
• are independent of management; • satisfy SEC and Nasdaq requirements; and • possess qualities such as personal and professional integrity, sound business judgment, utility expertise, technical, financial or other relevant expertise. The Committee also considers age and diversity (broadly construed to meandiversity. Diversity is broadly defined as a variety of opinions, perspectives, personal and professional experiences and backgrounds, such as gender, race and ethnicethnicity differences, as well as other differentiating characteristics) in making its recommendations for nominees to the full Board.characteristics. The Committee has the authority to retain assistance from independent third parties in identifying and evaluating prospective candidates for nomination and election to the Board. Middlesex Water Company 14 2016 Proxy Statement
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Middlesex Water Company 17 2021 Proxy Statement | Director Candidate Recommendations and Nominations by Shareholders The Corporate Governance and Nominating Committee considers shareholders’ recommendations for nominees for election to the Board. Shareholder nominees are evaluated under the same standards as nominees ultimately recommended by management or the non-management members of the Board. Nominations must be accompanied by the written consent of any such person to serve if nominated and elected, and by biographical material, to permit evaluation of the individual recommended, including appropriate references. Recommendations may be mailed to:
Middlesex Water Company
Office of the Corporate Secretary
1500 Ronson Road
P.O. Box 1500
485C Route 1 South Suite 400 Iselin, New Jersey 08830-0452 The Company did not receive any recommendations for nominations from any shareholders in connection with the 2016 Annual Meeting.
In order to be considered for inclusion in the Company’s Proxy Statement and form of proxy relating to the 20172021 Annual Meeting, nominations for Director must behave been received by the Company by the close of business on December 12, 2016.16, 2020. | Pension Committee | James F. Cosgrove Jr., Pension Committee Chair | Pension Committee Members in 2020: Pension Committee | James F. Cosgrove Jr.,Pension Committee Chair |
Pension Committee Members:
Steven M. Klein Ann L. Noble Walter G. Reinhard Independent Members:3 4 Meetings Held in 2015:2020:5 4 | Pension Committee Responsibilities The Pension Committee is responsible for matters relating to the investment and governance objectives of the Company’s retirement plans. The Pension Committee: | · | Reviews investment policies and determines recommended investment objectives for assets of the Company’s retiree benefit plans; |
| · | Reviews and makes recommendations to the Board with respect to changes in investment policies; |
| · | Reviews options offered in the Company’s 401 (k) Plan and the performance and fees associated with the Plan. |
• Reviews investment policies and determines recommended investment objectives for assets of the Company’s retiree benefit plans; • Reviews and makes recommendations to the Board with respect to changes in investment policies; • Reviews options offered in the Company’s 401(k) Plan and the performance and fees associated with the Plan. Independence The Board has determined that under current Nasdaq listing standards, all members of the Pension Committee are independent Directors. The Pension Committee reports to the Board on its activities. Committee Charter In January 2016, theFebruary 2021, Board of Directors re-approved a written Charter for the Pension Committee which is available in the Investor RelationsInvestors section of our website www.MiddlesexWater.com under Corporate Governance. Please refer to this Charter for a full listing of Pension Committee responsibilities. Ad Hoc Pricing Committee | James F. Cosgrove Jr., Ad Hoc Pricing Committee Chair | Ad Hoc Pricing Committee | James F. Cosgrove, Jr.,Ad Hoc Pricing Committee Chair |
Ad Hoc Pricing Committee Members:Members in 2020:
James F. Cosgrove Jr. Ann L. Noble Jeffries SheinShein* Walter G. Reinhard, ex officio Independent Members:2 3 Meetings Held in 2015:2020:0 *Until his retirement in May 2020 | Ad Hoc Pricing Committee Responsibilities The ad hocAd Hoc Pricing Committee meets, as needed, to review financial matters including, but not limited to, the pricing and issuance of equity and long-term debt securities.securities Middlesex Water Company 15 2016 Proxy Statement
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Middlesex Water Company 18 2021 Proxy Statement CORPORATE SUSTAINABILITY Middlesex Water continues to make meaningful progress in matters of ESG as part of our current and long term plans for sustainability. We’re committed to the highest standards of ethical behavior, further growing diversity, equity and inclusiveness in our workforce and our Board, making prudent investments in aging infrastructure, maintaining public health, safety and economic stability in the communities we serve and serving as a trusted and reliable resource to our customers and communities. Oversight Structure Our Board maintains overall oversight of the Company’s business strategy while our Corporate Governance and Nominating Committee oversees matters related to ESG and overall sustainability as well as Enterprise Risk Management. Our mature Enterprise Risk Management program, in place since 2006, includes assessing and mitigating risks related to the safety of our workforce, environmental compliance, the security of our information technology systems, climate, financial, brand and reputation and a host of other potential threats to our business and facilities. The executive team holds routine discussions with the Corporate Governance and Nominating Committee on all matters of risk, including ESG risks and related initiatives and progress toward sustainability goals. Our approach to corporate social responsibility includes capturing ESG metrics that connect to our business strategies, foster accountability and enhance operational performance. These generally relate to the following areas: Protecting the health and safety of our employees and customers Making investments in infrastructure resulting in enhanced service delivery, reliability and resiliency and, mitigate anticipated impacts of climate change Upholding good governance practices Supporting our people and our communities Advancing Our ESG Efforts Information about our corporate social responsibility program, including environmental, social and governance matters, is available in our Corporate Sustainability Report at www.MiddlesexWater.com. Since releasing our inaugural Corporate Sustainability Report in March of 2020, we have: ✔ | Partnered with an ESG Advisory firm to formalize our overall ESG strategy focused on long-term sustainability and value creation |
✔ | Formally added ESG oversight to the responsibilities of ContentsDIRECTOR COMPENSATION AND EQUITY OWNERSHIP GUIDELINES
Director Compensation
For 2015, Middlesex Water Company compensated eachthe Corporate Governance and Nominating Committee of the Board members who are not employed by the Company (“outside Directors”) with a Common Stock award valued at $15,000. In addition, Board members received an annual retainer of $15,000 and are compensated for attendance at Committee meetings. Mr. Doll, Chairman of the Board and an Executive Officer of the Company, receives no fee or common stock award for his service as a member of the Board or the Boards of the Company’s subsidiaries. The table below sets forth the annual retainers for 2015.
Position | | Annual Retainer | Outside Director | | $15,000 | Supplemental Retainer | | | Lead Director | | $ 5,000 | Chair of Audit Committee | | $ 7,500 | Chair of Compensation Committee | | $ 5,000 | All other Chairpersons | | $ 2,500receive regular updates on our sustainability strategy |
The
✔ | Developed a working group of internal subject matter experts to develop practices and procedures to better capture data for enhanced metric reporting resulting in greater insight into our business operations |
✔ | Increased engagement with external ESG ratings and ranking agencies resulting in more favorable scores |
✔ | Engaged in frequent discussions with institutional investors on governance practices and other ESG matters |
✔ | Enhanced disclosure on our website to support greater transparency on ESG related issues |
✔ | Increased alignment with Sustainability Accounting Standard Board committee meeting fees for outside Directors amounted(SASB) standards to $750 per Director for each Board committee meeting attended. In the event a Special Board or a Committee meeting attended via teleconference is held, the meeting fees for outside Directors are $400ensure tighter focus on ESG risks and $200 per meeting, respectively.Director Compensation Table
The following table details Director compensation earned during 2015.
Name | Fees earned or paid in cash ($) | Common Stock Awards ($) | Total Compensation ($) | James F. Cosgrove, Jr. | 25,200 | 15,000 | 40,200 | John C. Cutting (1) | 7,250 | 15,000 | 22,250 | Kim C. Hanemann (2) | | | | Steven M. Klein | 30,200 | 15,000 | 45,200 | Amy B. Mansue | 30,450 | 15,000 | 45,450 | John R. Middleton, M.D. | 24,000 | 15,000 | 39,000 | Walter G. Reinhard | 26,200 | 15,000 | 41,200 | Jeffries Shein | 26,000 | 15,000 | 41,000 |
(1)Dr. John C. Cutting, Ph. D. retired from the Board as of May 26, 2015.
(2) Kim C. Hanemann was namedopportunities most relevant to the Board on January 26, 2016.investing community
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Middlesex Water Company 19 2021 Proxy Statement Key Highlights
Environmental Stewardship
Middlesex Water is focused on investments in regulated infrastructure which contribute to overall service quality, reliability and resiliency. Our customers depend on a safe and reliable drinking water supply for public health, quality of life and economic stability and our team executed on numerous levels. Invested $36 million to mitigate water loss due to main breaks and leaks by proactively replacing 70,600 linear feet of water main in the Boroughs of Metuchen, Carteret, Township of Edison and the City of South Amboy, all in New Jersey, between 2018 and 2020. 2020 marked the 25th consecutive year of our RENEW Program in New Jersey under which we have been lining or replacing water mains, service lines, valves and hydrants to enhance water quality, improve fire flows and minimize service disruptions. Maintained compliance with state and federal drinking water regulations. Invested $5 million in raw water pump station improvements feeding our largest water treatment plant to improve the resiliency of our power supply and mitigate the impact of events associated with climate related risks. Began the $7.5 million renovation of our JRT Operations Center in New Jersey to support expanded material needs which will further mitigate the impact of our operations on the environment as well as house new Training and meeting facilities Continued construction of our approximately $72.0 million water treatment plant upgrade conversion to ozone for primary disinfection treatment to ensure compliance with increasingly stringent regulations, address constituents of emerging concern and foster greater service reliability. Completed leak survey for 300 miles of water main (approx. 40% of the Middlesex distribution system in New Jersey) using advanced acoustic leak detection allowing us to prioritize repairs to prevent water loss and increase water system reliability. Completed construction of 4.5 mile critical 42” large transmission main necessary for backup supply and resiliency. Achieved Honorable Recognition for Excellence and Innovation by U.S. EPA Aquarius Program for replacing an aged and unreliable community water system in DE with new infrastructure and connecting the system with our surrounding water districts. Substantially completed design plans for groundwater treatment at our largest wellfield in New Jersey in anticipation of forthcoming stricter standards related to polyflouroalkyl and perfluoroalkyl compounds, more commonly known as PFAS. Developed an operations plan to harden assets and identify and mitigate risks related to climate change.
Human Capital Management
Employee safety education, training and professional development are critical investments in human capital that help promote a sustainable, agile and engaged workforce and support the continuity of our business. Recruiting and retaining talent and developing technical expertise is important given the critical, life sustaining nature of our business. Our company core values foster an inclusive, equitable, diverse and supportive culture and an “open-door” approach where our entire workforce is able to speak with candor, raise concerns and implement new ideas in the best interest of the business. Our ability to consistently attract, retain and motivate talented and committed employees helps us to better position our company for the long term. In 2020, our management team and our Board placed increased emphasis on succession planning, leadership development and policies and strategies regarding recruitment, retention, career development, diversity, equity and inclusion. Further formalized succession planning strategies have been developed for key leadership positions. All employees receive training to identify and report operational, financial risks as well as risks to brand and reputation, which fosters a personal culture of accountability and reinforces our commitment to a safe and sustainable workplace. All employees have been provided a STOP WORK authority card which empowers them to report and immediately stop work which, in their opinion, is unsafe or is not consistent with our safety policies and procedures (both company driven and contractor work). Employees can take this action without fear of reprisal. We are a Participating Employer in the Apprenticeship USA Program, National Rural Water Association in both New Jersey and Delaware to train and license water and wastewater operators and grow a diverse talent pipeline. All employees receive cybersecurity training and other education regarding the handling of sensitive Company and customer data. Active and on-going workplace health and safety training programs and policies keep our rates of occupational injury and illness low. Middlesex Water Company 20 2021 Proxy Statement Supportive and Inclusive Corporate Culture Formal policies and related training help ensure a work environment free from all forms of harassment and discrimination. Middlesex named to the list of 2020 Top Workplaces based solely on employee feedback gathered through a third-party survey which measures 15 drivers of engaged cultures, including alignment, execution and connection. Launched an enterprise-wide Diversity, Equity and Inclusion (DEI) survey designed to identify related gaps in our Company culture. Ten video town hall meetings, hosted by the CEO and VP of Human Resources, were held with employees as a follow-up to the survey to share open dialogue about the importance of diversity and inclusion and how opportunities are created within the Company. Board and Executive management are comprised of 38% women. Management team includes 23% women. Diversity Training is ongoing with specific focus on Equity and Inclusion Training and learning delivered to all employees in 2020. Compensation and Employee Benefits Our compensation and benefits program is independently evaluated by a nationally recognized consulting firm to gauge effectiveness and is benchmarked against industry peers and the overall market. Increases and incentive compensation are based on merit, which is communicated to employees and well documented in the performance evaluation process. Executives’ long-term equity compensation is aligned with our shareholders’ interests by linking realizable pay with total shareholder return. Benefits include a variety of programs to enhance employee overall physical and mental health and well-being. Among them are: retirement savings plans, free flu shots, wellness newsletters and webinars, incentive programs for achieving fitness milestones, financial counseling, elder care assistance, substance abuse support and more. Supporting Our Communities Collaborated with local governments, stakeholder groups and other utilities in planning major infrastructure projects. Maintained commitment to infrastructure investment providing jobs and enhancing the water delivery framework to support public health and economic development. Developed a separate Supplier Code of Conduct to more clearly define vendor expectations. Supported local food drives and hosted employee volunteer opportunities in 2020 including National Public Lands Clean-up in New Jersey and Adopt-A-Highway in Delaware. Donated nearly $100,000 from employee and Company contributions to twenty different local community organizations in New Jersey and Delaware to support COVID-19 relief and help restock local food banks. Honored by the Delaware State Chamber of Commerce with the Superstar in Business award which recognizes businesses that display the highest of ethical standards and incorporate innovative ways to sustain and grow their business while maintaining a qualified workforce.
Governance Guidelines, polices and procedures guide our business processes. Our Board regularly reviews our governance policies and Board composition to assure we are aligned with the interests of our shareholders. At last year’s Annual Meeting of Shareholders we announced the appointment of Walter Reinhard as Lead independent Director. We also recently added Joshua Bershad, M.D. to the Board, whose skills and experience are listed on page 8 of this Proxy Statement. Key governance highlights are listed below: Expanded our existing Insider Trading Policy applicable to Directors, Officers and all employees. Distinct Director business conduct guidelines have also been established. Increased disclosure related to Board Responsibilities for issues related to human capital, information security and climate change. All employees, including Executive Officers, are required to annually review, attest to and comply with the Company’s Code of Conduct. Our Code of Conduct was significantly revised and expanded in early 2021 to include additional disclosures. Legal Department honored by New Jersey Law Journal with Professional Excellence Award. Introduced more stringent capital program project management and enterprise procurement policies and training for improved consistency. Middlesex Water Company 21 2021 Proxy Statement Our Approach to Executive Compensation Director Equity Ownership
As part of their annual compensation, each Director receives Company common stock valued at $15,000. The Board believes that all Directors should maintain a meaningful ownership stake in the Company to underscore the importance of aligning their long-term interests with those of our shareholders. Directors are required to hold common stock valued at least three times the amount of the annual retainer by the fifth anniversary of Board membership. All Board members met this requirement for 2015.
Middlesex Water Company 16 2016 Proxy Statement
Our Approach to Executive Compensation
| x | Executive Compensation Philosophy |
We maintain an
☑ | Executive Compensation Philosophy that details overall compensation goals and objectives as well as the approach to each element of compensation. The Philosophy is reviewed and approved by the |
We balance our need to appropriately serve our customers against our need to deliver long-term shareholder value. ☑ | Targeted Compensation Committee on an annual basis.We benchmark total compensation to the 50th
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We benchmark total compensation to the 50th percentile of our comparator group. | x☑ | Align Pay with Our Performance |
Budgeted Income Before Income Taxes is the financial metric on which incentive compensation is based for Named Executive Officers (NEOs). Such annual target amount is approved by the Board. Incentive compensation awards to NEOs, other than the CEO, are based 60% on achieving the financial metric and 40% on achievement of operational, service, growth and other non-financial metrics. The CEO’s incentive awards are based 80% on achieving the financial metric and 20% on operational, service, growth and other non-financial metrics. ☑ | Focus on which incentive compensation is based for Named Executive Officers (NEOs). Such annual target amount is approved by the Board. Incentive compensation awards to NEOs, other than the CEO, are based 60% on achieving the financial metric and 40% on achievement of operational, service, growth and other non-financial metrics. The CEO’s incentive awards are based 80% on achieving the financial metric and 20% on operational, service, growth and other non-financial metrics. | x | Focus on Long-Term Goals |
One element of our Compensation Philosophy is thatLong-Term Goals
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We believe our incentive compensation program should be simple, transparent and easily understood by shareholders, analysts, regulators and other interested parties. Our incentive compensation program is administered substantially in the form of a long-term benefit through restricted shares of Common Stock with a five-year cliff-vesting schedule. A modest short-term benefit is provided through the dividends on the awarded restricted Common Stock for the five-year period during which the shares are unvested. ☑ | Require Stock with a five-year cliff-vesting schedule. A modest short-term benefit is provided through the dividends on the awarded restricted Common Stock for the five-year period until the shares are vested.Ownership |
The Chief Executive Officer is required to beneficially hold shares of Common Stock equal in value to at least 3.0 times base salary. The Chief Financial Officer is required to beneficially hold 1.5 times base salary. All other NEOs are required to beneficially hold 1.0 times base salary and all NEOs are to hold the required shares by their fifth anniversary of their designation as NEOs. Directors are required to hold 3.0 times their annual retainer by the fifth anniversary of their Board membership. The Chief Executive Officer is required to beneficially hold shares of Common Stock equal in value to 3.0 times base salary. The Chief Financial Officer and Chief Operating Officer are required to beneficially hold 1.5 times base salary. All other NEOs are required to beneficially hold 1.0 times base salary. Directors are required to hold 3.0 times their annual retainer by the fifth anniversary of their Board service.
| x☑ | Regularly Review our Comparator Group |
We regularly review our designated comparator group to ensure our compensation program is properly aligned with the peers whose relative size, operations, regulatory requirements and other relevant characteristics are reasonably comparable to ours. | x⍉ | No Risky or Complicated Programs |
We do not engage in compensation programs that create undue risk or are difficult to assess how effectively incentive targets were achieved. | x⍉ | No Hedges of, or Liens on, our Common Stock |
We prohibit the pledging of, or hypothecating, or otherwise placing a lien on, any Common Stock or other equity interest of the Company. | xAll employees of the Company, including NEOs, are “at will employees.” All NEOs of the Company do however, have Change of Control Agreements deemed to incent management to actively represent the interest of shareholders in contemplation of a change in control. | x | No Retention of Restricted Stock Award Subject to Clawback⍉ | No Definitive Retention of Restricted Stock Award – Subject to Clawback |
Under our “clawback” policy, we do not allow any recipient of previously-awarded restricted Common Stock to retain the amount of such awards, which were based on achievement of financial metrics, that would have been invalidated by a restatement of financial statements. | x⍉ | No Repricing or Cash Buyouts of Restricted Stock Awards |
We do not reprice or buy out unvested restricted CommonCash Buyouts of Restricted Stock awards.
Middlesex Water CompanyAwards 17 2016 Proxy Statement
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We do not reprice or buy out unvested restricted Common Stock awards. Middlesex Water Company 22 2021 Proxy Statement EXECUTIVE COMPENSATION Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management, and based on this review and discussion, has recommended to the Board that it be included in this Proxy Statement.
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
The following Compensation Discussion and Analysis (“CD&A”) provides a detailed description of our executive compensation objectives, philosophy, practices and programs as well as how the Compensation Committee determines executive compensation under those programs. Our CD&A focuses on the compensation of our NEOs for calendar year 2015 who were: 1) Dennis W. Doll, President and Chief Executive Officer, (2) A. Bruce O’Connor, Vice President, Treasurer and Chief Financial Officer, (3) Richard M. Risoldi, Vice President – Operations and Chief Operating Officer, (4) Gerard L. Esposito, President – Tidewater Utilities, Inc. and (5) Bernadette M. Sohler, Vice President– Corporate Affairs.
Executive Summary
The objective of our executive compensation program is to align the interests of our senior leadership with those of our customers and shareholders. The key components of the Company’s compensation program are designed, augmented and modified, as appropriate, to ensure we attract and retain qualified executive talent, and appropriately reward performance. We continually strive to maintain a compensation program that provides adequate balance between shorter and longer-term operational and financial performance.
Our 2015 compensation program was designed to be benchmarked as to:
Base salaries
Incentive compensation
Perquisites and
Total compensation
The Company remains committed to a disciplined and balanced approach to meeting the short- and long-term needs of customers, shareholders and employees. This compensation philosophy is consistent with the Company’s risk management philosophy. The Company’s formal Enterprise Risk Management program seeks to mitigate, transfer or eliminate risk while simultaneously, maximizing opportunity for shareholders and maintaining appropriate quality service for the Company’s customers. The Company’s compensation program seeks to achieve an appropriate balance among all these objectives and therefore, does not encourage or reward inappropriate risk-taking.
Compensation Committee Report The Compensation Committee has reviewed and approved the Compensation Discussion and Analysis and has recommended to the Board that it be included in this Proxy Statement. COMPENSATION DISCUSSION AND ANALYSIS Note: As the COVID-19 pandemic’s impact on our business evolves, the Compensation Committee and the Board continues to evaluate our executive compensation program to ensure it fulfills the key objectives of our executive compensation philosophy and that it serves the best interests of our Company and our shareholders. Introduction The following Compensation Discussion and Analysis (“CD&A”) provides a detailed description of our executive compensation objectives, philosophy, practices and programs, as well as how the Compensation Committee determines executive compensation under those programs to motivate and retain its management team and to ensure alignment with stockholder value creation. Our CD&A addresses the compensation of our Named Executive Officers (NEOs) that has been paid in, or earned, for 2020. Those NEOs include: 1) Dennis W. Doll, President and Chief Executive Officer, 2) A. Bruce O’Connor, Senior Vice President, Treasurer and Chief Financial Officer, 3) Bernadette M. Sohler, Vice President - Corporate Affairs, 4) Lorrie B. Ginegaw, Vice President - Human Resources, and 5) Jay L. Kooper, Vice President, General Counsel & Secretary. Executive Summary Middlesex Water Company owns and operates regulated water and wastewater utility systems in New Jersey and Delaware. The Company also operates water and wastewater utility systems under contract on behalf of municipal and private clients. Despite the challenges of 2020, it was a very successful year for the Company during which it moved forward with numerous investments in its regulated utility infrastructure, delivered revenue and earnings growth, earned numerous awards and further advanced its sustainability strategy. All of this was accomplished while prioritizing the safety and security of its employees and customers and supporting our local communities against a backdrop of unprecedented challenges related to the COVID-19 pandemic. The overarching objective of our executive compensation program is to align the interests of our shareholders and customers with those of our executive leadership. The key components of the Company’s compensation program are designed and modified, as appropriate, to ensure we attract and retain qualified executive talent and appropriately reward financial and operational performance. We continually strive to maintain a compensation program that provides an adequate balance between shorter- and longer-term operational and financial objectives and related results. Our 2020 compensation program was benchmarked as to base salaries, incentive compensation and total compensation. The Company remains committed to a disciplined and balanced approach to meeting the short- and long-term needs of shareholders, customers and employees. This compensation philosophy is consistent with the Company’s risk management philosophy. The Company’s formal Enterprise Risk Management program seeks to eliminate, mitigate or transfer risk while simultaneously maximizing opportunity for shareholders and maintaining appropriate quality service for the Company’s customers. The Corporate Governance and Nominating Committee has formal responsibility for oversight of the Enterprise Risk Management Program. The Company’s compensation program seeks to achieve an appropriate balance among all these objectives and therefore, does not encourage or reward inappropriate risk-taking. Compensation Program Oversight The Compensation Committee is responsible for making recommendations to the full Board with respect to the compensation of the NEOs. As part of these duties, the Committee: | þ | administers the Company’s equity-based incentive compensation plan |
| þ | conducts an annual formal performance review of the Chief Executive Officer and, |
| þ | in consultation with the Chief Executive Officer, reviews the performance of the other NEOs and other Officers of the Company. |
The Board has ultimate authority to determine the compensation of all NEOs, in addition to those Officers who are not NEOs, for purposes of Proxy reporting.
The Compensation Committee is governed by a formal charter that describes the Committee’s scope of authority and responsibility. The Compensation Committee consists of Directors, who are all “independent” as set forth in the listing requirements for Nasdaq Global Select securities. The Corporate Governance and Nominating Committee evaluates the independence of Committee members at least annually, using standards no less restrictive than those contained in the Nasdaq Global Select listing requirements. This evaluation, and the determination that each member of the Committee is independent, was made most recently in February 2016.
Role of Executives in Compensation Committee Activities.The executive officers who serve as a resource to the Compensation Committee are the Chief Executive Officer and the Vice President-Human Resources. These executives provide the Compensation Committee with data regarding market-based compensation philosophy, processes and practices. This communication assists in the design and implementation of the Company’s compensation programs. In addition to providing factual information, such as Company-wide performance on relevant measures, these executives articulate management’s views and results on current compensation programs and processes, recommend relevant performance measures to be used for future evaluations and otherwise supply information to assist the Compensation Committee. Additional resources used by the Compensation Committee in their deliberations are provided by outside sources, as well as by individual Committee, or other Board members. The Chief Executive Officer also provides information about individual performance assessments for the other NEOs, and expresses to the Compensation Committee views on the appropriate levels of compensation for all Officers of the Company including the other NEOs, based on individual performance. The Compensation Committee periodically communicates directly with third-party consultants, providing such consultants with Company-specific information. Certain portions of such information may be provided by the Vice President-Human Resources or the Chief Executive Officer, in assisting in the evaluation of the estimated effect on the Company’s financial statements regarding any proposed changes to the various elements of compensation. Such a study was last completed in 2014 by Steven Hall & Partners. Executives participate in Committee activities solely in an informational and advisory capacity, and have no vote in the Committee’s decision-making process. The Chief Executive Officer and Vice President-Human Resources do not attend those portions of Compensation Committee meetings during which their performance is evaluated or their compensation is determined. No executive officer other than the Chief Executive Officer attends those portions of Compensation Committee meetings during which the performance of the other NEOs is evaluated or their compensation is determined. In addition, the Compensation Committee meets in executive session as it considers appropriate.
Use of Consultants.The Compensation Committee periodically engages qualified independent compensation consultants to assist in the compensation process for NEOs. The consultants are retained by, and report directly to, the Compensation Committee. The Chair of the Compensation Committee serves as the designated primary contact with outside compensation consultants. The Compensation Committee places no restrictions on consultants within the scope of contracted services and such consultants are not engaged by management for any purpose. The consultants provide expertise and information about competitive trends in the employment marketplace, including established and emerging compensation practices at other companies both inside and outside the Company’s comparator group. The consultants also provide proxy statement and survey data, and assist in assembling relevant comparator groups. In addition, the consultants also assist in establishing benchmarks for base salary and incentives from the comparator group proxy statement and survey data.
Middlesex Water Company 18 2016 Proxy Statement
In determining compensation for the NEOs in 2015, the Committee continued to rely on data from a comprehensive study presented in April 2014, performed by Steven Hall & Partners, as one element in their deliberations. Such information was supplemented by the Committee’s independent observations of current market conditions relative to the data in the 2014 study.
Administers the Company’s equity-based incentive compensation plan Conducts an annual formal performance review of the Chief Executive Officer and, In Consultation with the Chief Executive Officer, reviews the performance of the other NEOs and the other Officers of the Company. The Board has the ultimate authority to determine the compensation of all NEOs, in addition to those Officers who are not NEOs for purposes of Proxy reporting. The Compensation Committee is governed by a formal charter that describes the Committee’s scope of authority and responsibility. The Compensation Committee consists of Directors, who are all “independent,” as set forth in the listing requirements for the Nasdaq Stock Market where Middlesex Water is listed as a Nasdaq Global Select Company. The Corporate Governance and Nominating Committee evaluates the independence of Committee members at least annually, using standards no less restrictive than those contained in the Nasdaq Global Select listing requirements. This evaluation, and the determination that each member of the Committee is independent, was made most recently in February 2021. Role of Executives in Compensation Committee Activities The executive officers who serve as a resource to the Compensation Committee are the Chief Executive Officer and the Vice President, Human Resources. These executives provide the Compensation Committee with data regarding market-based compensation philosophy, processes and practices related to human capital management including developing, attracting and retaining personnel, succession planning, company culture and employment practices. This communication assists the Committee in the design and implementation of the Company’s compensation programs. In addition to providing factual information, such as Company-wide performance on relevant measures, these executives articulate management’s views and results on current compensation programs and processes, recommend relevant performance measures to be used for future evaluations and otherwise supply information to assist the Compensation Committee. Additional resources used by the Compensation Committee in their deliberations are provided by independent outside sources, as well as by individual Committee or other Board members. The Chief Executive Officer also provides individual performance assessments for the other NEOs, and expresses to the Compensation Committee recom- Middlesex Water Company 23 2021 Proxy Statement mendations for changes in compensation for all Officers of the Company, other than himself, based on individual performance. The Compensation Committee periodically communicates directly with independent third-party consultants, providing such consultants with Company-specific and market- based information. Certain portions of such information may be provided by the Vice President - Human Resources or the Chief Executive Officer, in assisting in the evaluation of the estimated effect on the Company’s results of operations regarding any proposed changes to the various elements of compensation. An executive compensation study was last completed by Steven Hall & Partners, an independent firm specializing in executive compensation, in February 2020. Executives participate in Committee activities solely in an informational and advisory capacity, and have no vote in the Committee’s decision-making process. The Chief Executive Officer and Vice President - Human Resources do not attend those portions of Compensation Committee meetings during which their performance is evaluated or their compensation is determined. No executive officer other than the Chief Executive Officer attends those portions of Compensation Committee meetings during which the performance of the other NEOs is evaluated or their compensation is determined. In addition, the Compensation Committee meets in executive session as it considers appropriate. Use of Consultants The Compensation Committee periodically engages qualified independent compensation consultants to assist in the compensation process for NEOs. The consultants are retained by, and report directly to, the Compensation Committee. The Chair of the Compensation Committee serves as the designated primary contact with outside compensation consultants. The Compensation Committee places no restrictions on consultants within the scope of contracted services and such consultants are not engaged by management for any purpose. The consultants provide expertise and information about competitive trends in the employment marketplace, including established and emerging compensation practices at other companies both inside and outside the Company’s comparator group. The consultants also provide Proxy Statement and survey data, and assist in assembling relevant comparator groups. In addition, the consultants also assist in establishing benchmarks for base salary and incentives from the comparator group Proxy Statements and survey data. Compensation Program Objectives and Philosophy Objectives | • Attract, retain and appropriately motivate employees • Compensate executives for long-term improvement in overall shareholder value • Provide differentiated executive pay based on experience, assigned responsibilities and performance • Support the attainment of short and long-term financial and strategic objectives |
The methods used to achieve the compensation program objectives for NEOs are influenced by the compensation and employment practices of a comparator group, as adopted in consultation with the Company’s independent executive compensation consultant. Other considerations include each NEO’s individual performance in achieving both financial and non-financial corporate objectives. Our program is designed to compensate the NEOs based on their level of assigned responsibilities, individual experience and performance levels and their knowledge and management of the Company’s operations. The creation of long-term value is highly dependent on the development and effective execution by our NEOs of our business strategy. Factors that influence the design of our executive compensation program include, among other things, various items listed as follows: We operate primarily in a highly regulated utility industry with regard to public health and safety, the environment, service levels to our customers and the rates for utility services charged to our customers. We value industry-specific experience that promotes safe, proper and reliable life-sustaining utility services for our customers; We value our executives’ ability to appropriately balance the short- and long-term needs of our customers, our employees and our shareholders. We seek to not only provide safe, proper and reliable utility services on a current basis for our customers, but we also plan and execute strategies that promote the sustainability of critical utility services into the future. Promotion of the sustainability of services also includes routine Compensation Committee discussions regarding the status of succession planning initiatives at both the executive and management levels. In addition, we simultaneously seek to provide financial returns for our shareholders that appropriately reflect the risks and opportunities that are inherent in meeting the short- and long-term needs of our customers, and that are inherent in the provision of our utility services. We work to appropriately recognize further contributions to shareholder value achieved through contract operations and other complementary business opportunities which are not traditional regulated public utilities and therefore, not regulated by a state public utility commission as to customers’ rates and service; We value our executives’ ability to attract, retain and continually develop a workforce that ensures critical technical and management skills are maintained in sufficient quantity and quality. Our compensation program for NEOs includes three components: (1) base salary, (2) an equity-based long-term incentive plan in the form of restricted common stock and (3) perquisites at levels that are competitive in the marketplace and appropriate for the roles of the NEOs. The incentive-based component of our compensation program is designed to be clear, transparent and understandable to investors and recipients. This is intended to simplify analysis by our shareholders of the relationship of pay to performance as well as to emphasize the critical importance of a long-term focus in the water and wastewater utility industry on financial and operational performance. Components of Our Compensation Program The Compensation Committee analyzes the level and relative mix of the elements of executive compensation by component (e.g., base salary, incentives,) and in the aggregate as related to total compensation. The Compensation Committee has generally established the 50th percentile of peer comparators and survey data as the target for total compensation. The Compensation Committee generally seeks to undertake a comprehensive review of the executive compensation program approximately every two years. Based on this analysis, the Compensation Committee reviews, challenges and recommends each NEO’s compensation, subject to approval by the full Board. Middlesex Water Company 24 2021 Proxy Statement When evaluating the components comprising total compensation, the Compensation Committee considers general market practices and the alignment of incentive awards with strategic objectives and Company operational and financial performance. The Compensation Committee seeks to create appropriate incentives to promote service quality and shareholder value without encouraging behaviors that result in inappropriate risk taking. Base Salary: Base salary is designed to provide a reasonable level of predictable compensation commensurate with market standards of the position held. NEOs are eligible for periodic adjustments to their base salary based on these factors. The Compensation Committee reviews and recommends to the Board any base salary changes for NEOs, including the Chief Executive Officer. Adjustments are made for each NEO’s specific experience, responsibilities and performance, estimated value in the marketplace and the Committee’s judgment of each NEO’s contribution to the success of the Company. Incentives: The Company does not have a formal plan or program that provides for cash or other form of short-term incentive compensation for NEOs other than dividends on restricted stock awards that are not yet vested. The Company has a long-term incentive plan in the form of restricted Company common stock (the Restricted Stock Plan). Awards under this plan are considered on an annual basis and are based on the achievement of certain financial and operational goals. The ultimate value of the compensation recognized from restricted shares issued is determined as of the date vesting occurs. Generally, the Restricted Stock Plan provides for five-year cliff-vesting from date of award for all shares granted in any individual year. The value of shares awarded in any given year can either increase or decrease between the date of issuance and the five-year vesting term. The Restricted Stock Plan provides for accelerated vesting in the case of a retirement. Shares fully vest for retirements occurring on or after age 65 or in the case of a Change In Control. There is no provision in the Restricted Stock Plan that specifically addresses re-pricing or cash buyouts relative to unvested restricted stock awards however, such practices are prohibited as a matter of policy and have never been employed. There is no minimum holding/retention period for restricted shares that become fully vested. The Company does however have minimum stock ownership and holding requirements. See Stock Ownership and Holding Requirements on page 28. The Restricted Stock Plan is designed to compensate the NEOs for executing specific financial and non-financial elements of the Company’s business plan. The target award is comprised of a single corporate financial goal, in addition to one or more individual non-financial performance goals. The corporate financial goal, for which incentive compensation was earned for 2020, was budgeted Income Before Income Taxes. Separate from this metric, a qualitative assessment of financial performance relative to the company’s peer group is made through an evaluation of the performance graph, as presented as part of the Form 10-K. The corporate financial goal comprised 60% of the target award for NEOs other than the President and Chief Executive Officer, whose corporate financial goal comprised 80% of his target award. The remaining portion of the target award for all NEOs is based upon the level of achievement of the individual non-financial performance goals. The non-financial individual performance goals are intended to further incent the NEOs to implement operational, technical, management and other initiatives that benefit the Company’s customers and shareholders, and which require effort and achievement above and beyond what would normally be required as part of the NEO’s base job responsibilities. The Compensation Committee evaluates the reasonableness of attaining designated incentive goals relative to the importance of such goals to the overall mission and strategies of the Company and the required effort to achieve such goals. The Committee recognizes that some level of calculated risk is required to achieve business objectives that ultimately benefit shareholders and customers however; the Committee discourages taking risk that, in the judgment of the Board, is inappropriate relative to the expectations of our shareholders and regulators. Delivered performance during the applicable measurement period may exceed or fall short of the targets, resulting in the NEO receiving an incentive award that is above or below the initial targeted level. Annual incentive awards granted in prior years are not taken into account by the Compensation Committee in the process of setting performance targets or in evaluating achievements for the current year. Incentive-based awards are subject to the Company’s “clawback” policy. Such policy requires that incentive-based awards are subject to return to the Company, in whole or in part, if a financial statement restatement occurs within the three calendar years subsequent to an award, where such restatement effectively negates the previous achievement of financial targets that precipitated such prior award. Awards made to any and all NEOs are subject to the provisions of the clawback policy. Our policy prohibits any Director, NEO or other Officer from buying or selling Company Common Stock without obtaining prior approval from our Corporate Secretary and General Counsel. This policy is designed to help assure that the Directors and NEOs will not trade in our securities at a time when they are in possession of inside information. In addition, our formal Insider Trading policy prohibits our Directors and NEOs from hedging the economic risk of stock ownership. In evaluating actual performance relative to the established corporate financial goal, the Compensation Committee may, at its discretion, exclude individual items that are either additive or deductive which are considered non-recurring in nature. Such items are generally presumed to be infrequent. In addition, the Compensation Committee may increase or decrease a Restricted Stock award based upon additional consideration of a NEO’s performance or achievements. Middlesex Water Company 25 2021 Proxy Statement Our Business and Strategy The global pandemic and its impact on public health and our economy has made our mission to provide safe drinking water all the more critical. The service we deliver is in itself life-sustaining. This service helps ensure public health and safety, provides fire protection, serves as a foundation for economic development and maintains and enhances the overall quality of life of our customers. Our crisis management and business continuity planning has been essential to our ability to deliver uninterrupted utility service. Operational readiness and the dedication of our teams are enabling us to maintain high levels of service, continue investment in regulated utility infrastructure and position ourselves for greater strength and resiliency once this crisis passes. While the events of the past year have forced us to be more versatile, our core operations, commitment to delivering quality service and our strategy have lent focus and stability. Our Company’s strategy is built for the long term. Investments we are making today under our Water for Tomorrow infrastructure investment campaign are designed to benefit current and future generations of water users. Diverse talent we are recruiting today and nurturing through training and professional development become the leaders of tomorrow. We drive accountability across our enterprise through a set of core values that drive daily decision-making. These core values of Respect, Integrity, Growth, Honesty and Teamwork serve as the standards by which our people operate and help ensure an inclusive workplace. We expect our teams to be accountable for upholding these values each and every day as we work to fulfill our mission. The basic tenets of our strategy for profitability and growth include: » | Investment in projects, products and services that complement our core water and wastewater competencies |
The methods used
» | Timely and adequate recovery of infrastructure investments and other costs necessary to achievemaintain and continually improve service quality |
» | Prudent acquisitions of investor and municipally-owned water and wastewater utilities |
» | Execution of municipal and industrial water and wastewater systems contracts |
Our 2020 Company Performance We continued to strengthen our reputation as a trusted service provider to our customers and as a valued employer, while we worked to further enhance value to our shareholders. The results below demonstrate some key accomplishments in 2020: ✔ | In response to the compensation program objectives for NEOs are influenced byCOVID-19 pandemic, we deployed our emergency management and business continuity plans which focused on maintaining the compensation and employment practices of a comparator group, as adopted in consultation with the Company’s independent executive compensation consultant. Other considerations include each NEO’s individual performance in achieving both financial and non-financial corporate objectives.Our program is designed to compensate the NEOs based on their level of assigned responsibilities, individual experience and performance levels and their knowledge and management of the Company’s operations. The creation of long-term value is highly dependent on the development and effective execution by our NEOs of our business strategy.
Factors that influence the design of our executive compensation program include, among other things, the items listed as follows:
We operate primarily in a highly regulated utility industry with regard to public health and safety the environment, service levels to our customers and the rates for utility services that are charged to our customers. We value industry-specific experience that promotes safe, proper and reliable utility services for our customers;
We value our executives’ ability to appropriately balance the short- and long-term needs of our customers, our employees and our shareholders. We seek to not only provide safe, proper and reliablecustomers while ensuring utility services onessential for public health protection.
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✔ | Awarded a current basis for our customers, but we also plan10-year contract from the Borough of Highland Park, NJ to operate and execute strategies that promotemaintain the sustainability of critical utility services into the future. In addition, we simultaneously seek to provide financial returns for our shareholders that appropriately reflect the risks and opportunities that are inherent in meeting the short- and long-term needs of our customers, and that are inherent in the provision of our utility services. We work to appropriately recognize further contributions to shareholder value achieved through contract operations and other complementary business opportunities that are not traditional regulated public utilities and therefore, not regulated by a state public utility commission as to customers’ rates;We value our executives’ ability to attract, retain and continually develop a workforce that ensures critical technical and management skills are maintained in sufficient quantity and quality.
Our compensation program for NEOs includes three components: (1) base salary, (2) an equity-based long-term incentive plan in the form of restricted common stock and (3) perquisites at levels that are competitive in the marketplace and appropriate for the roles of the NEOs. The incentive-based component of our compensation program is designed to be clear, transparent and understandable to investors and recipients. This is intended to simplify analysis by our shareholders, as well as to emphasize the critical importance of a long-term focus in theBorough’s water and wastewater utility industrysystems.
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✔ | Continued significant infrastructure investments under our ongoing Water for Tomorrow Capital Program. |
✔ | Maintained ongoing construction during the pandemic of a $72 million upgrade to our largest treatment plant in New Jersey to include new ozone treatment, new electric generation systems and other improvements while adhering to state safety guidelines. |
✔ | Continued focus on financialthe long term strength of our management team through succession planning and operational performance.Componentsleadership development training.
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✔ | Earned numerous awards including honors as a Top Workplace in New Jersey and a Superstar in Business in Delaware based on employee surveys conducted via third party. |
✔ | Issued our inaugural Corporate Sustainability Report highlighting our environmental, social and governance efforts. |
✔ | Completed construction of Our Compensation ProgramThe Compensation Committee analyzes the level and relative mix of executive compensation elements by component (e.g., base salary, incentives, and benefits) and4.5 mile Western Transmission Main that was placed into service in April 2020.
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✔ | Announced a 6.3% increase in the aggregate. The Compensation Committee has generally established the 50th percentile of peer comparators and survey data as the target for base salary, incentive compensation and total compensation. The Compensation Committee generally seeks to undertake a comprehensive review of the executive compensation program approximately every three years. The Chief Executive Officer provides recommendations to the Committee relating to base compensation changes relative to the NEOs, other than himself. Based on this analysis, the Compensation Committee reviews, challenges and recommends each NEO’s compensation, subject to approval by the full Board.When evaluating the components comprising total compensation, the Compensation Committee considers, among other things, general market practices and the alignment of incentive awards with strategic objectives and Company operational and financial performance. The Compensation Committee seeks to create appropriate incentives to promote service quality and shareholder value without encouraging behaviors that result in inappropriate risk taking.
Base Salary.Base salary is designed to provide a reasonable level of predictable compensation commensurate with market standards of the position held, adjusted for specific job responsibilities assigned, individual experience and demonstrated performance. NEOs are eligible for periodic adjustments to their base salary based on these factors. The Compensation Committee reviews and recommends to the Board any base salary changes for NEOs, including the Chief Executive Officer. Adjustments are made upward or downward for each NEO’s specific experience, responsibilities and performance, estimated value in the marketplace and the Committee’s judgment of each NEO’s contribution to the success of the Company.
Incentives.The Company does not have any formal plan or program that provides for cash or other form of short-term incentive compensation for NEOs other than dividends on restricted stock awards that are not yet vested. The Company has a long-term incentive plan in the form of restricted Company common stock (the Restricted Stock Plan). Awards under this plan are considered on an annual basisdividend, marking the 48th consecutive year of dividend increases.
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Middlesex Water Company 26 2021 Proxy Statement 2020 Executive Compensation Analysis and Conclusions In connection with the market-based analysis of compensation conducted by our independent consultant in the Company’s most recent executive compensation study, the Company established a long-term incentive target as a percentage of base salary. The respective financial and non-financial long-term award target percentages comprising the total award target percentage for each NEO for 2020 were as follows: Name | Base Salary at Grant Date | Target Restricted Stock Award | Financial Target Component | Non-Financial Target Component | Dennis W. Doll | $636,540 | 58% | 80% | 20% | A. Bruce O’Connor | $396,204 | 33% | 60% | 40% | Bernadette M. Sohler | $229,001 | 22% | 60% | 40% | Lorrie B. Ginegaw | $229,001 | 22% | 60% | 40% | Jay L. Kooper | $296,930 | 20% | 60% | 40% |
The values of the respective financial and non-financial long-term award targets for each NEO for 2020 performance were as follows: Name | Target Restricted Stock Award ($) | Financial Target Component ($) | Non-Financial Target Component ($) | Dennis W. Doll | 369,193 | 295,355 | 73,839 | A. Bruce O’Connor | 130,747 | 78,448 | 52,299 | Bernadette M. Sohler | 50,380 | 30,228 | 20,152 | Lorrie B. Ginegaw | 50,380 | 30,228 | 20,152 | Jay L. Kooper | 59,386 | 35,632 | 23,754 |
In order for any NEO to be eligible for any amount of long-term incentive award, the Committee, and ultimately the full Board, considers a variety of qualitative factors in their overall assessment of the individual and collective performance of the NEOs. Such factors align with the company’s core values. Elements of such values include, but are not limited to: Legal and regulatory compliance Compliance with the Company’s Code of Conduct Strong customer focus Teamwork Social responsibility Continuous improvement In its further assessment of the extent to which long-term incentive awards would be made relative to performance, the Committee evaluated the performance of each respective NEO, based upon the financial and operational metrics below. The financial target award metric of Budgeted Income Before Taxes, on which the financial target awards were based, was $27.1 million. This target was established to appropriately incentivize the NEOs and was based on known, anticipated and projected operational and financial opportunities and challenges in 2020. The non-financial target award metrics established for each NEO were as follows: Name | Non-Financial Performance Metrics | Dennis W. Doll | • Growth • Execute Debt & Equity Financing Plans • Succession Planning/Organizational Development | A. Bruce O’Connor | • Execute Debt & Equity Financing Plans • Growth • Base Rate Cases & Other Regulatory Proceedings | Bernadette M. Sohler | • Expand upon ongoing Corporate Sustainability/ESG initiatives and are based on the achievement of certain financial and operational goals. The value of the restricted shares is determined as of the date vesting occurs, generally five years from the date of issue. There is no provisionRelated Reporting | Lorrie B. Ginegaw | • Succession Planning/Organizational Development • Employee Related Technology Initatives | Jay L. Kooper | • Risk Management • Various Additional in the Restricted Stock Plan that specifically addresses re-pricing or cash buyouts relative to restricted stockLegal & Regulatory Proceedings |
The Company does not have established threshold and maximum award percentages defined relative to each financial and non-financial performance goal. There is no implicit expectation that partial awards however, such practices are prohibited as a matter of policy and have never been employed. The Restricted Stock Plan is designed to compensate the NEOs for executing specific financial and non-financial elements of the Company’s business plan. The target award is comprised of a single corporate financial goal, in addition to one or more individual non-financial performance goals. The corporate financial goal for 2014, for which incentive compensation was awarded in 2015, was budgeted Income Before Income Taxes. The corporate financial goal comprised 60% of the target award for NEOs other than the President and Chief Executive Officer, whose corporate financial goal comprised 80% of his target award. The remaining portion of the target award for all NEOs is based upon the level of achievement of the individual non-financial performance goals. The non-financial individual performance goals are intended to further incent the NEOs to implement operational, technical, management and other initiatives that benefit the Company’s customers and shareholders, and which require effort and achievement above and beyond what would normally be required as part of the NEO’s base job responsibilities.
Middlesex Water Company 19 2016 Proxy Statement
The Compensation Committee evaluates the reasonableness of attaining designated incentive goals relative to the importance of such goals to the overall mission and strategies of the Company and the required effort to achieve such goals. The Committee recognizes that some level of calculated risk is required to achieve business objectives that ultimately benefit shareholders and customers; however, the Committee discourages taking risk that, in the judgment of the Board, is inappropriate relative to the expectations of our shareholders and regulators. Delivered performance during the applicable measurement period may exceed or fall short of the targets, resulting in the NEO receiving an incentive award that is above or below the initial targeted level. Annual incentive awards granted in prior years are not taken into account by the Compensation Committee in the process of setting performance targets or in evaluating achievements for the current year.
Incentive-based awards are subject to the Company’s “clawback” policy. Such policy requires that incentive-based awards are subject to return to the Company, in whole or in part, if a financial statement restatement occurs within the three calendar years subsequent to an award, whereby such restatement effectively negates the previous achievement of financial targets that precipitated such prior award. Awards made to any and all NEOs are subject to the provisions of the clawback policy.
Our policy prohibits any Director or NEO from buying or selling Company Common Stock without obtaining prior approval from our Corporate Secretary and General Counsel. This policy is designed to help assure that the Directors and NEOs will not trade in our securities at a time when they are in possession of inside information. In addition, our policy prohibits our Directors and NEOs from hedging the economic risk of stock ownership.
In evaluating actual performance relative to the established corporate financial goal, the Compensation Committee may, at its discretion, exclude individual items that are either additive or deductive which are considered non-recurring in nature. Such items are generally presumed to be infrequent. In addition, the Compensation Committee may increase or decrease a Restricted Stock award based upon additional consideration of a NEO’s performance or achievements.
In 2015, the Compensation Committee evaluated achievement of the corporate financial goal for 2014. The Compensation Committee evaluated actual 2014 Income Before Income Taxes and determined that there were no non-recurring items in 2014 that should be considered in the determination of the level of achievement of the 2014 corporate financial goal. Based on the Company’s reported 2014 Income Before Income Taxes, the Compensation Committee determined that threshold financial performance was met in 2014 and awards were made to the NEOs related to the 2014 corporate financial goal. Detailed explanation of the factors contributing to 2014 financial performance are articulated in the Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s 2014 Annual Report to Shareholders. Separately, the Compensation Committee also evaluated the level of achievement of the individual personal performance goals relative to the contribution to the various customer-related, strategic, competitive, operational and management objectives referenced above.
Broad-based Benefits.NEOs are provided with certain health and welfare benefits available to all qualifying employees of the Company, as well as selected fringe benefits and perquisites, not generally available to all employees of the Company.
The following summarizes the broad-based benefits in which the NEOs were eligible to participate in 2015:
Defined benefit pension plan (see page 24 for description of limitations to participation in this Plan),
Defined contribution 401(k) retirement plan,
Health insurance coverage (all employees share in the cost of such coverage),
Disability insurance coverage.
Group term life insurance coverage (premiums associated with coverage above $50,000 are reported as taxable income to all eligible employees per Internal Revenue Service regulations)
Executive Benefits and Perquisites.The NEOs received the following fringe benefits and perquisites in 2015:
Use of a Company-owned vehicle. The cost of operation and maintenance of such vehicle is borne by the Company. The value of any personal use of such vehicle is reported as taxable income to the executive,
Use of a Company-owned cellular telephone, generally for business purposes,
Group term life insurance coverage of 1.5x base salary (amount in excess of coverage generally available to all employees, for which premiums are reported as taxable income to the executive),
Participation in a Supplemental Executive Retirement Plan (see below for description of limitations to participation in this Plan).
The Compensation Committee formally reviews all components of executive compensation on an annual basis, as well as on an interim basis, as deemed necessary.
Supplemental Executive Retirement Plan.Certain of the Company’s NEOs are eligible to participate in a non-qualified Supplemental Executive Retirement Plan (SERP) at the discretion of the Board. A participant, who retires on their normal retirement date, as defined in the SERP, is entitled to an annual retirement benefit of up to 75% of compensation, as defined in the SERP, generally reduced by the primary social security benefit, and further reduced by any benefit payable from the Company’s qualified defined benefit pension plan. Further reductions are made for certain retirement benefits from prior employment, where such benefits have accrued. The maximum annual retirement benefit to which two of the six eligible executives may be entitled is 50% of compensation.
Offsetting amounts related to Social Security and other benefit plans are calculated similarly for all NEOs. Generally, a participant is vested in the SERP at ten (10) years of service in the case of retirement, and in the event of a Change in Control, as described further herein. A participant’s right to receive benefits under the SERP generally commences upon retirement, to their beneficiary at death, and in connection with a Change in Control, upon termination under the circumstances described in the SERP.
Benefits are generally payable upon achieving Normal Retirement, as defined in the SERP, for fifteen (15) years, either to the participant or the participant’s beneficiary. A reduced benefit may be received upon Early Retirement, as defined in the SERP, after age 62 and before age 65. Retirement benefits may also be in the form of a single life annuity, joint and 50% survivor’s annuity, joint and 100% survivor’s annuity, single life annuity with a ten (10) year certain period or single life annuity with a fifteen (15) year certain period, paid on an actuarial equivalent basis.
Middlesex Water Company 20 2016 Proxy Statement
The Company is not obligated to set aside or earmark any monies or other assets specifically for the purpose of funding the SERP, except that upon a Change in Control, the Company would be obligated to make contributions to a trust anticipated to be sufficient to meet the obligations under the SERP. Absent a Change in Control, benefit payments are in the form of an unfunded general obligation of the Company.
Exceptions to Usual Procedures.The Compensation Committee may recommend to the full Board that they approve the payment of special cash compensation to one or more NEOs, in addition to payments approved during the annual compensation-setting cycle. The Committee may make such a recommendation if it believes it would be made relative to the Company financial target, or the non-financial targets, if the target is not fully achieved. The non-financial award targets are partially qualitative in nature. An element of judgment is applied by the Compensation Committee in assessing the extent to which any individual non-financial target was, or was not achieved. Awards are therefore recommended in the sole judgment and discretion of the Compensation Committee, with the ultimate approval of the full Board.
In the Compensation Committee’s evaluation of the extent to which the financial goal was achieved, it was concluded that there were no non-recurring items that should be considered in the evaluation. The Committee further concluded the Company financial incentive target of Budgeted Income Before Income Taxes had been substantially met in 2020. The Committee considered the significant favorable impact in 2020 on Income Tax Expense, Net Income and Earnings Per Share of the Company’s implementation of the Internal Revenue Service Tangible Property Regulations. Such outcome on Income Tax Expense, Net Income and Earnings Per Share was directly attributable to the Company’s negotiation with its economic regulators in the most recent base rate proceeding in New Jersey. In addition, the Committee assessed the extent to which the non-financial incentive goals were met for each NEO. Consequently, the Middlesex Water Company 27 2021 Proxy Statement Committee, and subsequently the full Board, approved the following restricted stock awards: Name | Company Financial Goal ($) | Non-Financial Operational Goal #1 Award ($) | Non-Financial Operational Goal #2 Award ($) | Total Long- Term Incentive Award ($) | Dennis W. Doll | 295,355 | 68,431 | 36,214 | 400,000 | A. Bruce O’Connor | 78,448 | 52,315 | 39,237 | 170,000 | Bernadette M. Sohler | 30,228 | 14,886 | 14,886 | 60,000 | Lorrie B. Ginegaw | 30,228 | 23,297 | 11,475 | 65,000 | Jay L. Kooper | 35,632 | 12,184 | 12,184 | 50,000 |
Broad-based Benefits. NEOs are provided with certain health and welfare benefits available to all qualifying employees of the Company, as well as selected fringe benefits and perquisites, not generally available to all employees of the Company. The following summarizes the broad-based benefits, available to all qualifying employees, in which the NEOs participate: Defined benefit pension plan (see page 30 for description of limitations to participation in this Plan), Defined contribution 401(k) retirement plan, Health insurance coverage (all employees share in the cost of such coverage), Disability insurance coverage, Group term life insurance coverage (premiums associated with coverage above $50,000 are reported as taxable income to all eligible employees per Internal Revenue Service regulations). Executive Benefits and Perquisites. The NEOs received the following fringe benefits and perquisites: Use of a Company-owned vehicle. The cost of operation and maintenance of such vehicle is borne by the Company. The value of any personal use of such vehicle is reported as taxable income to the executive, Use of a Company-owned cellular telephone, generally for business purposes, Group term life insurance coverage of 1.5x base salary (amount in excess of coverage generally available to all employees, for which premiums are reported as taxable income to the executive and for which total policy coverage is capped at $1,500,000), Participation in a Supplemental Executive Retirement Plan (see below for description of limitations to participation in this Plan). The Compensation Committee formally reviews all components of executive compensation on an annual basis, as well as on an interim basis, as deemed necessary. Supplemental Executive Retirement Plan. Certain of the Company’s NEOs are eligible to participate in a non-qualified Supplemental Executive Retirement Plan (SERP) at the discretion of the Board. A participant, who retires on their normal retirement date, as defined in the SERP, is entitled to an annual retirement benefit of up to 75% of eligible compensation, as defined in the SERP, reduced by the anticipated primary social security benefit, and further reduced by any benefit payable from the Company’s qualified defined benefit pension plan. Further reductions are made for certain retirement benefits from prior employment, where such benefits have accrued. The maximum annual retirement benefit to which two of the five NEOs may be entitled is 50% of eligible compensation. termination under the circumstances described in the SERP. Offsetting amounts related to Social Security and other benefit plans are calculated similarly for all NEOs. Generally, a participant is vested in the SERP at ten (10) years of service in the case of retirement, and in the event of a Change in Control, as described further herein. A participant’s right to receive benefits under the SERP generally commences: 1) upon retirement, 2) to their beneficiary at death or, 3) in connection with a Change in Control upon termination under the circumstances described in the SERP. Benefits are generally payable upon achieving Normal Retirement, as defined in the SERP, to the participant or the participant’s beneficiary. A reduced benefit may be received upon Early Retirement, as defined in the SERP, after age 62 and before age 65. The default method of benefit payment is a 15-year certain payout, payable in monthly installments. Subject to approval by the Compensation Committee, the benefit may be paid in the form of a single life annuity, joint and 50% survivor’s annuity, joint and 100% survivor’s annuity, single life annuity with a ten (10) year certain period or single life annuity with a fifteen (15) year certain period. Amounts paid in any manner other than 15-year certain option are adjusted on an actuarial equivalent basis. The Company is not obligated to set aside or earmark any monies or other assets specifically for the purpose of funding the SERP except that upon a Change in Control, the Company would be obligated to make contributions to a trust anticipated to be sufficient to meet the obligations under the SERP. Absent a Change in Control, benefit payments are in the form of an unfunded general obligation of the Company. Exceptions to Usual Procedures. The Compensation Committee may recommend to the full Board that they approve the payment of special cash compensation to one or more NEOs, in addition to payments approved during the annual compensation-setting cycle. The Committee may make such a recommendation if it believes it is appropriate to reward one or more NEOs in recognition of contributions to a particular project or initiative, or in response to customer, competitive or other factors that were not addressed during the recurring annual compensation-setting cycle or, that may have changed since the annual compensation-setting cycle. Stock Ownership and Holding Requirements | Named Executive Officer | Stock Ownership and Holding Requirement | Dennis W. Doll | 3.0 X Base Salary | A. Bruce O’Connor | 1.5 X Base Salary | Richard M. Risoldi | 1.5 X Base Salary | Gerard L. Esposito | 1.0 X Base Salary | Bernadette M. Sohler | 1.0 X Base Salary |
The Company established formal stock ownership and holding requirements for NEOs in 2012 whereby, a formal beneficial Common Stock ownership and holding requirement of 3.0 times base salary has been established for the CEO, intended to be achieved within five years. As of December 31, 2015, the CEO retains a beneficial stock ownership level in excess of 3.0 times base salary through a combination of personal purchases of stock on the open market and awards of restricted stock under the Company’s incentive compensation program. A beneficial stock ownership and holding requirement of 1.5 times base salary has been established for the Chief Financial Officer and Chief Operating Officer. A beneficial stock ownership and holding requirement of 1.0 times base salary has been established for all other NEOs. A portion of the shares that are under the beneficial ownership of each NEO is in the form of unvested restricted stock, to which the executive does not acquire unrestricted title until such restricted stock awards fully vest.
Employment Agreements.
Stock Ownership and Holding Requirements The Company has formal stock ownership and holding requirements for NEOs, to be achieved within five years of being designated a NEO. A formal beneficial Common Stock ownership and holding requirement of 3.0 times base salary has been established for the CEO. A beneficial stock ownership and holding requirement of 1.5 times base salary is in effect for the Chief Financial Officer. A beneficial stock ownership and holding requirement of 1.0 times base salary has been established for all other NEOs. Some or all of the shares that are under beneficial ownership of each NEO may be in the form of unvested restricted stock, to which the executive does not acquire unrestricted title until such restricted stock awards fully vest. Employment Agreements. The Company does not have employment agreements with any of the NEOs other than in conjunction with a Change in Control, as detailed elsewhere in this Proxy Statement. All NEOs are “at will” employees. | Compensation Committee
Amy B. Mansue, Chair
Steven M. Klein
John R. Middleton, M.D.
Jeffries Shein
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Middlesex Water Company 21 2016 Proxy Statement
Compensation Committee Amy B. Mansue, Chair James F. Cosgrove, Jr. Steven M. Klein Middlesex Water Company 28 2021 Proxy Statement SUMMARY COMPENSATION TABLE The following table details compensation earned or accrued by our NEOs for the three years ended December 31, 2020, 2019 and 2018, respectively. Name and Principal Position | Year | Salary ($) | (1) Stock Awards ($) | (2) Change in Pension Value and Non-Qualified Deferred Comp. Earnings ($) | (3) All other Compensation ($) | Total ($) | Dennis W. Doll Chairman, President and Chief Executive Officer | 2020 | 631,549 | 400,000 | 679,154 | 70,791 | 1,781,494 | 2019 | 615,199 | 334,647 | 755,609 | 76,455 | 1,781,910 | 2018 | 587,761 | 513,000 | 234,144 | 78,101 | 1,413,006 | A. Bruce O’Connor Sr. Vice President-Treasurer and Chief Financial Officer | 2020 | 393,097 | 170,000 | 474,207 | 36,406 | 1,073,710 | 2019 | 380,842 | 169,817 | 848,028 | 38,937 | 1,437,624 | 2018 | 319,602 | 159,453 | 155,438 | 37,938 | 672,431 | Bernadette M. Sohler Vice President Corporate Affairs | 2020 | 227,705 | 60,000 | 390,598 | 25,086 | 703,389 | 2019 | 223,588 | 56,793 | 350,826 | 23,414 | 654,621 | 2018 | 216,662 | 47,488 | 57,696 | 24,201 | 346,047 | Lorrie B. Ginegaw Vice President Human Resources | 2020 | 227,205 | 65,000 | 230,203 | 19,017 | 541,428 | 2019 | 220,588 | 56,685 | 181,992 | 18,943 | 478,208 | 2018 | 208,261 | 47,488 | 16,180 | 16,769 | 288,698 | Jay L. Kooper Vice President, General Counsel & Secretary | 2020 | 294,602 | 60,000 | — | 34,926 | 389,528 | 2019 | 284,369 | 50,000 | — | 33,483 | 367,852 | 2018 | 266,391 | 19,988 | — | 30,085 | 316,464 |
(1) | Reflects the value of ContentsSUMMARY COMPENSATION TABLE | The following table details compensation earned or accrued by our NEOs for the three years ended December 31, 2015, 2014 and 2013, respectively. | Name and Principal Position | Year | (1) Salary ($) | (2) Stock Awards ($) | (3) Change in Pension Value and Non-Qualified Deferred Comp. Earnings ($) | (4) All other Compensation ($) | Total ($) | Dennis W. Doll | 2015 | 485,802 | 271,936 | 86,044 | 47,391 | 891,173 | Chairman, President and | 2014 | 491,855 | 257,692 | 271,641 | 40,742 | 1,061,930 | Chief Executive Officer | 2013 | 461,958 | 191,690 | 0 | 32,701 | 686,349 | | | | | | | | A. Bruce O’Connor | 2015 | 273,979 | 88,788 | 73,669 | 26,850 | 463,286 | Vice President-Treasurer and | 2014 | 277,392 | 84,810 | 299,347 | 26,352 | 687,901 | Chief Financial Officer | 2013 | 260,531 | 70,405 | 0 | 24,254 | 355,190 | | | | | | | | Richard M. Risoldi | 2015 | 273,979 | 88,788 | 100,678 | 28,617 | 492,062 | Vice President-Operations | 2014 | 277,392 | 84,810 | 337,456 | 27,865 | 727,623 | and Chief Operating Officer | 2013 | 260,531 | 63,600 | 0 | 23,654 | 347,784 | | | | | | | | Gerard L. Esposito | 2015 | 189,906 | 28,539 | 141,971 | 20,071 | 380,487 | President | 2014 | 192,272 | 31,503 | 197,334 | 21,853 | 442,963 | Tidewater Utilities, Inc. | 2013 | 180,581 | 26,776 | 0 | 21,853 | 229,210 | | | | | | | | Bernadette M. Sohler | 2015 | 183,592 | 39,660 | 43,279 | 20,246 | 286,777 | Vice President | 2014 | 185,879 | 37,405 | 209,128 | 18,872 | 451,284 | Corporate Affairs | 2013 | 174,577 | 30,994 | 8,796 | 16,046 | 230,413 |
(1) | The base salary decrease in 2015 reflects 26 pay periods in 2015, as opposed to 27 in 2014. | | |
(2) | Reflects the value of Restricted Stock Plan awards in the applicable year. These awards generally do not vest to the participants until the expiration of five years from the date of such award. During such five-yearRestricted Stock Plan awards in the applicable year. These awards generally do not vest to the participants until the expiration of five years from the date of such award. During such five year period, the participants have contingent ownership of such shares, including the right to vote the same and to receive dividends thereon. | | |
(3) | Represents the aggregate change in the actuarial present value of the accumulated benefit under our defined benefit pension plan. The amounts are largely |
(2) | Represents the aggregate change in the actuarial present value of the accumulated benefits under all of our defined benefit pension plans for the named executive officers. The increases are primarily due to changes in the levels of qualifying compensation and an additional year of credited service. The increases for 2014 were driven by reductions in the discount rate from 4.87% in 2013 to 3.91% in 2014 applied to calculate the benefit and from the adoption of the latest mortality tables (RP-2014) issued by the Society of Actuaries. A zero is shown in those cases where the present value of accumulated benefits declined for 2013 due to the impact of the increase in the discount rate used to value the benefit from 3.99% in 2012 to 4.87% in 2013. The present value of accumulated benefits declined by $32,952, $146,124, $85,123 and $141,498 for Mr. Doll, Mr. O’Connor, Mr. Risoldi and Mr. Esposito, respectively. Neither the increase nor the decrease in pension value resulting from changes in the discount rate results in any increase or decrease in benefits payable to participants under the plans, other than additional credited service. Neither an increase in or decrease in the pension value resulting from changes in the discount rate results in any increase or decrease in benefits payable to participants under the plans, other than additional credit service years for the passage of time. Mr. Kooper does not particpate in the Company’s Defined Benefit (DB) Plan since his hire date was after the DB Plan was closed to new entrants. Alternatively, Mr. Kooper is the only NEO who does participate in the Company’s Discretionary Profit Sharing (DPS) Plan administered through the Company’s 401k Plan. See Schedule A - All Other Compensation. The Company does not have any nonqualified deferred compensation plans or related earnings. | | |
(3) | The detail “All Other Compensation” recognized for the benefit of the NEOs is set forth in Schedule A as supplemental information to the Summary Compensation Table. |
SCHEDULE A - SUMMARY - ALL OTHER COMPENSATION The following table details all other compensation earned or accrued for the three years ended December 31, 2020, 2019 and 2018, respectively. | Dividends on Restricted Stock | Personal Automobile Use | (4) Group Term Life Insurance Premiums | (4) (5) 401(K) - Employer Match | Spouse Travel | Total - All Other Compensation | Name and Principal Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | Dennis W. Doll | 2020 | 46,963 | 2,724 | 11,089 | 9,974 | 41 | 70,791 | Chairman, President and | 2019 | 49,452 | 4,369 | 11,911 | 9,799 | 924 | 76,455 | Chief Executive Officer | 2018 | 49,558 | 4,584 | 13,570 | 9,600 | 789 | 78,101 | A. Bruce O’Connor | 2020 | 15,975 | 2,109 | 8,348 | 9,974 | — | 36,406 | Sr. Vice President-Treasurer | 2019 | 16,055 | 3,817 | 8,333 | 9,730 | 1,002 | 38,937 | and Chief Financial Officer | 2018 | 16,457 | 4,040 | 7,198 | 9,624 | 619 | 37,938 | Bernadette M. Sohler | 2020 | 6,719 | 6,519 | 5,003 | 6,845 | — | 25,086 | Vice President | 2019 | 7,106 | 6,519 | 3,157 | 5,924 | 708 | 23,414 | Corporate Affairs | 2018 | 7,556 | 5,793 | 3,057 | 6,624 | 1,171 | 24,201 | Lorrie B. Ginegaw | 2020 | 5,929 | 5,537 | 810 | 6,741 | — | 19,017 | Vice President | 2019 | 6,165 | 5,537 | 521 | 6,720 | — | 18,943 | Human Resources | 2018 | 6,752 | 5,537 | 315 | 4,165 | — | 16,769 | Jay L. Kooper | 2020 | 1,025 | 8,176 | 1,501 | 24,224 | — | 34,926 | Vice President, | 2019 | 263 | 8,176 | 1,245 | 23,799 | — | 33,483 | General Counsel & Secretary | 2018 | — | 6,781 | 628 | 22,602 | 74 | 30,085 |
(4) | The detail of “All Other Compensation” recognized for the benefit of the NEOs is set forth on Schedule A, as supplemental information to the Summary Compensation Table. |
SCHEDULE - A SUMMARY - ALL OTHER COMPENSATION | The following table details all other compensation earned or accrued for the three years ended December 31, 2015, 2014 and 2013, respectively. | | | Dividends on Restricted Stock | Personal Automobile Use | (5) Group Term Life Insurance Premiums | (5) 401(K) - Employer Match | Spouse Travel | Total - All Other Compensation | Name and Principal Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | Dennis W. Doll | 2015 | 27,114 | 2,724 | 7,263 | 9,274 | 1,016 | 47,391 | Chairman, President and | 2014 | 19,326 | 3,918 | 7,346 | 9,111 | 1,120 | 40,742 | Chief Executive Officer | 2013 | 11,456 | 3,918 | 6,894 | 8,924 | 1,509 | 32,701 | | | | | | | | | A. Bruce O’Connor | 2015 | 11,129 | 2,478 | 3,983 | 8,805 | 455 | 26,850 | Vice President-Treasurer and | 2014 | 9,098 | 3,612 | 4,026 | 8,670 | 1,025 | 26,352 | Chief Financial Officer | 2013 | 6,854 | 3,612 | 3,775 | 8,804 | 1,208 | 24,254 | | | | | | | | | Richard M. Risoldi | 2015 | 10,557 | 4,534 | 3,983 | 8,927 | 616 | 28,617 | Vice President-Operations | 2014 | 8,406 | 6,546 | 4,026 | 7,897 | 1,309 | 27,865 | and Chief Operating Officer | 2013 | 3,195 | 6,195 | 8,960 | 6,288 | - | 24,898 | | | | | | | | | Gerard L. Esposito | 2015 | 4,547 | 4,807 | 3,960 | 6,545 | 212 | 20,071 | President | 2014 | 4,993 | 4,749 | 4,103 | 6,729 | 1,097 | 21,853 | Tidewater Utilities, Inc. | 2013 | 4,088 | 4,749 | 3,895 | 6,320 | 813 | 18,642 | | | | | | | | | Bernadette M. Sohler | 2015 | 4,892 | 5,939 | 2,584 | 5,928 | 903 | 20,246 | Vice President | 2014 | 4,236 | 4,112 | 1,396 | 6,505 | 1,270 | 16,046 | Corporate Affairs | 2013 | 3,209 | 4,112 | 1,308 | 6,110 | 1,041 | 14,691 |
(5) The benefits available to the NEOs under these programs are also available to all other employeesemployess of the Company.
Middlesex Water Company 22 2016 Proxy Statement
GRANTS OF PLAN-BASED AWARDS * | The following table details information relative to grants of plan-based awards to the NEOs under our Restricted Stock Plan during the year ended December 31, 2015. | Name | Grant Date | Stock Awards:
Number of Shares or Units
| | | (#) | Dennis W. Doll | 7/1/2015 | 12,006 | A. Bruce O’Connor | 7/1/2015 | 3,920 | Richard M. Risoldi | 7/1/2015 | 3,920 | Gerard L. Esposito | 7/1/2015 | 1,260 | Bernadette M. Sohler | 7/1/2015 | 1,751 |
*The Company does not employ the use of stock options.
STOCK VESTED DURING 2015* | The following table details information regarding the vesting of stock awards as of December 31, 2015. | | Stock Awards | Name | Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | Dennis W. Doll | 452 | 10,740 | A. Bruce O’Connor | 472 | 11,215 | Richard M. Risoldi | 235 | 5,584 | Gerard L. Esposito | 482 | 11,452 | Bernadette M. Sohler | 429 | 10,193 | *The Company does not employ the use of stock options. |
OUTSTANDING EQUITY AWARDS | The following table represents outstanding restricted stock awards as of December 31, 2015. | | Shares of stock that have not vested | Market value of shares of stock that have not vested | Name | (#) | ($) | Dennis W. Doll | 28,994 | 769,501 | A. Bruce O’Connor | 12,482 | 331,272 | Richard M. Risoldi | 11,685 | 310,120 | Gerard L. Esposito | 5,346 | 141,883 | Bernadette M. Sohler | 5,529 | 146,740 |
PENSION BENEFITS | The following table details the present value of accumulated benefits that have accrued under the Qualified Defined Benefit Pension Plan (Qualified Plan) and the SERP as of December 31, 2015. | Name | Plan | Years of Credited Service | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | Dennis W. Doll | MWC Qualified Plan | 11 | 437,598 | — | | MWC SERP | 11 | 1,752,240 | — | A. Bruce O’Connor | MWC Qualified Plan | 26 | 1,079,038 | — | | MWC SERP | 26 | 263,636 | — | Richard M. Risoldi | MWC Qualified Plan | 26 | 1,132,975 | — | | MWC SERP | 26 | 300,712 | — | Gerard L. Esposito | MWC Qualified Plan | 17 | 741,249 | — | | MWC SERP | 17 | 462,221 | — | Bernadette M. Sohler | MWC Qualified Plan | 21 | 595,467 | — | | MWC SERP | 21 | — | — |
Middlesex Water Company 23 2016 Proxy Statement
All employees, hired before April 1, 2007, including the NEOs, who receive pay for a minimum of 1,000 hours during the calendar year, are participants in
(5) | In addition to employer matching contributions under the Company’s Qualified Plan. Under the noncontributory Qualified401k Plan, current service costsincluded in this column are funded annually as required under Internal Revenue Service guidelines by the Qualified Plan. The Company’s annual contribution is determined on an actuarial basis. Benefits are measuredcontributions from the member’s entry date and accrue to normal retirement date or date of early retirement. Benefits are calculated, at normal retirement, at 1.25% of pay up toCompany’s Discretionary Profit Sharing Plan administered through the employee’s Social Security benefit integration level, plus 1.9% of such excess pay, multiplied by anticipated total years of service to normal retirement date, capped at 35 years of such excess pay, multiplied by years of service achieved and not to exceed number of years of service achieved at normal retirement date of age 65. Average payCompany’s 401k Plan. Mr. Kooper is the highest annual average of total pay during any 5 consecutive years within the 10 calendar-year period prior to normal retirement date. The benefit amounts are not subject to any deduction for Social Security benefits or other offset amounts. The benefits under the SERP are described on page 20of this Proxy Statement.All NEOs are eligible to receive early retirement benefits under the Qualified Plan and the SERP only in the event of their retirement. If Messrs. Doll, O’Connor, Risoldi or Ms. Sohler elected to receive early retirement benefits under the Qualified Plan, such benefits would be at a reduced level as defined under the Qualified Plan for any eligible employee who elects early retirement prior to age 62. If Messrs. Doll, O’Connor, Risoldi, Esposito or Ms. Sohler elected to receive early retirement benefits under the SERP (defined as retirement prior to age 65 but after age 62), such benefits would be at a reduced level as defined under the SERP. No lump sum payment of accumulated retirement benefits is provided under the Qualified Plan or the SERP.
Employees hired after March 31, 2007 are notnamed executive officer eligible to participate in the QualifiedDPS Plan but do participate in a defined contribution plan that provides an annual contribution, at the discretion of the Company, based upon a percentage of the participants’ compensation.
POTENTIAL PAYMENTS UPON CHANGE IN CONTROL
The Company has Change in Control Agreements with the NEOs. These agreements generally provide that if the executivesince he is terminated by the Company, other than for death, disability, retirement, Cause (as defined in the agreement), or if the executive resigns for Good Reason (as defined in the agreement) within three (3) years after a Change In Control of the Company, also as defined in the agreement, the executive is entitledineligible to receive, (a) a lump sum severance payment equal to three (3) times the executive’s average annual total compensation, as defined in the agreement for the five (5) years prior to the termination; (b) continued coverage for three (3) years under any health or welfare plan in which the executive and the executive’s dependents were participating; and (c) an additional amount equal to the amount of federal Excise Tax, if any, that is due or determined to be due resulting from the severance payments or any other payments under the agreement. The Company has no non-Change in Control severance arrangements. The Company does not gross-up for any other federal or state tax under any other agreement or plan. The benefits under any health or welfare benefit plan could end earlier than three (3) years from the date of termination and would end on the earlier of (i) the date the executive becomes covered by a new employer’s health and welfare benefit plan, or (ii) the date the executive becomes eligible for Medicare. Also, coverage for the executive’s dependents could end earlier than any of these dates if required by the health or welfare benefit plan due to age eligibility.
In addition to the benefits to be paid to the executive as noted above, on or before the third anniversary of the Change in Control, the Company shall pay the executive any deferred compensation, including, but not limited to, deferred bonuses allocated or credited to the executive as of the date of termination. Also, any outstanding restricted stock grants awarded to the executive under the Company’s stock plans, which are not vested on termination, shall immediately vest.
A Change in Control may also lead to the payment of benefits to the NEOs and other Executive Officers, who participate in the SERP. Undercompany’s Defined Benefit Plan.
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Middlesex Water Company 29 2021 Proxy Statement GRANTS OF PLAN-BASED AWARDS * The following table details information relative to grants of plan-based awards to the NEOs under our Restricted Stock Plan during the year ended December 31, 2020. Name | Grant Date
| Stock Awards: Number of Shares or Units
| | | (#) | Dennis W. Doll | 04/01/2020 | 5,566 | A. Bruce O’Connor | 04/01/2020 | 2,825 | Bernadette M. Sohler | 04/01/2020 | 945 | Lorrie B. Ginegaw | 04/01/2020 | 943 | Jay L. Kooper | 04/01/2020 | 832 |
*The Company does not employ the use of stock options. STOCK VESTED DURING 2020* The following table details information regarding the vesting of stock awards as of December 31, 2020. | Stock Awards | Name | Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | Dennis W. Doll | 12,006 | 806,923 | A. Bruce O’Connor | 3,920 | 263,463 | Bernadette M. Sohler | 1,751 | 117,685 | Lorrie B. Ginegaw | 1,568 | 105,385 | Jay L. Kooper | — | — |
*The Company does not employ the use of stock options. OUTSTANDING EQUITY AWARDS The following table represents outstanding unvested restricted stock awards as of December 31, 2020. | Shares of stock that have not vested | Market value of shares of stock that have not vested | Name | (#) | ($) | Dennis W. Doll | 40,563 | 2,939,601 | A. Bruce O’Connor | 14,108 | 1,022,407 | Bernadette M. Sohler | 5,824 | 422,065 | Jay L. Kooper | 5,154 | 373,510 | Lorrie B. Ginegaw | 1,189 | 86,167 |
PENSION BENEFITS The following table details the present value of accumulated benefits that have accrued under the Qualified Defined Benefit Pension Plan (Qualified Plan) and the SERP as of December 31, 2020. Name | Plan | Years of Credited Service | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | Dennis W. Doll | MWC Qualified Plan | 16 | 1,060,438 | — | | MWC SERP | 16 | 3,745,504 | — | A. Bruce O’Connor | MWC Qualified Plan | 31 | 2,107,349 | — | | MWC SERP | 31 | 1,296,671 | — | Bernadette M. Sohler | MWC Qualified Plan | 26 | 1,716,522 | — | | MWC SERP | 26 | — | — | Lorrie B. Ginegaw | MWC Qualified Plan | 16 | 668,181 | — | | MWC SERP | 16 | — | — | Jay L. Kooper | MWC Qualified Plan | 0 | — | — | | MWC SERP | 0 | — | — |
CEO to Median Employee Pay Ratio We are providing the SERP, if an executive leavesfollowing information regarding the Company’s employ, under the terms of a Change In Control agreement within five yearsrelationship of the Change in Control under any of the following circumstances: (a) the executive’s employment with the Company is terminated by the Company other than for cause; (b) the nature and scope of the executive’s duties or activities with the Company or its successor are reduced to a level significantly below that which the executive had enjoyed immediately prior to the Change in Control; (c) the executive’s base salary is reduced; or (d) if the Change in Control is preceded by the Company terminating the executive’s employment with the Company without cause during the six-month period prior to the occurrence of the Change in Control, the executive shall be entitled to receive an annual retirement benefit equal to 75% of the executive’s Compensation (and in some cases, 50% of Compensation) reduced by certain other benefits as more particularly set forth in the SERP. Such annual retirement benefits shall commence within sixty days after the later of (a) the executive’s Normal Retirement Date, or (b) the executive’s retirement or termination of employment with the Company or its successor. Unless the executive elects and receives approval of an alternative form of payment under the SERP, the executive shall receive the annual retirement benefit each year for fifteen years payable in monthly installments. Notwithstanding the foregoing, if an executive leaves the Company’s employ under the terms of a Change In Control agreement and within the time frame, and for the reasons discussed above, then, at the executive’s sole option, the executive may elect to receive a reduced benefit equal to 75% of the executive’s Compensation (and in some cases, 50% of Compensation) reduced by certain other benefits as prorated as set forth in the SERP. The following table indicates the potential value the NEOs would receive in connection with termination by the Company within three years after a Change in Control of the Company. All scenarios use December 31, 2015, the last business day of the Company’s last completed fiscal year, as the date for the triggering event set forth in the schedule. Additionally, the potential values to each of the NEOs also include the present value of accumulated benefits under the SERP assuming that each NEO made an election to receive such benefits within sixty days after the executive terminates employment with the Company or its successor.
Name | Compensation Paid During Calendar Year 2015 (using definition of “Compensa- tion” under the Agreement) | Termination Before Third Anniversary (1) | Dennis W. Doll | $608,018 | $4,049,568 | A. Bruce O’Connor | $326,481 | $1,806,303 | Richard M. Risoldi | $323,333 | $1,778,729 | Gerard L. Esposito | $213,615 | $1,037,614 | Bernadette M. Sohler | $205,587 | $ 987,238 |
(1) | Compensation and other benefits paid following termination on or before the third anniversary of the Change in Control. |
Middlesex Water Company 24 2016 Proxy Statement
PROPOSAL 2
NON-BINDING PROPOSAL TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Section 14A of the Exchange Act, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the “Dodd-Frank Act,” enables our shareholders to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. As previously disclosed, the Board has determined that it will hold an advisory vote on the compensation of our NEOs on an annual basis. The Compensation of our NEOs is described in the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative on pages 17-24 of this Proxy Statement.
The Compensation Committee of the Board is responsible for making recommendations to the full Board with respect to the compensation of the NEOs, including the Chief Executive Officer. As part of these duties, the Committee administers the Company’s equity-based incentive compensation plan and conducts an annual performance review of the Chief Executive Officer and, in consultation with the Chief Executive Officer, reviews the performance of the other NEOs. The Board has ultimate authority to determine the compensation of all NEOs, including the Chief Executive Officer.
The overall objectives of the Company’s compensation program are to retain, motivate, and reward employees and officers (including the NEOs) for short- and long-term performance, and to provide competitive compensation to attract appropriate talent to the Company. The methods used to achieve these goals for NEOs are influenced by the compensation and employment practices of our peers and competitors within the utilities industry, and elsewhere in the marketplace, for executive talent. Other considerations include each NEO’s individual performance in achieving both financial and non-financial corporate goals.
Based on its review of the total compensation of our NEOs for fiscal year 2015,CEO compared to the Compensation Committee believes that theannual total compensation for each of our median employee.
For fiscal 2020, our last completed fiscal year: • the NEOs is reasonable and effectively achievesannual compensation of our CEO, as reported in the objective of aligning compensation with performance measures directly related to our financial goals and creation of shareholder value without encouraging NEOs to take unnecessary or excessive risks. The CD&A sectionSummary Compensation Table included on page 29 of this Proxy Statement, was $1,781,494;
• the annual total compensation of our median employee was $73,761; and • the resulting ratio is 24:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K using data and assumptions summarized below. To identify our median employee, we first determined our employee population (excluding our CEO) as of the last day of our fiscal year, December 31, 2020 (the Determination Date). We had approximately 348 employees, representing all full-time, part-time, seasonal and temporary workers as of the Determination Date. The number does not include any independent contractors or “leased” workers, as permitted by applicable SEC rules. We then measured our employee population’s total direct compensation in fiscal 2020 for our consistently applied compensation measure based on information from our payroll management systems. This compensation measurement was calculated by totaling, for each employee, their annual W-2 wages, salary, bonuses and perquisites as of the Determination Date and target restricted stock awards granted in fiscal 2020. Once we identified our median employee, we then determined the annual total compensation of this employee. We believe the above is a reasonable estimate of the relationship between the pay of our CEO and the accompanying tables and narrative provide a comprehensive reviewpay of NEO compensation objectives, program and rationale. We urge you to read this disclosure before voting on this proposal, the approval of which is included as Proposal 2 in this Proxy Statement. This advisory vote is typically referred to as a “say-on-pay” vote.our median employee. For the reasons stated above, the Board is requesting your non-binding approval of the following resolution:
“Resolved, that the compensation of NEOs, as disclosed in the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative on pages 17-24 of this Proxy Statement, is approved.
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Middlesex Water Company 30 2021 Proxy Statement All employees hired before April 1, 2007, including all the NEOs except for Mr. Kooper, who was hired after March 31, 2007, and who receive pay for a minimum of 1,000 hours during the calendar year, are participants in the Company’s Qualified Plan. Under the noncontributory Qualified Plan, current service costs are funded annually, as required under Internal Revenue Service guidelines and by the Qualified Plan. The Company’s annual contribution is determined on an actuarial basis. Benefits are measured from the member’s entry date and accrue to normal retirement date or date of early retirement. Benefits are calculated, at normal retirement, at 1.25% of pay up to the employee’s Social Security benefit integration level, plus 1.9% of such excess pay, multiplied by anticipated total years of service to normal retirement date, capped at 35 years of such excess pay, multiplied by years of service achieved and not to exceed number of years of service achieved at normal retirement date of age 65. Average pay is the highest annual average of total pay during any 5 consecutive years within the 10 calendar-year period prior to normal retirement date. The benefit amounts are not subject to any deduction for Social Security benefits or other offset amounts. The benefits under the SERP are described on page 28 of this Proxy Statement. Messrs. Doll, O’Connor and Ms. Sohler are eligible to receive early retirement benefits under the Qualified Plan, only in the event of their retirement. If any of the aforementioned NEOs elected to receive early retirement benefits under the Qualified Plan, such benefits would be at a reduced level on an actuarial basis, as defined under the Qualified Plan for any eligible employee who elects early retirement prior to age 62. Ms. Ginegaw’s current age and credited years of service preclude her from qualifying for early retirement benefits under the Qualified Plan. With respect to the SERP, if participating NEOs, upon achieving age 62 and ten years of service, elect to receive early retirement benefits (defined as retirement prior to age 65 but after age 62) such benefits would be at a reduced level as defined under the SERP. Mr. Doll and Mr. O’Connor are eligible to receive early retirement benefits under the SERP, only in the event of their retirement. Ms. Sohler’s and Ms. Ginegaw’s current age and credited years of service preclude them from qualifying for early retirement benefits under the SERP. Mr. Kooper is not a participant in the SERP. No lump sum payment of accumulated retirement benefits is provided under the Qualified Plan or the SERP. Employees hired after March 31, 2007 are not eligible to participate in the Qualified Plan, but do participate in a qualified defined contribution plan, in lieu of the Qualified Plan, that provides an annual contribution at the discretion of the Company, based upon a percentage of the participants’ compensation. Mr. Kooper is a participant in the discretionary qualified defined contribution plan. POTENTIAL PAYMENTS UPON CHANGE IN CONTROL The Company has Change in Control Agreements with the NEOs. These agreements generally provide that if the executive is terminated by the Company, other than for death, disability, retirement, Cause (as defined in the agreement), or if the executive resigns for Good Reason (as defined in the agreement) within three (3) years after a Change In Control of the Company, also as defined in the agreement, the executive is entitled to receive, (a) a lump sum severance payment equal to three (3) times the executive’s average annual total eligible compensation, as defined in the agreement, for the five (5) years prior to the termination; (b) continued coverage for three (3) years under any health or welfare plan in which the executive and the executive’s dependents were participating; and (c) an additional amount equal to the amount of federal Excise Tax, if any, that is due or determined to be due resulting from the severance payments or any other payments under the agreement. The Company has no non-Change in Control severance arrangements. The Company does not gross-up payments for any other federal or state income or other tax under a Change in Control or, under any other agreement or plan. The benefits under any health or welfare benefit plan could end earlier than three (3) years from the date of termination and would end on the earlier of (i) the date the executive becomes covered by a new employer’s health and welfare benefit plan, or (ii) the date the executive becomes eligible for Medicare. Also, coverage for the executive’s dependents could end earlier than any of these dates if required by the health or welfare benefit plan due to age eligibility. In addition to the benefits to be paid to the executive as noted above, if there is a separation from service under the terms of the Change in Control agreement on or before the third anniversary of the Change in Control, the Company shall pay the executive any deferred compensation, including, but not limited to, deferred bonuses allocated or credited to the executive as of the date of termination. Also, any outstanding restricted stock grants awarded to the executive under the Company’s stock plans, which are not vested on termination, shall immediately vest. A Change in Control may also lead to the payment of benefits to the NEOs and other Executive Officers, who participate in the SERP. Under the SERP, if an executive leaves the Company’s employ under the terms of a Change In Control agreement within five years of the Change in Control, the executive shall be entitled to receive an annual retirement benefit equal to 75% of the executive’s Compensation (and in some cases, 50% of Compensation) reduced by certain other benefits as more particularly set forth in the SERP. Such annual retirement benefits shall commence within sixty days after the later of (a) the executive’s Normal Retirement Date, or (b) the executive’s retirement or termination of employment with the Company or its successor. Unless the executive elects and receives approval of an alternative form of payment under the SERP, the executive shall receive the annual retirement benefit each year for fifteen years payable in monthly installments. Notwithstanding the foregoing, if an executive leaves the Company’s employ under the terms of a Change In Control agreement, then, at the executive’s sole option, the executive may elect to receive a reduced benefit equal to 75% of the executive’s eligible Compensation (and in some cases, 50% of Compensation) reduced by certain other benefits as prorated and as set forth in the SERP, to commence within 60 days of separation of employment. The following table indicates the potential value the NEOs would receive in connection with termination by the Company within three years after a Change in Control of the Company. All scenarios use December 31, 2020, the last business day of the Company’s most recent fiscal year, as the date for the triggering event set forth in the schedule. Additionally, the potential values to each of the NEOs also include the present value of accumulated benefits under the SERP assuming that each NEO made an election to receive such benefits within sixty days after the executive terminates employment with the Company or its successor. Name | Compensation Paid During Calendar Year 2020 (using definition of “Compensa- tion” under the Agreement) ($) | Termination Before Third Anniversary (1) ($) | Dennis W. Doll | 942,388 | 6,955,979 | A. Bruce O’Connor | 475,957 | 3,008,386 | Bernadette M. Sohler | 275,513 | 1,458,273 | Lorrie B. Ginegaw | 258,164 | 1,332,979 | Jay L. Kooper | 300,810 | 1,236,811 | (1) Compensation and other benefits paid following termination on or before third anniversary of the Change in Control. |
Middlesex Water Company 31 2021 Proxy Statement PROPOSAL 2 NON-BINDING PROPOSAL TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS Section 14A of the Exchange Act, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the “Dodd-Frank Act,” enables our shareholders to vote to approve, on an advisory (non-binding) basis, the compensation of our NEOs as disclosed in this Proxy Statement in accordance with the SEC’s rules. As previously disclosed, the Board has determined that it will hold an advisory vote on the compensation of our NEOs on an annual basis. The Compensation of our NEOs is described in the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative on pages 22-31 of this Proxy Statement. The Compensation Committee of the Board of Directors is responsible for making recommendations to the full Board of Directors with respect to the compensation of the NEOs, including the Chief Executive Officer. As part of these duties, the Committee administers the Company’s equity-based incentive compensation plan and conducts an annual performance review of the Chief Executive Officer and, in consultation with the Chief Executive Officer, reviews the performance of the other NEOs. The Board of Directors has ultimate authority to determine the compensation of all NEOs, including the Chief Executive Officer. The overall objectives of the Company’s compensation program are to retain, motivate, and reward employees and officers (including the NEOs) for short- and long-term performance, and to provide competitive compensation to attract appropriate talent to the Company. The methods used to achieve these goals for NEOs are influenced by the compensation and employment practices of our peers and competitors within the utilities industry, and elsewhere in the marketplace, for executive talent. Other considerations include each NEO’s individual performance in achieving both financial and non-financial corporate goals. Based on its review of the total compensation of our NEOs for fiscal year 2020, the Compensation Committee believes that the total compensation for each of the NEOs is reasonable and effectively achieves the objective of aligning compensation with performance measures directly related to our financial goals and creation of shareholder value without encouraging NEOs to take unnecessary or excessive risks. The Compensation Discussion and Analysis section of this Proxy Statement and the accompanying tables and narrative provide a comprehensive review of NEO compensation objectives, program and rationale. We urge you to read this disclosure before voting on this proposal, the approval of which is included as Proposal 2 in this Proxy Statement. This advisory vote is typically referred to as a “say-on-pay” vote. For the reasons stated above, the Board is requesting your non-binding approval of the compensation of NEOs, as disclosed in the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative on pages 22-31 of this Proxy Statement. Your vote on this proposal will be non-binding and will not be construed as overruling a decision by the Board. Your vote will not create or imply any change to fiduciary duties or create or imply any additional fiduciary duties for the Board. However, the Board values the opinions that our shareholders express in their votes and will consider the outcome of the vote when making future executive compensation decisions as it deems appropriate. THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL 2, THE NON-BINDING ADVISORY PROPOSAL APPROVING THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS. |
Middlesex Water Company 32 2021 Proxy Statement REPORT OF THE AUDIT COMMITTEE The Audit Committee of the Board of Directors is comprised solely of independent directors. The Committee for the year 2020 was Steven M. Klein, Kim C. Hanemann, Amy B. Mansue and Ann L. Noble. Mr. Klein serves as Audit Committee Chair and is the designated Audit Committee Financial Expert, as defined by the Securities and Exchange Commission (SEC). The Audit Committee operates under a written Charter adopted by the Board of Directors which is reviewed and adopted annually by the Audit Committee and the Board of Directors. The Charter is available on the Company’s website at www.MiddlesexWater.com. Management is responsible for the Company’s consolidated financial statements and internal controls. The Company’s independent accountants, Baker Tilly US, LLP (“Baker Tilly”), are responsible for performing an integrated independent audit of the Company’s annual consolidated financial statements and internal controls over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) (United States) and for issuing a report thereon. The Audit Committee’s responsibility is to oversee the quality and integrity of the Company’s accounting, auditing and financial reporting practices. In this context, the Audit Committee meets periodically with Baker Tilly without management present. Each year, the Audit Committee evaluates and considers the qualifications, audit quality, tenure and independence of Baker Tilly. In doing so, the Audit Committee considers the qualifications of Baker Tilly’s engagement team serving the Company, monitors rotation requirements of the Baker Tilly engagement team and interviews engagement team leadership with each rotation. The Committee also discusses with Baker Tilly the most recent Public Company Accounting Oversight Board (PCAOB) inspection report for their firm. Baker Tilly has served as the Company’s independent registered public accounting firm since 2006. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated audited financial statements with management and Baker Tilly. The Audit Committee discussed with Baker Tilly the matters required to be discussed under the rules adopted by the PCAOB which included: Middlesex Water Company 25 2016 Proxy Statement
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board is comprised solely of independent Directors. The Committee for the year 2015 was Steven M. Klein, Chairman, Amy B. Mansue and John R. Middleton, M.D. Mr. Klein serves as Audit Committee Chair and is the designated Audit Committee Financial Expert, as defined by the Securities and Exchange Commission. John C. Cutting, Ph.D. served on the Audit Committee until his retirement from the Board in May 2015. Kim C. Hanemann, named to the Board in January 2016, has been appointed to serve on the Audit Committee for 2016 with fellow Directors Klein, Mansue and Middleton. The Audit Committee operates under a written Charter adopted by the Board which is reviewed and adopted annually by the Audit Committee and the Board. The Charter is available on the Company’s website at www.MiddlesexWater.com.
Management is responsible for the Company’s consolidated financial statements and internal controls. The Company’s independent accountants, Baker Tilly Virchow Krause, LLP (Baker Tilly), are responsible for performing an integrated independent audit of the Company’s annual consolidated financial statements and internal controls over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) (United States) and for issuing reports thereon. The Audit Committee’s responsibility is to oversee the quality and integrity of the Company’s accounting, auditing and financial reporting practices.
In this context, the Audit Committee has met with the independent accountants without management present. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated audited financial statements with management and the independent accountants. The Audit Committee discussed with the independent accountants the matters required to be discussed under the rules adopted by the PCAOB, which included as applicable:
1. | Significant issues with regard to the independent accountant’sBaker Tilly’s appointment or retention; |
2. | Significant risks identified during the independent accountant’sBaker Tilly’s risk assessment procedures; |
3. | Significant changes to the independent accountant’sBaker Tilly’s planned audit strategy or to the significant risks originally identified; |
4. | Significant accounting policies and practices and significant unusual transactions; |
5. | Critical accounting policies and practices; |
6. | Critical accounting estimates;The independent accountant’s |
7. | Baker Tilly’s evaluation of the quality of the entity’sCompany’s financial reporting; |
8. | Other information in documents containing audited financial statements; |
9. | Difficult or contentious matters for which the
independent accountantBaker Tilly was consulted; |
10. | Management’s consultations with other accountants; |
11. | Going concern consideration;- considerations;
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12. | Uncorrected and corrected misstatements; |
13. | Material written communications between the Company and the independent accountant; and- Baker Tilly;
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14. | Significant difficulties encountered in performing the audit. The independent accountants also provided to the Audit Committee the written disclosures required by the applicable rules of the PCAOB, and the Audit Committee discussed with the independent accountants the firm’s independence with respect to Middlesex Water Company and its management. The Audit Committee has the sole authority to pre-approve permitted non-audit services performed by the independent accountants and has considered whether the independent accountants’ provision of non-audit services to the Company is compatible with maintaining their independence.
Based on the Audit Committee’s discussions with management and the independent accountants, the Audit Committee’s review of the audited financial statements, the representations of management regarding the audited financial statements and the report of the independent accountants to the Audit Committee, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, for filing with the SEC.
The Audit Committee also discussed with management the process used for the establishment and maintenance of disclosure controls and procedures in quarterly and annual reports which is required by the SEC and the Sarbanes-Oxley Act of 2002, for certain of the Company’s filings with the SEC.
| Audit Committee
Steven M. Klein, Chairman
Kim C. Hanemann
Amy B. Mansue
John R. Middleton, M.D.
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Baker Tilly discussed with the Audit Committee their evaluation of critical audit matters under the PCAOB auditor reporting model, and the related effect on their auditor report. Baker Tilly also provided to the Audit Committee the written disclosures required by the applicable rules of the PCAOB, and the Audit Committee discussed with Baker Tilly the firm’s independence with respect to Middlesex Water Company and its management. The Audit Committee has the sole authority to pre-approve permitted non-audit services performed by Baker Tilly and has considered whether any such non-audit services, provided to the company, is compatible with maintaining their independence. Based on the Audit Committee’s discussions with management and Baker Tilly, the Audit Committee’s review of the audited financial statements, the representations of management regarding the audited financial statements and the report of Baker Tilly to the Audit Committee, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the SEC. The Audit Committee also discussed with management the process used for the establishment and maintenance of disclosure controls and procedures in quarterly and annual reports which is required by the SEC and the Sarbanes-Oxley Act of 2002, for certain of the Company’s filings with the SEC. Audit Committee Steven M. Klein, Chairman Joshua Bershad, M.D. Kim C. Hanemann Amy B. Mansue Middlesex Water Company 33 2021 Proxy Statement PROPOSAL 3 RATIFICATION OF APPOINTMENT BY THE AUDIT COMMITTEE OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The shares represented by the proxies will be voted for ratification of the appointment by the Audit Committee of Baker Tilly US, LLP (Baker Tilly) as our independent registered public accounting firm, to issue a report to the Board and shareholders on our financial statements for the year ending December 31, 2021. Although submission of the appointment of an independent registered public accounting firm to shareholders for ratification is not required by law or regulation, the Board is submitting the selection of an independent registered public accounting firm for shareholder ratification. The Audit Committee is solely responsible for the appointment, compensation and oversight of the work of our independent registered public accounting firm. Representatives of Baker Tilly are expected to be present at the Annual Meeting and will be afforded an opportunity to make a statement, if they so desire, and to respond to appropriate questions. The affirmative vote of a majority of the votes cast by shareholders in person or represented by proxy, at the Annual Meeting is required for the approval of this Proposal. The Board has not determined what action it would take if the shareholders do not approve the selection of Baker Tilly, but may reconsider the selection if the shareholders’ action so warrants. Even if the selection is ratified, the Audit Committee, exercising its own discretion, may select different auditors at any time during the year if it determines that such a change would be in the Company’s best interests and in the best interests of shareholders. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES Baker Tilly was previously approved and appointed by the Audit Committee as the Company’s independent registered public accounting firm for the years ended December 31, 2020 and 2019. Aggregate fees billed to the Company for the years ended December 31, 2020 and 2019 by Baker Tilly are as follows: | 2020 ($) | 2019 ($) | Audit Fees {a} | 420,283 | 544,960 | Audit-Related Fees | — | — | Total Audit and Audit-Related Fees | 420,283 | 544,960 | Tax Fees {b} | 32,500 | 33,000 | All Other Fees | — | — | Total Fees | 452,783 | 577,960 | {a} Audit fees were incurred for audits of the financial statements and internal control over financial reporting of the Company, an audit of the financial statements of a subsidiary of the Company, reviews of the financial statements included in the Company’s quarterly reports on Form 10-Q, and services provided in 2019 in connection with equity and debt financings. {b} Tax fees were incurred for the preparation of the Company’s tax returns. |
The Audit Committee has established an approval policy for all recurring audit services and all other permitted services to be performed by Baker Tilly. Recurring audit services include annual audits of the Company’s financial statements and internal control over financial reporting, tax return preparation, and reviews of the Company’s Quarterly Reports on Form 10-Q. Recurring audit services require the pre-approval of the Audit Committee. All other permitted services with fees less than $50,000, individually and in the aggregate, are subject to the pre-approval of the Audit Committee Chair, with subsequent ratification by the Audit Committee. Middlesex Water Company 26 2016 Proxy Statement
PROPOSAL 3
RATIFICATION OF APPOINTMENT BY THE AUDIT COMMITTEE OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The shares represented by the proxies will be voted for ratification of the appointment by the Audit Committee of Baker Tilly Virchow Krause, LLP (Baker Tilly) as our independent registered public accounting firm, to issue a report to the Board and shareholders on our financial statements for the fiscal year ending December 31, 2016.
Although submission of the appointment of an independent registered public accounting firm to shareholders for ratification is not required by law or regulation, the Board is submitting the selection of an independent registered public accounting firm for shareholder ratification. Under the Sarbanes-Oxley Act of 2002 and the rules of the SEC promulgated thereunder, the Audit Committee is solely responsible for the appointment, compensation and oversight of the work of our independent registered public accounting firm. Representatives of Baker Tilly are expected to be present at the Annual Meeting and will be afforded an opportunity to make a statement, if they so desire, and to respond to appropriate questions.
The affirmative vote of a majority of the votes cast by shareholders in person or represented by proxy, at the Annual Meeting is required for the approval of this Proposal. The Board has not determined what action it would take if the shareholders do not approve the selection of Baker Tilly, but may reconsider the selection if the shareholders’ action so warrants. Even if the selection is ratified, the Audit Committee, exercising its own discretion, may select different auditors at any time during the year if it determines that such a change would be in the Company’s best interests and in the best interests of shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL 3, THE RATIFICATION OF THE APPOINTMENT OF BAKER TILLY VIRCHOW KRAUSE, LLPUS, LLP. |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES
Baker Tilly was previously approved and appointed by the Audit Committee as the Company’s independent registered public accounting firm for the years ended December 31, 2015 and 2014. Aggregate fees billed to the Company for the years ended December 31, 2015 and 2014 by Baker Tilly are as follows:
| 2015 | 2014 | Audit Fees {a} | $385,754 | $382,571 | Audit-Related Fees | – | – | Total Audit and Audit-Related Fees | 385,754 | 382,571 | Tax Fees {b} | 25,618 | 23,500 | All Other Fees | – | – | Total Fees | $411,372 | $406,071 |
{a} | Audit fees were incurred for audits of the financial statements and internal control over financial reporting of the Company, an audit of the financial statements of a subsidiary of the Company, reviews of the financial statements included in the Company’s quarterly reports on Form 10-Q and services provided in connection with the Company’s July 2015 Registration Statement on Form S-3. | | |
{b} | Tax fees were incurred for the preparation of the Company’s tax returns. |
The Audit Committee has established pre-approval policies and procedures for all audit and non-audit services to be performed by Baker Tilly. The Audit Committee approves 100% of the services related to Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees in excess of $5,000.
Middlesex Water Company 27 2016 Proxy Statement
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 28, 2016,
Middlesex Water Company 34 2021 Proxy Statement SECURITY OWNERSHIP AND OTHER MATTERS SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS The following table sets forth as of March 29, 2021, the number of shares of Middlesex Water common stock beneficially owned by the elected Directors, Executive Officers named in the table appearing under Executive Compensation, and all elected Directors and Executive Officers as a group. All individual elected Directors and Executive Officers owned less than 0.77% of the shares outstanding on March 29, 2021. Name | Total Shares Beneficially Owned (1) | Directors | | Joshua Bershad, M.D. | 136,211 | James F. Cosgrove Jr. | 7,653 | Kim C. Hanemann | 2,890 | Steven M. Klein | 7,116 | Amy B. Mansue | 8,290 | Ann L. Noble | 1,221 | Walter G. Reinhard | 7,808 | Named Executive Officers | | Dennis W. Doll | 102,969 | A. Bruce O'Connor | 37,326 | Bernadette M. Sohler | 10,515 | Lorrie B. Ginegaw | 9,471 | Jay L. Kooper | 1,189 | All elected Directors and Executive Officers as a group. All Directors own stock in Middlesex Water Company. Jeffries Shein owned 2.04% of the shares outstanding as of March 28, 2016. All other individual elected Directors and Executive Officers owned less than 3.46% of the shares outstanding on March 28, 2016.Name | Total Shares Beneficially Owned (1) | Directors | | James F. Cosgrove, Jr. Cosgrove, Jr. | 4,779 | Kim C. Hanemann | 100 | Steven M. Klein | 4,326 | Amy B. Mansue | 5,500 | John R. Middleton, M.D. | 13,516 | Walter G. Reinhard | 9,118 | Jeffries Shein | 331,421 | | | Named Executive Officers | | Dennis W. Doll | 73,533 | A. Bruce O’Connor | 47,799 | Richard M. Risoldi | 32,472 | Gerard L. Esposito | 20,835 | Bernadette M. Sohler | 9,504 | All elected Directors and Executive Officers as a group including those named above. (14group including those named above. (15 people) | 559,958* |
(1) | Beneficial owner has the sole power to vote such shares. | | |
| * | Represents 3.45% of the shares outstanding on March 28, 2016. Percentage of each individual is based on 16,240,167 shares outstanding as of March 28, 2016. |
Section 16(A) Beneficial Ownership Reporting Compliance 355,977*
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(1) Beneficial owner has the sole power to vote such shares. * Represents 2.03% of the shares outstanding on March 29, 2021. Percentage of each individual is based on 17,478,098 shares outstanding as of March 29, 2021. Section 16(A) Beneficial Ownership Reporting Compliance Under Section 16 of the Securities Exchange Act of 1934, Officers and Directors, and certain beneficial owners of the Company’s equity securities are required to file reports of ownership and changes in ownership with the SEC on specified due dates. Based solely on a review of the copies of these reports furnished to us, we believe that all filing requirements applicable to such Officers and Directors (we are not aware of any five percent holder) were met during 2020. Other Security Holders The following table sets forth as of March 29, 2021, certain information with respect to the beneficial ownership of shares of Common Stock by each person or group we know to beneficially own more than five percent of the outstanding shares of such stock. Name and Address of Beneficial Owners | Number of Shares | Percent of Class | T. Rowe Price Associates, Inc. 100 East Pratt Street Baltimore, MD 21202 | 1,830,377 (1) | 10.4% | BlackRock Inc. 55 East 52nd Street New York, NY 10055 | 1,357,157 (2) | 7.8% | The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355 | 1,080,825 (3) | 6.19% |
| (1) | This information is based on a Schedule 13G Combined filed with the SEC on specified due dates. Based solelyFebruary 16, 2021. | | (2) | This information is based on a review ofSchedule 13G Combined filed with the copies of these reports furnished to us, we believe that all filing requirements applicable to such Officers and Directors (we are not aware of any five percent holder) were met during 2015.Other Security Holders
The following table sets forth as of March 28, 2016, certainSEC on January 29, 2021.
| | (3) | This information is based on a Schedule 13G Combined filed with respect to the beneficial ownership of shares of Common Stock by each person or group we know to beneficially own more than five percent of the outstanding shares of such stock.SEC on February 10, 2021. |
OTHER MATTERS Name and Address of Beneficial Owners | Number of Shares | Percent of Class | BlackRock Institutional Trust Company | | | 400 Howard Street | | | San Francisco, CA 94105 | 1,033,847 (1) | 6.37% |
The Board does not intend to bring any other matters before the Annual Meeting and has no reason to believe any will be presented for consideration at the Annual Meeting. If, however, other matters properly do come before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote in their discretion on such matters. | (1) | This information is based on a Schedule 13F Combined filed with the SEC on December 31, 2015 by BlackRock Fund Advisors. |
OTHER MATTERS
The Board does not intend to bring any other matters before the Annual Meeting and has no reason to believe any will be presented for consideration at the Annual Meeting. If, however, other matters properly do come before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote in their discretion on such matters.
Electronic Access to Proxy Materials and Annual Reports
Our Proxy Statement and Annual Report are available on the Investor Relations section of our website at www.MiddlesexWater.com and the following website www.proxyvote.com. Paper copies of these documents may be requested by contacting our Corporate Secretary in writing at the Office of the Corporate Secretary, Middlesex Water Company, 1500 Ronson Road, P.O. Box 1500, Iselin, New Jersey 08830-0452. The Company is subject to the informational requirements of the Securities Exchange Act of 1934 and files an Annual Report on Form 10-K with the Securities and Exchange Commission. Additional copies of the 2015 Annual Report on Form 10-K filed by the Company, including the financial statements and schedules, but without exhibits, can be mailed without charge to any shareholders. The exhibits are obtainable from the Company upon payment of the reasonable cost of copying such exhibits.
Minutes of 2015 Annual Meeting of Shareholders
The minutes of the 2015 Annual Meeting of Shareholders will be submitted at the Annual Meeting for the correction of any errors or omissions but not for the approval of the matters referred to therein.
Middlesex Water Company 28 2016 Proxy Statement
Electronic Access to Proxy Materials and Annual Reports Our Proxy Statement and Annual Report are available at www.proxyvote.com. Paper copies of these documents may be requested by contacting our Corporate Secretary in writing at the Office of the Corporate Secretary, Middlesex Water Company, 485C Route 1 South, Suite 400, Iselin, New Jersey 08830. The Company is subject to the informational requirements of the Securities Exchange Act of 1934 and files an Annual Report on Form 10-K with the Securities and Exchange Commission. Additional copies of the 2020 Annual Report on Form 10-K filed by the Company, including the financial statement and schedules, but without exhibits, can be mailed without charge to any shareholders. The exhibits are obtainable from the company upon payment of the reasonable cost of copying such exhibits. Minutes of 2020 Annual Meeting of Shareholders The minutes of the 2020 Annual Meeting of Shareholders will be submitted at the Annual Meeting for the correction of any errors or omissions but not for the approval of the matters referred to therein. Middlesex Water Company 35 2021 Proxy Statement
1500 Ronson Road
Iselin, New Jersey 08830-0452
732-634-1500
MiddlesexWater.com
FROM GARDEN STATE PARKWAY (NORTH OR SOUTH):
Take Exit 131 to fourth traffic light. Turn right onto Middlesex-Essex Turnpike and proceed (about 1/2 mile) to third traffic light (Gill Lane). Turn right and go (about 1 mile) under railroad underpass and make right onto Ronson Road. Proceed past three large mirror-sided office buildings on the right. At the sign, make a right into Middlesex Water Company.
FROM NEW JERSEY TURNPIKE (NORTH OR SOUTH):
Take Exit 11 onto the Garden State Parkway North and follow above directions.
FROM US ROUTE NO. 1 (NORTH OR SOUTH):
Proceed to the Woodbridge Center area and follow signs to Gill Lane. When on Gill Lane, make a left turn onto Ronson Road and follow above directions.
Your Vote Counts! MIDDLESEX WATER COMPANY 2021 Annual Meeting Vote by May 24, 2021 11:59 PM ET 485C ROUTE 1 SOUTH SUITE 400 ISELIN, NJ 08830 D44504-P53660 You invested in MIDDLESEX WATER COMPANY and it’s time to vote! You have the right to vote on proposals being presented at the Annual Meeting. This is an important notice regarding the availability of proxy material for the shareholder meeting to be held on May 25, 2021. Get informed before you vote View the Notice and Proxy Statement and Annual Report online OR you can receive a free paper or email copy of the material(s) by requesting prior to May 11, 2021. If you would like to request a copy of the material(s) for this and/or future shareholder meetings, you may (1) visit www.ProxyVote.com, (2) call 1-800-579-1639 or (3) send an email to sendmaterial@proxyvote.com. If sending an email, please include your control number (indicated below) in the subject line. Unless requested, you will not otherwise receive a paper or email copy. For complete information and to vote, visit www.ProxyVote.com Control # Smartphone users Point your camera here and vote without entering a control number Virtually at: Vote Virtually at the Meeting* May 25, 2021 11:00 AM EDT www.virtualshareholdermeeting.com/MSEX2021 *Please check the meeting materials for any special requirements for meeting attendance. V1 Vote at www.ProxyVote.com THIS IS NOT A VOTABLE BALLOT This is an overview of the proposals being presented at the upcoming shareholder meeting. Please follow the instructions on the reverse side to vote these important matters. Voting Items 1. Election of Directors Nominees: 01) Dennis W. Doll 02) Kim C. Hanemann 03) Ann L. Noble 04) Joshua Bershad, M.D. 2. To provide a non-binding advisory vote to approve named executive officer compensation. 3. To ratify the appointment of Baker Tilly US, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. NOTE: We may also transact such other business that may properly come before the meeting or any postponement or adjournment thereof. Board Recommends For For For Prefer to receive an email instead? While voting on www.ProxyVote.com, be sure to click “Sign up for E-delivery”. D44505-P53660 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com 485C ROUTE 1 SOUTH SUITE 400 ISELIN, NJ 08830 Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/MSEX2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D44488-P53660 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY MIDDLESEX WATER COMPANY For Withhold For All To withhold authority to vote for any individual The Board of Directors recommends you vote FOR the following: All All Except nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. 1. Election of Directors ! ! ! Nominees: 01) Dennis W. Doll 02) Kim C. Hanemann 03) Ann L. Noble 04) Joshua Bershad, M.D. The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain 2. To provide a non-binding advisory vote to approve named executive officer compensation. ! ! ! 3. To ratify the appointment of Baker Tilly US, LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2021. ! ! ! NOTE: We may also transact such other business that may properly come before the meeting or any postponement or adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. D44489-P53660 MIDDLESEX WATER COMPANY Annual Meeting of Shareholders May 25, 2021 This proxy is solicited by the Board of Directors The shareholder(s) hereby appoint(s) James F. Cosgrove, Jr. and Walter G. Reinhard, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Middlesex Water Company that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders, to be held virtually at www.virtualshareholdermeeting.com/MSEX2021 at 11:00 a.m., on May 25, 2021, and any adjournment or postponement thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS, FOR THE APPROVAL, BY NON-BINDING VOTE, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AND FOR RATIFICATION OF THE APPOINTMENT BY THE AUDIT COMMITTEE OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. Continued and to be signed on reverse side |
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