UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x☒
Filed by a party other than the Registrant ¨☐
Check | the appropriate box: |
Preliminary Proxy Statement |
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
Definitive Proxy Statement |
Definitive Additional Materials |
Soliciting Material Under §240.14a-12 |
CONSOLIDATED EDISON, INC.
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required. |
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
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(5) | Total fee paid: |
Fee paid previously with preliminary materials. |
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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(2) | Form, Schedule or Registration Statement No.: |
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(4) | Date Filed: |
![]() | Consolidated Edison, Inc. 4 Irving Place New York, NY 10003 |
Kevin BurkeJohn McAvoy
Chairman of the Board
John McAvoy
President and Chief Executive Officer
April 8, 2014
3, 2017
Dear Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of Consolidated Edison, Inc. We hope that you will join the Board of Directors and the Company’s management at the Company’s Headquarters at 4 Irving Place, New York, New York, on Monday, May 19, 2014,15, 2017, at 10:00 a.m.
The accompanying Proxy Statement, provided to stockholders on or about April 3, 2017, contains information about matters to be considered at the Annual Meeting. At the Annual Meeting, stockholders will be asked to vote on the election of Directors, the ratification of the appointment of independent accountants for 2014, the approval of the Company’s Stock Purchase Plan, and2017, the approval, on an advisory basis, of named executive officer compensation, and the frequency, on an advisory basis, of future advisory votes to approve named executive officer compensation.
Whether or not you plan to attend the Annual Meeting, please vote as soon as possible. It is very important that as many shares as possible be represented at the meeting.
Sincerely,
Sincerely,
![]() |
John McAvoy |
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Consolidated Edison, Inc.
4 Irving Place, New York, NY 10003
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: | Monday, May 15, 2017, at 10:00 a.m. | |
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4 Irving Place New York, |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Dear Stockholders:
The Annual Meeting of Stockholders of Consolidated Edison, Inc. will be held at the Company’s Headquarters, 4 Irving Place, New York, New York, on Monday, May 19, 2014, at 10:00 a.m. for the following purposes:
Items of Business: | a. To elect as the members of the Board of Directors the |
b. | To ratify the appointment of PricewaterhouseCoopers LLP as independent accountants for |
c. |
To approve, on an advisory basis, named executive officer compensation; |
d. To conduct an advisory vote on the frequency of future advisory votes on named executive officer compensation; and e. | To transact such other business as may properly come before the meeting, or any adjournment or postponement of the meeting. |
By Order of the Board of Directors,
Jeanmarie Schieler
Vice President and Corporate Secretary
Dated: April 3, 2017
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDERS’ MEETING TO BE HELD ON MONDAY, MAY 15, 2017. THE COMPANY’S PROXY STATEMENT AND ANNUAL REPORT, PROVIDED TO STOCKHOLDERS ON OR ABOUT APRIL 3, 2017, ARE AVAILABLE AT
CONEDISON.COM/SHAREHOLDERS
IMPORTANT!
Whether or not you plan to attend the meeting in person, we urge you to vote your shares of Company Common Stock by telephone, by Internet, or by completing and returning a proxy card or a voter instruction form, so that your shares will be represented at the Annual Meeting.
By Order of the Board of Directors,
Carole Sobin
Vice President and Corporate Secretary
Dated: April 8, 2014
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDERS MEETING TO BE HELD ON MONDAY, MAY 19, 2014
The Company’s Proxy Statement and Annual Report are available at
www.conedison.com/investorreports.annual meeting.
![]() | TABLE OF CONTENTS |
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SUMMARY | ||||
1 | ||||
1 | ||||
1 | ||||
3 | ||||
3 | ||||
3 | ||||
3 | ||||
4 | ||||
PROXY STATEMENT | ||||
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING | ||||
| 13 | |||
14 | ||||
THE BOARD OF DIRECTORS | 15 | |||
15 | ||||
16 | ||||
16 | ||||
16 | ||||
17 | ||||
20 | ||||
20 | ||||
20 | ||||
21 | ||||
21 | ||||
22 | ||||
STOCK OWNERSHIP AND SECTION 16 COMPLIANCE | 23 | |||
23 | ||||
24 | ||||
24 | ||||
AUDIT COMMITTEE MATTERS | 25 | |||
25 | ||||
25 | ||||
COMPENSATION COMMITTEE REPORT | 26 | |||
COMPENSATION DISCUSSION AND ANALYSIS | 27 | |||
27 | ||||
27 | ||||
27 | ||||
29 |
![]() | PROXY STATEMENT SUMMARY |
PROXY STATEMENT
PROXY MATERIALS
What areThis section highlights the proxy materials?
The proxy materials (“proposals to be acted upon as well as information about Consolidated Edison, Inc. (the “Company”) that can be found in this Proxy Materials”) includeStatement and does not contain all of the following:
Theinformation that you need to consider. Before voting, please carefully review the complete Proxy Statement.
TheStatement and the Annual Report to Stockholders of Consolidated Edison, Inc. (the “Company”),the Company provided to stockholders on or about April 3, 2017, which includes the consolidated financial statements and accompanying notes for the year ended December 31, 2013,2016, and other information relating to the Company’s financial condition and results of operations.
If you received the Proxy Materials by mail, they also include a proxy card or a voter instruction form for use at the 2014 Annual Meeting of Stockholders (the “Annual Meeting”).
Why am I receiving the Proxy Materials?
The Proxy Materials are provided to stockholders of the Company on or about April 8, 2014, in connection with the solicitation of proxies by the Board of Directors of the Company for use at the Annual Meeting and any adjournments or postponements of the Annual Meeting. As a stockholder, you are invited to attend the Annual Meeting and to vote on the items of business described in this Proxy Statement. The Proxy Materials include information that we are required to provide to you under the rules of the Securities and Exchange Commission. We are providing the Proxy Materials to our stockholders by mail, e-mail, or in accordance with the Securities and Exchange Commission’s “Notice and Access” rule.
Why did I receive the Proxy Materials in the mail?
We are providing some of our stockholders, including stockholders who have previously requested to receive paper copies of the Proxy Materials, with paper copies of the Proxy Materials. You may also access the Proxy Materials and vote online at the Internet address provided on the proxy card or the voter instruction form. If you do not want to receive paper copies of proxy materials on an ongoing basis, please follow the instructions for Internet voting on your proxy card or voter instruction form.
Why did I receive e-mail delivery of the Proxy Materials?
We are providing e-mail delivery of the Proxy Materials to those stockholders who have previously elected electronic delivery. Those stockholders should have received an e-mail containing a link to the website where those materials are available and a link to the proxy voting website.
Why did I receive a Notice of Internet Availability of Proxy Materials?
To reduce the environmental impact of our Annual Meeting, we are providing the Proxy Materials over the Internet. As a result, we are sending many of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) instead of a paper copy of the Proxy Materials. All stockholders receiving the Notice of Internet Availability may access the Proxy Materials over the Internet and request a paper copy of the Proxy Materials by mail. Instructions on how to access the Proxy Materials over the Internet, to vote online, and to request a paper copy may be found in the Notice of Internet Availability. In addition, the Notice of Internet Availability contains instructions on how you may request delivery of proxy materials in printed form by mail or electronically on an ongoing basis.
Can I request a paper copy of the Proxy Statement and Annual Report?
The Company’s Proxy Statement and Annual Report are available on our website atwww.conedison.com/investorreports.A copy of these materials is also available without charge upon written request to the Company’s Vice President and Corporate Secretary at the Company’s principal executive offices at 4 Irving Place, New York, New York 10003.
I share an address with another stockholder, and we received only one copy of the Proxy Materials. How may I obtain an additional copy?
If you are a registered holder of Company Common Stock, Computershare may deliver only one copy of the Proxy Materials or Notice of Internet Availability to multiple stockholders who share an address unless Computershare has received contrary instructions.
If you hold your Company Common Stock through a broker, bank, or other financial institution (“broker”), your broker may deliver only one copy of the Proxy Materials or Notice of Internet Availability to multiple stockholders who share an address unless contrary instructions are received.
The Company will deliver promptly, upon written or oral request, a separate copy of the Proxy Materials or Notice of Internet Availability to a stockholder at a shared address to which a single copy of the documents was delivered.
Stockholders who wish to receive additional copies of the Proxy Materials or Notice of Internet Availability, now or in the future, and stockholders who share an address and wish to receive a single copy of the Proxy Materials or Notice of Internet Availability on an ongoing basis, should submit the request to the Company by telephone (212-460-4322) or by mail to the Company’s Vice President and Corporate Secretary at the Company’s principal offices at 4 Irving Place, New York, New York 10003.
Who pays the cost of soliciting proxies for the Annual Meeting?
The Company will pay the expenses associated with the solicitation of proxies. The solicitation of proxies is being made by mail, telephone, the Internet, facsimile, electronic transmission, or overnight delivery. The expense associated with the solicitation of proxies will include reimbursement for postage and clerical expenses to brokerage houses and other custodians, nominees or fiduciaries for forwarding Proxy Materials and other documents to beneficial owners of stock held in their names. Morrow & Co., LLC, 470 West Avenue, Stamford, CT 06902, has been retained to assist in the solicitation of proxies. The estimated cost of Morrow’s services is $22,000 plus out-of-pocket expenses.
VOTING AND RELATED MATTERS2017 ANNUAL MEETING OF STOCKHOLDERS (“ANNUAL MEETING”)
What is the record date?
The Board of Directors has established March 25, 2014 as the record date for the determination of the Company’s stockholders entitled to receive notice of and to vote at the Annual Meeting.
How many votes do I have?
You are entitled to one vote on each proposal presented at the Annual Meeting for each outstanding share of Company Common Stock you owned on the record date.
How many votes can be cast by all stockholders entitled to vote at the Annual Meeting?
One vote on each proposal presented at the Annual Meeting for each of the 292,901,302 shares of Company Common Stock that were outstanding on the record date.
How many votes must be present to hold the Annual Meeting?
To constitute a quorum to transact business at the Annual Meeting, the holders of a majority of the shares entitled to vote at the Annual Meeting, or 146,450,652, must be present in person or by proxy. We urge you to vote by proxy even if you plan to attend the Annual Meeting, so that we will know as soon as possible that enough votes will be present to hold the meeting. Abstentions and broker non-votes are counted in the determination of the quorum.
How does the Board of Directors recommend that I vote?
| Monday, May 15, 2017, at 10:00 a.m. | |
• Location: | Company Headquarters, 4 Irving Place, New York, NY 10003.
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• Record Date & Voting: | Stockholders of record at the close of business on March 21, 2017 are entitled to vote. On the record date, 305,274,517 shares of Company Common Stock were outstanding. Each outstanding share of Common Stock is entitled to one vote. | |
• Admission: | Please follow the instructions contained in “Who Can Attend the Annual Meeting?” and “Do I Need a Ticket to Attend the Annual Meeting?” on page 62. |
Management Proposals | Board’s Voting Recommendation | Vote Required For Approval* | Page References (for more detail) | |||||
Proposal No. 1. | Election of | FOR EACH NOMINEE | MAJORITY OF VOTES CAST | 5 to 11 | ||||
Proposal No. 2. | Ratification of the | FOR | MAJORITY OF VOTES CAST | 12 | ||||
Proposal No. 3. | Advisory Vote to Approve | FOR | MAJORITY OF VOTES CAST | 13 | ||||
Proposal No. 4. | Advisory | FOR (1 YEAR) | 14 |
* | The presence, in person or by proxy, of holders of a majority of the outstanding shares of Company Common Stock is required to constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and brokernon-votes (shares held by a broker or nominee that does not have discretionary authority to vote on a particular matter and has not received voting instructions from its clients) are counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting but are not considered votes cast and have no effect on the vote. |
CONSOLIDATED EDISON, INC. –Proxy Statement | 1 |
What vote is required to approve each item of business?
![]() | PROXY STATEMENT SUMMARY |
The 12 nominees for Director named in this Proxy Statement receiving a majority of the votes cast at the meeting in person or by proxy shall be elected (meaning the number of shares voted “for” a Director nominee must exceed the number of shares voted “against” that Director nominee), subject to the Board’s policy regarding resignations by Directors who do not receive a majority of “for” votes.
The affirmative vote of a majority of the votes cast at the meeting in person or by proxy shall be required to approve the Company’s Stock Purchase Plan. Under New York law, abstentions and broker non-votes, are voted neither “for” nor “against,” and have no effect on the vote. Under New York Stock Exchange rules, approval of this proposal requires the affirmative vote of a majority of votes cast, which includes abstentions, at the meeting in person or by proxy. Thus, under New York Stock Exchange rules, abstentions have the same effect as a vote “against” the Company’s Stock Purchase Plan.
In all other matters, the affirmative vote of a majority of the votes cast at the meeting, in person or by proxy, will be the act of the stockholders.
Except as discussed above, abstentions and broker non-votes are voted neither “for” nor “against,” and have no effect on the vote, but are counted in the determination of the quorum.
How do I vote?
You can vote whether or not you attend the Annual Meeting. Stockholders have a choice of voting over the Internet, by telephone, by mail using a proxy card or voter instruction form, or in person at the Annual Meeting.
If you received a printed copy of the Proxy Materials, please follow the instructions on your proxy card or voter instruction form. Your proxy card or voter instruction form provides information on how to vote over the Internet, by telephone, or by mail.
If you received a Notice of Internet Availability, please follow the instructions on the notice. The Notice of Internet Availability provides information on how to vote over the Internet, by telephone, or by mail.
If you received an e-mail notification, please click on the link provided in the e-mail notification and follow the instructions on how to vote over the Internet or by telephone.
If you are a registered holder of the Company’s Common Stock, you may also vote in person at the Annual Meeting.
To help us reduce the environmental impact of our meeting, we ask that you vote through the Internet or by telephone, both of which are available 24 hours a day. To ensure that your vote is counted, please remember to submit your vote by the date and time indicated on your Notice of Internet Availability, proxy card or voter instruction form, as applicable.
If my shares are held by my broker, can my shares be voted if I don’t instruct my broker?
The Securities and Exchange Commission has approved a New York Stock Exchange rule that affects the manner in which your broker may vote your shares. Your broker may not vote on your behalf for the election of directors or compensation-related matters unless you provide specific voting instructions to your broker. For your vote to be counted, you need to communicate your voting decisions to your broker, in the manner prescribed by your broker, before the date of the Annual Meeting.
If you have any questions about this rule or the proxy voting process in general, please contact the broker where you hold your shares. The Securities and Exchange Commission also has a website (www.sec.gov/spotlight/proxymatters.shtml) with more information about your rights as a stockholder.
If I am a registered holder of Company Common Stock, what if I don’t vote for one or more of the matters listed on my proxy card?
All shares represented by properly executed proxies received in time for the Annual Meeting will be voted at the Annual Meeting in the manner specified by the persons giving those proxies. If you return a signed proxy without indicating voting instructions your shares will be voted as follows:
• | Proposal No. 1: Election of Directors.The Board of Directors has nominated ten directors for election at the Annual Meeting and recommends the election of each of the |
Committee Memberships | ||||||||||||||||||
Name | Primary Occupation | Independent | Audit | Corporate Nominating | Environment, Health and Safety | Executive | Finance | Management and | Operations Oversight | |||||||||
Vincent A. Calarco Director since 2001 | Non-Executive Chairman of Yale New Haven Health System | ✓ | ✓(C) | ✓ | ✓ | ✓ | ||||||||||||
George Campbell, Jr. Director since 2000 | FormerNon-Executive Chairman, Webb Institute | ✓ | ✓ | ✓ | ✓(C) | ✓ | ||||||||||||
Michael J. Del Giudice Director since 1999 | Founder and Senior Managing Director, Millennium Capital Markets LLC | ✓ | ✓ | ✓(C)(L) | ✓ | ✓ | ||||||||||||
Ellen V. Futter Director since 1997 | President, American Museum of Natural History | ✓(C) | ✓ | |||||||||||||||
John F. Killian Director since 2007 | Former Executive Vice President and Chief Financial Officer, Verizon Communications Inc. | ✓ | ✓ | ✓ | ✓ | |||||||||||||
John McAvoy Director since 2013 | Chairman, President and Chief Executive Officer, Consolidated Edison, Inc. | ✓(C) | ||||||||||||||||
Armando J. Olivera Director since 2014 | Former President and Chief Executive Officer, Florida Power & Light Company | ✓ | ✓ | ✓ | ✓ | |||||||||||||
Michael W. Ranger Director since 2008 | Senior Managing Director, Diamond Castle Holdings LLC | ✓ | ✓ | ✓ | ✓(C) | |||||||||||||
Linda S. Sanford Director since 2015 | Former Senior Vice President, Enterprise Transformation, International Business Machines Corporation (IBM) | ✓ | ✓ | ✓ | ✓ | |||||||||||||
L. Frederick Sutherland Director since 2006 | Former Executive Vice President and Chief Financial Officer and Former Senior Advisor to the Chief Executive Officer, Aramark Corporation | ✓ | ✓ | ✓(C) | ✓ |
✓ = Member (C) = Chair (L) = Lead Director
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• | Proposal No. 4: Advisory Vote on the Frequency of Future Advisory Votes on Named Executive Officer Compensation.The Board recommends a vote, on an advisory basis, to conduct future advisory votes on Named Executive Officer compensation every year. (See “Advisory Vote on the Frequency of Future Advisory Votes on Named Executive Officer Compensation” on page 14.) |
2 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | PROXY STATEMENT SUMMARY |
The Company believes that good corporate governance includes proactive stockholder engagement as well as accepting invitations to discuss matters of interest to stockholders. The Company shared with the Board the feedback it received from institutional investors and stockholders following the 2016 proxy season on issues relating to disclosure practices, corporate governance, and environmental, health and safety matters. The Company’s engagement with institutional investors resulted in the Board’s adoption of proxy access, which enables the stockholders of the Company to include their own director nominees in the Company’s Proxy Statement and form of proxy along with candidates nominated by the Board, so long as they meet certain requirements, as set forth in the Company’sBy-laws. (See “The Board of Directors – Proxy Access” on page 15 and “Compensation Discussion and Analysis – Executive Summary – Stockholder Engagement and Say on Pay” on page 29 for additional information.)
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Composition. The members of the Board of Directors have the combination of skills, professional experience, and diversity of backgrounds necessary to oversee the Company’s business. Risk Oversight. The Board and its committees oversee the Company’s policies and procedures for managing risks that are identified through the Company’s enterprise risk management program. Membership on Public Company Boards. None of the members of the Board of Directors serve on more than three other public company boards.Can I revoke my proxy or change my vote?• Yes, depending on how your shares of Company Common Stock are held, you may revoke your proxy or change your vote by sending in a new, properly executed proxy card or voter instruction form with a later date, or by casting a new vote by Internet or telephone, or by sending a properly executed written notice of revocation to the Company’s Vice President and Corporate Secretary at the Company’s principal executive offices at 4 Irving Place, New York, New York 10003. Check the instructions on your Notice of Internet Availability, proxy card or voter instruction form for information regarding your specific revocation options. If you are a registered holder of Company Common Stock, you may also change your vote by appearing at the Annual Meeting and voting in person. Attendance at the Annual Meeting without voting will not by itself revoke a proxy.• • ANNUAL MEETING INFORMATIONWhat is the location, date, and time of the Annual Meeting?The Annual Meeting will be held at the Company’s principal executive offices at 4 Irving Place, New York, New York 10003, on Monday, May 19, 2014, at 10:00 a.m.Where can I find directions to the Annual Meeting?Directions to the Annual Meeting are available on our website atwww.conedison.com/investorreports.
Who can attend the Annual Meeting?
Attendance at the Annual Meeting will be limited to holders of Company Common Stock on March 25, 2014, the record date, the authorized representative (one only) of an absent stockholder, and invited guests of management.
Do I need a ticket to attend the Annual Meeting?
Yes, you will need an admission ticket and proof of ownership of Company Common Stock on the record date to enter the meeting.
If you received a printed copy of the Proxy Materials and you are a registered holder of Company Common Stock, your proxy card serves as your admission ticket to the Annual Meeting.
If you received a printed copy of the Proxy Materials and you hold your shares through a broker or through an employee plan, please bring to the Annual Meeting a copy of a brokerage or other statement reflecting your stock ownership as of the record date.
If you received a Notice of Internet Availability, that Notice of Internet Availability serves as your admission ticket to the Annual Meeting.
If you received an e-mail notification, please access the Proxy Materials by clicking on the link provided in the e-mail notification and follow the instructions for downloading a copy of your admission ticket.
If you hold your shares through a broker, you can expedite your admission to the Annual Meeting by registering in advance and printing your admission ticket by visitingwww.proxyvote.com and following the instructions provided (you will need the 12 digit number included on your proxy card, voter instruction form or Notice of Internet Availability).
You may be asked to present valid picture identification to gain entrance to the Annual Meeting. Any person claiming to be an authorized representative of a stockholder must, upon request, produce written evidence of the authorization.
Are there any special attendance procedures?
In order to assure the holding of a fair and orderly meeting and to accommodate as many stockholders as possible who may wish to speak at the Annual Meeting, management will limit the general discussion portion of the meeting and permit only stockholders or their authorized representatives to address the meeting. No signs, banners, placards, handouts, cameras, recording equipment, and similar items may be brought to the meeting room. Many cellular phones have built-in digital cameras, and, while these phones may be brought into the Annual Meeting, the camera function may not be used at any time. Recording of the Annual Meeting is prohibited. Suitcases, briefcases, packages, and other items may be subject to inspection.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
(Proposal No. 1)
Twelve Directors are to be elected at the Annual Meeting to hold office until the next Annual Meeting and until their respective successors are elected and qualified. (SeeSee “The Board of Directors” on pages 15 to 21.20 for additional information.)
KEY FEATURES OF THE EXECUTIVE COMPENSATION PROGRAM
Type | Component | Objective | ||
Performance-Based Compensation | Annual Incentive Compensation | Achievement of financial and operating objectives for which the Named Executive Officers have individual and collective responsibility. | ||
Long-Term Incentive Compensation | Achievement, over a multi-year period, of financial and operating objectives critical to the performance of the Company’s business plans and strategies. Achievement, over a three-year period, of the Company’s cumulative total shareholder return relative to the Company’s compensation peer group companies. | |||
Fixed & Other Compensation | Base Salary, Retirement Programs, Benefits and Perquisites | Differentiate base salary based on individual responsibility and performance. Provide retirement and other benefits that reflect the competitive practices of the industry and provide limited and specific perquisites. |
(See “Compensation Discussion and Analysis – Executive Summary” on pages 27 to 28 for additional information.)
CHANGES TO EXECUTIVE COMPENSATION PROGRAM FOR 2017
For 2017, the Management Development and Compensation Committee approved the following changes to the annual incentive plan: • Overall weighting of Other Financial Performance increased from 20% to 25% and the maximum payout for the capital budget component reduced from 200% to 120%. • Overall weighting of the Operating Objectives reduced from 30% to 25% and the maximum payout increased from 175% to 200%. •�� Operating Objectives modified to enhance alignment with the Company’s corporate imperatives – Employee and Public Safety, Environment and Sustainability, Operational Excellence and Customer Experience. |
(See “Compensation Discussion and Analysis – Executive Compensation Actions – Annual Incentive Compensation” on pages 34 to 38 for additional information.)
CONSOLIDATED EDISON, INC. –Proxy Statement | 3 |
![]() | PROXY STATEMENT SUMMARY |
KEY COMPENSATION GOVERNANCE PRACTICES
• | Pay Practices. The Company has no employment agreements, no golden parachute excise taxgross-ups, and no individually negotiated equity awards with special treatment upon a change of control. |
• | Long-Term Incentive Compensation. The long term incentive plan: (i) prohibits the repricing of stock options or the buyout of underwater options without stockholder approval; (ii) prohibits recycling of shares for future awards except under limited circumstances; (iii) prohibits accelerated vesting of outstanding equity awards except if both a change in control occurs and a participant’s employment is terminated under certain circumstances; and (iv) caps the maximum number of shares that may be awarded to a director, officer, or eligible employee in a calendar year. |
• | Long-Term Incentive Mix. The following charts illustrate that all Named Executive Officer long-term equity-based incentive compensation is performance-based. As described in proxy statements filed in 2016, over half of the Company’s compensation peer group companies granted some form ofnon-performance-based incentive compensation to their named executive officers: |
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• | Risk Management. The Company’s compensation programs include various features that have been designed to mitigate risk. |
• | Stock Ownership Guidelines. The Company has stock ownership guidelines for directors and certain officers, including the Named Executive Officers. |
• | No Hedging Nor Pledging. The Company prohibits all Directors, officers, financial personnel, and certain other individuals from shorting, hedging, and pledging Company securities or holding Company securities in a margin account. |
• | Recoupment Policy. The Company’s compensation recoupment policy (commonly referred to as a “clawback policy”) applies to all officers of the Company and its subsidiaries with respect to incentive-based compensation. |
• | Annual Advisory Vote to Approve Named Executive Officer Compensation. In 2016, 92.15% of the shares voted were voted to approve the Company’s Named Executive Officer compensation. |
4 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING |
PROPOSAL NO. 1 ELECTION OF DIRECTORS
Ten Directors are to be elected at the Annual Meeting to hold office until the next annual meeting and until their respective successors are elected and qualified. (See “Information About the Director Nominees” on pages 6 to 11.) Directors are permitted to stand for election until they reach the mandatory retirement age of 72.75. Of the Board members standing for election, one (John McAvoy)John McAvoy is a currentthe only member who is an officer of the Company. All of the nominees were elected Directors at the last Annual Meeting, other than Mr. McAvoy and Armando J. Olivera. Mr. McAvoy was appointed to the Board of Directors, effective December 26, 2013, at the time his appointment as President and Chief Executive Officer of the Company became effective. Mr. Olivera was elected to the Board of Directors effective February 20, 2014. A professional search firm assisted the Corporate Governance and Nominating Committee in connection with its recommendation of Mr. Olivera.Meeting.
The Company’s management believes that all of the nominees will be able and willing to serve as Directors of the Company. All of the Directors also serve as Trustees of the Company’s
subsidiary, Consolidated Edison Company of New York, Inc. (“Con Edison of New York”). Mr. McAvoy also serves onas Chairman of the Board of the Company’s subsidiary, Orange and Rockland Utilities, Inc. (“Orange & Rockland”).
Gordon J. Davis and Eugene R. McGrath, who served with distinction as Directors of the Company, have reached the mandatory retirement age and therefore will be retiring from the Board effective May 19, 2014, and will not be standing for re-election. The Board has reduced the number of Directors to 12 effective immediately prior to the Annual Meeting.
Shares represented by every properly executed proxy will be voted at the Annual Meeting for or against the election of the Director nominees as specified by the stockholder giving the proxy. If one or more of the nominees is unable or unwilling to serve, the shares represented by the proxies will be voted for any substitute nominee or nominees as may be designated by the Board.
The Board Recommends a Vote FOR Proposal No. 1.
Election of eachEach of the 12ten Director nominees requires the Director tomust receive a majority of the votes cast at the Annual Meeting, in person or by proxy, to be elected (meaning the number of shares voted “for” a Director nominee must exceed the number of shares voted “against” that Director nominee), subject to the Board’s policy regarding resignations by Directors who do not receive a majority of “for” votes. Abstentions and brokernon-votes are voted neither “for” nor “against,” and have no effect on the vote.
CONSOLIDATED EDISON, INC. –Proxy Statement | 5 |
![]() | MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING |
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(Proposal No. 2)Information About the Director Nominees
At the Annual Meeting, as a matter of sound corporate governance, stockholders will be asked to ratify the selection of PricewaterhouseCoopers LLP (“PwC”) as independent accountants for the Company for the year 2014. If the selection of PwC is not ratified, the Audit Committee will take this into consideration in the future selection of independent accountants.
PwC has acted as independent accountants for the Company for many years. The Audit Committee’s charter provides that at least once every five years, the Audit Committee will evaluate whether it is appropriate to rotate the Company’s independent accountants.
The Audit Committee considered the firm’s qualifications. This included a review of PwC’s performance in prior years, as well as PwC’s reputation for integrity and for competence in the fields of accounting and auditing. The Audit Committee also reviewed a report provided by PwC regarding its quality controls, inquiries or investigations by governmental or professional authorities and independence. (See “REPORT OF THE AUDIT COMMITTEE” and “Fees Paid to PricewaterhouseCoopers LLP” on pages 31 to 32.)
Representatives of PwC will be present at the Annual Meeting and will be afforded the opportunity to make a statement if they desire to do so and to respond to appropriate questions.
The Board Recommends a Vote FOR Proposal No. 2.
Ratification of Proposal No. 2 requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting, in person or by proxy. Abstentions and broker non-votes are voted neither “for” nor “against,” and have no effect on the vote.
APPROVAL OF THE COMPANY’S STOCK PURCHASE PLAN
(Proposal No. 3)
Introduction
The Company’s stockholders are being requested to approve The Consolidated Edison, Inc. Stock Purchase Plan as amended and restated to extend the plan term for an additional ten years and to authorize up to ten million (10,000,000) shares of Company Common Stock for issuance (as amended and restated, the “Stock Purchase Plan”). The Stock Purchase Plan does not reflect any other material amendment as compared to the stock purchase plan approved by the Company’s shareholders in May 2004 (the “Expiring Stock Purchase Plan”). New York Stock Exchange rules require stockholder approval for equity compensation plans such as the Stock Purchase Plan.
The Stock Purchase Plan was considered by the Management Development and Compensation Committee (the “Committee”) of the Board of Directors in consultation with Mercer (US) Inc. (“Mercer”), the Committee’s independent compensation consultant. The Committee recommended that the Board of Directors approve the Stock Purchase Plan and the Board of Directors unanimously approved the Stock Purchase Plan, subject to the approval of the Company’s stockholders at the Annual Meeting.
If approved by the Company’s stockholders at the Annual Meeting, the Stock Purchase Plan will become effective on May 19, 2014.
Timing of Proposal
The Expiring Stock Purchase Plan was approved by the Company’s stockholders at the Annual Meeting on May 17, 2004 and is scheduled to expire on May 17, 2014. If approved by the Company’s stockholders at the Annual Meeting, the Stock Purchase Plan will be scheduled to expire on May 19, 2024.
Description of the Stock Purchase Plan
The following is a summary of the material terms of the Stock Purchase Plan. Capitalized terms used in this summary have the meaning set forth in the Stock Purchase Plan. The complete text of the Stock Purchase Plan is set forth in Appendix A to this Proxy Statement, and stockholders are urged to review it together with the following information, which is qualified in its entirety by reference to Appendix A.
Purpose of the Stock Purchase Plan
The Stock Purchase Plan is a broad-based employee stock purchase plan providing eligible union and management employees and members of the Board of Directors of the Company and its participating affiliates with the opportunity to purchase shares of Company Common Stock. The Stock Purchase Plan provides participants who purchase shares of Company Common Stock under the Stock Purchase Plan with a ten percent discount from the prevailing market price of a share of Company Common Stock through matching contributions from the Company or its participating affiliates (referred to herein as a “Company matching contribution”) equal to 11 percent of a participant’s contribution. (See “Approval of the Company’s Stock Purchase Plan—Company Matching Contributions” on page 10.) Approval of the Stock Purchase Plan will continue to allow purchases of shares of Company Common Stock to be made in a convenient manner, through payroll deductions or cash payments, and without any fees, commissions or charges payable by participants, other than the purchase price.
Term of the Stock Purchase Plan
The maximum term of the Stock Purchase Plan is ten years following approval by the Company’s stockholders, unless an extension of the term is subsequently approved by stockholders. If the Stock Purchase Plan is approved by stockholders at the Annual Meeting, the Stock Purchase Plan will continue until May 19, 2024.
Eligibility and Participation
Employees of the Company and its participating affiliates with more than three months of service are eligible to participate in the Stock Purchase Plan. In addition, members of the Boards of Directors of the Company and its participating affiliates are also eligible. As of December 31, 2013, the eligible participants included approximately 14,000 employees, 11 executive officers of the Company and participating affiliates and 12 non-employee members of the Boards of Directors of the Company and its participating affiliates. As of December 31, 2013, more than 57 percent of employees of the Company and its participating affiliates were participating in the Expiring Stock Purchase Plan.
Available Shares and Investment Limits
The maximum number of shares of Company Common Stock authorized for issuance pursuant to the Stock Purchase Plan is ten million (10,000,000), subject to adjustment by reason of stock split, spinoff, recapitalization, merger, consolidation, or similar corporate transaction that affects shares of Company Common Stock. Eligible participants, other than non-employee members of the Boards of Directors of the Company and its participating affiliates, may invest up to 20 percent of their pay under the Stock Purchase Plan through payroll deductions or cash payments, subject to a maximum amount, excluding dividend reinvestments, of $25,000 during any calendar year. Non-employee members of the Boards of Directors may invest under the Stock Purchase Plan through cash payments, subject to a maximum amount, excluding dividend reinvestments, of $25,000 during any calendar year. The maximum annual benefit under the Stock Purchase Plan available to a participant is $2,778 (excluding dividend reinvestments and brokerage commissions), based on the maximum annual Company matching contribution available to a participant who makes the maximum annual contribution of $25,000. (See “Approval of the Company’s Stock Purchase Plan—Company Matching Contributions” on page 10.) Dividends paid on shares of Company Common Stock held under the Stock Purchase Plan are reinvested in additional shares, unless otherwise directed by the participant.
Source of Shares
Shares of Company Common Stock purchased under the Stock Purchase Plan may be authorized, but unissued, shares or treasury shares purchased directly from the Company by the agent that the Company appoints to administer the Stock Purchase Plan (“New Shares”), or shares purchased by the agent on any securities exchange where shares are traded, in the over-the-counter market, or in negotiated transactions (“Shares Purchased on the Open Market”).
Dilution
Total potential dilution (as a percentage of the 292,872,396 shares of Company Common Stock outstanding as of December 31, 2013) associated with the ten million (10,000,000) shares of Company Common Stock authorized under the Stock Purchase Plan is 3.4 percent. Participants purchased 864,281 shares in 2013 for $49.5 million under the Expiring Stock Purchase Plan (665,718 shares for $39.8 million in 2012 and 721,520 shares for $37.9 million in 2011), including dividend reinvestments. Annual dilution for 2013 was 0.3 percent (0.2 percent in 2012 and 0.3 percent in 2011). Annual dilution equals shares purchased divided by the number of shares of Company Common Stock outstanding at the beginning of the year. The actual dilution associated with the shares of Company Common Stock to be issued under the Stock Purchase Plan prior to its scheduled termination on May 19, 2024 is not determinable at this time, and will depend on the amounts invested by participants and the purchase price of the shares at various future dates. In addition, the Company may from time to time determine whether shares purchased under the Stock Purchase Plan will be Shares Purchased on the Open Market (which would not be dilutive) or New Shares. Potential dilution amount is a forward-looking statement. Forward-looking statements are not facts. Actual results may differ materially because of factors such as those identified in reports the Company files with the Securities and Exchange Commission.
Purchase Price of Shares
The purchase price of shares of Company Common Stock under the Stock Purchase Plan is dependent upon the source of the shares. For New Shares, the price for a given month is the average of the high and low prices at which shares of Company Common Stock were traded on the New York Stock Exchange on the trading day immediately preceding the purchase dates occurring during a given month. For Shares Purchased on the Open Market, the purchase price of the shares of Company Common Stock for a given month is the average cost, exclusive of brokerage commissions and other expenses, of all shares purchased by the Stock Purchase Plan’s agent during the month. All brokerage commissions and other expenses incurred by the Stock Purchase Plan’s agent in the purchase of shares under the Stock Purchase Plan are paid by the Company or its participating affiliates and are not included in the cost of the shares to the participant.
Company Matching Contributions
To provide a ten percent discount for purchases under the Stock Purchase Plan, the Company or its participating affiliates contribute an amount equal to one-ninth of the amount invested by each participant (including dividend reinvestments)—$1 for each $9 invested. The maximum Company matching contribution available to a participant annually is $2,778 (excluding dividend reinvestment and brokerage commissions), which is available to participants who make the maximum annual contribution of $25,000. (See “Approval of the Company’s Stock Purchase Plan—Available Shares and Investment Limits” on page 9.)
Holding Period
A participant may at any time withdraw or dispose of shares of Company Common Stock held under the Stock Purchase Plan. However, if the shares have been held for less than one year, the participant is ineligible to make further investments under the Stock Purchase Plan (including dividend reinvestments) until the first day of the 13th calendar month following the calendar month during which the shares were purchased.
Modification and Termination of the Stock Purchase Plan
The Company reserves the right and power to suspend, terminate, amend or otherwise modify the Stock Purchase Plan; provided, however, that no suspension, termination, amendment or modification will restrict the right of any participant to withdraw all full shares held under the Stock Purchase Plan, and to receive the net proceeds, after expenses of sale, of any fractional shares held. Any amendment or other modification of the Stock Purchase Plan would, under the New York Stock Exchange listing standards, require stockholder approval if the amendment or modification constituted a material revision under the listing standards.
Other
The Stock Purchase Plan is not a qualified “employee stock purchase plan” under Sections 423 or 401(a) of the Internal Revenue Code and is not subject to the provisions of the Employee Retirement Income Security Act of 1974.
Plan Benefits
It is not presently possible to determine, with respect to the persons and groups shown in the table below, the number of shares to be purchased in the future by such person or groups pursuant to the Stock Purchase Plan. Therefore, the following table sets forth information pertaining to shares which have been purchased during 2013 pursuant to the Expiring Stock Purchase Plan.
Stock Purchase Plan Benefits(1)
Dollar Value | Number of Shares | |||||||
John McAvoy | $ | 2,478 | 43.29 | |||||
Robert Hoglund | $ | 4,146 | 72.35 | |||||
Craig Ivey | $ | 3,226 | 56.13 | |||||
William Longhi | $ | 0 | 0 | |||||
Elizabeth D. Moore | $ | 3,217 | 55.97 | |||||
Kevin Burke | $ | 0 | 0 | |||||
Non-NEO Executive Group | $ | 10,576 | 184.05 | |||||
Non-Executive Director Group | $ | 335 | 5.92 | |||||
Non-Executive Officer Employee Group(2) | $ | 1,095,926 | 19,383.03 |
Footnotes:
U.S. Federal Income Tax Consequences
The following is a general summary as of the date of this Proxy Statement of the U.S. federal income tax consequences associated with the Stock Purchase Plan and is not intended to address state or local tax consequences. The federal tax laws are complex and subject to change and the tax consequences for any participant will depend on his or her individual circumstances. Participants are advised to consult their individual tax advisors concerning the tax implications of participation in the Stock Purchase Plan.
Company Matching Contributions. The aggregate amount of Company matching contributions contributed to a participant’s account under the Stock Purchase Plan in each year will constitute taxable wage income to the participant in the given year. The Company will be entitled to a deduction for amounts contributed by the Company and its participating affiliates with respect to a given year.
Dividends. Dividends, which are paid on shares of Company Common Stock purchased by a participant under the Stock Purchase Plan, will constitute taxable income to the participant in the year of payment, even if the dividends are reinvested and not distributed to the participant. The Company will not be entitled to a deduction for dividends paid with respect to the shares.
Taxes Upon Disposition of Shares. Any gain or loss realized by a participant upon disposition of shares of Company Common Stock purchased under the Stock Purchase Plan will constitute either long-term or short-term gain or loss to a participant in connection with the sale or exchange of a capital asset depending on the holding period. The gain or loss for a share will be the difference between the price the participant received upon disposition of the share and the purchase cost of the share as reported to a participant. The Company will not be entitled to a deduction upon disposition of the shares.
Equity Compensation Plan Information
The following table sets forth, as of December 31, 2013, certain information about the Company’s equity compensation plans.
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders | ||||||||||||
2003 LTIP(1) | 2,297,545 | $ | 43.383 | — | ||||||||
2013 LTIP(2) | 19,760 | — | 4,980,240 | |||||||||
Total equity compensation plans approved by security holders | 2,317,305 | — | 4,980,240 | |||||||||
Total equity compensation plans not approved by security holders | 5,000 | (3) | — | — | ||||||||
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Total | 2,322,305 | — | 4,980,240 | (4) | ||||||||
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Footnotes
The Board Recommends a Vote FOR Proposal No. 3.
Approval of Proposal No. 3 requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting, in person or by proxy. Under New York law, abstentions and broker non-votes are voted neither “for” nor “against,” and have no effect on the vote. Under New York Stock Exchange rules, approval of this proposal requires the affirmative vote of a majority of votes cast, which includes abstentions, at the meeting in person or by proxy. Thus, under New York Stock Exchange rules, abstentions have the same effect as a vote “against” the Stock Purchase Plan.
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
(Proposal No. 4)
The Company values the opinions of our stockholders, and in accordance with Section 14A of the Securities Exchange Act of 1934, the stockholders may vote to approve, on an advisory basis, the compensation of the Company’s Named Executive Officers. The Board recommends that the stockholders vote to approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in the Compensation Discussion and Analysis (“CD&A”) section, and the related compensation disclosure tables on pages 33 to 64. The Company currently conducts such votes annually. In 2013, the Company held a “say-on-pay” vote to approve the Company’s Named Executive Officer compensation, as set forth in the 2013 proxy statement, and 90.20 percent of the shares voted were voted “for” the proposal. Following this year’s vote, the next such vote will be at the Company’s 2015 annual meeting of stockholders.
As discussed in the CD&A, the Company’s executive compensation program is designed to assist in attracting and retaining key executives critical to the Company’s long-term success, and to motivate these executives to create value for its stockholders and to provide reliable service for its customers. The Management Development and Compensation Committee (the “Compensation Committee”), with the assistance of its independent compensation consultant, seeks to provide base salary, target annual incentive awards, and target long-term incentive award values that are competitive with the median level of compensation provided by the Company’s compensation peer group. (See “Committee Actions with Respect to Executive Compensation—Compensation Peer Group” on page 40.)
The Compensation Committee believes that performance-based variable compensation should represent the most significant portion of each Named Executive Officer’s total direct compensation to motivate strong annual and multi-year Company performance. Additionally, the Compensation Committee believes that most of the performance-based variable compensation should be in the form of long-term, rather than annual incentives, to emphasize the importance of sustained Company performance. Each year, the Compensation Committee evaluates the level of compensation and the mix of base salary and performance-based variable compensation of each Named Executive Officer to ensure that it meets the Compensation Committee’s objectives and is competitive with levels of compensation of the compensation peer group.
The Compensation Committee chooses performance measures under the annual incentive plan and the long term incentive plan to support the Company’s short- and long-term business plans and strategies. In setting targets for the short- and long-term performance measures, the Compensation Committee considers the Company’s annual and long-term business plans and certain other factors, including pay-for-performance alignment, economic and industry conditions, and the practices of the compensation peer group. The Compensation Committee sets challenging, but achievable, goals for the Company and its executives to drive the achievement of short- and long-term objectives.
The Compensation Committee, in consultation with its independent compensation consultant, introduced changes for 2014 for the performance restricted stock units granted to certain executive officers, including the Named Executive Officers other than Mr. Burke (who retired as an executive officer in 2013), for the 2014-2016 performance period. The Compensation Committee removed “Incentive Plan Percentage” (the average calculated payout under the Company’s annual incentive plan over the three-year performance period) as a performance measure because it used the same performance measures as the annual incentive plan. The Compensation Committee replaced “Incentive Plan Percentage” with a target for (i) cumulative adjusted earnings per share during the three-year performance period, which focuses on the creation of long-term shareholder value through improving after-tax profitability, and (ii) certain operating objectives for the period (long-term system reliability and environmental sustainability), which are important to the Company’s operating effectiveness and are closely aligned with its business goals. The Compensation Committee will continue to use “Shareholder Return Percentage” (the cumulative change in Company total shareholder returns over the three-year performance period compared with the Company’s compensation peer group as constituted on the date the performance restricted stock units are granted) as a performance measure. Awards to the Company’s executive officers, including the
Named Executive Officers, under the long term incentive plan will continue to be completely performance based applying pre-established performance measures. (See “Executive Summary of the Executive Compensation Program—2014 Performance Restricted Stock Unit Awards” on pages 35 to 36.)
For the reasons highlighted above and more fully discussed in the CD&A, the Board recommends that the stockholders vote in favor of the following resolution:
“RESOLVED, That the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby approved.”
The Board Recommends a Vote FOR Proposal No. 4.
Approval of Proposal No. 4 requires the affirmative vote of a majority of the vote cast on the proposal at the Annual Meeting, in person or by proxy. Abstentions and broker non-votes are voted neither “for” nor “against,” and have no effect on the vote.
The Board values the opinions of the Company’s stockholders as expressed through their vote and other communications. Although the vote is on an advisory basis, the Board and its Compensation Committee will consider the voting results when making future compensation decisions for the Company’s Named Executive Officers.
Information About the Nominees
The Board and the Corporate Governance and Nominating Committee consider the qualifications of Directors and Director candidates individually and in the broader context of the Board’s overall composition and the Company’s current and future needs. The Board believes that the Board, as a whole, should possess a combination of skills, professional experience, and diversity of backgrounds necessary to oversee the Company’s business. The Board has adopted Corporate Governance Guidelines to assist it in exercising its responsibilities to the Company and its stockholders. In evaluating Director candidates and considering incumbent Directors for renomination to the Board, the Board and the Corporate Governance and Nominating Committee consider various factors. Pursuant to the Guidelines, the Corporate Governance and Nominating Committee reviews with the Board the skills and characteristics of Director nominees, including independence, integrity, judgment, business
experience, areas of expertise, availability for service, factors relating to the composition of the Board (including its size and structure), and the Company’s principles of diversity. For incumbent Directors, the Corporate Governance and Nominating Committee also considers past performance of the Director on the Board.
The current Director nominees bring to the Company the benefit of their qualifications, leadership, skills, and the diversity of their experience and backgrounds as set forth below, which provide the Board, as a whole, with the skills and expertise that reflect the needs of the Company’s regulated utilities and competitive energy businesses. Below,Company. See pages 6 to 11 for information about each Director nominee, isincluding their age as of the date of the Annual Meeting, business experience, period of service as a Director, public or investment company directorships, during the past five years, and other directorships.
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Vincent A. Calarco | ||
![]() | Director since: 2001 Age: 74 Board • Audit (Chair) • Corporate Governance and Nominating • Executive • Management Development and Compensation |
Career Highlights: Mr. Calarco has been theNon-Executive Chairman of Yale New Haven Health System since October 2016. Mr. Calarco was theNon-Executive Chairman of Newmont Mining Corporation, Denver, CO, a gold production company, from January 2008 to April 2016. From April 1985 to July 2004, Mr. Calarco was Chairman, President and Chief Executive Officer of Crompton Corporation (now known as Chemtura Corporation). Chemtura is a global specialty chemicals company, headquartered in Philadelphia, PA. Mr. Calarco also held various management and executive positions at Uniroyal Chemical Company.
Other Directorships: Mr. Calarco is a Trustee of Con Edison of New York and a Director of Newmont Mining Corporation. During the past five years, Mr. Calarco also served as a Director of CPG International, Inc. through October 2013. Mr. Calarco is also the President and a Trustee of the Hopkins School, and a Director or Trustee of Swanson Industries, Yale New Haven Health System andYale-New Haven Hospital.
Attributes and Skills: Mr. Calarco has experience leading public companies, and has management and executive experience with manufacturing companies. Mr. Calarco’s experience from his leadership positions and financial oversight experience in senior management roles at Newmont Mining Corporation and Crompton Corporation and his service on other boards support the Board in its oversight of the Company’s management, financial, operations, and strategic planning activities.
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![]() | Director since: 2000 Age: 71 Board • Corporate Governance and Nominating • Executive • Management Development and | |
![]() | Compensation (Chair) • Operations Oversight |
Career Highlights: Dr. Campbell, a physicist, was theNon-Executive Chairman of the Webb Institute, Glen Cove, NY, an all scholarship college offering degrees exclusively in naval architecture and marine engineering, from November 2012 to October 2016. Dr. Campbell was the President of The Cooper Union for the Advancement of Science and Art, New York, NY, a college focusing primarily on engineering, architecture, and art, from July 2000 to June 2011. Dr. Campbell also held various management positions at AT&T Bell Laboratories. Dr. Campbell also served as President and Chief Executive Officer of NACME, Inc., anon-profit corporation focused on engineering education and science and technology policy.
Other Directorships: Dr. Campbell is a Trustee of Con Edison of New York and a Director of Barnes and Noble, Inc. Dr. Campbell is also a Director or Trustee of the Josiah Macy Foundation, The Mitre Corporation, Montefiore Medical Center, Rensselaer Polytechnic Institute, the U.S. Naval Academy Foundation and the Webb Institute.
Attributes and Skills: Dr. Campbell has experience leading premiere colleges and anon-profit corporation, with a focus on engineering and science. Dr. Campbell also has experience in management and research and development at a public company. Dr. Campbell’s experience from his leadership positions at Webb Institute, The Cooper Union for the Advancement of Science and Art, AT&T Bell Laboratories, and NACME, Inc., and his service on other boards support the Board in its oversight of the Company’s operations and management activities.
CONSOLIDATED EDISON, INC. –Proxy Statement | ||
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Director since: 1999 Age: 74 Board Committees: • Audit • Corporate Governance and Nominating (Chair & Lead Director) • Executive • Management Development and Compensation |
Career Highlights: Mr. Del Giudice is the founder and Senior Managing Director of Millennium Capital Markets LLC, New York, NY, an investment banking firm since 1996, and Chairman of Carnegie Hudson Resources, LLC, a private equity firm. Mr. Del Giudice was a General Partner at the investment bank of Lazard Frères & Co., and served as Chief of Staff to New York State Governor Mario Cuomo, Director of State Operations to New York State Governor Hugh Carey, and Chief of Staff to the New York State Assembly Speaker Stanley Steingut.
Other Directorships: Mr. Del Giudice is a Trustee of Con Edison of New York and a Director of Fusion Telecommunications International, Inc. During the past five years, Mr. Del Giudice also served as a Director of Reis, Inc. through September 2013. Mr. Del Giudice also served as Lead Director of Barnes and Noble, Inc. through September 2010. Mr. Del Giudice is Acting Chair of the New York Racing Association, and a Director of Bloomfield Industries, Corinthian Capital Group, and Universal Marine Medical Supply International LLC.
Attributes and Skills: Mr. Del Giudice has experience in private equity, with a focus on the power and energy infrastructure market, as well as experience in government service. Mr. Del Giudice’s experience from his investment activities and his government service support the Board in its oversight of the Company’s corporate governance, financial, and strategic planning activities, and the Company’s relationships with stakeholders.
![]() ![]() | Ellen V. Futter Director since: 1997 Age: 67 Board Committees: • Environment, Health and Safety (Chair) • Operations Oversight |
Career Highlights: Ms. Futter has been the President of the American Museum of Natural History, New York, NY, since November 1993. Previously, Ms. Futter served as the President of Barnard College, New York, NY, and as the Chairman of the Federal Reserve Bank of New York, and was a corporate attorney at the law firm of Milbank, Tweed, Hadley & McCloy.
Other Directorships: Ms. Futter is a Trustee of Con Edison of New York. During the past five years, Ms. Futter also served as a Director of JPMorgan Chase & Co., Inc. through July 2013. Ms. Futter is also a Director or Trustee of NYC & Company and the Brookings Institution and a Manager at the Memorial Sloan-Kettering Cancer Center.
Attributes and Skills: Ms. Futter has management and operations experience leading major New Yorknot-for-profit entities that provide services to the public. Ms. Futter also has legal and financial experience. Ms. Futter’s experience from her leadership positions at the American Museum of Natural History and Barnard College, and her legal experience support the Board in its oversight of the Company’s operations, planning and regulatory activities and the Company’s relationships with stakeholders.
8 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING |
![]() | John F. Killian Director since: 2007 Age: 62 Board Committees: • Audit • Corporate Governance and Nominating • Management Development and Compensation |
Career Highlights:Mr. Killian was the Executive Vice President and Chief Financial Officer of Verizon Communications Inc., a telecommunications company, from March 2009 to December 2010. Mr. Killian was the President of Verizon Business, Basking Ridge, NJ, from October 2005 until February 2009, the Senior Vice President and Chief Financial Officer of Verizon Telecom from June 2003 until October 2005, and the Senior Vice President and Controller of Verizon Telecom from April 2002 until June 2003. Mr. Killian also served in executive positions at Bell Atlantic and was the President and Chief Executive Officer of NYNEX CableComms Limited.
Other Directorships: Mr. Killian is a Trustee of Con Edison of New York and Goldman Sachs Trust II and a Director of Houghton Mifflin Harcourt Company. Mr. Killian is also a Trustee of Providence College.
Attributes and Skills: Mr. Killian has leadership experience at regulated consumer services companies, including experience with financial reporting and internal auditing. Mr. Killian’s experience from his leadership positions at Verizon Communications, Inc., Bell Atlantic and NYNEX CableComms Limited supports the Board in its oversight of the Company’s auditing, financial, operating, and strategic planning activities, and the Company’s relationships with stakeholders.
![]() | John McAvoy Director since: 2013 Age: 56 Board Committee: • Executive (Chair) |
Career Highlights: Mr. McAvoy has been Chairman of the Board of the Company and Con Edison of New York since May 2014. Mr. McAvoy has been President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York since December 2013. Mr. McAvoy was President and Chief Executive Officer of Orange & Rockland from January 2013 to December 2013. Mr. McAvoy was Senior Vice President of Central Operations for Con Edison of New York from February 2009 to December 2012. Mr. McAvoy joined Con Edison of New York in 1980.
Other Directorships: Mr. McAvoy is a Trustee of Con Edison of New York. Mr. McAvoy is also a Director or Trustee of the American Gas Association, the Edison Electric Institute, the Intrepid Sea, Air and Space Museum, the Mayor’s Fund to Advance New York City, New York State Energy Research and Development Authority, and the Partnership for New York City. Mr. McAvoy is also Chair of the Electricity Information Sharing and Analysis Center Executive Committee and Orange & Rockland.
Attributes and Skills: Mr. McAvoy has leadership, engineering, financial, and operations experience, as well as knowledge of the utility industry and the Company’s business. Mr. McAvoy’s experience from his leadership positions at the Company, and his service on other boards, supports the Board in its oversight of the Company’s management, financial, operations, and strategic planning activities, and the Company’s relationships with stakeholders.
CONSOLIDATED EDISON, INC. –Proxy Statement | 9 |
![]() | MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING |
Armando J. Olivera Director since: 2014 Age: 67 Board Committees: • Environment, Health and • Finance • Operations Oversight |
Career Highlights: Mr. Olivera was President of the utility industry. Mr. Olivera’s experience from his leadership positions at Florida Power & Light Company, an electric utility that is a subsidiary of a publicly traded energy company, and his service on other boards, supports the Board in its oversight of the Company’s management, financial, operations, and strategic planning activities. Mr. Olivera was President of Florida Power & Light Company from June 2003, and Chief Executive Officer from July 2008, until his retirement in May 2012. Mr. Olivera joined Florida Power & Light Company in 1972. Mr. Olivera also served as Chairman of the Boards of twonon-profits: Florida Reliability Coordinating Council that focuses on the reliability and adequacy of bulk electricity in Florida, and Southeastern Electric Exchange that focuses on coordinating storm restoration services and enhancing operational and technical resources.
Other Directorships: Mr. Olivera is a Trustee of Con Edison of New York. Mr. Olivera also serves as a Director of Fluor Corporation and Lennar Corporation. During the past five years, Mr. Olivera served as a Director of AGL Resources, Inc. until July 2016, and as a Director of Florida Power & Light Company until his retirement in May 2012. Mr. Olivera joined Florida Power & Light Company in 1972.Mr. Olivera has been a Director of the Company and a Trustee of Con Edison of New York since February 2014. Mr. Olivera serves as a Director of Fluor Corporation and AGL Resources, Inc. (and had served as a director of Nicor, Inc. prior to its merger in 2011 with AGL Resources, Inc.). During the past five years, Mr. Olivera served as a Director of Florida Power & Light Company through May 2012. Mr. Olivera is also a Trustee of Cornell University Florida Reliability Coordinating Council, Inc., and Miami Dade College.
Attributes and Skills: Mr. Olivera has leadership, engineering, and operations experience, as well as knowledge of the utility industry. Mr. Olivera’s experience from his leadership positions at Florida Power & Light Company, and his service on other boards, supports the Board in its oversight of the Company’s management, financial, operations, and strategic planning activities.
Michael W. Ranger Director since: 2008 Age: 59 Board Committees: • Audit • Finance • Operations Oversight (Chair) |
Career Highlights: Mr. Ranger has been Senior Managing Director of Diamond Castle Holdings LLC, New York, NY, a private equity investment firm, since 2004 andNon-Executive Chairman of KDC Solar LLC since 2010. Mr. Ranger was an investment banker in the energy and power sector for twenty years, including at Credit Suisse First Boston, Donaldson, Lufkin and Jenrette, DLJ Global Energy Partners, and Drexel Burnham Lambert. Mr. Ranger was also a member of the Utility Banking Group at Bankers Trust.
Other Directorships: Mr. Ranger is a Trustee of Con Edison of New York and a Director of Covanta Holding Corporation. Mr. Ranger is also a Director or Trustee of Bonten Media Group, KDC Solar LLC, Morristown-Beard School, Professional Direction Enterprise, Inc., and St. Lawrence University.
Attributes and Skills: Mr. Ranger has investment experience focusing on the energy and power sector, investment banking experience in the energy and power sector, and experience as a member of a utility banking group. Mr. Ranger’s experience from his investment activities in the energy and power sector supports the Board in its oversight of the Company’s financial and strategic planning activities.
10 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING |
Linda S. Sanford Director since: 2015 Age: 64 Board Committees: • Corporate Governance and Nominating • Environment, Health and Safety • Finance |
Career Highlights: Ms. Sanford was Senior Vice President Enterprise Transformation, International Business Machines Corporation (IBM), a multinational technology and consulting corporation, from January 2003 to December 2014. Ms. Sanford joined IBM in 1975.
Other Directorships: Ms. Sanford is a Trustee of Con Edison of New York and a Director of Pitney Bowes Inc., RELX NV (formerly Reed Elsevier NV) and RELX PLC (formerly Reed Elsevier PLC). During the past five years, Ms. Sanford served as a Director of ITT Corporation through May 2013. Ms. Sanford is also a Director or Trustee of ION Group and New York Hall of Science.
Attributes and Skills: Ms. Sanford has leadership experience at an international technology company, including experience with information technology, manufacturing, customer relations, and corporate planning. Ms. Sanford’s experience from her leadership positions at IBM and her service on other boards supports the Board in its oversight of technology, relationship with stakeholders, and financial and strategic planning activities.
L. Frederick Sutherland Director since: 2006 Age: 65 Board Committees: • Audit • Finance (Chair) • Management Development and Compensation |
Career Highlights: Mr. Sutherland was the Executive Vice President and Chief Financial Officer of Aramark Corporation, Philadelphia, PA, a provider of services, facilities management and uniform and career apparel, from 1997 through April 2015 and the Senior Advisor to the Chief Executive Officer from April 2015 to December 2015. Prior to joining Aramark in 1980, Mr. Sutherland was Vice President in the Corporate Banking Department of Chase Manhattan Bank, New York, NY.
Other Directorships: Mr. Sutherland is a Trustee of Con Edison of New York and a Director of Colliers International Group Inc. Mr. Sutherland is also a Director or Trustee of People’s Light and Theater and Sterling Talent Solutions. Mr. Sutherland is also Chairman of the Board of WHYY, a PBS affiliate.
Attributes and Skills: Mr. Sutherland has leadership experience at an international managed services company, including experience with financial reporting, internal auditing, mergers and acquisitions, financing, risk management, corporate compliance, and corporate planning. Mr. Sutherland also has corporate banking experience. Mr. Sutherland’s experience from his leadership positions at Aramark Corporation and Chase Manhattan Bank supports the Board in its oversight of the Company’s financial reporting, auditing, and strategic planning activities.
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![]() | MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING |
PROPOSAL NO. 2 RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
At the Annual Meeting, as a matter of sound corporate governance, stockholders will be asked to ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP (“PwC”) as independent accountants for the Company for 2017. If the appointment of PwC is not ratified, the Audit Committee will take this into consideration in the future appointment of independent accountants.
PwC has acted as independent accountants for the Company for many years. The Audit Committee considered PwC’s qualifications in determining whether to appoint PwC as independent accountants for 2017. The Audit Committee reviewed PwC’s performance, as well as PwC’s reputation for
integrity and for competence in the fields of accounting and auditing. The Audit Committee also reviewed a report provided by PwC regarding its quality controls, inquiries or investigations by governmental or professional authorities and independence. (See “Audit Committee Matters” on page 25.) Based on this review, the Audit Committee believes that the appointment of PwC as independent accountants for the Company for 2017 is in the best interests of the Company and its stockholders.
Representatives of PwC will be present at the Annual Meeting and will be afforded the opportunity to make a statement if they desire to do so and to respond to appropriate questions.
The Board Recommends a Vote FOR Proposal No. 2.
Ratification of Proposal No. 2 requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting, in person or by proxy. Abstentions and brokernon-votes are voted neither “for” nor “against,” and have no effect on the vote.
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![]() | MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING |
PROPOSAL NO. 3 ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
The Company values the opinions of its stockholders, and in accordance with Section 14A of the Securities Exchange Act of 1934, the stockholders have the opportunity to approve, on an advisory basis, the compensation of the Named Executive Officers (commonly referred to as a “say on pay” vote) as disclosed in the Compensation Discussion and Analysis (“CD&A”) section of this Proxy Statement, the related compensation disclosure tables, and the narrative discussion that accompanies the compensation disclosure tables on pages 27 to 59. The Company currently conducts such votes annually. The Board recommends that the stockholders vote to approve, on an advisory basis, the compensation of the Named Executive Officers. In 2016, the Company held a say on pay vote and 92.15% of the shares voted were voted “for” the proposal. Following this year’s say on pay vote, the next such vote will be at the Company’s 2018 annual meeting of stockholders.
As discussed in the CD&A, the Company’s executive compensation program is designed to assist in attracting and retaining key executives critical to its long-term success, to motivate these executives to create value for its stockholders, and to provide safe, reliable, and efficient service for its customers. The Management Development and Compensation Committee (the “Compensation Committee”), with the assistance of its independent compensation consultant, seeks to provide base salary and performance-based compensation, including target annual cash incentive compensation and target long-term equity-based incentive compensation, that are competitive with the median level of compensation provided by the Company’s compensation peer group and effectively link pay with performance.
The Compensation Committee believes that performance-based compensation should represent the most significant portion of each Named Executive Officer’s target total direct compensation and should be in the form of long-term, rather than annual incentives, to emphasize the importance of sustained Company performance. Each year, the Compensation Committee evaluates the level of compensation, the mix of base salary, performance-based compensation and retirement and welfare benefits provided to each Named Executive Officer.
The Compensation Committee chooses performance goals under the annual incentive plan and the long term incentive plan to support the Company’s short- and long-term business plans and strategies. In setting targets for the short- and long-term performance goals, the Compensation Committee considers the Company’s annual and long-term business plans and certain other factors, includingpay-for-performance alignment, economic and industry conditions, and the practices of the compensation peer group. The Compensation Committee sets challenging, but achievable, goals for the Company and its executives to drive the achievement of short- and long-term objectives.
For the reasons indicated and more fully discussed in the CD&A, the Board recommends that the stockholders vote in favor of the following advisory resolution:
“RESOLVED, That the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of RegulationS-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion that accompany the compensation disclosure tables is hereby approved.”
The Board Recommends a Vote FOR Proposal No. 3.
Approval of Proposal No. 3 requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting, in person or by proxy. Abstentions and brokernon-votes are voted neither “for” nor “against,” and have no effect on the vote.
As an advisory vote, Proposal No. 3 is not binding on the Company, the Board, or the Compensation Committee. However, the Company, the Board, and the Compensation Committee value the opinions of the Company’s stockholders as expressed through their vote and other communications and will consider the voting results when making future compensation decisions for the Named Executive Officers.
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![]() | MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING |
PROPOSAL NO. 4 ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON NAMED EXECUTIVE OFFICER COMPENSATION
As described in Proposal No. 3, the stockholders have the opportunity to cast an advisory vote to approve Named Executive Officer compensation (commonly referred to as a “say on pay” vote). In accordance with the requirements of Section 14A of the Securities and Exchange Act of 1934, this Proposal No. 4 provides the stockholders with the opportunity, at least once every six years, to provide an advisory vote on how often the Company should include a say on pay vote in the Company’s proxy statement for future annual stockholder meetings (commonly referred to as a “say on pay” frequency vote).
Under this Proposal No. 4, the stockholders may vote to have the say on pay vote every year, every two years, or every three years, or may abstain from voting. In 2011, the Company held
its first advisory vote on the say on pay frequency vote and 86.68% of the shares voted were voted “for” an annual vote. Following this year’s say on pay frequency vote, it is expected that the next such vote will be at the Company’s 2023 annual stockholders’ meeting. Stockholders may cast their advisory vote on the say on pay frequency vote every “1 Year,” “2 Years,” or “3 Years,” or “Abstain.”
The Board recommends that the stockholders approve, on an advisory basis, continuing to hold an annual say on pay vote. The Board continues to believe that an annual vote is the most appropriate for the Company as it will provide the stockholders with an opportunity to express their views on the Company’s executive compensation program in a consistent and timely manner.
The Board Recommends a Vote of 1 YEAR for Proposal No. 4.
Approval of Proposal No. 4 requires the affirmative vote of a plurality of the votes cast on the proposal at the Annual Meeting, in person or by proxy. This means that the option for holding an advisory vote every one year, two years, or three years receiving the greatest number of votes will be considered the preferred frequency of the stockholders. Abstentions and brokernon-votes are voted neither “for” nor “against,” and have no effect on the vote.
As an advisory vote, Proposal No. 4 is not binding on the Company, the Board, or the Compensation Committee. However, the Company, the Board, and the Compensation Committee value the opinions of the stockholders as expressed through their vote and other communications and will consider the results of this advisory vote when making future decisions about the frequency of the say on pay vote.
14 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | THE BOARD OF DIRECTORS |
Meetings and Board Members’ AttendanceMEETINGS AND BOARD MEMBERS’ ATTENDANCE
The Board of Directors held 11 meetings in 2013.2016. At its meetings the Board considers a wide variety of matters involving such things as the Company’s strategic planning, its financial condition and results of operations, its capital and operating budgets, personnel matters, succession planning, risk management, industry issues, accounting practices and disclosure, and corporate governance practices.
In accordance with the Company’s Corporate Governance Guidelines, the Chair of the Corporate Governance and Nominating Committee (currently Mr. Del Giudice) serves as Lead Director and, as such, chairs the executive sessions of thenon-management Directors and the independent Directors. The Company’s independent Directors met oncetwice in executive session and thenon-management Directors met nine times in executive session during 2013.
2016.
During 2013,2016, each incumbent member of the Board attended more than 75 percent75% of the combined meetings of the Board of Directors and the Board Committees on which he or she served (heldheld during the period that he or she served).
served. Directors are expected to attend the Annual Meeting. All of the current Directors attended the 20132016 annual meeting of stockholders, except Messrs. McAvoy and Olivera who were elected to the Board in December 2013 and February 2014, respectively.
stockholders.
Corporate GovernanceCORPORATE GOVERNANCE
The Company’s corporate governance documents, including its Corporate Governance Guidelines, the charters of the Audit, Corporate Governance and Nominating, and Management Development and Compensation Committees, and the Standards of Business Conduct, are available on the Company’s website atwww.conedison.com/investor/governance_documents.aspconedison.com/shareholders.. The Standards of Business Conduct applies to all Directors, officers and employees. The Company intends to post on its website atwww.conedison.com/investor/governance_documents.aspconedison.com/shareholders amendments to its Standards of Business Conduct and a description of any waiver from a provision of the Standards of Business Conduct granted by the Board to any Director or executive officer of the Company within four business days after such amendment or waiver.
Leadership StructurePROXY ACCESS
The Company developed and implemented a proxy access framework that allows a stockholder or a group of up to 20 stockholders who have owned at least three percent (3%) of the outstanding shares of the Company for at least three years
to submit nominees for up to twenty percent (20%) of the Board, or two nominees, whichever is greater, for inclusion in the Company’s Proxy Statement and form of proxy, subject to complying with the requirements identified in theBy-laws of the Company.
As discussed in the Corporate Governance Guidelines, the Board selects the Company’s Chief Executive Officerchief executive officer and Chairmanchairman of the Board in the manner that it determines to be in the best interest of the Company’s stockholders. Historically,The Company’s leadership structure combines the roles of Chief Executive Officerthe chairman and Chairman have been combined. To promote an effective and orderly Chief Executive Officer transition, the Board determined that Mr. Burke should continue to serve as Chairman of the Board for an interim period after his retirement as Chief Executive Officer, which was effective December 25, 2013.chief executive officer. The Board madebelieves that this determination based onleadership structure is appropriate for the Company due to a variety of factors, including Mr. Burke’sMcAvoy’s long-standing knowledge of the Company and the utility industry, and his extensive engineering, operationsfinancial, and legaloperations experience.
Mr. McAvoy was promoted to the position of Chief Executive Officer effective December 26, 2013, upon Mr. Burke’s retirement, and was appointed to the Board at the time his appointment as Chief Executive Officer of the Company became effective. Mr. McAvoy has been nominated to the Board for election at the Annual Meeting. As Chief Executive Officer, Mr. McAvoy has day-to-day management responsibility for the Company and he reports to the Board. As Chairman, Mr. Burke presides at meetings of the Board and stockholders, facilitates communication between the Board and the Company’s management, assists the Chief Executive Officer in formulating long-term strategy, coordinates with the Lead Director on agendas and schedules for Board meetings, information flow to the Board, and other matters pertinent to the Company and the Board, and is available for consultation and communication with major stockholders as appropriate.
The Board also will continue to havehas an independent Lead Director who is the Chair of the Corporate Governance and Nominating Committee. The Corporate Governance Guidelines provide that the Lead Director: (i) acts as a liaison between the independent Directors and the Company’s management; (ii) chairs the executive sessions ofnon-management and independent Directors and has the authority to call additional executive sessions as appropriate; (iii) chairs Board meetings in the Chairman’s absence; (iv) coordinates with the Chairman on agendas and schedules for Board meetings, information flow to the Board, and other matters pertinent to the Company and the Board; and (v) is available for consultation and communication with major stockholders as appropriate.
The Board consists of a substantial majority of Directors who are independent. (See “The Board of Directors—Board Members’ Independence” on page 23.pages 16 to 17.) The Board routinely holds executive sessions at which onlynon-management Directors are present, and the independent Directors meet in executive session at least once a year.
Pursuant to the Company’s Corporate Governance Guidelines, the Board has oversight responsibility for reviewing the Company’s strategic plans, objectives and risks. The CommitteesEach of the standing committees of the Board, which administerother than the Board’s risk oversight function areExecutive Committee, is chaired bynon-management Directors (see Directors. (See “The Board of Directors—Standing Committees of the Board” on pages 2417 to 27)19).
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The Board’s primary function is one of oversight. In connection with its oversight function, the Board oversees the Company’s policies and procedures for managing risk. The Board administers its risk oversight function primarily through its Committees whichthat report to the Board. Board Committees have assumed oversight of various risks that have been identified through the Company’s enterprise risk management program. The Audit Committee reviews the Company’s risk assessment and risk management policies and the Audit Committee reports to the Board on the Company’s risk management program. Management regularly provides reports to the Board and its Committees concerning risks identified through the Company’s enterprise risk management program.
Related Person Transactions and PolicyRELATED PERSON TRANSACTIONS AND POLICY
The Company has adopted a written policy for approval of transactions between the Company and its Directors, Director nominees, executive officers, greater-than-five percent (5%) beneficial owners, and their respective immediate family members, where the amount involved in the transaction since the beginning of the Company’s last completed fiscal year exceeds or is expected to exceed $100,000.
The policy provides that the Corporate Governance and Nominating Committee reviews certain transactions subject to the policy and determines whether or not to approve or ratify those transactions. In doing so, the Corporate Governance and Nominating Committee takes into account, among other factors it deems appropriate, whether the transaction is on terms that are no less favorable to the Company than terms generally available to an unaffiliated third-partythird party under the same or similar circumstances and the extent of the related person’s interest in the transaction. In addition, the Board has delegated authority to the Chair of the Corporate Governance and Nominating Committee topre-approve or ratify transactions where the aggregate amount involved is expected to be less than $1.0 million. A summary of any new transactionspre-approved by the Chair will be provided to the full Corporate Governance and Nominating Committee for its review in connection with a regularly scheduled Committeecommittee meeting.
The Corporate Governance and Nominating Committee has considered and adopted standingpre-approvals under the policy for limited transactions with related persons.Pre-approved transactions include:
(i) | business transactions with other companies at which a related person’s only relationship is as an employee (other |
business transactions with other companies at which a related person’s only relationship is as an employee (other than an executive officer), if the amount of business falls below the thresholds in the New York Stock Exchange’s listing standards and the Company’s Director independence standards; and
than an executive officer), if the amount of business falls below the thresholds in the New York Stock Exchange’s listing standards and the Company’s Director independence standards; and |
contributions to non-profit organizations at which a related person’s only relationship is as an employee (other than an executive officer) if the aggregate amount involved is less than both $1.0 million and two percent of the organization’s consolidated gross annual revenues.
(ii) | contributions tonon-profit organizations at which a related person’s only relationship is as an employee (other than an executive officer) if the aggregate amount involved is less than both $1.0 million and two percent (2%) of the organization’s consolidated gross annual revenues. |
In 2013,2016, Ms. Futter’s brother received approximately $155,000$161,000 for providing legal services to Con Edison of New York and will provide suchis providing legal services in 2014.2017. The provision of these services by Ms. Futter’s brother was approved by the Committee.
Board Members’ IndependenceBOARD MEMBERS’ INDEPENDENCE
The Board of Directors has affirmatively determined that the following Directors are “independent” as defined in the New York Stock Exchange’s listing standards: Mr. Calarco, Dr. Campbell, Mr. Davis, Mr. Del Giudice, Mr. Hennessy, Mr. Killian, Mr. Olivera, Ms. Piñero, Mr. Ranger, Ms. Sanford, and Mr. Sutherland.
To assist it in making determinations of Director independence, the Board has adopted independence standards, which are set forth in its Corporate Governance Guidelines, available on the Company’s website atwww.conedison.com/investor/pdfs/Guidelines.pdfconedison.com/shareholders. Under these standards, the Board has determined that each of the following relationships below is categorically immaterial and therefore, by itself, does not preclude a Director from being independent:
(i) | (a) the Director has an immediate family member who is a current employee of the Company’s internal or external auditor, but the immediate family member does not personally work on the Company’s audit; or (b) the Director or an immediate family member was, within the last three years, a partner or employee of such a firm but no longer works at the firm and did not personally work on the Company’s audit within that time; |
(ii) | the Director or an immediate family member is, or has been within the last three years, employed at another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee, but the Director or the Director’s immediate family member is not an executive officer of the other company and his or her compensation is not determined or reviewed by that company’s compensation committee; |
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(iii) | the Director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in any of the last three fiscal years, but the total payments in each year were less than $1.0 million, or two percent (2%) of such other company’s consolidated gross revenues, whichever is greater; |
(iv) | the Director is a partner or the owner of five percent (5%) or more of the voting stock of another company that has made payments to, or received payments from, the Company for property or services in any of the last three fiscal years, but the total payments in each year were less than $1.0 million, or two percent (2%) of such other company’s consolidated gross revenues, whichever is greater; |
(v) | the Director is a partner, the owner of five percent (5%) or more of the voting stock or an executive officer of another company which is indebted to the Company, or to which the Company is indebted, but the total amount of the indebtedness in each of the last three fiscal years was less than $1.0 million, or two percent (2%) of such other company’s consolidated gross revenues, whichever is greater; and |
(vi) | the Director or an immediate family member is a director or an executive officer of anon-profit organization to which the Company has made contributions in any of the last three fiscal years, but the Company’s total contributions to the organization in each year were less than $1.0 million, or two percent (2%) of such organization’s consolidated gross revenues, whichever is greater. |
Standing Committees of the BoardSTANDING COMMITTEES OF THE BOARD
Audit Committee
The Audit Committee, composed of fourfive independent Directors (currently Mr. Calarco, Chair, Mr. Del Giudice, Mr. Killian, Mr. Ranger, and Mr. Sutherland), is directly responsible for the appointment of the independent accountants for the Company, subject to stockholder ratification at the Annual Meeting. The Audit Committee has appointed PwC as the Company’s independent accountants for the fiscal year 2017. If the selectionappointment of PricewaterhouseCoopers LLPPwC is not ratified, the Audit Committee will take this into consideration in the future selection of independent accountants.
The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the
work of the independent accountants for the Company. The Audit Committee reviews the proposed auditing andnon-audit fees and approves in advance the proposed auditing andnon-audit services associated with the Company’s retention of the independent accountants. Every five years the Audit Committee evaluates whether it is appropriate to rotate the Company’s independent accountants and, in conjunction with mandatory rotation of the lead engagement partner, the Audit Committee is directly involved in selecting the lead engagement partner of the independent accountants. The Audit Committee meets with the Company’s management, including Con Edison of New York’s General Auditor, the General Counsel, and the Company’s independent accountants, several times a year to discuss internal controls and accounting matters, the Company’s financial statements, filings with the Securities and Exchange Commission, earnings press releases and the scope and results of the auditing programs of the independent accountants and of Con Edison of New York’s internal auditing department. The Audit Committee also oversees the Company’s risk assessment and risk management policies, and the Company’s management of risks, relating to the Committee’sits duties and responsibilities that have been identified through the Company’s enterprise risk management program. Each member of the Audit Committee is “independent” as defined in the New York Stock Exchange’s listing standards.standards and Rule10A-3 of the Securities and Exchange Act of 1934. The Board of Directors of the Company has determined that each Director on the Audit Committee is an “audit committee financial expert” as suchthe term is defined in Item 407(d)(5) of RegulationS-K and is “independent” as such term is defined in Rule 10A-3 under of the Securities and Exchange Act of 1934. The Audit Committee held eightsix meetings in 2013.
2016.
Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee, composed of fourfive independent Directors (currently Mr. Del Giudice, Chair, Mr. Calarco, Dr. Campbell, Mr. Killian, and Ms. Piñero)Sanford), annually evaluates each Director’s individual performance when considering whether to nominate the Director forre-election to the Board and is responsible for recommending candidates to fill vacancies on the Board. In addition, the Corporate Governance and Nominating Committee assists with respect to the composition and size of the Board and of all Committees of the Board. The Corporate Governance and Nominating Committee also makes recommendations to the Board as to the compensation of Board members as well as other corporate governance matters, including Board independence criteria and determinations and corporate governance guidelines. Additionally, the Corporate Governance and Nominating
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Committee oversees the Company’s management of risks, relating to the Committee’sits duties and responsibilities that have been identified through the Company’s enterprise risk management program.
All of the members of the Corporate Governance and Nominating Committee are “independent” as defined in the New York Stock Exchange’s listing standards. The Company’s Corporate Governance Guidelines provide that the Board of Directors consists of a substantial majority of Directors who meet the New York Stock Exchange definition of independence, as determined by the Board in accordance with the standards described in the Guidelines under “The Board of Directors—Board Members’ Independence” on pages 2316 to 24. 17.
Among its duties, the Corporate Governance and Nominating Committee reviews the skills and characteristics of Director candidates as well as their integrity, judgment, business experience, areas of
expertise and availability for service, factors relating to the composition of the Board (including its size and structure) and the Company’s principles of diversity.
The Corporate Governance and Nominating Committee has the authority under its charter to hire advisors to assist it in its decisions. The Corporate Governance and Nominating Committee retains a professional search firm to assist it in identifying director candidates. The search firm assists the Committee in developing criteria for potential Board members to complement the Board’s existing strengths. Based on such criteria, the firm also provides, the Committee, for its review and consideration, lists of potential candidates with background information. After consulting with the Corporate Governance and Nominating Committee, the firm further screens and interviews candidates as directed by the Committee to determine their qualifications, interest and any potential conflicts of interest and provides its results to the Committee. The Committee also considers candidates recommended by stockholders. There are no differences in the manner in which the Committee will evaluate candidates recommended by stockholders. The Committee will make an initial determination as to whether a particular candidate meets the Company’s criteria for Board membership, and will then further consider candidates that do. Stockholder recommendations for candidates, accompanied by biographical material for evaluation, may be sent to the Vice President and Corporate Secretary of the Company. Each recommendation should include information as to the qualifications of the candidate and should be accompanied by a written statement (presented to the Vice President and Corporate Secretary of the Company) from the suggested candidate to the effect that the candidate is willing to serve.
The Corporate Governance and Nominating Committee has also retained Mercer, a wholly-owned subsidiary of Marsh & McLennan Companies, Inc., to provide information, analyses, and objective advice regarding director compensation. The Corporate Governance and Nominating Committee directs Mercer to: (i) assist the Committeeit by providing competitive market information on the design of the director compensation program, (ii) advise the Committeeit on the design of the director compensation program and also provide advice on the administration of the program, and (iii) brief the Committeeit on director compensation trends among the Company’s compensation peer group and broader industry. The Board members, including the chief executive officer, consider the recommendations of the Corporate Governance and Nominating Committee. The decisions may reflect factors and considerations in addition to the information and advice provided by Mercer.
The Corporate Governance and Nominating Committee held four meetings in 2013.
2016.
Environment, Health and Safety Committee
The Environment, Health and Safety Committee, composed of four threenon-management Directors (currently Ms. Futter, Chair, Mr. Davis, Mr. Hennessy,Olivera, and Ms. Piñero)Sanford), provides advice and counsel to the Company’s management on corporate environment, health and safety policies and on such other environment, health, safety, and sustainability matters as it fromtime-to-time the Committee deems appropriate. The Environment, Health and Safety Committee also reviews significant issues identified by management relating to the Company’s environment, health and safety programs and its compliance with environment, health and safety laws and regulations, and makes such other reviews and recommends to the Board such other actions as it may deem necessary or desirable to help promote sound planning by the Company with due regard to the protection of the environment, health and safety. Additionally, the Environment, Health and Safety Committee oversees the Company’s management of risks, relating to the Committee’sits duties and responsibilities that have been identified through the Company’s enterprise risk management program. The Environment, Health and Safety Committee held fivefour meetings in 2013.
2016.
Executive Committee
The Executive Committee, composed of four non-managementMr. McAvoy, Chair, and three independent Directors (currently Mr. Burke, the Chairman of the BoardCalarco, Dr. Campbell, and of the Committee, Mr. Calarco, Mr. Del Giudice, and Mr. McGrath)Giudice), and Mr. McAvoy, may exercise, during intervals between the meetings of the Board, all the powers vested in the Board, except for certain specified matters. No meetings of the Executive Committee were held in 2013.2016.
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Finance Committee
The Finance Committee, composed of four independent Directors (currently Mr. Sutherland, Chair, Mr. Davis,Olivera, Mr. Hennessy,Ranger, and Mr. Ranger)Ms. Sanford), reviews and makes recommendations to the Board with respect to the Company’s financial condition and policies, capital and operating budgets, financial forecasts, major contracts and real estate transactions, financings, investments, bank credit arrangements, its dividend policy, strategic business plan, litigation, and other financial matters. Additionally, the Finance Committee oversees the Company’s management of risks, relating to the Committee’sits duties and responsibilities that have been identified through the Company’s enterprise risk management program. The Finance Committee held eightnine meetings in 2013.
2016.
Management Development and Compensation Committee
The Management Development and Compensation Committee (the “Compensation Committee”), composed of fourfive independent Directors (currently Dr. Campbell, Chair, Mr. Calarco, Mr. Del Giudice, Mr. Killian, and Mr. Killian)Sutherland), makes recommendations to the Board relating to officer and senior management appointments. The Compensation Committee also establishes and oversees the Company’s executive compensation and welfare benefit plans and policies, administers its equity plans and annual incentive plan and reviews and approves annually all compensation relating to the Named Executive Officers under the Company’s executive compensation program. Additionally, the Compensation Committee oversees the Company’s management of risks, relating to the Committee’sits duties and responsibilities that have been identified through the Company’s enterprise risk management program.
The Compensation Committee has the authority, under its charter, to engage the services of outside advisors, experts, and others to assist it. The Compensation Committee engages Mercer to provide information, analyses, and objective advice regarding executive compensation. The Compensation Committee directs Mercer to: (i) assist the Committeeit in the development and assessment of the compensation peer group for the purposes of providing competitive market information for the design of the executive compensation program, (ii) compare the Company’s chief executive officer’s base salary, annual incentive and long-term incentive compensation to that of the chief executive officers of the identified compensation peer group and broader industry, (iii) advise the Committeeit on the officers’ base salaries and target award levels within the annual and long-term incentive plans, (iv) advise the Committeeit on the design of the Company’s annual and long-term incentive plans and also provide advice on the
administration of the plans, (v) brief the Committeeit on executive compensation trends among the Company’s compensation peer group and broader industry, and (vi) assist with the preparation of the Compensation Discussion and Analysis Report for this Proxy Statement. The Compensation Committee held seventhree meetings in 2013, of which2016 and Mercer attended four.
all meetings.
For a discussion of the role of the Compensation Committee and information about the Company’s processes and procedures for the consideration and determination of executive compensation, see the “COMPENSATION DISCUSSION AND ANALYSIS REPORTCompensation Discussion and Analysis” beginning on page 33.27.
In addition, the Compensation Committee also reviews and makes recommendations as necessary to provide for orderly succession and transition in the senior management of the Company and receives reports and makes recommendations with respect to minority and female recruitment, employment and promotion. ItThe Compensation Committee also oversees and makes recommendations to the Board with respect to compliance with the Employee Retirement Income Security Act of 1974 (“ERISA”), and reviews and makes recommendations with respect to benefit plans and plan amendments, the selection of plan trustees and the funding policy and contributions to the funded plans, and reviews the performance of the funded plans. Each of the members of the Compensation Committee is “independent”“independent,” as defined in the New York Stock Exchange’s listing standards, and meets the “outside director” criteria of Section 162(m) of the Internal Revenue Code and the “Non-Employee”“Non-Employee” Director criteria of Rule16b-3 under the Securities Exchange Act of 1934.
Operations Oversight Committee
The Operations Oversight Committee, composed of five fournon-management Directors (currently Mr. McGrath,Ranger, Chair, Dr. Campbell, Ms. Futter, Mr. Hennessy, and Mr. Killian)Olivera), oversees the Company’s operation of its electric, gas, and steam deliveryefforts relating to the Company’s operating systems and their impact on the customer. The Operations Oversight Committee also reviews significant issues identified by the Company relating to the Company’s subsidiaries’ operating systems and their impact on the customer. The Operations Oversight Committee also reviews compliance of the Company’s subsidiaries’ operating systems with laws and regulations and the Company’s corporate policies and procedures, as may be necessary or appropriate. Additionally, the Operations Oversight Committee oversees the Company’s management of risks, relating to the Committee’sits duties and responsibilities that have been identified through the Company’s enterprise risk management program. The Operations Oversight Committee held four meetings in 2013.2016.
CONSOLIDATED EDISON, INC. –Proxy Statement | 19 |
![]() | THE BOARD OF DIRECTORS |
Planning CommitteeCOMPENSATION CONSULTANT DISCLOSURE
The Planning Committee, composed of five non-management Directors (currently Ms. Piñero, Chair, Mr. Davis, Ms. Futter, Mr. McGrath, and Mr. Ranger), reviews and makes recommendations to the Board regarding long-range planning for the Company. Additionally, the Committee oversees the Company’s management of risks, relating to the Committee’s duties and responsibilities that have been identified through the Company’s enterprise risk management program. The Planning Committee held three meetings in 2013.
Compensation Consultant Disclosure
The Management Development and Compensation Committee has retained Mercer, a wholly-owned subsidiary of Marsh & McLennan Companies, Inc., to assist the Committee with its responsibilities related to the Company’s executive compensation programs and the Corporate Governance and Nominating Committee has retained Mercer to assist it with its responsibilities related to the Directordirector compensation program, including the design and structure of the Company’s long term incentive plan. Mercer’s fees for executive and Directordirector compensation consulting to the committees in 20132016 were approximately $580,200.
$810,500.
During 2013,2016, the Company retained Marsh & McLennan affiliates (other than Mercer) to provide services, unrelated to executive compensation. These services were approved by the Company’s management. The aggregate fees paid for these other services, which include litigation,insurance fees and auction services, and a corporate membership for safety professionals, were approximately $199,510.
$102,500.
The Management Development and Compensation Committee considered the independence of Mercer under the rules of the Securities and Exchange Commission and the listing standards of the New York Stock Exchange. The Management Development and Compensation Committee concluded that the services provided by the Marsh & McLennan affiliates (other than Mercer), did not raise any conflicts of interest and did not impair Mercer’s ability to provide independent advice to the Compensation Committee concerning executive or director compensation matters.
Compensation Committee Interlocks and Insider ParticipationCOMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Calarco, Dr. Campbell (Chair), Mr. Del Giudice, Mr. Killian and Mr. KillianSutherland were on the Company’s Management Development and Compensation Committee during 2013.2016. The Company believes that there are no interlocks with the members who serve on thisthe Compensation Committee.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Communications with the Board of Directors
Interested parties may communicate directly with the members of the Company’s Board of Directors, including thenon-management Directors as a group, by writing to them, care of the Company’s Vice President and Corporate Secretary, at the Company’s principal executive officesoffice at 4 Irving Place, New York, New York 10003. The Vice President and Corporate Secretary will forward all communications to the Director or the Directors indicated.
20 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | DIRECTOR COMPENSATION |
DIRECTORELEMENTS OF COMPENSATION
In 2016,non-employee Directors were eligible to receive the following:
Those members of the Board who are not employees of
Amount | ||||
Annual Retainer(1) | $ | 100,000 | ||
Lead Director Retainer | $ | 35,000 | ||
Chair of Audit Committee Retainer | $ | 25,000 | ||
Member of Audit Committee Retainer (excluding the Audit Committee Chair) | $ | 10,000 | ||
Chair of Corporate Governance and Nominating Committee Retainer | $ | 10,000 | ||
Chair of Management Development and Compensation Committee Retainer | $ | 15,000 | ||
Retainer for Chairs of: Environment, Health and Safety Committee; Finance Committee; and Operations Oversight Committee | $ | 5,000 | ||
Acting Committee Chair Fee (where the regular Chair is absent) | $ | 200 | ||
Audit Committee member fee (for each meeting of the Audit Committee attended) | $ | 2,000 | ||
Committee member fee (for each Committee meeting attended) | $ | 1,500 | ||
Annual equity award (deferred stock units)(2) | $ | 135,000 |
Footnotes:
(1) | Effective April 1, 2016, the annual retainer was increased from $90,000 to $100,000. |
(2) | Effective April 1, 2016, the annual equity award was increased from $120,000 to $135,000. |
In 2016, the Company or its subsidiaries are paid an annual retainer of $90,000. The Chairman of the Board and the Lead Director each receive an additional annual retainer of $130,000 and $35,000, respectively. In 2013, the Chairs of the Environment, Health and Safety, Finance, Operations Oversight, and Planning Committees each received an additional annual retainer of $5,000. The Chairs of each of the Corporate Governance and Nominating Committee, the Management Development and Compensation Committee, and the Audit Committee received an additional annual retainer of $10,000, $10,000, and $20,000, respectively. Effective April 1, 2014, the annual retainer amounts payable to each of the Chairs of the Management Development and Compensation Committee and the Audit Committee were increased by $5,000, to $15,000 and $25,000, respectively. Each Audit Committee member (other than the Audit Committee Chair) received an additional annual retainer of $10,000 and each member of the Audit Committee received a fee of $2,000 for each meeting of the Audit Committee attended. Members of the other Committees of the Board or of the Boards of its subsidiaries received a fee of $1,500 for each meeting of a Committee attended. The Acting Chair of any Board Committee, at meetings where the regular Chair is absent, was paid an additional meeting fee of $200 for any Committee meeting at which he or she presided.
In 2013, the Company reimbursed Board members who were not currently employees of the Companynon-employee Directors for reasonable expenses incurred in attending Board and Committee meetings. No person who served on both the Company Board and on the Board of its subsidiary, Con Edison of New York, and corresponding Committees, was paid additional compensation for concurrent service. Members of the BoardDirectors who wereare employees of the Company or its subsidiaries received no retainerdo not receive retainers, meeting fees, or meeting feesannual equity awards for their service on the Board.
The Company has stock ownership guidelines fornon-employee Directors under which each Director is to own shares (including stock equivalents and restricted stock units) with a value equal to four times the annual director retainer (not including committee and/or committee chair fees) paid to such Director during the previous fiscal year.
Members of the BoardNon-employee Directors participate in the long term incentive plan. Pursuant to the long term incentive plan, eachnon-employee Director then serving was allocated an annual equity award of $105,000$135,000 of deferred stock units on the first business day following the 20132016 Annual Meeting. Effective April 1, 2014, the allocation was increased by $15,000, to $120,000 for each non-employee Director. If anon-employee Director wasis first appointed to the Board after an annual meeting, his or her first annual equity award will be pro rated. Settlement of the 20132016 annual equity awards of stock units werewas automatically deferred until the Director’s termination of service from the Board of Directors. Eachnon-employee Director may elect to receive some or all of his or her 20132016 annual equity awards of stock units on another date or to further defer any other prior annual equity award of stock units, including any related dividend equivalents earned on prior annual equity award of stock units, in accordance with the terms of the long term incentive plan and Section 409A of the Internal Revenue Code.units. Eachnon-employee Director may also elect to defer all or a portion of his or her 20132016 retainers and meeting fees into additional deferred stock units, which are deferred until the Director’s termination of service. Dividend equivalents are payable on 20132016 deferred stock units in the amount and at the time that dividends are paid on Company Common Stock and are credited in the form of additional deferred stock units which are fully vested as of the date the dividends would have been paid to the Director or, at the Director’s option, are paid in cash. All payments on account of deferred stock units will be made in shares of Company Common Stock. The long term incentive plan provides that cash compensation deferred into stock units, the annual stock unit awards, and the dividend equivalents granted tonon-employee Directors that are credited in the form of additional deferred stock units, are fully vested, and payable in a singleone-time payment of whole shares (rounded to the nearest whole share) within sixty60 days following separation from Board service unless the director elected to defer distribution to another date.
Directors are eligible to participate in the stock purchase plan, which is described in Note M to the financial statements in the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2013.2016.
CONSOLIDATED EDISON, INC. –Proxy Statement | 21 |
Director Compensation Table
![]() | DIRECTOR COMPENSATION |
The following table sets forth the compensation for the members of the Company’s Board of Directors for the fiscal year ended December 31, 2013.2016.
Director Compensation
Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | All Other Compensation(2) ($) | Total ($) | ||||||||||||
Kevin Burke | — | $ | 43,772 | — | $ | 43,772 | ||||||||||
Vincent A. Calarco | $ | 148,500 | $ | 105,000 | — | $ | 253,500 | |||||||||
George Campbell, Jr. | $ | 130,000 | $ | 105,000 | $ | 10,500 | (3) | $ | 245,500 | |||||||
Gordon J. Davis | $ | 112,500 | $ | 105,000 | $ | 10,500 | (3) | $ | 228,000 | |||||||
Michael J. Del Giudice | $ | 192,500 | $ | 105,000 | — | $ | 297,500 | |||||||||
Ellen V. Futter | $ | 114,500 | $ | 105,000 | $ | 10,000 | $ | 229,500 | ||||||||
John F. Hennessy III | $ | 118,500 | $ | 105,000 | — | $ | 223,500 | |||||||||
John F. Killian | $ | 138,000 | $ | 105,000 | $ | 10,500 | (3) | $ | 253,500 | |||||||
John McAvoy(4) | — | — | — | — | ||||||||||||
Eugene R. McGrath | $ | 116,000 | $ | 105,000 | $ | 10,500 | (3) | $ | 231,500 | |||||||
Sally H. Piñero | $ | 117,500 | $ | 105,000 | — | $ | 222,500 | |||||||||
Michael W. Ranger | $ | 114,000 | $ | 105,000 | — | $ | 219,000 | |||||||||
L. Frederick Sutherland | $ | 142,000 | $ | 105,000 | — | $ | 247,000 |
Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | All Other Compensation(2) ($) | Total ($) | ||||||||||||
Vincent A. Calarco | $ | 148,200 | $ | 135,000 | — | $ | 283,200 | |||||||||
George Campbell, Jr. | $ | 132,000 | $ | 135,000 | $ | 5,000 | (3) | $ | 272,000 | |||||||
Michael J. Del Giudice | $ | 176,000 | $ | 135,000 | — | $ | 311,000 | |||||||||
Ellen V. Futter | $ | 116,000 | $ | 135,000 | $ | 5,000 | $ | 256,000 | ||||||||
John F. Killian | $ | 133,000 | $ | 135,000 | — | $ | 268,000 | |||||||||
John McAvoy(4) | — | — | — | — | ||||||||||||
Armando J. Olivera | $ | 120,000 | $ | 135,000 | $ | 5,000 | $ | 260,000 | ||||||||
Michael W. Ranger | $ | 144,000 | $ | 135,000 | — | $ | 279,000 | |||||||||
Linda S. Sanford | $ | 120,000 | $ | 135,000 | — | $ | 255,000 | |||||||||
L. Frederick Sutherland | $ | 142,500 | $ | 135,000 | — | $ | 277,500 |
Footnotes:
(1) | On May |
(2) | The “All Other Compensation” column includes matching contributions made by the Company to qualified |
(3) | The amounts reported in the “All Other Compensation” column |
(4) | Mr. McAvoy |
22 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | STOCK OWNERSHIP AND SECTION 16 COMPLIANCE |
BENEFICIALSTOCK OWNERSHIP OF SECURITIESDIRECTORS AND EXECUTIVE OFFICERS
Directors and Executive Officers
The following table includes information,provides, as of February 28, 2014, with respect to2017, the beneficial ownershipamount of shares of the CompanyCompany’s Common Stock beneficially owned by each non-employee Director, each executive officer named in the Summary Compensation Table,Named Executive Officer, and by all Directors and executive officers of the Company as a group. Each executive officergroup, and memberinformation about the amount of the Board held his or her shares with sole voting power and sole investment power, except for the restricted stock units and deferred stock units (the holders of which have no voting rights or investment power) and shares as to which voting power, or investment power, or both, were shared with a spouse or a relative of such person. As of February 28, 2014, such ownership was, in each case, less than one percent of the outstanding 292,894,758 shares.their other Company equity-based holdings.
Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Other Stock- Based Holdings(2) | Total Number of Shares | |||||||||
Kevin Burke | 290,937 | 25,936 | 316,873 | |||||||||
Vincent A. Calarco | 24,515 | — | 24,515 | |||||||||
George Campbell, Jr. | 22,662 | 8,988 | 31,650 | |||||||||
Gordon J. Davis | 26,296 | 1,724 | 28,020 | |||||||||
Michael J. Del Giudice | 35,684 | 1,782 | 37,466 | |||||||||
Ellen V. Futter | 16,648 | 7,724 | 24,372 | |||||||||
John F. Hennessy III | 10,202 | — | 10,202 | |||||||||
John F. Killian | 7,564 | 4,989 | 12,553 | |||||||||
Eugene R. McGrath | 63,001 | 1,782 | 64,783 | |||||||||
Armando J. Olivera | 975 | — | 975 | |||||||||
Sally H. Piñero | 30,475 | 1,500 | 31,975 | |||||||||
Michael W. Ranger | 25,549 | — | 25,549 | |||||||||
L. Frederick Sutherland | 28,833 | 1,782 | 30,615 | |||||||||
John McAvoy | 3,764 | 10,206 | 13,970 | |||||||||
Robert Hoglund | 20,512 | 15,000 | 35,512 | |||||||||
Craig Ivey | 3,153 | 35,306 | 38,459 | |||||||||
William Longhi | 25,421 | 15,541 | 40,963 | |||||||||
Elizabeth D. Moore | 24,663 | — | 24,663 | |||||||||
Directors and Executive Officers as a group, including the above-named persons (24 persons) | 731,375 | 132,260 | 863,635 |
Name | Shares Beneficially Owned(1) | Other Equity-Based Holdings(2) | Total(3) | |||||||||
Vincent A. Calarco | 34,098 | — | 34,098 | |||||||||
George Campbell, Jr. | 26,231 | 11,900 | 38,131 | |||||||||
Michael J. Del Giudice | 42,882 | 1,942 | 44,824 | |||||||||
Ellen V. Futter | 23,752 | 7,724 | 31,476 | |||||||||
John F. Killian | 12,504 | 7,457 | 19,961 | |||||||||
Armando J. Olivera | 7,478 | — | 7,478 | |||||||||
Michael W. Ranger | 41,885 | — | 41,885 | |||||||||
Linda S. Sanford | 6,111 | — | 6,111 | |||||||||
L. Frederick Sutherland | 40,634 | 6,637 | 47,271 | |||||||||
John McAvoy | 6,974 | 113,480 | 120,454 | |||||||||
Robert Hoglund | 7,669 | 30,000 | 37,669 | |||||||||
Craig Ivey | 66 | 35,306 | 35,372 | |||||||||
Elizabeth D. Moore | 2,022 | 35,331 | 37,353 | |||||||||
Timothy P. Cawley | 2,441 | 10,918 | 13,359 | |||||||||
Directors and Executive Officers as a group, including theabove-named persons (22 persons) | 276,931 | 328,940 | 605,871 |
Footnotes:
(1) |
(2) | Represents |
(3) | As of February 28, 2017, ownership was, in each case, less than one percent (1%) of the outstanding 305,111,726 shares. |
CONSOLIDATED EDISON, INC. –Proxy Statement | 23 |
![]() | STOCK OWNERSHIP AND SECTION 16 COMPLIANCE |
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table provides information, as of December 31, 2013, information2016, with respect to persons who are known to the Company to beneficially own more than five percent (5%) of Company Common Stock:Stock.
Name and Address of Beneficial Owner | Shares of Common Stock Beneficially Owned | Percent of Class | ||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 23,779,520 | (1) | 7.80 | % | ||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | 20,578,607 | (2) | 6.75 | % | ||||
State Street Corporation State Street Financial Center One Lincoln Street Boston, MA 02111 | ||||||||
| ||||||||
| (3) | % |
Footnotes:
(1) | BlackRock, Inc. stated in its Schedule 13G/A, filed on January 23, 2017 with the Securities and Exchange Commission, that it has sole voting power for 20,201,086 of these shares and sole dispositive power for 23,779,520 of these shares. |
(2) | The Vanguard Group stated in its Schedule 13G/A, filed on February 10, 2017 with the Securities and Exchange Commission, that it has sole voting power for 518,089 of these shares, shared voting power for 86,464 of these shares, sole dispositive power for 20,013,489 of these shares, and shared dispositive power for 565,118 of these shares. |
(3) | State Street Corporation stated in its Schedule 13G, filed on February |
Section 16(a) Beneficial Ownership Reporting ComplianceSECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Directors and executive officers of the Company to file reports of ownership and changes in ownership of the equity securities of the Company and its subsidiaries with the Securities and Exchange Commission and to furnish copies of these reports to the Company, within specified time limits. Based upon its review of the reports furnished to the Company for 20132016 pursuant to Section 16(a) of the Act, the Company believes that all of the reports were filed on a timely basis, except for one transaction, which was reported late for Kevin Burke,Joseph P. Oates, relating to the 796 deferred stock units thatacquisition of 308 shares of Company Common Stock before he received when he became a non-employee Director in December 2013.was required to file Section 16(a) reports.
24 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | AUDIT COMMITTEE MATTERS |
REPORT OF THE AUDIT COMMITTEE REPORT
The Company’s Audit Committee consisted of fourfive independent Directors in 2013.2016. Each member of the Audit Committee meets the qualifications required by the New York Stock Exchange and Securities and Exchange Commission.
The Audit Committee has reviewed and discussed with management the audited financial statements of the Company for the year ended December 31, 2013.2016. The Audit Committee has also discussed with PricewaterhouseCoopers LLP (“PwC”), the Company’s independent registered public accountants, the matters required to be discussed under the rules adopted by the Public Company Accounting Oversight Board (“PCAOB”).
The Audit Committee has received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence. The Audit Committee has discussed with PwC its independence and qualifications. In 2013, PwC did not provide any The Audit Committee also considered whether PwC’s provision of limited tax andnon-audit services to the Company.
Based on the Audit Committee’s review and discussions, the Audit Committee recommended to the Board of Directors that the Company’s audited financial statements be included in the Company’s Annual Report on Form10-K for the year ended December 31, 20132016 for filing with the Securities and Exchange Commission.
Audit Committee:
Vincent A. Calarco (Chair)
Michael J. Del Giudice
John F. Killian
Michael W. Ranger
L. Frederick Sutherland
Fees Paid to PricewaterhouseCoopersFEES PAID TO PRICEWATERHOUSECOOPERS LLP
Fees paid or payable to PwC for services related to 20132016 and 20122015 are as follows:
2013 | 2012 | |||||||
Audit Fees | $ | 4,431,699 | $ | 4,545,751 | ||||
Audit-Related Fees(1) | $ | 748,925 | $ | 999,393 | ||||
Tax Fees | $ | — | $ | — | ||||
All Other Fees | $ | — | $ | — | ||||
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TOTAL FEES | $ | 5,180,624 | $ | 5,545,144 | ||||
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2016 | 2015 | |||||||
Audit Fees | $ | 5,285,173 | $ | 4,992,800 | ||||
Audit-Related Fees(a) | $ | 1,053,925 | $ | 369,002 | ||||
Tax Fees(b) | $ | 25,000 | $ | 75,088 | ||||
All Other Fees | $ | 0 | $ | 102,867 | (c) | |||
TOTAL FEES | $ | 6,364,098 | $ | 5,539,757 |
Footnote:
Relates to assurance and related service fees that are reasonably related to the performance of the annual audit or quarterly reviews of the Company’s financial statements that are not specifically deemed “Audit Services.” The major items included in Audit-Related Fees in |
(b) | Relates to fees for tax compliance reporting relating to the Foreign Account Tax Compliance Act. |
(c) | Relates to fees in 2015 for cybersecurity risk review. |
The Audit Committee, or as delegated by the Audit Committee, the Chair of the Committee, approves in advance each auditing service andnon-audit service permitted by applicable laws and regulations, including tax services, to be provided to the Company and its subsidiaries by its independent accountants.
EXECUTIVE COMPENSATION REPORT OF THE MANAGEMENT DEVELOPMENT AND
COMPENSATION COMMITTEE
CONSOLIDATED EDISON, INC. –Proxy Statement | 25 |
![]() | COMPENSATION COMMITTEE REPORT |
The Management Development and Compensation Committee of the Board of Directors of the Company (the “Committee”) is composed of four independent Directors. The Committee establishes, reviews and administers the Company’s executive compensation program for the Chief Executive Officer and the other members of senior management, including the Named Executive Officers listed on the Summary Compensation Table, and determines the compensation of such officers.
The Committee has reviewed and discussed the Compensation Discussion and Analysis Report (the “CD&A”) for 20132016 with management of the Company. Based on this review and discussion, the Committee recommended to the Board of Directors that the CD&A be included in the Company’s Annual Report onForm 10-K for the year ended December 31, 20132016 and this Proxy Statement.
Management Development and Compensation Committee:
George Campbell, Jr. (Chair)
Vincent A. Calarco
Michael J. Del Giudice
John F. Killian
L. Frederick Sutherland
26 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | COMPENSATION DISCUSSION AND ANALYSIS |
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COMPENSATION DISCUSSION AND ANALYSIS REPORTINTRODUCTION
Introduction
This section of the Proxy Statement provides management’s discussion and analysisan overview of the Company’s 20132016 executive compensation program (the “executive compensation program”) and an analysis of the decisions made with respect to the compensation of the Company’s Named Executive Officers (as identified by the Company under Securities and Exchange Commission rules). The executive compensation program covers the Company’s Named Executive Officers (as set forth on page 36). The discussion and analysis addresses:
A. Introduction
The Company’s executive compensation program is designed to assist in attracting and retaining key executives critical toOfficers. For 2016, the Company’s long-term success, and to motivate these executives to create value for its stockholders and to provide safe, reliable, and efficient service for its customers. The Committee seeks to provide base salary, and performance-based variable compensation, including target annual cash incentive compensation and target long-term equity-based incentive compensation, that aligns pay to performance and is competitive with the median level of compensation provided by the Company’s compensation peer group. (See “Committee Actions with Respect to Executive Compensation—Compensation Peer Group” on page 40.)
The Committee believes that performance-based variable compensation should represent the most significant portion of each Named Executive Officer’s target total direct compensation to motivate strong annual and multi-year Company performance. Additionally, the Committee believes that most of the performance-based variable compensation should be in the form of long-term, rather than annual incentives, to emphasize the importance of sustained Company performance. Each year, the Committee evaluates the level of compensation and the mix of base salary and performance-based variable compensation of each Named Executive Officer to ensure that it meets the Committee’s objectives and is competitive with levels of compensation provided by the Company’s compensation peer group.
Key features of the executive compensation program include:Officers were:
Base salary: recognizes individual responsibility and performance.
Performance-based variable compensation:
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B. Key Governance Features
The Company is committed to maintaining strong compensation governance practices to ensure adherence with the pay-for-performance philosophy of the executive compensation program and aligning the executive compensation program with the long-term interests of the Company’s stockholders:
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C. 2013 Say-on-Pay Vote and Shareholder Outreach
The Company values the opinions of its stockholders as expressed through their votes and other communications. In 2013, the Company held a “say-on-pay” vote to approve Named Executive Officer compensation, as set forth in the 2013 proxy statement, and 90.2 percent of the shares voted were voted “for” the proposal. The Company is committed to furthering the long-term interests of stockholders and creating long-term stockholder value through sustainable growth strategies. As part of this commitment, the Company believes it is important to maintain an ongoing dialogue with stockholders to better understand their views on our executive compensation program and to solicit and respond to feedback so the Company can further align the program with stockholder objectives. During 2013 and 2014, the Company engaged in outreach with stockholders, investment firms, and institutional stockholders. These discussions were conducted via teleconference and in person with senior management.
Our shareholder outreach efforts focused on the design of the executive compensation program, disclosure practices, corporate governance, and the results of the most recent say-on-pay vote.
As part of its continuing review of the alignment between the executive compensation program and the creation of long-term shareholder value, the Committee, in consultation with its independent compensation consultant and management, considered feedback from stockholders, developing market practices, and evolving business priorities. After careful consideration, the Committee determined that certain compensation design changes to the performance measures for the 2014-2016 performance restricted stock unit awards under the long term incentive plan would link more directly Named Executive Officer compensation to the creation of long-term shareholder value. These changes, which are discussed in more detail below, replace “Incentive Plan Percentage” (the average calculated payout under the Company’s annual incentive plan over the three-year performance period) as a performance measure with cumulative adjusted earnings per share and operating objectives (long-term system reliability and environmental sustainability) as performance measures. In addition to achieving better long-term executive compensation alignment with performance, these changes will provide greater clarity and transparency around performance measures, minimize the overlap of performance measures between annual and long-term incentives, and present a more overall competitive design around our long-term equity program.
(iv) 2014 Performance Restricted Stock Unit Awards
The Committee, in consultation with its independent compensation consultant, introduced changes for 2014 for the performance restricted stock units awarded to certain executive officers, including the Named Executive Officers other than Mr. Burke (who retired as an executive officer in 2013), for the 2014-2016 performance period. The Committee removed “Incentive Plan Percentage” as a performance measure because it used the same
performance measures as the annual incentive plan. The Committee replaced it with a target for cumulative adjusted earnings per share during the three-year performance period, which focuses on the creation of long-term shareholder value by improving after-tax profitability, and certain operating objectives for the period (long-term system reliability and environmental sustainability), which are important to the Company’s operating effectiveness and are closely aligned with its business goals. The Committee will continue to use “Shareholder Return Percentage” (the cumulative change in the Company’s total shareholder returns over the three-year performance period compared with the Company’s compensation peer group as constituted on the date the performance restricted stock units are awarded) as a performance measure. Awards to the Company’s executive officers, including the Named Executive Officers, under the long term incentive plan will continue to be completely performance based applying pre-established performance measures. For 2014, the target number of performance restricted stock units that may be earned will be based on the satisfaction of the following performance measures: 50 percent Shareholder Return Percentage; 30 percent cumulative adjusted earnings per share; and 20 percent operating objectives.
These changes are intended to provide a clearer, more transparent connection between the Company’s executive compensation program and financial and business performance. The changes would link more directly Named Executive Officer compensation to the creation of long-term shareholder value.
A. Executive Compensation Program Overview
The executive compensation program consists of the following components:
Base salary;
Annual incentive compensation;
Long-term incentive compensation;
Retirement and welfare benefits; and
Perquisites and personal benefits.
The Company’s Named Executive Officers are:
John McAvoy, President and Chief Executive Officer (effective December 26, 2013) and former President and Chief Executive Officer, Orange & Rockland
Robert Hoglund, Senior Vice President and Chief Financial Officer
Craig Ivey, President, Con Edison of New York
William Longhi, President, Shared Services, Con Edison of New York
Elizabeth D. Moore, Senior Vice President and General Counsel
Kevin Burke, formerTimothy P. Cawley, President and Chief Executive Officer, who retired as anOrange & Rockland
The Company’s executive officer on December 25, 2013compensation program is designed to assist in attracting and retaining key executives critical to its long-term success, to motivate these executives to create value for its stockholders, and to promote safe, reliable, and efficient service for its customers. Each year, the Management Development and Compensation Committee (the “Compensation Committee”) evaluates the level of compensation, the mix of base salary, performance-based compensation, and retirement and welfare benefits provided to each Named Executive Officer. The Compensation Committee, with the assistance of its independent compensation consultant, seeks to align pay to performance and provide
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B.base salary and performance-based compensation, including target annual cash incentive compensation and target long-term equity-based incentive compensation that are competitive with the median level of compensation provided by the Company’s compensation peer group companies. (See “Executive Compensation Philosophy and ObjectivesObjectives—Competitive Positioning—Attraction and Retention” on page 29 and “Executive Compensation Actions—Compensation Peer Group” on page 33.) The Compensation Committee believes that performance-based compensation should represent the most significant portion of each Named Executive Officer’s target total direct compensation to motivate strong annual and multi-year Company performance.
Additionally, the Compensation Committee believes that most of the performance-based compensation should be in the form of long-term, rather than annual, incentives to emphasize the importance of sustained Company performance.
Key Features of the Executive Compensation Program
Type | Component | Objective | ||
Performance- Based Compensation | Annual Incentive Compensation | Achievement of financial and operating objectives for which the Named Executive Officers have individual and collective responsibility. | ||
Long-Term Incentive Compensation | Achievement, over a multi-year period, of financial and operating objectives critical to the performance of the Company’s business plans and strategies. Achievement, over a three-year period, of the Company’s cumulative total shareholder return relative to the Company’s compensation peer group companies. | |||
Fixed & Other Compensation | Base Salary, Retirement Programs, Benefits and Perquisites | Differentiate base salary based on individual responsibility and performance. Provide retirement and other benefits that reflect the competitive practices of the industry and provide limited and specific perquisites. |
Key Compensation Governance Practices
The Company is committed to maintaining strong compensation governance practices to support thepay-for-performance philosophy of the executive compensation program and align the executive compensation program with the long-term interests of the Company’s stockholders:
• | Pay Practices. The Company has no employment agreements, no golden parachute excise taxgross-ups, and no individually negotiated equity awards with special treatment upon a change of control. |
• | Long-Term Incentive Compensation. The Long Term Incentive Plan: (i) prohibits the repricing of stock options or the buyout of underwater options without stockholder approval; (ii) prohibits recycling of shares for future awards except under limited circumstances; (iii) prohibits accelerated vesting of outstanding equity awards except if both a change in control occurs and a participant’s employment is terminated under certain circumstances; and (iv) caps the maximum number of shares that may be awarded to a director, officer, or eligible employee in a calendar year. |
• | Long-Term Incentive Mix. All Named Executive Officer long-term incentive compensation is performance-based. Based on proxy statements filed in 2016, over half of the Company’s compensation peer group companies granted some form ofnon-performance-based incentive compensation to their named executive officers. (See “Executive Compensation Philosophy andObjectives—Pay-for-Performance Alignment and Pay Mix” on page 30.) |
• | Risk Management. The relevant features of the Company’s compensation programs that mitigate risk are: |
¡ | Annual and long-term incentives under the Company’s compensation programs appropriately balanced between annual and long-term financial performance goals that are tied to key goals that are expected to enhance stockholder value; |
¡ | Annual and long-term incentives tied to multiple performance goals to reduce undue weight on any one goal; |
¡ | Non-financial performance factors used in determining the actual payout of annual incentive compensation as a counterbalance to financial performance goals; |
¡ | Compensation programs designed to deliver a significant portion of compensation in the form of long-term incentives, discouraging excessive focus on annual results; |
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¡ | Performance-based equity awards based on performance over a three-year period, focusing on sustainable performance over a three-year cycle rather than any one year; and |
¡ | Annual and long-term incentive plans that are subject to payment caps and Compensation Committee discretion to reduce payouts. |
• | Stock Ownership Guidelines. Stock ownership guidelines for directors and certain officers, including the Named Executive Officers, encourage a long-term commitment to the Company’s sustained performance through stock ownership. (See “Director Compensation” on page 21 and “Stock Ownership Guidelines” on page 45.) |
• | No Hedging Nor Pledging. To encourage a long-term commitment to the Company’s sustained performance, the Company prohibits all directors, officers, financial personnel, and certain other individuals from shorting, hedging, and pledging Company securities or holding Company securities in a margin account. (See “No Hedging Nor Pledging” on page 45.) |
• | Recoupment Policy. The Company’s compensation recoupment policy applies to all officers of the Company and its subsidiaries for incentive-based compensation and is intended to reduce potential risks associated with its executive compensation program and align the long-term interests of officers and stockholders. (See “Recoupment Policy” on page 45.) |
Stockholder Engagement and Say on Pay
The Company believes that good corporate governance includes proactive stockholder engagement as well as accepting invitations to discuss matters of interest to stockholders. The Company shared with the Board the feedback it received from institutional investors and stockholders following the 2016 proxy season on issues relating to disclosure practices, corporate governance, and
environmental, health and safety matters. The Company’s engagement with institutional investors resulted in the Board’s adoption of proxy access, which enables the stockholders of the Company to include their own director nominees in the Company’s Proxy Statement and form of proxy along with candidates nominated by the Board, so long as they meet certain requirements, as set forth in the Company’sBy-laws.
In 2016, the Company held its annual say on pay vote to approve Named Executive Officer compensation, as set forth in the 2016 proxy statement, and 92.15% of the shares voted were voted “for” the proposal. The Company intends to hold an annual say on pay vote unless stockholders advise the Company to change the frequency of the vote at the Company’s 2017 annual meeting of stockholders.
EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES
The Compensation Committee’s philosophy and objectives governing the development and implementation of the Company’s executive compensation program are to provide competitive, performance-based compensation. There are no material differences in the Company’s compensation policies for each Named Executive Officer.
(i) Competitive Positioning—Attraction and Retention
The Company’s executive compensation program is designed to assist in attractingattract and retainingretain key executives critical to the Company’s long-term success. The Compensation Committee seeks to align pay to performance and provide base salary, target annual incentive awards,cash incentives, and target long-term incentive award valuesequity-based incentives that are competitive with the median level of compensation provided by the Company’s compensation peer group.group companies. (See “Executive Compensation Actions—Compensation Peer Group” on page 33.) The Company also seeks to provide retirement and welfare benefits, perquisites, and personalother benefits that are competitive with those provided by the compensation peer group.industry and to provide limited and specific perquisites.
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Mr. McAvoy became President and Chief Executive Officer at the end of 2013. Pursuant to his employment offer letter, Mr. McAvoy receives an initial base salary of $1,140,000, participates in the Company’s annual incentive plan, with a 2014 target bonus opportunity of 100 percent of base salary and a maximum bonus opportunity of 200 percent of base salary, and participates in the Company’s long term incentive plan. In addition, for 2014, Mr. McAvoy’s long-term incentive opportunity is 375 percent of base salary.
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In 2014, Mr. McAvoy’s2016, the Named Executive Officers’ target total direct compensation compared to the Company’s compensation peer group median iswas as follows:
Company Target Compensation as a Percentage of Peer Group Median Target | ||||||||||||||||
Principal Position | Base Salary | Target Total Cash Compensation (Base Salary + Target Annual Incentive) | Target Long-Term Incentive Compensation | Target Total Direct Compensation | ||||||||||||
John McAvoy | ||||||||||||||||
President and Chief Executive Officer(1) | 99 | % | 93 | % | 94 | % | 94 | % |
Company Target Compensation as a Percentage of Compensation Peer Group Median Target | ||||||||||||||||
Base Salary | Target Total Cash Compensation (Base Salary + Target Annual Incentive) | Target Long-Term Incentive Compensation | Target Total Direct Compensation | |||||||||||||
John McAvoy | ||||||||||||||||
Chairman, President and Chief Executive Officer(1) | 95 | % | 100 | % | 90 | % | 94 | % | ||||||||
Other Named Executive Officers (Average)(2) | 109 | % | 104 | % | 113 | % | 107 | % |
Footnote:Footnotes:
(1) | Based on comparisons |
In 2013, the target total direct compensation of the Named Executive Officers, other than Mr. McAvoy, compared to the Company’s compensation peer group median was as follows:
Company Target Compensation as a Percentage of Peer Group Median Target | ||||||||||||||||
Principal Position | Base Salary | Target Total Cash Compensation (Base Salary + Target Annual Incentive) | Target Long-Term Incentive Compensation | Target Total Direct Compensation | ||||||||||||
Kevin Burke | ||||||||||||||||
Former President and Chief Executive Officer(1) | 109 | % | 103 | % | 105 | % | 104 | % | ||||||||
Other Named Executive Officers (Average)(2) | 102 | % | 97 | % | 94 | % | 95 | % |
Footnote:
(2) | Based on comparisons |
(ii) Pay-PerformancePay-for-Performance Alignment and Target Total Direct CompensationPay Mix
The Company’s executive compensation program is designed to motivate its executive officersthe Company’s key executives to create sustainable stockholder value for its stockholders and providepromote safe, reliable and efficient service for its customers. The Compensation Committee seeks to ensure thatbalance the target total direct compensation of each Named Executive Officer is balanced appropriately between base salary (fixed compensation) and annual cash incentive compensation and long-term equity-based incentive compensation
(performance-based variable compensation). The Compensation Committee believes that fixed compensation should recognize each Named Executive Officer’s individual responsibility and performance. The Compensation Committee believes that performance-based variable compensation should represent the most significant portion of each Named Executive Officer’s target total direct compensation to motivate strong annual and multi-year performance. The Committee also believes that most of the performance-based variable compensation targeted to each Named Executive Officer should be in the form of long-term, rather than annual, incentives to emphasize the importance of sustained Company performance. The target
Target annual cash incentive and target long-term equity-based incentive grants made to each Named Executive Officer by the Committeeawards reflect the Compensation Committee’s
desired balance between these elements, relative to the base salary paid to each executive.Named Executive Officer. Awards under the Company’s annual incentive plan are based on achievingthe achievement of financial and operating objectives critical tofor which the performance of the Company’s businesses.Named Executive Officers have individual and collective responsibility. Awards of performance restricted stock units under the Company’s long term incentive plan are based on achievingthe achievement of financial and operating objectives critical to the Company’s business plans and strategies and the achievement, over a three-year period, of the Company’s cumulative total shareholder return relative to the total shareholder return for the Company’s compensation peer group over a three-year period.companies.
As shown below for 2014, the mix of target total direct compensation for Mr. McAvoy meets the Committee’s objectives: each is weighted heavily towards performance-based variable compensation, with the largest portion delivered in long-term incentives.
As President and Chief Executive Officer in 2014, Mr. McAvoy’s mix of target total direct compensation will be as follows:
As shown below for 2013,For 2016, the mix of target total direct compensation for the Named Executive Officers other than Mr. McAvoy, meets the Compensation Committee’s objectives: each is weighted heavily towardstoward performance-based variable compensation, with the largest portion delivered in long-term incentives, and the target total direct compensation mix of the Named Executive Officers is in line with that of the Company’s compensation peer group.group companies (except that the Company does not providenon-performance based incentive compensation).
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The following charts illustrate the average mix of target total direct compensation for the former President and Chief Executive OfficerMr. McAvoy and for chief executive officers in ourthe Company’s compensation peer group companies for 2013:2016:
The following charts illustrate the average mix of target total direct compensation for the other Named Executive Officers and other named executive officers (based on comparisons to compensation for functionally comparable positions) in ourthe Company’s compensation peer group companies for 2013:2016 (see footnote 2 to the table in “Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention” on page 30):
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The following charts illustrate that all Named Executive Officer long-term incentive compensation is performance-based and that, based on proxy statements filed in 2016, over half of the Company’s compensation peer group companies granted some form ofnon-performance-based incentive compensation to their named executive officers:
![]() | ![]() |
(iii) Determining Performance MeasuresGoals
The Compensation Committee chooses performance measuresgoals under the annual incentive plan and the long termlong-term incentive planplans to support the Company’s short- and long-term business plans and strategies. In setting targets for the short- and long-term performance measures,goals, the Compensation Committee considers the Company’s annual and long-term business plans and certain other factors, includingpay-for-performance alignment, economic and industry conditions, and the pay practices of the compensation peer group.group companies. The Compensation Committee sets challenging, but achievable, goals for the Company and its key executives to drive the achievement of short- and long-term objectives.
A.ROLE OF COMPENSATION COMMITTEE AND OTHERS IN DETERMINING EXECUTIVE COMPENSATION
The role of the Compensation Committee is to establish and oversee the Company’s executive compensation and retirement and welfare benefit plans and policies, administer its equity plans and annual incentive plan and review and approve annually all compensation relating to the Named Executive
Officers. All of the decisions with respect to determining the amount or form of compensation of the Named Executive Officers under the Company’s executive compensation program are made by the Compensation Committee.
The role of the Company’s chief executive officer with respect toin determining the amount orand form of the compensation of the other Named Executive OfficersOfficers’ compensation is to provide his recommendations to the Compensation Committee. The chief executive officer is not present when the Compensation Committee determines his compensation. The chief executive officer considers the following in making his recommendations:recommendations for the other Named Executive Officers’ compensation:
Individual performance of each of the other Named Executive Officers;
TheEach of the other Named Executive Officer’s contribution towardstoward the Company’s long-term performance;
The scope of theireach of the other Named Executive Officer’s individual responsibilities; and
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Compensation peer group company proxy statement data provided by the Compensation Committee’s independent compensation consultant.
The Company’s Human Resources department also supports the Compensation Committee in its work.
C. Compensation Consultant’s Role
The Compensation Committee has the authority under its charter to hire advisors to assist it in its compensation decisions. It has retained Mercer as its independent compensation consultant to provide information, analyses, and objective advice regarding executive compensation. The Compensation Committee periodically meets with Mercer in executive session to discuss compensation matters. The Compensation Committee’s decisions reflect factors and considerations in addition to the information and advice provided by Mercer. A discussion of Mercer’s role as the Compensation Committee’s independent compensation consultant is set forth in the section titled “The Board of Directors—Standing Committees of the BoardBoard—Management Development and Compensation Committee” on page 24.19.
For 2013,2016, the Compensation Committee used a compensation peer group of publicly-traded utility companies of comparable size and scope to that of the Company. The compensation peer group was developed in 2007 and has remained consistent since then except for the loss of two peers that were acquired by other peers (in 2012 Progress Energy was acquired by Duke Energy and Constellation Energy was acquired by Exelon). The Committee annually reviews the composition of the compensation peer group and the impact of acquisitions. For 2013 the Committee concluded that no changes are needed because the peer group continues to represent publicly-traded utility companies of comparable size and scope to that of the Company. The Company’s 2012 revenues approximated the 50th percentile of the peer group. The purpose of the compensation peer group is to provide benchmark information on compensation levels provided to the Company’s officers, as well as to measure relative total shareholder returns for the vesting of performance restricted stock unitperformance-based equity awards. The Compensation Committee annually reviews the composition of the compensation peer group companies and the impact of acquisitions. For 2016, the Compensation Committee made the following change to the compensation peer group: WEC Energy Group (a company formed by the June 2015 merger between Wisconsin Energy Corporation and Intergrys Energy Group) was added because of its mix of business and size. The Company’s 2015 revenues approximated the 66th percentile of the compensation peer group.
For 2013,2016, the Company’s compensation peer group consisted of the following companies:
Company Name | 2012 Revenue(1) | |||
(in millions) | ||||
Exelon Corporation | $ | 23,489 | ||
Duke Energy Corporation | $ | 19,624 | ||
The Southern Company | $ | 16,537 | ||
FirstEnergy Corp. | $ | 15,320 | ||
PG&E Corporation | $ | 15,040 | ||
American Electric Power Company, Inc. | $ | 14,945 | ||
NextEra Energy, Inc. | $ | 14,256 | ||
Dominion Resources, Inc. | $ | 13,093 | ||
PPL Corporation | $ | 12,189 | ||
Edison International | $ | 11,862 | ||
Entergy Corporation | $ | 10,302 | ||
Xcel Energy Inc. | $ | 10,128 | ||
Sempra Energy | $ | 9,647 | ||
DTE Energy Company | $ | 8,791 | ||
CenterPoint Energy, Inc. | $ | 7,452 | ||
Ameren Corporation | $ | 6,828 | ||
Pepco Holdings, Inc. | $ | 5,081 | ||
NiSource Inc. | $ | 5,061 | ||
Median | $ | 12,026 | ||
Consolidated Edison, Inc. | $ | 12,188 | ||
Percentile Rank | 53 | rd |
Company Name | 2015 Revenue(1) | |||
(in millions) | ||||
Duke Energy Corporation | $ | 23,459 | ||
The Southern Company | $ | 17,489 | ||
NextEra Energy, Inc. | $ | 17,486 | ||
PG&E Corporation | $ | 16,833 | ||
American Electric Power Company, Inc. | $ | 16,453 | ||
FirstEnergy Corp. | $ | 15,031 | ||
Dominion Resources, Inc. | $ | 11,683 | ||
Edison International | $ | 11,524 | ||
Entergy Corporation | $ | 11,513 | ||
Xcel Energy Inc. | $ | 11,024 | ||
DTE Energy Company | $ | 10,337 | ||
Sempra Energy | $ | 10,231 | ||
Eversource Energy | $ | 7,955 | ||
PPL Corporation | $ | 7,669 | ||
CenterPoint Energy, Inc. | $ | 7,386 | ||
Ameren Corporation | $ | 6,098 | ||
WEC Energy Group, Inc. | $ | 5,926 | ||
NiSource Inc. | $ | 4,652 | ||
Median | $ | 11,269 | ||
Consolidated Edison, Inc. | $ | 12,554 | ||
Percentile Rank | 66th |
Footnote:
(1) | Source: Standard & Poor’s Research Insight (represents net revenues, restated if applicable). |
For 2017, the Compensation Committee made no change to the compensation peer group.
A portion of each Named Executive Officer’s annual cash compensation is paid in the form of base salary. Base salary is reviewed on an annual basisannually to recognize individual performance, as well as at the time of a promotion or other change in responsibilities.
In setting base salary for the Company’s Named Executive Officers, including the chief executive officer, the Compensation Committee considers various factors, including:
Recommendations from the chief executive officer for each of the other Named Executive Officers;
A general assessment of each Named Executive Officer’s performance of his or her responsibilities; and
The level of base salary compared to key executives holding equivalent positions in the Company’s compensation peer group.group companies.
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Effective February 1, 2013,2016, base salary merit increases for the Named Executive Officers as a group increased by an average of 3.3 percent.3.0%. The 20132016 base salary of each Named Executive Officer is set forth in the “Salary” column of the Summary Compensation Table on page 54.48.
C. Annual Incentive Compensation
(i) Awards
A significant portion of the annual cash incentive compensation paid to the Named Executive Officers is directly relatedrelates to the Company’s financial and operating performance, factors that the Compensation Committee believes influence stockholder value.
Individual performance is taken into considerationconsidered in setting annual cash incentive compensation through the establishment by the Compensation Committee of financial and operating objectives for which the Named Executive Officers have individual and collective responsibility.
For 2013,2016, the Compensation Committee set the range of the award that each Named Executive Officer was eligible to receive under the annual incentive plan after considering various factors, including:
Recommendations from the chief executive officer for each of the other Named Executive Officers;
A general assessment of each Named Executive Officer’s performance of his or her responsibilities; and
The level of annual incentive compensation compared to executives holding functionally comparable positions in the Company’s compensation peer group.
• | The level of annual incentive compensation compared to key executives in the Company’s compensation peer group companies. (See footnote 2 to the table in “Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention” on page 29.) |
The range of awards included threshold, target and maximum levels reflecting differing levels of achievement of the various financial and operating objectives. Awards are scaled to reflect relative levels of achievement of the objectives between the threshold, target and maximum levels. The range of each Named Executive Officer’s potential award is set forth onin the Grants of Plan-Based Awards Table on pages 55 to 56.page 50. Awards under the annual incentive plan are designed to provide a competitive level of compensation if the officersNamed Executive Officers achieve the target financial and operating objectives. Over the past three years, the aggregate actual awards to the Named Executive Officers ranged from 131 percent to 155 percent of aggregate target annual incentive awards. Pursuant to the terms of the annual incentive plan, the Compensation Committee has the discretion to adjust (upward or
downward) the annual incentive awardsaward to be paid to each Named Executive Officer.
Awards under the annual incentive plan are calculated as follows:
Base Salary X Target Percentage
X Weighting Earned
“Base Salary” is the annual base salary of the Named Executive Officer as of the end of the year to which the annual incentive award relates, and is determined as discussed under the caption “Committee Actions with Respect to Executive Compensation—Base Salary” on page 41.
“Target Percentage” is a percentage of base salaryBase Salary that varies based on the Named Executive Officer’s position. The target percentage for Mr. McAvoy is 80 percent (reflecting the percentage that was established based on his position as president and chief executive officer of Orange & Rockland for most of 2013). The target percentage for Mr. Ivey and Mr. Longhi is 80 percent; the target percentage for Mr. Hoglund and Ms. Moore is 50 percent; and the target percentage for Mr. Burke is 100 percent (reflecting the percentage that was established based on his position as President and Chief Executive Officer for most of 2013).follows:
Target Percentage | ||||
John McAvoy Chairman, President and Chief Executive Officer | 125 | % | ||
Robert Hoglund Senior Vice President and Chief Financial Officer | 50 | % | ||
Craig Ivey President, Con Edison of New York | 80 | % | ||
Elizabeth D. Moore Senior Vice President and General Counsel | 50 | % | ||
Timothy P. Cawley President and Chief Executive Officer, Orange & Rockland | 80 | % |
“Weighting Earned”Earned” is the sum of the weightings earned for the following components: adjusted net income, other financial performance, and operating objectives. For each Named Executive Officer, target weightings, totaling 100 percent100%, are assigned for each component as follows: 50% for adjusted net income, 20% for other financial performance, and 30% for operating objectives. For 2017, target weightings for adjusted net income will be 50%, other financial performance will be increased to each25%, and operating objectives will be decreased to 25%. The change in target weightings reflects the importance of the Named Executive Officer’s objectives.Company’s financial objectives in driving performance. Weightings earned reflect achievement of the objectives and may vary from zero to 200 percent. If actual results are between200% for adjusted net income and other financial performance, targets,and from zero to 175% for operating objectives, reflecting achievement of the applicable objectives. For 2017, weightings earned are interpolated.for operating objectives will vary from zero to 200%. This increase in weightings is competitive with practices at the companies in the compensation peer group. In addition, for 2017, weightings earned for the capital budget component of other financial performance will be reduced from 200% to 120%.
The financial objectives under the annual incentive plan were selected as those most indicative ofare key performance measures that support the Company’s success duringshort- and long-term business plans and strategies and create value
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for the year.Company’s stockholders. For 2013,2016, the financial objectives consisted of “adjusted net income” and “other financial performance” components.
The “adjusted net income” component, reflecting the financial results of the Company’s business for which its Named Executive OfficerOfficers are responsible and accounting for 50 percent50% of each Named Executive Officer’s potential annual incentive award, was:as shown on the adjusted“Executive Compensation Actions—Annual Incentive Compensation—Achievement of 2016 Financial and Operating Objectives” table on page 38, was comprised of “Adjusted Company Net Income” and “Adjusted Regulated Net Income.” “Adjusted Company Net Income” is the Company’s net income for Mr. Hoglund, Ms. Moore, and Mr. Burke (reflecting components that were established based on his position as President and Chief Executive Officer for mostreported under generally accepted accounting principles (GAAP) in the Company’s financial statements excluding the impact of 2013);certain items. (See footnote (1) to the adjusted regulatedfollowing table.) “Adjusted Regulated Net Income” is net income (the total adjusted net income foras reported under GAAP in the financial statements of Con Edison of New York and Orange & Rockland) for Mr. Ivey and Mr. Longhi; and, 70 percent of Orange & Rockland’s adjusted net income and 30 percent of Con Edison of New York’s adjusted net income for Mr. McAvoy (reflecting components that were established based on his position as President and Chief Executive Officer of Orange & Rockland for most of 2013). “Adjusted net income” excludes the impacts in 2013 of the net mark-to-market activity (after-tax gain of $45 million) and the disallowance of tax deductions relating to the Lease In/Lease Out transactions (after-tax charge of $95 million) at the Company’s competitive energy businesses.Rockland.
2013For 2016, target adjusted net income and actual adjusted net income were:were as follows:
Target | Actual | Performance Relative to Targets | ||||||||||
(in millions) | ||||||||||||
Adjusted Company net income | $ | 1,098.0 | $ | 1,112.1 | 101.3 | % | ||||||
Adjusted Con Edison of New York net income | $ | 1,015.0 | $ | 1,019.6 | 100.5 | % | ||||||
Adjusted Orange & Rockland net income | $ | 55.0 | $ | 65.2 | 118.5 | % | ||||||
Adjusted Regulated net income | $ | 1,070.0 | $ | 1,084.9 | 101.4 | % |
Target | Actual | Performance Relative to Target | ||||||||||
(in millions) | ||||||||||||
Adjusted Company Net Income | $ | 1,150 | $ | 1,189.2 | (1) | 103.4 | % | |||||
Adjusted Regulated Net Income | $ | 1,123 | $ | 1,115.3 | 99.3 | % | ||||||
Adjusted Con Edison of New York Net Income | $ | 1,063 | $ | 1,056.1 | 99.4 | % | ||||||
Adjusted Orange & Rockland Net Income | $ | 60 | $ | 59.2 | 98.7 | % |
Footnote:
(1) | Excludes the effects of the gain on the sale of Con Edison Clean Energy Businesses, Inc.’s retail supply businesses, the goodwill impairment related to its energy service business and its netmark-to-market effects. Also reflects the timing of the sale as compared to target. |
If actual adjusted net income for 20132016 had been less than or equal to 90 percent90% of the target adjusted net income, no annual incentive awards would have been made.
The weightings earned for the 50 percent50% “adjusted net income” component were determined based uponon the following scale:
Performance Relative to Targets | Weighting Earned | |
³ 110% | 100% | |
107.5% | 87.5% | |
105% | 75.0% | |
102.5% | 62.5% | |
(Target) 100% | 50.0% | |
97.5% | 37.5% | |
95% | 25.0% | |
< 92.5% | 12.5% | |
£ 90% | 0% |
Performance Relative to Performance Goal | Weighting Earned(1) | Payout Relative to Target | ||
³ 110% | 100% | 200% | ||
(Target) 100% | 50% | 100% | ||
< 90% | 0% | 0% |
(1) | The weightings earned, which were interpolated for actual performance between performance goals, are shown on the “Executive Compensation Actions—Annual Incentive Compensation—Achievement of 2016 Financial and Operating Objectives” table on page 38. |
The “other“other financial performance”performance” component, reflecting the responsibilities of theCompany’s business for which its Named Executive OfficerOfficers are responsible and accounting for 20 percent20% of each Named Executive Officer’s potential annual incentive award, as shown on the “Achievement“Executive Compensation Actions—Annual Incentive Compensation—Achievement of 20132016 Financial and Operating Objectives”Objectives” table on pages 45 to 46,page 38, was comprised of one or more of the Con Edison of New York and Orange & Rockland budgets, or objectives for Con Edison Clean Energy Businesses, Inc. and its subsidiaries (the “Clean Energy Businesses,” which were formerly referred to as the competitive energy businessesbusinesses) relating to operationscompliance with financial reporting requirements, level of bad debt, and maintenance expense, capital expenditures, dividend payout and value atfinancial risk exposure. For 2017, “other financial performance” will account for 25% of each Named Executive Officer’s potential annual incentive award. The change in target weightings reflects the importance of the Company’s financial objectives in driving performance.
Con Edison of New York’s “other financial performance” component is allocated 10 percent10% for capital budget performance and 10 percentup to 10% for operating budget performance (up to 15% for operating budget performance in 2017), subject to a 25 percentmaximum 25% upward or downward adjustment based on certain performance criteria.the achievement ofpre-established targets for 25 capital projects and 12 operating and maintenance programs, respectively. The targets for the capital projects consist of completing milestones within specified budget targets, and, for the operating and maintenance programs, completing a number of units within specified per unit budget targets. Orange & Rockland’s and the Clean Energy Businesses’ “other financial performance” component is up to 20% (up to 25% for 2017) and up to 1%, respectively.
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2013
The target budgets and actual expenditures were:for 2016 were as follows:
Target | Actual | Weightings | Performance Relative to Targets | |||||||||||||||||||||||||
(in millions) | Target (in millions) | Actual (in millions) | Performance Relative to Target | |||||||||||||||||||||||||
Con Edison of New York | ||||||||||||||||||||||||||||
Operating Budget | $ | 1,334.0 | $ | 1,313.3 | 10 | % | 98.4 | % | $ | 1,505.0 | $ | 1,477.3 | 98.2 | % | ||||||||||||||
Capital Budget | $ | 2,005.0 | $ | 2,113.5 | 10 | % | 105.4 | % | $ | 2,776.9 | $ | 2,702.2 | 97.3 | % | ||||||||||||||
Orange & Rockland | ||||||||||||||||||||||||||||
Operating Budget | $ | 182.5 | $ | 180.3 | 20 | % | 98.8 | % | $ | 205.1 | $ | 197.2 | 96.1 | % |
Weightings earned for the “other financial performance” component are based on the Company’s business for which each Named Executive Officer is responsible. For Mr. McAvoy, “other financial performance” weighting earned is 20 percent for Orange & Rockland’s operating budget (reflecting components that were established based on his position as President and Chief Executive Officer of Orange & Rockland for most of 2013). For Mr. Hoglund, Ms. Moore, and Mr. Burke (reflecting components that were established based on his position as President and Chief Executive Officer for most of 2013), “other financial performance” weighting earned is allocated 10 percent for Con Edison of New York’s capital budget, eight percent for Con Edison of New York’s operating budget, one percent for Orange & Rockland’s operating budget, and one percent for the competitive energy businesses’ objectives. For Mr. Ivey, “other financial performance” weighting earned is 10 percent for each of Con Edison of New York’s operating budget and capital budget. For Mr. Longhi, “other financial performance” weighting earned is allocated 10 percent for Con Edison of New York’s capital budget, nine percent for Con Edison of New York’s operating budget, and one percent for Orange & Rockland’s operating budget.
The weightings earned for Con Edison of New York’s and Orange & Rockland’s “other financial performance” component were determined based uponon the following scales:
Con Edison of New York Performance Relative to Operating Budget Target | Weighting Earned for | Weighting Earned for | Weighting Earned for | |||
£93.75% | 16.0% | 20.0% | 18.0% | |||
95.00% | 14.4% | 18.0% | 16.2% | |||
96.25% | 12.8% | 16.0% | 14.4% | |||
97.50% | 11.2% | 14.0% | 12.6% | |||
98.75% | 9.6% | 12.0% | 10.8% | |||
(Target) 100% | 8.0% | 10.0% | 9.0% | |||
101.25% | 6.4% | 8.0% | 7.2% | |||
102.50% | 4.8% | 6.0% | 5.4% | |||
103.75% | 3.2% | 4.0% | 3.6% | |||
105.00% | 1.6% | 2.0% | 1.8% | |||
³106.25% | 0% | 0% | 0% |
Con Performance Operating | Weighting McAvoy, | Weighting Earned for Ivey(1) | Payout Relative to Target | |||
£ 89% | 16% | 20% | 200% | |||
(Target)99-101% | 8% | 10% | 100% | |||
³ 111% | 0% | 0% | 0% |
Footnote:
(1) | The weightings earned, which were interpolated for actual performance between performance goals, are shown on the “Executive Compensation Actions—Annual Incentive Compensation—Achievement of 2016 Financial and Operating Objectives” table on page 38. In 2016, Con Edison of New York achievedpre-established performance goals for 11 out of 12 operating and maintenance programs, as a result of which the weighting earned was subject to a 110% upward adjustment. |
Con Edison of New York Performance Capital Budget Target | Weighting Earned for McAvoy, Hoglund, Ivey, and Moore(1) | Payout Relative to Target | ||
£ 89.00% | 20% | 200% | ||
(Target) 99-101% | 10% | 100% | ||
³ 110.00% | 0% | 0% |
Footnote:
(1) | The weightings earned, which were interpolated for actual performance between performance goals, are shown on the “Executive Compensation Actions—Annual Incentive Compensation—Achievement of 2016 Financial and Operating Objectives” table on page 38. In 2016, Con Edison of New York achieved 24 out of 25pre-established performance goals for capital projects, as a result of which the weighting earned was subject to a 120% upward adjustment. |
Con Edison of New York Performance Relative to Capital Budget Target | Weighting Earned for | |
£95.00% | 20% | |
96.00% | 18% | |
97.00% | 16% | |
98.00% | 14% | |
99.00% | 12% | |
(Target) 100% | 10% | |
101.00% | 8% | |
102.00% | 6% | |
103.00% | 4% | |
104.00% | 2% | |
³105.00% | 0% |
Orange & Performance to Operating Budget Target | Weighting Earned for McAvoy, Hoglund, and Moore(1) | Weighting Earned for Cawley | Payout Relative to Target | |||
£ 89.00% | 2% | 40% | 200% | |||
(Target)99-101% | 1% | 20% | 100% | |||
³ 111.00% | 0% | 0% | 0% |
Footnote:
Orange & Rockland Performance Relative to Operating Budget Target | Weighting Earned | Weighting Earned for | ||
£ 93.75% | 40% | 2.0% | ||
95.00% | 36% | 1.8% | ||
96.25% | 32% | 1.6% | ||
97.50% | 28% | 1.4% | ||
98.75% | 24% | 1.2% | ||
(Target) 100% | 20% | 1.0% | ||
101.25% | 16% | 0.8% | ||
102.50% | 12% | 0.6% | ||
103.75% | 8% | 0.4% | ||
105.00% | 4% | 0.2% | ||
³106.25% | 0% | 0% |
(1) | The weightings earned, which were interpolated for actual performance between performance goals, are shown on the “Executive Compensation Actions—Annual Incentive Compensation—Achievement of 2016 Financial and Operating Objectives” table on page 38. |
(iv) Operating Objectives
The “operating objectives” component, reflecting the primary responsibilities of eachthe Named Executive Officer accountand accounting for 30 percent30% of aeach Named Executive Officer’s potential annual incentive award, as shown on the “Executive Compensation Actions—Annual Incentive Compensation—Achievement of 2016 Financial and are designed to encourage improved performance regarding specific matters that are important to day-to-day operationsOperating Objectives” table on page 38, was comprised of the Company’s businesses. Each of the operating objectives include specific, pre-established, targets that are established by the
Committee annually in consultation with management in multiple areas that impact day-to-day operations. The operating objectives chosen represent a number of key indicators that guide Con Edison of New York, Orange & Rockland, and the CompanyClean Energy Businesses to serve itstheir customers in a safe, reliable, and efficient manner. The Committee seeks to targetEach of the operating objectives include specific,pre-established targets that encourage superior performance to furtherin multiple areas that impact theday-to-day operations of the Company’s challengingbusinesses. For 2017, “operating objectives” will account for 25% of each Named Executive Officer’s potential annual operating strategic plans and incent continuous improvement in performance.incentive award.
36 | CONSOLIDATED EDISON, INC. –Proxy Statement |
The following includes the types of operating objectives that the Committee established for 2013:
![]() | COMPENSATION DISCUSSION AND ANALYSIS |
EmployeeCon Edison of New York’s and Public Safety—measures the continued safe operation of the system for the Company’s employees and customers.
Environmental—measures reductions in risks to the environment and the health and safety of the Company’s employees and customers, and the protection of the environment.
Employee Development—measures the Company’s continued commitment to a diverse workforce and the development of strong corporate leadership through effective training and mentoring of employees.
Delivery System Performance—measures the continued reliability and efficient performance of the electric, gas and steam systems.
Customers and Stakeholders—measures the resolution of customer and stakeholder issues and enhances customer satisfaction through proactive customer outreach.
In addition to the operating objectives set forth above, the Committee also uses otherOrange & Rockland’s operating objectives for 2016, each accounting for up to 30% (up to 25% in 2017), are shown in the competitive energy businessesfollowing tables. Operating objectives for the Clean Energy Businesses (accounting for up to 1%) include those that are important to the success of its business, including the achievement of target levels of:their business: (i) gross margins;renewable capacity installed; (ii) retail sales and collections;electric commodity volume; and (iii) financial, regulatory controls, andemployee business development objectives.
Con Edison of New York Operating | Unit of Measure | Target | Actual | |||||||
Electric Network System Availability | % | ³ 99.999 | 99.999 | |||||||
ElectricNon-Network System Availability | % | ³ 99.99 | 99.99 | |||||||
Electric Reliability Performance Measure | # | 0 | 0 | |||||||
Respond to Gas Odor Complaints within 30 Minutes | % | ³ 75.0 | 89.1 | |||||||
Total Gas LeakYear-End Inventory | # | < 750 | 211 | |||||||
Steam Operations—Normal Pressure Operations | % | ³ 99.77 | 100.0 | |||||||
Generation Station—Forced Outages | % | £ 4.0 | 1.3 | |||||||
Public Service Commission Complaints | Per 100,000 Customers | £ 2.3 | 1.3 | |||||||
Representative Calls Answered in 30 Seconds | % | ³ 63.0 | 64.3 | |||||||
Customer Satisfaction Surveys | #—Score | ³ 85.0 | 91.6 | |||||||
Safety Index | % | ³ 87.5 | 100.0 | |||||||
Environmental Index | % | ³ 87.5 | 87.5 | |||||||
Storm Index | % | ³ 83.3 | 100.0 | |||||||
Employee Development Index | % | ³ 83.3 | 100.0 |
(v) Footnote:
(1) | Operating objectives were weighted equally. |
The weightings earned for Con Edison of New York’s “operating objectives” component were determined based on the following scales:
Performance Indicators Achieved | Weighting Hoglund, | Weighting Earned Ivey(1) | Payout Relative to Target | |||
14/14 | 49% | 52.5% | 175% | |||
(Target) 11/14 | 28% | 30% | 100% | |||
< 7/14 | 0% | 0% | 0% |
Footnote:
(1) | The weightings earned, which were based on actual performance between performance goals, are shown on the “Executive |
Compensation Actions—Annual Incentive Compensation—Achievement of 2016 Financial and Operating Objectives” table on page 38. Con Edison of New York achieved 14 out of the 14 operating objectives resulting in a weighting earned of 52.5% of the component target weighting. |
Orange & Rockland Operating Objectives(1) | Unit of Measure | Target | Actual | |||||||
Electric Service Reliability— Frequency | Outages Per Customer | £ 1.20 | 0.99 | |||||||
Electric Service Reliability— Restoration Time | Minutes | £ 115.5 | 106.7 | |||||||
Customer Experience | % | 85.7 | 100 | |||||||
Respond to Gas Odor Calls within 30 Minutes | % | ³ 75.0 | 88.9 | |||||||
Gas Leaks | ||||||||||
Workable Gas Leaks | # # | | £ 20 £ 250 |
| | 2 27 |
| |||
Damage Prevention Program | % | ³ 100.0 | 100 | |||||||
Gas Main Replacement Program | # of Feet | ³ 110,880 | 123,330 | |||||||
Storm Hardening / System Resiliency Projects | % | ³ 75.0 | 100 | |||||||
Major Capital Projects | % | ³ 80.0 | 80.0 | |||||||
Safety Index | % | ³ 87.5 | 87.5 | |||||||
Environmental Index | % | ³ 80.0 | 100 | |||||||
Storm Index | % | ³ 85.7 | 100 | |||||||
Employee Development Index | % | ³ 83.3 | 100 |
Footnote:
(1) | Operating objectives were weighted equally. The weightings earned for Orange & Rockland’s “operating objectives” component were determined based on the following scales: |
Performance Indicators Achieved | Weighting Earned for McAvoy, Hoglund, and Moore(1) | Weighting Earned for Cawley(1) | Payout Relative to Target | |||
13/13 | 1.75% | 52.5% | 175% | |||
(Target) 11/13 | 1% | 30% | 100% | |||
< 7/13 | 0% | 0% | 0% |
Footnote:
(1) | The weightings earned, which were based on actual performance between performance goals, are shown on the “Executive Compensation Actions—Annual Incentive Compensation—Achievement of 2016 Financial and Operating Objectives” table on page 38. Orange & Rockland achieved 13 out of the 13 operating objectives resulting in a weighting earned of 52.5% of the component target weighting. |
CONSOLIDATED EDISON, INC. –Proxy Statement | 37 |
![]() | COMPENSATION DISCUSSION AND ANALYSIS |
Achievement of 20132016 Financial and Operating Objectives
The following table shows, for each Named Executive Officer, the target weightings assigned to the financial and operating objectives and the weightings earned based on achievement ofachieving those objectives. The weightings of the Company’s subsidiaries for each of the Named Executive Officers, were based on each subsidiary’s relative contribution to the Company’s net income. For Mr. McAvoy, the table reflects the financial and operating objectives and the weightings established for his position as President and Chief Executive Officer of Orange & Rockland for most of 2013. For Mr. Burke, the table reflects the financial and operating objectives and the weightings established for his position as President and Chief Executive Officer for most of 2013.
Objectives | Mr. McAvoy | Mr. Hoglund, Ms. Moore and Mr. Burke | Mr. Ivey | Mr. Longhi | ||||||||||||||||||||||||||||
Target | Earned | Target | Earned | Target | Earned | Target | Earned | |||||||||||||||||||||||||
Net Income | ||||||||||||||||||||||||||||||||
Adjusted net income | 50 | % | 85.7 | % | 50 | % | 56.4 | % | 50 | % | 57.0 | % | 50 | % | 57.0 | % | ||||||||||||||||
Other Financial | ||||||||||||||||||||||||||||||||
Con Edison of New York(1) | ||||||||||||||||||||||||||||||||
Operating Budget | — | — | 8 | % | 10.0 | % | 10 | % | 12.5 | % | 9 | % | 11.2 | % | ||||||||||||||||||
Capital Budget | — | — | 10 | % | 0.0 | % | 10 | % | 0.0 | % | 10 | % | 0.0 | % | ||||||||||||||||||
Orange & Rockland Operating Budget | 20 | % | 23.9 | % | 1 | % | 1.2 | % | — | — | 1 | % | 1.2 | % | ||||||||||||||||||
Competitive Energy Businesses | — | — | 1 | % | 2.0 | % | — | — | — | — | ||||||||||||||||||||||
Operating | ||||||||||||||||||||||||||||||||
Con Edison of New York | — | — | 28 | % | 56.0 | % | 30 | % | 60.0 | % | 29 | % | 58.0 | % | ||||||||||||||||||
Orange & Rockland | 30 | % | 45.0 | % | 1 | % | 1.5 | % | — | — | 1 | % | 1.5 | % | ||||||||||||||||||
Competitive Energy Businesses | — | — | 1 | % | 0.8 | % | — | — | — | — | ||||||||||||||||||||||
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Total | 100 | % | 154.6 | % | 100 | % | 127.9 | % | 100 | % | 129.5 | % | 100 | % | 128.9 | % | ||||||||||||||||
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McAvoy, Hoglund, and Moore | Ivey | Cawley | ||||||||||||||||||||||
Target | Earned | Target | Earned | Target | Earned | |||||||||||||||||||
Financial Objectives | ||||||||||||||||||||||||
Adjusted Net Income | ||||||||||||||||||||||||
Adjusted Company Net Income | 50 | % | 67 | % | — | — | — | — | ||||||||||||||||
Adjusted Regulated Net Income | — | — | 50 | % | 46.5 | % | — | — | ||||||||||||||||
Adjusted Con Edison of New York Net Income | — | — | — | — | 10 | % | 9.4 | % | ||||||||||||||||
Adjusted Orange & Rockland Net Income | — | — | — | — | 40 | % | 34.8 | % | ||||||||||||||||
Other Financial Performance | ||||||||||||||||||||||||
Con Edison of New York Operating Budget | 8 | % | 9.5 | % | 10 | % | 11.9 | % | — | — | ||||||||||||||
Con Edison of New York Capital Budget | 10 | % | 14 | % | 10 | % | 14 | % | — | — | ||||||||||||||
Orange & Rockland Operating Budget | 1 | % | 1.3 | % | — | — | 20 | % | 25.8 | % | ||||||||||||||
Clean Energy Businesses | 1 | % | 2 | % | — | — | — | — | ||||||||||||||||
Operating Objectives | ||||||||||||||||||||||||
Con Edison of New York | 28 | % | 49 | % | 30 | % | 52.5 | % | — | — | ||||||||||||||
Orange & Rockland | 1 | % | 1.8 | % | — | — | 30 | % | 52.5 | % | ||||||||||||||
Clean Energy Businesses | 1 | % | 1.5 | % | — | — | — | — | ||||||||||||||||
Total | 100 | % | 146.1 | % | 100 | % | 124.9 | % | 100 | % | 122.5 | % |
Footnote:
(vi) 20132016 Annual Incentive Awards
In February 2014,2017, the Compensation Committee evaluated and determined whether the applicable financial and operating objectives were satisfied. In assessing performance against the objectives, the Compensation Committee considered actual results achieved against the specific targets associated with each objective and, based on the results, determined that the 20132016 annual incentive awards appropriately reflected actual performance achieved. For Mr. McAvoy,awards. The Compensation Committee did not exercise discretion to adjust (upward or downward) the table reflects his annual incentive award based on financial and operating objectives that were established based on his position as President and Chiefto be paid to each Named Executive Officer of Orange & Rockland for most of 2013. For Mr. Burke, the table reflects his annual incentive award based on financial and operating objectives that were established based on his position as President and Chief Executive Officer for most of 2013.
Officer.
The following table shows the calculation of the 20132016 annual incentive awards for each Named Executive Officer.
Principal Position | Base Salary | × | Target Percentage | × | Weighting Earned | = | 2013 Award | |||||||||||||||
John McAvoy | ||||||||||||||||||||||
President and Chief Executive Officer | $ | 396,600 | 80 | % | 154.6 | % | $ | 490,500 | ||||||||||||||
Robert Hoglund | ||||||||||||||||||||||
Senior Vice President and Chief Financial Officer | $ | 660,400 | 50 | % | 127.9 | % | $ | 422,300 | ||||||||||||||
Craig Ivey | ||||||||||||||||||||||
President, Con Edison of New York | $ | 709,100 | 80 | % | 129.5 | % | $ | 734,700 | ||||||||||||||
William Longhi | ||||||||||||||||||||||
President, Shared Services, Con Edison of New York | $ | 501,600 | 80 | % | 128.9 | % | $ | 517,300 | ||||||||||||||
Elizabeth D. Moore | ||||||||||||||||||||||
Senior Vice President and General Counsel | $ | 556,700 | 50 | % | 127.9 | % | $ | 356,100 | ||||||||||||||
Kevin Burke | ||||||||||||||||||||||
Former President and Chief Executive Officer | $ | 1,265,700 | 100 | % | 127.9 | % | $ | 1,618,800 |
Name & Principal Position | Base Salary | × | Target Percentage | × | Weighting Earned | = | 2016 Award | |||||||||||||||||||||
John McAvoy Chairman, President and Chief Executive Officer | $ | 1,225,000 | 125 | % | 146.1 | % | $ | 2,237,200 | ||||||||||||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | $ | 723,000 | 50 | % | 146.1 | % | $ | 528,200 | ||||||||||||||||||||
Craig Ivey President, Con Edison of New York | $ | 797,300 | 80 | % | 124.9 | % | $ | 796,600 | ||||||||||||||||||||
Elizabeth D. Moore Senior Vice President and General Counsel | $ | 609,500 | 50 | % | 146.1 | % | $ | 445,300 | ||||||||||||||||||||
Timothy P. Cawley President and Chief Executive Officer, Orange & Rockland | $ | 409,700 | 80 | % | 122.5 | % | $ | 401,500 |
38 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | COMPENSATION DISCUSSION AND ANALYSIS |
D. Long-Term Incentive Compensation
(i) Awards
Named Executive Officers are eligible to receive equity-based awards under the Company’s long term incentive plan. The Compensation Committee determines the target long-term incentive award value for each Named Executive Officer based on various factors, including:
Recommendations from the chief executive officer for each of the other Named Executive Officers;
A general assessment of each Named Executive Officer’s performance of his or her responsibilities; and
Level of long-term incentive compensation compared to executives holding functionally comparable positions in the Company’s compensation peer group.
• | The level of long-term incentive compensation compared to key executives in the Company’s compensation peer group companies. (See footnote 2 to the table in “Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention” on page 30.) |
(ii) Performance Restricted Stock UnitPerformance-Based Equity Awards
It is the Compensation Committee’s practice in the first quarter of each year to approve its annualperformance-based equity awards of performance restricted stock units under the long term incentive plan for the Company’s Named Executive Officers. The Compensation Committee’s use of performance-based equity awards is intended to further reinforce the alignment of Named Executive Officer pay opportunities with stockholders by directly linking pay to the achievement of strong, sustained long-term financial and operating performance.
The performance restricted stock units awarded to Named Executive Officers provide for the right to receive one share of Company Common Stock and/or a cash payment equal to the fair market value of one share of Company Common Stock for each stock unit granted,awarded, subject to the satisfaction of certainpre-established long-term performance objectives. Named Executive Officers may elect to defer the receipt of the cash value of the award into the Company’s supplementaldeferred income plan and/or to defer the receipt of the shares. Dividends are not paid and do not accrue on the performance restricted stock unit awardsunits during the vesting period.
(iii) 20132016 Performance Restricted Stock Unit Awards
The number of performance restricted stock units awarded in 2013 for the 2013-2015 performance period to the Named Executive Officers in 2016 for the 2016-2018 performance period is shown in the Grants of Plan-Based Awards Table on pages 55 to 56.
page 50. Payouts to officers of the performance restricted stock units, if any, are calculated by anon-discretionary formula as follows:
Award X 50%30% X Incentive PlanAdjusted EPS Percentage
plus
Award X 20% X Operating Objectives Percentage
plus
Award X 50% X Shareholder Return Percentage
“Award” is the annual award of performance restricted stock units under the long term incentive plan. The target award of performance restricted stock units is a percentage of base salary that varies based on each Named Executive Officer’s position. Mr. McAvoy’s target award is 200 percent (reflecting the target percentage for his position as President and Chief Executive Officer of Orange & Rockland for most of 2013); the target award for Mr. Ivey is 250 percent; the target award for Mr. Longhi is 200 percent; the target award for Mr. Hoglund is 200 percent; the target award for Ms. Moore is 150 percent; and the target award for Mr. Burke is 375 percent (reflecting the target percentage for his position as President and Chief Executive Officer for most of 2013).follows:
Target Award Base Salary | ||||
John McAvoy Chairman, President and Chief Executive Officer | 425 | % | ||
Robert Hoglund Senior Vice President and Chief Financial Officer | 200 | % | ||
Craig Ivey President, Con Edison of New York | 250 | % | ||
Elizabeth D. Moore Senior Vice President and General Counsel | 150 | % | ||
Timothy P. Cawley President and Chief Executive Officer, Orange & Rockland | 200 | % |
“Incentive PlanAdjusted EPS Percentage” is the average calculated payout under the Company’s annual incentive planrelative to target over the performance period beginning on January 1, 20132016 and ending on December 31, 2015 (for awards granted2018 based on attainment of the Company’s three-year cumulative Adjusted EPS performance goal, set forth in 2013). (See “Committee Actions with Respect to Executive Compensation—Annual Incentive Compensation” beginning on page 41.)the following table, that was established in the first quarter of 2016.
Three-Year Cumulative Adjusted EPS (weighting 30%)(1) | ||||||
Performance Relative to Target | Performance Goal | Payout Relative to Target(2) | ||||
³ 112% | ³ $13.57 | 200% | ||||
(Target) 100% | $12.12 | 100% | ||||
< 88% | < $10.67 | 0% |
Footnotes:
(1) | Adjusted EPS is the Company’s earnings per share based on adjusted earnings, which excludes the impact of certain items from net income determined in accordance with GAAP. |
(2) | Interpolated for actual performance between performance goals. |
CONSOLIDATED EDISON, INC. –Proxy Statement | 39 |
![]() | COMPENSATION DISCUSSION AND ANALYSIS |
“Shareholder ReturnOperating Objectives Percentage” is the weighting earnedpayout relative to target over the performance period beginning January 1, 2016 and ending December 31, 2018 based on the attainment of the Company’s operating performance goals, set forth in the following table, that were established in the first quarter of 2016. These performance goals further long-term reliability and foster environmental sustainability.
Operating Objectives | Performance Goals(1) | |||||||||||
Threshold | Target | Maximum | ||||||||||
Advanced Meter Infrastructure Work Plan | 2 | 3 | (2) | 4 | ||||||||
Cyber Security Work Plan | 5 | 6 | (3) | 7 | ||||||||
Gas Main Replacement (Number of Miles Completed) | 200 | 235 | ³ 270 | |||||||||
Growth in Renewable Portfolio (MW (AC)) (Weighting 5.0%) | | 127.5 | | 255 | (4) | | ³ 382.5 | |
Footnotes:
(1) | Payouts are relative to “Target” and are as follows: Threshold: 50%; Target: 100%; and Maximum: 150%. Payouts for Gas Main Replacement and Growth in Renewable Portfolio are interpolated for actual performance between performance goals. |
(2) | Target approved by the Compensation Committee for 2016. The Compensation Committee to approve the annual work plan. Performance results are based on average achievement over the three-year period. |
(3) | Target approved by the Compensation Committee for 2016. The Compensation Committee to approve the annual work plan. Performance results are based on average achievement over the three-year period. The target approved by the Compensation Committee for 2016 applies to the second year of the three-year performance period for the 2015 performance units. |
(4) | Target approved by the Compensation Committee for 2016. The Compensation Committee to approve annual plan levels on a three-year cumulative basis. The target approved by the Compensation Committee for 2016 applies to the second year of the three-year performance period for the 2015 performance units (and the third year of the three-year performance period for the 2014 performance units). |
“Shareholder Return Percentage” is the payout relative to target based on the cumulative change in Company total shareholder returnsreturn over the performance period beginning on January 1, 20132016 and ending on December 31, 20152018 compared with the Company’s compensation peer group as constituted on the date the performance restricted stock units were awardedgranted in 2013.2016. In the event that the companies that make up the
compensation peer group change during the performance period, the Compensation Committee will use the compensation peer group as constituted on the date the performance restricted stock unitsunit awards are granted. If a company ceases to be publicly traded before the end of the performance period, that company’s total shareholder returns will not be used to calculate the total shareholder return portion of the performance unit awards.
The Compensation Committee believes that total shareholder return is a performance goal that aligns executive compensation with the creation of stockholder value.
The level of performance units will be earned as follows:
Company Percentile Rating | Payout Relative to Target(1) | |
90th or greater | 200% | |
(Target) 50th | 100% | |
25th | 25% | |
Below 25th | 0% |
Footnote:
(1) | Interpolated for actual performance between performance goals. |
The actual payout of the performance restricted stock unit awards to the Named Executive Officers for the 2013-20152016-2018 performance period to the officers may vary from zero up to a maximum of 200 percent190% of such award, based on actual performance over the performance period. The maximum payout of the performance restricted stock unit awards represents the weighted average of: (i) the maximum payoutunder each of the performance restricted stock unit awards that vest based on payouts from the annual incentive plan (200 percent), plus (ii) the maximum payout of the performance restricted stock unit awards that vest based on the cumulative change in total shareholder returns (200 percent). objectives as follows:
Maximum Percentage Payout | Target Weight | Weighted Average | ||||||||||
Adjusted EPS | 200 | % | 30 | % | 60 | % | ||||||
Operating Objectives | 150 | % | 20 | % | 30 | % | ||||||
Shareholder Return | 200 | % | 50 | % | 100 | % | ||||||
TOTAL | 190 | % |
The maximum payout for performance restricted stock unit awards awarded prior to 2013 that vest based on the cumulative change in total shareholder return was 150 percent. TheCompensation Committee hasmay exercise negative discretion to adjust (upward or downward) the actual performance restricted stock unit awards to be paid to a Named Executive Officer.
40 | CONSOLIDATED EDISON, INC. –Proxy Statement |
The Committee believes that total shareholder return is the performance measure that most closely helps the Company to achieve its overall compensation philosophy by aligning executive rewards with the creation of stockholder value, as articulated in the Company’s compensation philosophy. Total shareholder return is balanced with the annual operating and financial objectives of the annual incentive plan to further align executives’ rewards with other key Company performance objectives which total shareholder return does not fully capture.
![]() | COMPENSATION DISCUSSION AND ANALYSIS |
(iv) Calculation of Payout of 20112014 Performance Restricted Stock Unit Awards
Following the end of the relevant performance period for each outstanding performance restricted stock unit award, the Compensation Committee reviews the Company’s achievement of the performance measures is reviewed by the Committee.goals. The Compensation Committee evaluates and approves the Company’s performance relative to the performance measurestarget and pays out the performance restricted stock units in either cash and/or shares of Company Common Stock (as elected by the officer)Named Executive Officer) based on the attainment of suchthe performance measures.goals.
For the 2014-2016 performance period, payouts of the performance units were calculated based on the followingnon-discretionary formula:
TheAward X 30% X Adjusted EPS Percentage
plus
Award X 20% X Operating Objectives Percentage
plus
Award X 50% X Shareholder Return Percentage for
“Award” was the awardsannual award of performance restricted stock units forunder the 2011-2013long term incentive plan. The target award of performance units was a percentage of base salary that varies based on each Named Executive Officer’s position as follows:
Target Award as a Percentage of | ||||
John McAvoy Chairman, President and Chief Executive Officer | 375 | % | ||
Robert Hoglund Senior Vice President and Chief Financial Officer | 200 | % | ||
Craig Ivey President, Con Edison of New York | 250 | % | ||
Elizabeth D. Moore Senior Vice President and General Counsel | 150 | % | ||
Timothy P. Cawley President and Chief Executive Officer, Orange & Rockland | 200 | % |
“Adjusted EPS Percentage” was the payout relative to target over the performance period that began January 1, 2014 and ended December 31, 2016 based on attainment of the Company’s three-year cumulative Adjusted EPS performance goal, set forth in the following table, that was established in the first quarter of 2014.
Three-Year Cumulative Adjusted EPS (weighting 30%) | ||||||
Performance Relative to Target | Performance Goal | Payout Relative to Target(1) | ||||
³ 112% | ³ $13.14 | 200% | ||||
(Target) 100% | $11.73 | 100% | ||||
< 88% | < $10.32 | 0% | ||||
ACTUAL | $11.96(2) | 116.3% |
Footnotes:
(1) | Interpolated for actual performance between performance goals. |
(2) | Excludes the effects of the 2014 gain on Con Edison Clean Energy Businesses, Inc.’s sale of solar electric production projects and loss from lease in/lease out transactions, the 2016 gain on sale of its retail supply businesses and goodwill impairment related to its energy service business, and its netmark-to-market effects. Also, excludes 2015 impairment of assets held for sale of Pike County Light & Power Company. |
CONSOLIDATED EDISON, INC. –Proxy Statement | 41 |
![]() | COMPENSATION DISCUSSION AND ANALYSIS |
“Operating Objectives Percentage” was the payout relative to target over the performance period that began January 1, 2014 and ended December 31, 2016 based on the attainment of the Company’s operating performance goals, set forth in the following table, that were paid outestablished in 2013the first quarter of 2014.
Operating Objectives | Performance Goals(1) | Payout Relative to Target | ||||||||||||
Threshold | Target | Maximum | ||||||||||||
System Hardening and Resiliency Projects (Weighting 10%) |
| 83
|
|
| 93
|
|
| ³ 103
|
| 102 / 145% | ||||
Growth in Renewable Portfolio (MW (AC)) (Weighting 5%) |
| 231.5
|
|
| 463 (2)
|
|
| ³ 694.5
|
| 786 / 150% | ||||
SF6 Gas Emissions Pounds of Gas Emitted (Weighting 2.5%) |
| 51,750
|
|
| 45,000
|
|
| £ 38,250
|
| 38,892 / 145.2% | ||||
Opacity Occurrences Number of Occurrences (Weighting 2.5%) |
| 207
|
|
| 180
|
|
| £ 153
|
| 89 / 150% | ||||
TOTAL | 147.0% |
Footnotes:
(1) | Payouts were relative to “Target” and were as follows: Threshold: 50%; Target: 100%; and Maximum: 150%. Payouts were interpolated for actual performance between performance goals. |
(2) | The Compensation Committee approved annual plan levels on a three-year cumulative basis, 2014-2016. Target amount represents the sum of the three annual targets as approved by the Compensation Committee. |
“Shareholder Return Percentage” was the payout relative to target based on the cumulative change in Company total shareholder return over the performance period that began January 1, 2014 and ended December 31, 2016 compared with the Company’s compensation peer group as constituted on the date the performance units were calculatedgranted
in 2014. In the event that the companies that made up the compensation peer group changed during the performance period, the Compensation Committee used the compensation peer group as constituted on the date the performance unit awards were granted. If a company ceased to be publicly traded before the end of the performance period, that company’s total shareholder returns was not used to calculate the total shareholder return portion of the performance unit awards.
The level of performance units earned was as follows:
|
Target(1) | |
| ||
| ||
| ||
| ||
| ||
(Target) 50th | 100% | |
| ||
| ||
| ||
| ||
25th | 25% | |
Below 25th | 0% | |
ACTUAL 56th | 115% |
Footnote:
(1) | Interpolated for actual performance between performance goals. |
The payout of the performance unit awards represents the weighted average of the percentage payout under each of the performance objectives as follows:
Maximum Percentage Payout | Target Weight | Actual Result | Weighted Result | |||||||||||||
Adjusted EPS | 200 | % | 30 | % | 116.3 | % | 34.9 | % | ||||||||
Operating Objectives | 150 | % | 20 | % | 147 | % | 29.4 | % | ||||||||
Shareholder Return | 200 | % | 50 | % | 115 | % | 57.5 | % | ||||||||
TOTAL | 190 | % | 121.8 | % |
The Compensation Committee did not exercise negative discretion to adjust the actual performance unit awards to be paid to a Named Executive Officer.
42 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | COMPENSATION DISCUSSION AND ANALYSIS |
The following table shows, for each Named Executive Officer, the calculation of the payout with respect to the performance restricted stock units for the 2011 – 20132014–2016 performance period:
Principal Position | Award × 50% | × | Incentive Plan Percentage(1) | + | Award × 50% | × | Shareholder Return Percentage | = | 2011-2013 Payout Total | |||||||||||||||||||
John McAvoy | ||||||||||||||||||||||||||||
President and Chief Executive Officer | 3,850 | 143.5 | % | 3,850 | 61 | % | 7,873 | |||||||||||||||||||||
Robert Hoglund | ||||||||||||||||||||||||||||
Senior Vice President and Chief Financial Officer | 14,000 | 136.7 | % | 14,000 | 61 | % | 27,678 | |||||||||||||||||||||
Craig Ivey | ||||||||||||||||||||||||||||
President, Con Edison of New York | 12,500 | 138.0 | % | 12,500 | 61 | % | 24,875 | |||||||||||||||||||||
William Longhi | ||||||||||||||||||||||||||||
President, Shared Services, Con Edison of New York | 10,500 | 161.3 | % | 10,500 | 61 | % | 23,342 | |||||||||||||||||||||
Elizabeth D. Moore | ||||||||||||||||||||||||||||
Senior Vice President and General Counsel | 5,900 | 136.7 | % | 5,900 | 61 | % | 11,664 | |||||||||||||||||||||
Kevin Burke(2) | ||||||||||||||||||||||||||||
Former President and Chief Executive Officer | 48,659.5 | 136.7 | % | 48,659.5 | 61 | % | 96,200 |
Name & Principal Position | 2014 Award | Weighted Result | 2014-2016 Payout Total | |||||||||
John McAvoy Chairman, President and Chief Executive Officer | 83,700 | 121.8 | % | 101,947 | ||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | 26,000 | 121.8 | % | 31,668 | ||||||||
Craig Ivey President, Con Edison of New York | 35,000 | 121.8 | % | 42,630 | ||||||||
Elizabeth D. Moore Senior Vice President and General Counsel | 16,000 | 121.8 | % | 19,488 | ||||||||
Timothy P. Cawley President and Chief Executive Officer, Orange & Rockland | 15,000 | 121.8 | % | 18,270 |
Footnote:RETIREMENT AND OTHER BENEFITS
2011 | 2012 | 2013 | ||||||||||
Mr. McAvoy | 149.1 | % | 126.8 | % | 154.6 | % | ||||||
Mr. Hoglund, Ms. Moore, and Mr. Burke | 152.7 | % | 129.6 | % | 127.9 | % | ||||||
Mr. Ivey | 152.1 | % | 132.4 | % | 129.5 | % | ||||||
Mr. Longhi | 170.8 | % | 184.3 | % | 128.9 | % |
A. Retirement and Welfare Benefits
The Company provides employees with a range of retirement and welfare benefits that reflects the competitive practices of the utility industry. These benefits assist the Company in attracting, retaining and motivating employees critical to its long-term success. Named Executive Officers are eligible for benefits under the following Company plans:
Tax-qualified retirement plan and its relatednon-qualified supplemental retirement income plan (collectively, the “retirement plans”);
Tax-qualified savings plan and its relatednon-qualified supplemental deferred income plan;
Stock purchase plan; and
Health and welfare plans.
A The Company maintains atax-qualified retirement plan that covers substantially all the Company’s employees. All management employees, including any Named Executive Officer,Officers, whose benefits under the plan are limited by the Internal Revenue Code, are eligible to participate in anon-qualified supplemental retirement income plan. The retirement plans are described inand the narrative to the Pension Benefits Table on pages 57 to 58.
The estimated retirement benefits payable to the Named Executive Officers (determined on a present value basis) are set forthdescribed in the Pension Benefits Table.Table and the narrative to the Pension Benefits Table on pages 53 to 54. There were no
changes to the retirement plans for plan year 2016 with respect to the Named Executive Officers.
As required by Securities and Exchange Commission rules, the “Change in Pension Value andNon-Qualified Deferred Compensation Earnings” column of the Summary Compensation Table on page 5448 sets forth the year-over-year change in the actuarial present value of the accumulated pension benefits for each Named Executive Officer under the retirement plans, and above-market earnings on deferred compensation with respect to the non-qualified deferred compensation arrangements.plans. The Company did not provide above-market or preferential earnings with respect to thenon-qualified deferred compensation arrangements in the years reported.
The change in the actuarial present value of an accumulated pension values shownbenefit is subject to many external variables, including fluctuations in interest rates and changes in actuarial assumptions, and does not represent actual compensation paid to the Named Executive Officers.Officers in 2016. Instead, the amounts represent changes in the estimated retirement benefits payable to the Named Executive Officers based on the year-over-year difference between the amounts required to be disclosed underin the Pension Benefits Table on page 5954 as of December 31, 20132016 and the amounts reported underin the Pension Benefits Table in the 20132016 proxy statement as of December 31, 2012.
on page 54.
The change toin the actuarial present value of Mr. Burke’sMcAvoy’s accumulated pension benefitsbenefit resulted primarily from his salary increase upon his promotion to chief executive officer in 2013 was $4.7 million due primarily2013. For management employees who participate in the retirement plan and who were hired before January 1, 2001, including
CONSOLIDATED EDISON, INC. –Proxy Statement | 43 |
![]() | COMPENSATION DISCUSSION AND ANALYSIS |
Mr. McAvoy, a “final average salary” formula is used to determine a participant’s pension benefit. The “final average salary” includes a participant’s highest average salary for the 48 consecutive months within the 120 consecutive months prior to retirement. (See narrative to the Pension Benefits Table on page 53.) Mr. Burke’s electionMcAvoy’s higher earnings as chief executive officer in 2016 replaced lower earnings during a portion of the 48 consecutive month “final average salary” period resulting in a higher “final average salary” pursuant to retire two years earlier than actuarially assumed in 2012.
the pension formula.
A The Company maintains atax-qualified savings plan that covers substantially all of the Company’s employees. All employees, including anythe Named Executive Officer,Officers, whose benefits under the plan are limited by the Internal Revenue Code, are eligible to participate in a supplementaldeferred income plan, anon-qualified deferred compensation plan. Named Executive Officers may defer a portion of their salary into the supplementaldeferred income plan. The plans aredeferred income plan is described in the narrative to the NonqualifiedNon-Qualified Deferred Compensation Table on page 60.
55. Company matching contributions allocated to the Named Executive Officers under the savings plan and supplementaldeferred income plan are included in the “All Other Compensation” column of the Summary Compensation Table on page 54.48.
Employees who participate in the savings plan, including the Named Executive Officers, may contribute up to 50% of their compensation on abefore-tax basis and/or anafter-tax basis, into their savings plan accounts. For participating employees whose retirement plan benefit is based on the final average salary formula, including Messrs. McAvoy and Cawley, the Company matches 50% for each dollar contributed by such employees on the first six percent (6%) of their regular earnings. For participating employees whose retirement plan benefit is determined using the cash balance formula, including Messrs. Hoglund and Ivey and Ms. Moore, the Company matches 100% for each dollar contributed by such employees on the first four percent (4%) of their regular earnings plus an additional 50% for each dollar contributed on the next four percent (4%) of their regular earnings. The final average salary formula and the cash balance formula under the retirement plan are described in the narrative to the Pension Benefits Table on page 53.
Pursuant to the Internal Revenue Code, effective for 2016, the savings plan limits the “additions” that can be made to a participating employee’s account to $53,000 per year. “Additions” include Company matching contributions,before-tax contributions made by a participating employee under Section 401(k) of the Internal Revenue Code, and
employeeafter-tax contributions. Of those additions, the maximumbefore-tax contribution was $18,000 per year (or $24,000 per year for participants age 50 and over). In addition, no more than $265,000 of annual compensation may be taken into account in computing benefits under the savings plan.
The stock purchase plan covers substantially all of the Company’s employees, including the Named Executive Officers, and provides the opportunity to purchase shares of Company Common Stock. The stock purchase plan is described in Note M toMto the financial statements in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2013.
2016.
Active employee benefits, such as medical, prescription drug, dental, vision, life insurance and disability coverage, are available to substantially all employees, including the Named Executive Officers, through the Company’s health and welfare benefits plans. Employees contribute towardstoward the cost of the health plans by paying a portion of the premium costs on apre-tax basis. Employees may purchase additional life insurance and disability coverage on anafter-tax basis. Officers, including the Named Executive Officers, may purchase supplemental health benefits on anafter-tax basis with the option to continue their participation following retirement. The Company also provides all employees with paidtime-off benefits, such as vacation and sick leave.
B. Perquisites and Personal Benefits
Pursuant to the executive compensation program, theThe Company provides certain officers, including the Named Executive Officers, with limited, specific perquisites that are competitive with industry practices. The Compensation Committee reviews the level of perquisites and personal benefits annually. The Company provides the following perquisites, the costs of which, if used by a Named Executive Officer in 20132016, are set forth in the “All Other Compensation” column of the Summary Compensation Table on page 54:48:
Supplemental health insurance;
Reimbursement for reasonable costs of financial planning; and
A company vehicle and, in the case of the current and former chief executive officer, a company vehicle and driver.
44 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | COMPENSATION DISCUSSION AND ANALYSIS |
C. Severance and Change of Control Benefits
The Company provides for the payment of severance benefits upon certain types of employment terminations. Providing severance and change of control benefits assists the Company in attracting and retaining executive talent and reduces the personal uncertainty that executives are likely to feel when considering a corporate transaction. These arrangements also provide valuable retention incentives that focus executives on completing such transactions, thus, enhancing long-term shareholderstockholder value. The compensation under the various circumstances that trigger payments or provision of benefits upon termination or a change of control was chosen to be broadly consistent with prevailing competitive practices.
Officers of the Company, including the Named Executive Officers, are provided benefits under the officers’ severance program. The severance benefits payable to each Named Executive Officer are set forth in the severance program which is described in footnotes 2 and 3 to the Potential Payments Upon Termination of Employment or Change of Control table on pages 6257 to 63.58. The estimated severance benefits that each Named Executive Officer would be entitled to receive upon a hypothetical termination of employment are set forth in the applicable Potential Payments Upon Termination of Employment or Change of Control table beginning on page 62.57.
As set forth in greater detail in the narrative to the Potential Payments Upon Termination of Employment or Change of Control table, the change of control provisions under the Company’s severance program provide that payments may be made only in the event that the Named Executive Officer’s employment is terminated under certain circumstances in connection with a change of control. With respect to awards granted under the 2003 Long Term Incentive Plan only, upon a change of control, the vesting of long term incentive plan grants will accelerate, whether or not the Named Executive Officer’s employment with the Company continues. With respect to awards granted under the 2013 Long Term Incentive Plan, the vesting of long term incentive plan grants will accelerate only in the event that a Named Executive Officer’s employment is terminated under certain circumstances in connection with a change of control.
The Company has established the following stock ownership guidelines for certain officers:officers, including the Named Executive Officers. The stock ownership guidelines for the Company’s Named Executive Officers are as follows:
Title | Multiple of Base Salary | |||
Chief Executive Officer | 3 × base salary | |||
Chief Financial Officer | 2 × base salary | |||
President of Con Edison of New York | 2 × base salary | |||
| ||||
| ||||
President and Chief Executive Officer of Orange & Rockland | 2 × base salary | |||
| 1 × base salary | |||
| ||||
|
Officers of the Company subject to the guidelines have five years from January 1st after their appointment to one of the covered title or promotion to a position with a higher ownership requirement to meet the guidelines. In January 2017, it was determined that, as of December 31, 2016, these
officers have either met their ownership milestones or are making reasonable progress towards their milestones.
The officers covered by the guidelines are expected to retain for at least one year a minimum of 25 percent25% of the net shares acquired upon exercise of stock options and 25 percent25% of the net shares acquired pursuant to vested restricted stock and restricted stock unit grants until their holdings of common stock equal or exceed their applicable ownership guidelines.
Officers subject to the guidelines have five years from January 1st after their appointment to covered titles to meet the guidelines. In February 2014, it was determined that, as of December 31, 2013, these officers have either met their ownership milestones or are making reasonable progress towards their milestones.
For purposes of the guidelines:
“Stock ownership” includes the value of the officers’ individually-owned shares, the value of vested restricted stockshares and performance based restricted stock units,shares, and shares held under the Company’s benefit plans. Equity-based incentive compensation held by the Company’s officers is based 100% on performance. Restricted stock and restricted stock units do not vest until the end of the performance period and performance is determined by the Compensation Committee.
Theone-year period is measured from the date the stock options are exercised or the restricted stock or restricted stock units vest, as applicable.
“Net shares” means the shares remaining after sale of shares necessary to pay the related tax liability and, if applicable, exercise price.
To encourage a long-term commitment to the Company’s sustained performance, the Company’s policies prohibit all directors, officers, including the Named Executive Officers, financial personnel, and certain other individuals from shorting, hedging, and pledging Company securities or holding Company securities in a margin account.
In 2010, the Company adopted a Recoupment Policy.Policy (commonly referred to as a “clawback policy”). The Recoupment Policy provides forallows the recoupment ofCompany to recoup excess incentive-based compensation received by any current or former officer during the three-year period preceding the date on which the Company’s Audit Committee determines that the Company is required to prepare an accounting restatement due to the Company’s material noncompliance with any financial reporting requirement under the securities laws. The Recoupment Policy applies to the long-term incentive-based compensation awards paid on or after January 1, 2011, under the Company’s long term incentive plan, and the incentive-based compensation payments made under the Company’s annual incentive plan based on any performance period commencing on or after January 1, 2011.plan.
![]() | COMPENSATION DISCUSSION AND ANALYSIS |
Section 162(m) of the Internal Revenue Code places a limit of $1,000,000$1 million on the amount of compensation that the Company may deduct in any one year with respect to each of the Named Executive Officers, other than the chief financial officer, employed by the Company on the last day of the fiscal year. There is an exception to the $1,000,000$1 million limitation for performance-based compensation meeting certain requirements. While the Compensation Committee considers the tax impact of Section 162(m), the Compensation Committee has determined that it is appropriate to maintain flexibility in compensating Named Executive Officers in a
manner intended to promote varying corporate goals, recognizing that certain amounts paid to Named Executive Officers in excess of $1,000,000$1 million may not be deductible under Section 162(m). Accordingly, the Company has not adopted a policy that all compensation must not be limited in its deductibility under Section 162(m) and, while the CompanyCompensation Committee strives to award executive compensation that meets the deductibility requirements, it mayhas reserved the right to enter into compensation arrangements under which payments are not deductible on account of Section 162(m). For 2013,2016, the Company estimates that $415,000approximately $1,740,000, $1,971,000, and $931,000 of the compensation paid to Mr. McAvoy, Mr. Ivey, and $714,000 of the compensation paid to Mr. LonghiMs. Moore, respectively, was not deductible for federal income tax purposes.
46 | CONSOLIDATED EDISON, INC. –Proxy Statement |
COMPENSATION POLICIES AND PRACTICES AS THEY RELATE TO THE
COMPANY’S RISK MANAGEMENT
![]() | COMPENSATION RISK MANAGEMENT |
In 2013,2016, the Management Development and Compensation Committee asked Mercer to undertake a risk assessment of the Company’s compensation programs to determine whether the Company’s compensation policies and practices for employees, generally, would reasonably be expected to have a material adverse effect on the Company’s risk management and create incentives that could lead to excessive or inappropriate risk taking by employees. The Compensation Committee also asked management to review the assessment. Based on Mercer’s risk assessment findings, with which the Compensation Committee and management concur, the Company’s compensation programs are not reasonably likely to have a material adverse effect on the Company’s risk management or create incentives that could lead to excessive or inappropriate risk taking by employees.
Among the relevant features of the Company’s compensation programs that mitigate risk are as follows:are:
the Company’s compensation programs include a Recoupment PolicyA recoupment policy applicable to all Company officers with respect to incentive-based compensation for periods commencing on or after January 1, 2011;compensation;
short-termAnnual and long-term incentives under the Company’s compensation programs are appropriately balanced between annual and long-term financial performance goals that are tied to key measures that drive shareholder value;
tied to key goals that are expected to enhance stockholder value; |
short-termAnnual and long-term incentives are tied to severalmultiple performance measuresgoals to reduce undue weight on any one measure and the use of non-financialgoal;
Non-financial performance factors used in determining the actual payout of short-termannual incentive compensation serves as a counterbalance to the quantitativefinancial performance measures;goals;
the Company’s compensationCompensation programs are designed to deliver a significant portion of compensation in the form of long-term incentives, discouraging excessive focus on annual results;
the performance restricted stock unitPerformance-based equity awards under the Company’s compensation programs are based on performance over a three-year period, focusing on sustainable performance over a three-year cycle rather than any one year;
maximum awards that may be paid out under short-termAnnual and long-term incentive awards that are subject to appropriate payment caps and theCompensation Committee retains the discretion to reduce payouts; and
to encourage a long-term commitment to the Company’s sustained performance, the Company has adopted shareShare ownership guidelines that further align the long-term interests of executives and shareholders, as well asstockholders, and restrictions on shorting, hedging, and pledging Company securities.
CONSOLIDATED EDISON, INC. –Proxy Statement | 47 |
![]() | SUMMARY COMPENSATION TABLE |
|
The following table sets forth certain information with respect to the compensation for the Named Executive Officers.Officers for the fiscal years ended December 31, 2016, 2015 and 2014. Information for Mr. McAvoyCawley for fiscal years ended December 31, 2012 and 20112014 is not provided because he was not a Named Executive Officer in either of those years.that year.
Summary Compensation Table
Name & Principal | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings(3) ($) | All Other Compensation(4) ($) | Securities and Exchange Commission Total(5) ($) |
| Securities and Exchange Commission Total Without Change in Pension Value(6) ($) | ||||||||||||||||||||||||||||
John McAvoy President and Chief Executive Officer | 2013 | $ | 405,959 | $ | — | $ | 946,800 | $ | 490,500 | $ | 1,057,674 | $ | 26,739 | $ | 2,927,672 | $ | 1,869,998 | |||||||||||||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | | 2013 2012 2011 | | $ $ $ | 658,692 638,400 619,867 |
| $ $
| — 0 — | (7)
| $ $ $ | 1,472,800 1,098,720 1,213,240 |
| $ $ $ | 422,300 414,700 474,800 |
| $ $ $ | 80,542 230,589 212,488 |
| $ $ $ | 52,486 60,292 61,129 |
| $ $ $ | 2,686,820 2,442,701 2,581,524 |
| $ $ $ | 2,606,278 2,212,112 2,369,036 |
| |||||||||||
Craig Ivey President, Con Edison of New York | | 2013 2012 2011 | | $ $ $ | 707,492 684,083 611,000 |
| $ $
| — 0 — | (7)
| $ $ $ | 1,841,000 1,373,400 1,083,250 |
| $ $ $ | 734,700 730,600 755,900 |
| $ $ $ | 132,729 201,736 153,233 |
| $ $ $ | 53,819 92,900 48,857 |
| $ $ $ | 3,469,740 3,082,719 2,652,240 |
| $ $ $ | 3,337,011 2,880,983 2,499,007 |
| |||||||||||
William Longhi President, Shared Services, Con Edison of New York |
| 2013 2012 2011 |
| $ $ $ | 500,300 481,583 431,583 |
|
| — — — |
| $ $ $ | 1,157,200 833,850 909,930 |
| $ $ $ | 517,300 716,600 591,700 |
| $ $ $ | 695,948 2,724,026 1,109,618 |
| $ $ $ | 32,637 77,112 65,461 |
| $ $ $ | 2,903,385 4,833,171 3,108,292 |
| $ $ $ | 2,207,437 2,109,145 1,998,674 |
| |||||||||||
Elizabeth D. Moore Senior Vice President and General Counsel |
| 2013 2012 2011 |
| $ $ $ | 555,350 539,142 521,833 |
| $ $
| — 0 — | (7)
| $ $ $ | 946,800 696,510 511,294 |
| $ $ $ | 356,100 350,200 400,200 |
| $ $ $ | 90,338 114,778 133,689 |
| $ $ $ | 44,971 59,029 53,835 |
| $ $ $ | 1,993,559 1,759,659 1,620,851 |
| $ $ $ | 1,903,221 1,644,881 1,487,162 |
| |||||||||||
Kevin Burke(8) Former President and Chief Executive Officer |
| 2013 2012 2011 |
| $ $ $ | 1,244,063 1,214,042 1,177,633 |
| $ $
| — 0 — | (7)
| $ $ $ | 4,870,760 4,179,060 4,337,333 |
| $ $ $ | 1,618,800 1,577,200 1,804,200 |
| $ $ $ | 4,688,339 7,414,192 3,498,783 |
| $ $ $ | 199,502 138,960 147,098 |
| $ $ $ | 12,621,464 14,523,454 10,965,047 |
| $ $ $ | 7,933,125 7,109,262 7,466,264 |
|
Name & Principal Position | Year | Salary | Bonus | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings(3) | All Other Compensation(4) | Securities and Exchange Commission Total(5) | Securities and Exchange Commission Total Without Change in Pension Value(6) | |||||||||||||||||||||||||||||||
John McAvoy | 2016 | $ | 1,220,767 | $ | — | $ | 6,176,408 | $ | 2,237,200 | $ | 5,103,773 | $ | 64,256 | $ | 14,802,404 | $ | 9,698,631 | |||||||||||||||||||||||
Chairman, President and Chief Executive Officer | 2015 | $ | 1,171,350 | $ | — | $ | 3,987,654 | $ | 1,776,600 | $ | 4,030,677 | $ | 59,392 | $ | 11,025,673 | $ | 6,994,996 | |||||||||||||||||||||||
2014 | $ | 1,140,000 | $ | — | $ | 3,055,887 | $ | 1,711,100 | $ | 3,724,321 | $ | 54,380 | $ | 9,685,688 | $ | 5,961,367 | ||||||||||||||||||||||||
Robert Hoglund | 2016 | $ | 721,242 | $ | — | $ | 1,739,205 | $ | 528,200 | $ | 134,593 | $ | 59,272 | $ | 3,182,512 | $ | 3,047,919 | |||||||||||||||||||||||
Senior Vice President and Chief Financial Officer | 2015 | $ | 700,200 | $ | — | $ | 1,268,799 | $ | 531,100 | $ | 142,890 | $ | 55,970 | $ | 2,698,959 | $ | 2,556,069 | |||||||||||||||||||||||
2014 | $ | 679,742 | $ | — | $ | 949,260 | $ | 511,500 | $ | 814,137 | $ | 54,178 | $ | 3,008,817 | $ | 2,194,680 | ||||||||||||||||||||||||
Craig Ivey President, Con Edison of New York | 2016 | $ | 795,367 | $ | — | $ | 2,393,265 | $ | 796,600 | $ | 155,369 | $ | 61,341 | $ | 4,201,942 | $ | 4,046,573 | |||||||||||||||||||||||
2015 | $ | 772,225 | $ | — | $ | 1,754,100 | $ | 831,100 | $ | 118,048 | $ | 58,922 | $ | 3,534,395 | $ | 3,416,347 | ||||||||||||||||||||||||
2014 | $ | 748,058 | $ | — | $ | 1,277,850 | $ | 855,000 | $ | 230,725 | $ | 57,813 | $ | 3,169,446 | $ | 2,938,721 | ||||||||||||||||||||||||
Elizabeth D. Moore | 2016 | $ | 608,017 | $ | — | $ | 1,100,010 | $ | 445,300 | $ | 125,952 | $ | 51,049 | $ | 2,330,328 | $ | 2,204,376 | |||||||||||||||||||||||
Senior Vice President and General Counsel | 2015 | $ | 590,267 | $ | — | $ | 801,039 | $ | 447,700 | $ | 108,323 | $ | 49,290 | $ | 1,996,619 | $ | 1,888,296 | |||||||||||||||||||||||
2014 | $ | 573,017 | $ | — | $ | 584,160 | $ | 431,200 | $ | 128,517 | $ | 46,955 | $ | 1,763,849 | $ | 1,635,332 | ||||||||||||||||||||||||
Timothy P. Cawley | 2016 | $ | 409,033 | $ | — | $ | 995,955 | $ | 401,500 | $ | 559,125 | $ | 30,587 | $ | 2,396,200 | $ | 1,837,075 | |||||||||||||||||||||||
President and Chief Executive Officer, Orange & Rockland | 2015 | $ | 400,725 | $ | — | $ | 725,028 | $ | 233,000 | $ | 550,075 | $ | 30,074 | $ | 1,938,902 | $ | 1,388,827 | |||||||||||||||||||||||
Footnotes:
(1) | Dividends are not paid and do not accrue on |
(2) | The amounts paid were awarded under the annual incentive plan. |
(3) | Amounts do not represent actual compensation paid to the Named Executive Officers. Instead, the amounts represent the aggregate change in the actuarial present value of the accumulated pension benefit based on the difference between the amounts required to be disclosed |
The change in the present value of Mr. McAvoy’s accumulated pension benefit resulted primarily from his salary increase upon his promotion to chief executive officer in 2013. For management employees who participate in the retirement plan and who were hired before January 1, 2001, including Mr. McAvoy, a “final average salary” formula is used to determine a participant’s pension benefit. The “final average salary” includes a participant’s highest average salary for the 48 consecutive months within the 120 consecutive months prior to retirement. Mr. McAvoy’s higher earnings as chief executive officer in 2016 replaced lower earnings during a portion of the 48 consecutive month “final average salary” period resulting in a higher “final average salary” pursuant to the pension formula. See “Retirement and Other Benefits—Retirement Plans” on page 43 and narrative to the Pension Benefits Table on page 53. |
48 |
![]() | SUMMARY COMPENSATION TABLE |
(4) |
Mr. McAvoy | Mr. Hoglund | Mr. Ivey | Mr. Longhi | Ms. Moore | Mr. Burke | McAvoy | Hoglund | Ivey | Moore | Cawley | ||||||||||||||||||||||||||||||||||
Personal use of company provided vehicle | $ | 2,940 | $ | 1,594 | $ | — | $ | 7,628 | $ | 4,995 | $ | 5,658 | ||||||||||||||||||||||||||||||||
Personal use of Company provided vehicle | $ | 5,298 | $ | 4,283 | $ | 435 | $ | 6,734 | $ | 7,516 | ||||||||||||||||||||||||||||||||||
Driver costs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 10,136 | $ | 1,451 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Financial planning | $ | 10,250 | $ | 10,000 | $ | 10,000 | $ | 10,000 | $ | 10,000 | $ | 0 | $ | 18,500 | $ | 10,800 | $ | 10,800 | $ | 10,800 | $ | 10,800 | ||||||||||||||||||||||
Supplemental health insurance | $ | 1,370 | $ | 1,370 | $ | 1,370 | $ | — | $ | — | $ | 344 | $ | 2,384 | $ | 2,384 | $ | 2,384 | $ | 833 | $ | — | ||||||||||||||||||||||
Company matching contributions to the savings plan | $ | 7,650 | $ | 15,300 | $ | 15,300 | $ | 7,650 | $ | 11,955 | $ | 7,650 | ||||||||||||||||||||||||||||||||
Supplemental plan | $ | 4,529 | $ | 24,222 | $ | 27,149 | $ | 7,359 | $ | 18,021 | $ | 29,672 | ||||||||||||||||||||||||||||||||
Accrued vacation | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 146,042 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||
Company matching contributions: Qualified savings plan | $ | 7,950 | $ | 14,430 | $ | 15,900 | $ | 12,101 | $ | 7,950 | ||||||||||||||||||||||||||||||||||
Non-qualified savings plan | $ | 28,673 | $ | 27,375 | $ | 31,822 | $ | 20,581 | $ | 4,321 | ||||||||||||||||||||||||||||||||||
Total | $ | 26,739 | $ | 52,486 | $ | 53,819 | $ | 32,637 | $ | 44,971 | $ | 199,502 | $ | 64,256 | $ | 59,272 | $ | 61,341 | $ | 51,049 | $ | 30,587 |
The value of the items in the table are based on the aggregate incremental cost, which except for the Company provided vehicle, is the actual cost to the Company. The cost of the Company provided vehicle was determined based on the personal use of the vehicle as a percentage of total usage compared to the lease value of the vehicle.
(5) |
(6) | To show the effect that the year-over-year change in pension value had on total compensation, |
CONSOLIDATED EDISON, INC. –Proxy Statement | 49 |
GRANTS OF PLAN-BASED AWARDS TABLE
![]() | GRANTS OF PLAN-BASED AWARDS TABLE |
The following table sets forth certain information with respect to the grant of equity plan awards andnon-equity incentive plan awards awarded to the Named Executive Officers for the fiscal year ended December 31, 2013.
Grants of Plan-Based Awards2016.
Name & Principal Position | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | Grant Date Fair Value of Stock Awards(3) ($) | ||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||
John McAvoy | 2/1/2013 | $ | 39,700 | $ | 317,300 | $ | 634,600 | 4,500 | 18,000 | 36,000 | $ | 946,800 | ||||||||||||||||||||
President and Chief Executive Officer | ||||||||||||||||||||||||||||||||
Robert Hoglund | 2/1/2013 | $ | 41,300 | $ | 330,200 | $ | 660,400 | 7,000 | 28,000 | 56,000 | $ | 1,472,800 | ||||||||||||||||||||
Senior Vice President and Chief Financial Officer | ||||||||||||||||||||||||||||||||
Craig Ivey | 2/1/2013 | $ | 70,900 | $ | 567,300 | $ | 1,134,600 | 8,800 | 35,000 | 70,000 | $ | 1,841,000 | ||||||||||||||||||||
President, Con Edison of New York | ||||||||||||||||||||||||||||||||
William Longhi | 2/1/2013 | $ | 50,200 | $ | 401,300 | $ | 802,600 | 5,500 | 22,000 | 44,000 | $ | 1,157,200 | ||||||||||||||||||||
President, Shared Services, Con Edison of New York | ||||||||||||||||||||||||||||||||
Elizabeth D. Moore | 2/1/2013 | $ | 34,800 | $ | 278,400 | $ | 556,800 | 4,500 | 18,000 | 36,000 | $ | 946,800 | ||||||||||||||||||||
Senior Vice President and General Counsel | ||||||||||||||||||||||||||||||||
Kevin Burke | 2/1/2013 | $ | 158,200 | $ | 1,265,700 | $ | 2,531,400 | 23,200 | 92,600 | 185,200 | $ | 4,870,760 | ||||||||||||||||||||
Former President and Chief Executive Officer |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | Grant Stock | ||||||||||||||||||||||||||||||
Name & Principal Position | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||
John McAvoy Chairman, President and | 2/1/2016 | $ | 153,100 | $ | 1,225,000 | $ | 2,358,100 | 2,078 | 83,100 | 157,890 | $ | 6,176,408 | ||||||||||||||||||||
Robert Hoglund Senior Vice President and | 2/1/2016 | $ | 45,200 | $ | 361,500 | $ | 695,900 | 585 | 23,400 | 44,460 | $ | 1,739,205 | ||||||||||||||||||||
Craig Ivey President, Con Edison of | 2/1/2016 | $ | 79,700 | $ | 637,800 | $ | 1,227,800 | 805 | 32,200 | 61,180 | $ | 2,393,265 | ||||||||||||||||||||
Elizabeth D. Moore Senior Vice President and | 2/1/2016 | $ | 38,100 | $ | 304,800 | $ | 586,700 | 370 | 14,800 | 28,120 | $ | 1,100,010 | ||||||||||||||||||||
Timothy P. Cawley President and Chief Executive Officer, Orange & Rockland | 2/1/2016 | $ | 41,000 | $ | 327,800 | $ | 631,000 | 335 | 13,400 | 25,460 | $ | 995,955 |
Footnotes:
(1) | Represents annual cash incentive award opportunity awarded under the Company’s annual incentive plan. (See “ |
(2) | Represents |
(3) | The “Grant Date Fair Value of Stock Awards” column reflects the grant date fair value of the performance |
50 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | OUTSTANDING EQUITY AWARDS TABLE |
OUTSTANDING EQUITY AWARDS TABLE
|
The following table sets forth certain information with respect to all unvested stock awards previously awarded to the Named Executive Officers as of the fiscal year ended December 31, 2013. None of the Named Executive Officers have unexercised option awards.2016.
Outstanding Equity Awards at Fiscal Year-End
STOCK AWARDS(1) | ||||||||
Name & Principal Position | Equity Incentive Plan Awards: Number of unearned shares, units or other rights held that have not vested (#) | Equity Incentive Plan Awards: Market or Payout Value of unearned shares, units or other rights that have not vested ($) | ||||||
John McAvoy | 7,000 | (2) | $ | 386,960 | ||||
President and Chief Executive Officer | 18,000 | (3) | $ | 995,040 | ||||
Robert Hoglund | 22,400 | (2) | $ | 1,238,272 | ||||
Senior Vice President and Chief Financial Officer | 28,000 | (3) | $ | 1,547,840 | ||||
Craig Ivey | 28,000 | (2) | $ | 1,547,840 | ||||
President, Con Edison of New York | 35,000 | (3) | $ | 1,934,800 | ||||
William Longhi. | 17,000 | (2) | $ | 939,760 | ||||
President, Shared Services, Con Edison of New York | 22,000 | (3) | $ | 1,216,160 | ||||
Elizabeth D. Moore | 14,200 | (2) | $ | 784,976 | ||||
Senior Vice President and General Counsel | 18,000 | (3) | $ | 995,040 | ||||
Kevin Burke | 85,200 | (2)(4) | $ | 4,709,856 | ||||
Former President and Chief Executive Officer | 92,600 | (3)(4) | $ | 5,118,928 |
STOCK AWARDS(1) | ||||||||
Name & Principal Position | Equity Incentive Number of unearned | Equity Incentive Market or Payout Value | ||||||
John McAvoy | 68,200 | (2) | $ | 5,024,976 | ||||
Chairman, President and Chief Executive Officer | 83,100 | (3) | $ | 6,122,808 | ||||
Robert Hoglund | 21,700 | (2) | $ | 1,598,856 | ||||
Senior Vice President and Chief Financial Officer | 23,400 | (3) | $ | 1,724,112 | ||||
Craig Ivey | 30,000 | (2) | $ | 2,210,400 | ||||
President, Con Edison of New York | 32,200 | (3) | $ | 2,372,496 | ||||
Elizabeth D. Moore | 13,700 | (2) | $ | 1,009,416 | ||||
Senior Vice President and General Counsel | 14,800 | (3) | $ | 1,090,464 | ||||
Timothy P. Cawley | 12,400 | (2) | $ | 913,632 | ||||
President and Chief Executive Officer, Orange & Rockland | 13,400 | (3) | $ | 987,312 |
Footnotes:
(1) | Value of unvested |
(2) | The number of performance |
(3) | The number of performance |
CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | OPTION EXERCISES AND STOCK VESTED TABLE |
OPTION EXERCISES AND STOCK VESTED TABLE
|
The following table sets forth certain information with respect to all stock awards vested in 20132016 for the Named Executive Officers. None of the Named Executive Officers exercised options in 2013.
STOCK AWARDS(1) | ||||||||
Name & Principal Position | Number of Shares Acquired on Vesting | Value Realized on Vesting | ||||||
John McAvoy Chairman, President and Chief Executive Officer | 101,947 | $ | 7,512,474 | |||||
Robert Hoglund Senior Vice President and Chief Financial Officer | 31,668 | $ | 2,333,615 | |||||
Craig Ivey President, Con Edison of New York | 42,630 | $ | 3,141,405 | |||||
Elizabeth D. Moore Senior Vice President and General Counsel | 19,488 | $ | 1,436,071 | |||||
Timothy P. Cawley President and Chief Executive Officer, Orange & Rockland | 18,270 | $ | 1,346,316 |
Stock Vested
STOCK AWARDS(1) | ||||||||
Name & Principal Position | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||
John McAvoy President and Chief Executive Officer | 7,873 | $ | 435,141 | |||||
Robert Hoglund Senior Vice President and Chief Financial Officer | 27,678 | $ | 1,529,763 | |||||
Craig Ivey President, Con Edison of New York | 24,875 | $ | 1,374,841 | |||||
William Longhi President, Shared Services, Con Edison of New York | 23,342 | $ | 1,290,112 | |||||
Elizabeth D. Moore Senior Vice President and General Counsel | 11,664 | $ | 644,669 | |||||
Kevin Burke Former President and Chief Executive Officer | 96,200 | $ | 5,316,974 |
Footnotes:Footnote:
(1) | Represents the vesting of each Named Executive Officer’s performance |
52 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | PENSION BENEFITS |
Retirement Plan Benefits
The retirement plan, a tax qualified retirement plan, covers substantially all of the Company’s employees. The supplemental retirement income plan provides certain highly compensated employees, (includingincluding the Named Executive Officers)Officers, whose benefits are limited by the Internal Revenue Code, with that portion of their retirement benefit that represents the difference betweenbetween: (i) the amount they would have received under the retirement plan absent IRSInternal Revenue Code limitations on the amount of final average salary that may be considered in calculating pension benefits and the amount of pension benefits paidpayable; and (ii) the amount actually paid from the retirement plan. All amounts under the supplemental retirement income plan are paid out of the Company’s general assets.
For management employees hired before January 1, 2001, including Messrs. McAvoy Longhi, and Burke,Cawley, the retirement plans provideplan provides pension benefits based on: (i) the participant’s highest average salary for 48 consecutive months within the 120 consecutive months prior to retirement (“final average salary”); (ii) the portion of final average salary in excess of the Social Security taxable wage base in the year of retirement; and (iii) the participant’s length of service. For purposes of the retirement plans,plan, a participant’s salary for a year is deemed to include any award under the Company’s annual incentive plans for that year. Participants in the retirement plans whose age and years of service equal 75 are entitled to an annual pension benefit for life, payable in monthly installments.installments or, effective June 1 2017, in a lump sum. Participants may earn increased pension benefits by working additional years. Benefits payable to a participant who retires between ages 55 and 59 with less than 30 years of service are subject to a reduction of 1.5one and a half percent (1.5%) for each full year of retirement before age 60. Early retirement reduction factors are not applied to pensions of employeesparticipants electing retirement at age 55 or older with at least 30 years of
service. Effective January 1, 2013, the portion of future benefits earned and payable at retirement to participants who were under age 50 prior to 2013 and who retire between ages 55 and 59 are subject to an early retirement reduction. The reduction applied to benefits earned after 2012 is 5five percent (5%) for each full year of retirement before age 60. The retirement plans provide plan provides
an annual adjustment equal to the lesser of three percent (3%) or 3/4three-quarters (3/4) of the annual increase in the Consumer Price Index to offset partially the effects of inflation.
From January 1, 2009 through June 30, 2012, management employees covered under the final average salary formula who were at least age 55 and had 30 or more years of service received an additional pension accrual from the time the employee became eligible through June 30, 2012, at a rate equal to one-twelfth of 0.5 percent of the final average salary for each month of service.
For management employees hired on or after January 1, 2001, including Messrs. Hoglund and Ivey and Ms. Moore, the retirement plans provideplan provides pension benefits based on a cash balance formula under which benefits accrue at the end of each calendar quarter. Benefit distributions are made in the form of a lump sum payment, but participants may elect instead to receive an immediate or deferred lifetime annuity.
annuity but participants may also elect a lump sum payment. The crediting percent, which can range from four percent (4%) to seven percent (7%), depending on the participant’s age and years of service, is applied to the participant’s base salary and annual incentive award (“Earnings”) during the quarter. In addition, a participant whose Earnings exceed the Social Security Wage Base ($113,700118,500 for 2013)2016) will receive a four percent (4%) credit on the amount of his or her Earnings that exceed the Social Security Wage Base. The cash balance account of participants is credited with interest quarterly at a rate equal toone-quarter (1/4) of the annual interest rate payable on the30-year U.S. Treasury bond, subject to a minimum annual rate of three percent (3%) and a maximum annual rate of nine percent.percent (9%). The following table shows how this works:
Age Plus Years of Service | Rate on Earnings | Plus | Rate on Earnings Above Social Security Wage Base | Rate on Earnings | Plus | Rate on Earnings Above Social Security Wage Base | ||||||||||||||||
Under 35 | 4.00 | % | 4.00 | % | 4 | % | 4 | % | ||||||||||||||
35–49 | 5.00 | % | 4.00 | % | 5 | % | 4 | % | ||||||||||||||
50–64 | 6.00 | % | 4.00 | % | 6 | % | 4 | % | ||||||||||||||
Over 64 | 7.00 | % | 4.00 | % | 7 | % | 4 | % |
As part of Mr. Hoglund’s employment offerFrom June 1, 2017 through December 31, 2021, management employees hired before January 1, 2017 may make an irrevocable election to have future company contributions made to the savings plan in 2004, the Company agreed to provide Mr. Hoglund credit for an additional ten yearslieu of service in the cash balance formula to offset part of the long-term incentives forfeited upon leaving his previous employer. Five of the additional ten years of service were credited on April 1, 2014 after he completed ten years of continuous employment and the remaining five yearsformula. Supplemental benefits will be credited after he completes fifteen years of continuous service. The portion of Mr. Hoglund’s retirement benefit that is attributable to the additional years of service provided by the Company will be paid under the supplemental retirementdeferred income plan.plan if qualified plan benefits are restricted by Internal Revenue Service limits.
CONSOLIDATED EDISON, INC. –Proxy Statement | 53 |
![]() | PENSION BENEFITS |
The following table shows certain pension benefits information for each Named Executive Officer as of December 31, 2013.
Pension Benefits2016.
Name & Principal Position | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit(1) | Payments during Last Fiscal Year | ||||||||||
John McAvoy Chairman, President and Chief Executive Officer | Retirement Plan Supplemental Retirement | |
|
| $ $ |
| $ $ | 0 0 | ||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | Retirement Plan Supplemental Retirement Income Plan | 13 18 | (2) | $ $ | 307,843 1,750,883 |
| $ $ | 0 0 |
| |||||
of New York | Retirement Plan Supplemental Retirement | |
|
| $ $ |
|
| $ $ | 0 0 |
| ||||
Senior Vice President General Counsel | Retirement Plan Supplemental Retirement | |
|
| $ $ |
|
| $ $ | 0 0 |
| ||||
President Officer, Orange & Rockland | Retirement Plan Supplemental Retirement | |
|
| $ $ |
|
|
| ||||||
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
| $ $ | 0 0 |
|
Footnotes:
(1) | Amounts were calculated as of December 31, |
(2) | As part of Mr. Hoglund’s employment offer in 2004, the Company agreed to provide Mr. Hoglund credit for an additional ten years of service in the cash balance formula to offset part of the long-term incentives forfeited upon leaving his previous employer. Five of the additional ten years of service were credited on April 1, 2014 after he completed ten years of continuous employment and the remaining five years will be credited after he completes 15 years of continuous service. The portion of Mr. Hoglund’s retirement benefit that is attributable to the additional years of service provided by the Company ($666,055 as of December 31, 2016) will be paid under the supplemental retirement income plan. |
54 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | NON-QUALIFIED DEFERRED COMPENSATION |
NONQUALIFIED DEFERRED COMPENSATIONDeferred Income Plan
Company Savings Plan
The savings plan, atax-qualified retirement savings plan, covers substantially all of the Company’s employees. Participating employees may contribute up to 50 percent of their compensation on a before-tax basis and/or an after-tax basis, into theirThe savings plan accounts. In addition, the Company matches an amount equal to 50 percent for each dollar contributed by participating employees on the first six percent of their regular earnings. Effective January 1, 2013, for participating employees whose pension benefits are based on the final average salary formula the plan will continue, asis described on pages 57 to 58. Effective January 1, 2013, the Company match increases for participatingpage 44. All employees, including Named Executive Officers, whose pension benefits are determined using the cash balance formula including Messrs. Hoglund and Ivey and Ms. Moore. The Company match increases from 50 percent for each dollar contributed by participating employees on the first six percent of their regular earnings to 100 percent for each dollar contributed on the first four percent of their regular earnings plus an additional 50 percent for each dollar contributed on the next four percent of their regular earnings.
Pursuant to IRS rules, effective for 2013,under the savings plan limits the “additions” that can be made to a participating employee’s account to $51,000 per year. “Additions” include Company matching contributions, before-tax contributions madeare limited by a participating employee under Section 401(k) of the Internal Revenue Code, and employee after-tax contributions.
Of those additions, the current maximum before-tax contribution is $17,500 per year (or $23,000 per year for certain participants age 50 and over). In addition, no more than $255,000 of annual compensation may be taken into account in computing benefits under the savings plan.
Supplemental Plan
Certain highly compensated employees, including the Named Executive Officers, are eligible to participate indefer a portion of their salary into the supplementaldeferred income plan, anon-qualified deferred compensation plan. The supplementaldeferred income plan permits participating officers to defer on abefore-tax basis: (i) up to 50 percent50% of their base salary,salary; (ii) all or a portion of their annual incentive award,award; and (iii) the cash value of any restricted stock unit awards (including any dividend equivalents). Deferrals (including any investment returns thereon) are fully vested. In addition, under the supplementaldeferred income plan, the Company will credit participating employees with a Company matching contribution on that portion of their contributions that cannot be matched under the savings plan because of IRSInternal Revenue Code limitations. Earnings on amounts contributed under the supplementaldeferred income plan reflect investment in accordance with participating employees’ investment elections. Deferrals and any earnings thereon are always 100% vested. Company matching contributions vest
100% three years after a participating employee’s date of hire. There were no above-market or preferential earnings with respect to the supplementaldeferred income plan. Individuals participating in the deferred income plan may elect to have their account balances credited with a return that is benchmarked to numerous investmentreceive the performance of funds institutionally managed by the Nationwide Insurance Company. Participants may change their investment allocation once per calendar quarter. All amounts distributed from the supplementaldeferred income plan are paid out of the Company’s general assets.
Amounts deferred, if any, under the savings plan and the supplementaldeferred income plan by the Named Executive Officers are included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table on page 54.48. Company matching contributions allocated to the Named Executive Officers under the savings plan and the supplementaldeferred income plan are shown in the “All Other Compensation” column of the Summary Compensation Table on page 54.48. Amounts realized upon vesting of stock awards that were deferred into the supplementaldeferred income plan, if any, are shown on the “Value Realized on Vesting” column of the Option Exercises and Stock Vested Table on page 57.52.
CONSOLIDATED EDISON, INC. –Proxy Statement | 55 |
![]() | NON-QUALIFIED DEFERRED COMPENSATION |
NonqualifiedNon-Qualified Deferred Compensation Table
The following table sets forth certain information with respect to nonqualifiednon-qualified deferred compensation for each Named Executive Officer as of December 31, 2013.
Nonqualified Deferred Compensation2016.
Name & Principal Position | Executive Contributions in Last FY(1) ($) | Registrant Contributions in Last FY(2) ($) | Aggregate Earnings/ (Losses) in Last FY(3) ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE(4) ($) | |||||||||||||||
John McAvoy President and Chief Executive Officer | $ | 9,057 | $ | 4,529 | $ | 4,238 | $ | 0 | $ | 37,767 | ||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | $ | 32,295 | $ | 24,222 | $ | 101,406 | $ | 0 | $ | 471,489 | ||||||||||
Craig Ivey President, Con Edison of New York | $ | 68,744 | $ | 27,149 | $ | 126,856 | $ | 0 | $ | 867,990 | ||||||||||
William Longhi President, Shared Services, Con Edison of New York | $ | 14,718 | $ | 7,359 | $ | 38,702 | $ | 0 | $ | 286,685 | ||||||||||
Elizabeth D. Moore Senior Vice President General Counsel | $ | 139,306 | $ | 18,022 | $ | 84,909 | $ | 0 | $ | 770,695 | ||||||||||
Kevin Burke Former President and Chief Executive Officer | $ | 124,057 | $ | 29,672 | $ | 932,720 | $ | 0 | $ | 5,488,400 |
Name & Principal Position | Executive Contributions in Last FY(1) | Registrant Contributions in Last FY(2) | Aggregate in Last FY(3) | Aggregate Distributions | Aggregate Balance at Last FYE(4) | |||||||||||||||
John McAvoy Chairman, President and Chief Executive Officer | $ | 737,593 | $ | 28,673 | $ | 98,147 | $ | 0 | $ | 1,057,898 | ||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | $ | 116,164 | $ | 27,375 | $ | 63,627 | $ | 0 | $ | 854,770 | ||||||||||
Craig Ivey President, Con Edison of New York | $ | 408,298 | $ | 31,822 | $ | 136,647 | $ | 0 | $ | 2,186,243 | ||||||||||
Elizabeth D. Moore Senior Vice President General Counsel | $ | 27,441 | $ | 20,581 | $ | 94,797 | $ | 0 | $ | 1,650,850 | ||||||||||
Timothy P. Cawley President and Chief Executive Officer, Orange & Rockland | $ | 8,642 | $ | 4,321 | $ | 6,071 | $ | 0 | $ | 155,238 |
Footnotes:
(1) | Amounts set forth under “Executive Contributions in Last FY” column are reported in either: (i) the “Salary” column of the Summary Compensation Table; (ii) the “Value Realized on Vesting” column of the Option Exercises and Stock Vested Table; or (iii) the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table of the Company’s proxy statements for its |
(2) | The amounts set forth under the “Registrant Contributions in Last FY” column are reported in the “All Other Compensation” column of the Summary Compensation Table on page |
(3) | Represents earnings or losses on accounts for fiscal year |
(4) | Aggregate account balances as of December 31, |
Mr. McAvoy | Mr. Hoglund | Mr. Ivey | Mr. Longhi | Ms. Moore | Mr. Burke | McAvoy | Hoglund | Ivey | Moore | Cawley | ||||||||||||||||||||||||||||||||||
Executive Contributions | $ | 21,056 | $ | 201,774 | $ | 620,613 | $ | 148,985 | $ | 570,125 | $ | 3,034,591 | $ | 865,830 | $ | 386,333 | $ | 1,675,900 | $ | 1,267,390 | $ | 101,838 | ||||||||||||||||||||||
Company Matching Contributions | $ | 10,070 | $ | 104,100 | $ | 60,126 | $ | 38,453 | $ | 44,051 | $ | 259,050 | $ | 92,334 | $ | 182,772 | $ | 151,666 | $ | 102,929 | $ | 15,157 | ||||||||||||||||||||||
Earnings | $ | 6,641 | $ | 165,615 | $ | 187,251 | $ | 99,247 | $ | 156,519 | $ | 2,194,759 | $ | 99,734 | $ | 285,665 | $ | 358,677 | $ | 280,531 | $ | 38,243 | ||||||||||||||||||||||
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Total | $ | 37,767 | $ | 471,489 | $ | 867,990 | $ | 286,685 | $ | 770,695 | $ | 5,488,400 | $ | 1,057,898 | $ | 854,770 | $ | 2,186,243 | $ | 1,650,850 | $ | 155,238 |
56 | CONSOLIDATED EDISON, INC. –Proxy Statement |
POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL
![]() | POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL |
POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL |
The Company’s Severance Program for Officers of Consolidated Edison, Inc.the Company and its Subsidiariessubsidiaries (the “Severance Program”) provides compensation to the Named Executive Officers other than Mr. Burke (who retired on December 25, 2013), in the event of certain terminations of employment or a change of control of the Company. The amount of compensation that is potentially payable to each Named Executive Officer other than Mr. Burke, in each situation is listed in the table below.table. These amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to these Named Executive Officers, which would only be known at the time that they become eligible for payment. The tables reflecttable reflects the amount that could be payable under the Severance Program assuming such termination occurred at December 31, 2013.2016. The price per share of Company Common Stock on December 31, 2016 was $73.68 per share.
Name | Executive Benefits and | Resignation for any Reason (prior to CIC) or Resignation without Good Reason (following a CIC) | Retirement | Termination without Cause(2) | Termination for Cause | Termination without Cause or Resignation for Good Reason (following a CIC)(3) | Death or Disability | |||||||||||||||||||
John McAvoy | Severance | $ | 0 | $ | 0 | $ | 3,420,000 | $ | 0 | $ | 5,700,000 | $ | 0 | |||||||||||||
President and Chief Executive Officer | Long-term incentives(4) | $ | 0 | $ | 1,382,000 | (5) | $ | 1,382,000 | (5) | $ | 0 | $ | 1,382,000 | (6) | $ | 1,382,000 | (5) | |||||||||
Benefits and Perquisites | $ | 109,615 | $ | 109,615 | $ | 1,800,209 | $ | 109,615 | $ | 3,465,802 | $ | 2,389,615 | ||||||||||||||
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Total | $ | 109,615 | $ | 1,491,615 | $ | 6,602,209 | $ | 109,615 | $ | 10,547,802 | $ | 3,771,615 | ||||||||||||||
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Robert Hoglund | Severance | $ | 0 | $ | 0 | $ | 1,320,800 | $ | 0 | $ | 2,311,400 | $ | 0 | |||||||||||||
Senior Vice President and Chief Financial Officer | Long-term incentives(4) | $ | 0 | $ | 2,786,112 | (5) | $ | 2,786,112 | (5) | $ | 0 | $ | 2,786,112 | (6) | $ | 2,786,112 | (5) | |||||||||
Benefits and Perquisites | $ | 50,800 | $ | 50,800 | $ | 208,773 | $ | 50,800 | $ | 341,746 | $ | 1,371,600 | ||||||||||||||
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Total | $ | 50,800 | $ | 2,836,912 | $ | 4,315,685 | $ | 50,800 | $ | 5,439,258 | $ | 4,157,712 | ||||||||||||||
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Craig Ivey | Severance | $ | 0 | $ | 0 | $ | 1,843,700 | $ | 0 | $ | 3,120,100 | $ | 0 | |||||||||||||
President, Con Edison of New York | Long-term incentives(4) | $ | 0 | $ | 3,482,640 | (5) | $ | 3,482,640 | (5) | $ | 0 | $ | 3,482,640 | (6) | $ | 3,482,640 | (5) | |||||||||
Benefits and Perquisites | $ | 54,546 | $ | 54,546 | $ | 239,566 | $ | 54,546 | $ | 399,586 | $ | 1,472,746 | ||||||||||||||
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Total | $ | 54,546 | $ | 3,537,186 | $ | 5,565,906 | $ | 54,546 | $ | 7,002,326 | $ | 4,955,386 | ||||||||||||||
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William Longhi | Severance | $ | 0 | $ | 0 | $ | 1,304,200 | $ | 0 | $ | 2,207,100 | $ | 0 | |||||||||||||
President, Shared Services, Con Edison of New York | Long-term incentives(4) | $ | 0 | $ | 2,155,920 | (5) | $ | 2,155,920 | (5) | $ | 0 | $ | 2,155,920 | (6) | $ | 2,155,920 | (5) | |||||||||
Benefits and Perquisites | $ | 48,231 | $ | 48,231 | $ | 392,105 | $ | 48,231 | $ | 710,979 | $ | 1,051,431 | ||||||||||||||
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Total | $ | 48,231 | $ | 2,204,151 | $ | 3,852,225 | $ | 48,231 | $ | 5,073,999 | $ | 3,207,351 | ||||||||||||||
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Elizabeth D. Moore | Severance | $ | 0 | $ | 0 | $ | 1,113,500 | $ | 0 | $ | 1,948,600 | $ | 0 | |||||||||||||
Senior Vice President and General Counsel | Long-term incentives(4) | $ | 0 | $ | 1,780,016 | (5) | $ | 1,780,016 | (5) | $ | 0 | $ | 1,780,016 | (6) | $ | 1,780,016 | (5) | |||||||||
Benefits and Perquisites | $ | 42,823 | $ | 42,823 | $ | 158,909 | $ | 42,823 | $ | 249,995 | $ | 1,156,223 | ||||||||||||||
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Total | $ | 42,823 | $ | 1,822,839 | $ | 3,052,425 | $ | 42,823 | $ | 3,978,611 | $ | 2,936,239 | ||||||||||||||
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Name & Principal Position | Executive Benefits and Payments Upon Termination(1) | Resignation for any Reason (prior to CIC) or Resignation without Good Reason (following a CIC) | Retirement | Termination without Cause(2) | Termination for Cause | Termination without Cause or Resignation for Good Reason (following a CIC)(3) | Death or Disability | |||||||||||||||||||
John McAvoy | Severance | $ | 0 | $ | 0 | $ | 4,287,600 | $ | 0 | $ | 7,043,900 | $ | 0 | |||||||||||||
Chairman, President and Chief Executive Officer | Long-term plan incentives(4) | $ | 0 | $ | 11,147,784 | (5) | $ | 11,147,784 | (5) | $ | 0 | $ | 11,147,784 | (5) | $ | 11,147,784 | (5) | |||||||||
Benefits and Perquisites | $ | 0 | $ | 0 | $ | 2,909,481 | $ | 0 | $ | 5,793,962 | $ | 1,225,000 | ||||||||||||||
Total(6) | $ | 0 | $ | 11,147,784 | $ | 18,344,865 | $ | 0 | $ | 23,985,646 | $ | 12,372,784 | ||||||||||||||
Robert Hoglund | Severance | $ | 0 | $ | 0 | $ | 1,446,000 | $ | 0 | $ | 2,530,500 | $ | 0 | |||||||||||||
Senior Vice President and Chief Financial Officer | Long-term plan incentives(4) | $ | 0 | $ | 3,322,968 | (5) | $ | 3,322,968 | (5) | $ | 0 | $ | 3,322,968 | (5) | $ | 3,322,968 | (5) | |||||||||
Benefits and Perquisites | $ | 0 | $ | 0 | $ | 182,701 | $ | 0 | $ | 340,401 | $ | 723,000 | ||||||||||||||
Total(6) | $ | 0 | $ | 3,322,968 | $ | 4,951,669 | $ | 0 | $ | 6,193,869 | $ | 4,045,968 | ||||||||||||||
Craig Ivey | Severance | $ | 0 | $ | 0 | $ | 2,072,900 | $ | 0 | $ | 3,508,000 | $ | 0 | |||||||||||||
President, Con Edison of New York | Long-term plan incentives(4) | $ | 0 | $ | 4,582,896 | (5) | $ | 4,582,896 | (5) | $ | 0 | $ | 4,582,896 | (5) | $ | 4,582,896 | (5) | |||||||||
Benefits and Perquisites | $ | 0 | $ | 0 | $ | 208,856 | $ | 0 | $ | 392,712 | $ | 797,300 | ||||||||||||||
Total(6) | $ | 0 | $ | 4,582,896 | $ | 6,864,652 | $ | 0 | $ | 8,483,608 | $ | 5,380,196 | ||||||||||||||
Elizabeth D. Moore | Severance | $ | 0 | $ | 0 | $ | 1,219,100 | $ | 0 | $ | 2,133,400 | $ | 0 | |||||||||||||
Senior Vice President and General Counsel | Long-term plan incentives(4) | $ | 0 | $ | 2,099,880 | (5) | $ | 2,099,880 | (5) | $ | 0 | $ | 2,099,880 | (5) | $ | 2,099,880 | (5) | |||||||||
Benefits and Perquisites | $ | 0 | $ | 0 | $ | 152,822 | $ | 0 | $ | 280,644 | $ | 609,500 | ||||||||||||||
Total(6) | $ | 0 | $ | 2,099,880 | $ | 3,471,802 | $ | 0 | $ | 4,513,924 | $ | 2,709,380 | ||||||||||||||
Timothy P. Cawley | Severance | $ | 0 | $ | 0 | $ | 1,065,300 | $ | 0 | $ | 1,802,800 | $ | 0 | |||||||||||||
President and Chief Executive Officer, Orange & Rockland | Long-term plan incentives(4) | $ | 0 | $ | 1,900,944 | (5) | $ | 1,900,944 | (5) | $ | 0 | $ | 1,900,944 | (5) | $ | 1,900,944 | (5) | |||||||||
Benefits and Perquisites | $ | 0 | $ | 0 | $ | 356,629 | $ | 0 | $ | 688,257 | $ | 409,700 | ||||||||||||||
Total(6) | $ | 0 | $ | 1,900,944 | $ | 3,322,873 | $ | 0 | $ | 4,392,001 | $ | 2,310,644 |
Footnotes:
(1) |
(2) | As per the Severance Program, the Executive’s severance benefit pursuant to a termination without |
vacation pay, (ii) a lump sum equal to the net present value of one additional year of service credit under the Company’s |
CONSOLIDATED EDISON, INC. –Proxy Statement | 57 |
![]() | POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL |
(3) | As per the Severance Program, the Executive’s severance benefit under a termination without Cause or resignation for Good Reason (on or following CIC) is equal to the same severance benefit under a termination without Cause (before CIC) as described in footnote 2 |
(4) |
(5) | For disclosure purposes, |
(6) |
Assumptions
Below is aA description of the assumptions that were used in creating the tablestable for Messrs. McAvoy, Hoglund, Ivey, and Longhi, and Ms. Moore. For purposes of the description below, Messrs. McAvoy, Hoglund, Ivey and Longhi,Cawley, and Ms. Moore are each(each defined as the “Executive.”
“Executive”) is as follows:
Separation from Service
As perWith respect to unvested performance-based equity awards under the long term incentive plan, in the event of a Termination, resignation, retirement, death or Disability, the Management Development and Compensation Committee has discretion to determine the terms of the performance-based restricted stock awards (including, without limitation, to accelerate the vesting of unvested awards). Unless otherwise provided inby the applicable long term incentive plan award agreement,Compensation Committee, in the event of a retirement, death or Disability, restricted stockperformance-based equity awards vestpro-rata through the date of termination on the termination date.
As per the 2003 long term incentive plan, in the event of a Change in Control (as described below), unvested stock unit awards fully vest on the date of such event. In the event of a Change in Control, unvested performance-based restricted stock awards vest pro-rata through the date of such event.
For the purposes of the long term incentive plan: (i) a “Termination” means a resignation or discharge from employment, except death, disability or retirement, (ii) “retirement” means resignation on or after age 55 with at least five years of service, and (iii) “Disability” means an inability to work in any gainful occupation for which the person is reasonably qualified by education, training or experience because of a sickness or injury for which the person is under doctor’s care, and (iv)care.
Change in Control
As per the long term incentive plan, in the event of a Change in Control or CIC Separation from Service, as applicable, unvested performance-based equity awards, respectively, vestpro-rata through the date of the Change in Control, assuming targeted performance was achieved.
For purposes of the long term incentive plan, “Change in Control” has the same meaning as such term is used in“Change of Control” under the Severance Program.
For purposes of the long term incentive plan, a “CIC Separation from Service” means a termination without Cause
or due to a resignation for Good Reason that occurs on or before the second anniversary following the occurrence of a Change in Control.
Incremental Pension Amounts“Cause” means the conviction of the Executive of a felony or the entering by the Executive of a plea ofnolo contendere to a felony, in either case having a significant adverse effect on the business and affairs of the Company.
“Good Reason” occurs if the Executive resigns for any of the following reasons: (i) any material decrease in base compensation, (ii) any material breach by the Company of any material provisions of the long term incentive plan, (iii) a requirement by the Company for the Executive to be based at any office or location more than 50 miles from the location the Executive is employed prior to the Change in Control, or (iv) the assignment of any duties materially inconsistent in any respect with the Executive’s position, authority, duties or responsibilities.
Incremental Retirement Amounts
As per the Severance Program, the amounts relating to the incremental pensionretirement amounts in the above tablestable are based on the net present value of one additional year of additional service credit under the Company’s pensionretirement plans following a termination without Cause or a resignation for Good Reason (two additional years if such termination is in connection with a Change ofin Control) assuming compensation at the Executive’s annual salary and target award, age 65 normal retirement, and the assumptions used to calculate lump sum benefits under the qualified retirement plan in December 2013. These2016.
The assumptions for Messrs. McAvoy and Cawley include interest rates of 1.40 percent1.47% for the first five years, 4.66 percent3.34% for the next 15 years, and 5.62 percent4.30% thereafter (adjusted to -0.29 percent, 2.91 percent-0.23%, 1.61% and 3.85 percent,2.56%, respectively, to reflect cost of living adjustments) and theRP-2000 mortality table projected for 2013 (50 percent2016 (50% male/50 percent50% female blend).
58 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL |
The assumptions for Messrs. Hoglund’s and Ivey’s and Ms. Moore’s pensionretirement amount do not reflect a cost of living adjustmentare in accordance with the “cash balance” formula. All amounts payable pursuant to an incrementalnon-qualified pension retirement plan are assumed to be paid as a lump sum.
Termination without Cause or a Resignation for Good Reason
As per the Severance Program, the Executive will receive certain benefits as described in the table above if he or she is terminated by the Company for reasons other than Cause or he or she resigns for Good Reason (following a Change of Control). A termination is for Cause if it is for any of the following reasons: (i) willful and continued failure to substantially perform his or her duties, (ii) a conviction of a felony or entering a plea ofnolo contendere to a felony that has a significant adverse effect on the business of the Company, or (iii) a willful engaging in illegal conduct or in gross misconduct materially and demonstrably injurious to the Company.
As per the Severance Program, a resignation for Good Reason occurs if the Executive resigns for any of the following reasons on or following a Change of Control: (i) any material decrease in base compensation (except uniform decreases affecting similarly situated employees), (ii) any material breach by the Company of any material provisions of the Severance Program, (iii) a requirement by the Company for the Executive to be based more than 50 miles from the location the Executive is employed prior to the Change of Control, or (iv) the assignment of any duties materially inconsistent in any respect with the Executive’s position, authority, duties or responsibilities in effect immediately prior to the Change of Control or any other action by the Company resulting in a material diminution in position, authority, duties or responsibilities.
Payments upon Termination of Employment in Connection with a Change of Control
As per the Severance Program, the Executive will receive certain benefits as described in the above table if his or her termination of employment is without Cause by the Company or he or she resigns for Good Reason following a Change of Control.
As per the Severance Program, in the event an Executive receives any payment or distribution from the Company in connection with a Change of Control, he or she may be subject to certain excise taxes pursuant to Section 280G.280G of the Internal Revenue Code. If any such payment by the Company to any of the Executivesor distribution subjects the Executive to such taxes and the Executive would receive a greater netafter-tax amount if the payment were reduced to avoid such taxation, the aggregate present value of amounts payable to the Executive pursuant to the Severance Program will be reduced (but not below zero) to the extent it does not trigger taxation under Section 4999 of the Internal Revenue Code.
As per the Company’s Deferred Income Plan, the Executive is entitled to a death benefit equal to two times his or her base salary. The benefit isbenefits are payable in a lump sum.
CONSOLIDATED EDISON, INC. –Proxy Statement | 59 |
![]() | QUESTIONS AND ANSWERS ABOUT THE 2017 ANNUAL MEETING AND VOTING |
QUESTIONS AND ANSWERS ABOUT THE 2017 ANNUAL MEETING AND VOTING |
Payment upon Retirement for Mr. BurkePROXY MATERIALS
Mr. Burke retired as President and Chief Executive OfficerWhat Are The Proxy Materials?
The Proxy Materials include the following:
The Proxy Statement.
The Annual Report to Stockholders of the Company, effectivewhich includes the consolidated financial statements and accompanying notes for the year ended December 25, 2013. Mr. Burke31, 2016, and other information relating to the Company’s financial condition and results of operations.
If you received accrued vacation paythe Proxy Materials by mail, they also include a proxy card or a voter instruction form for use at the 2017 Annual Meeting.
Why Am I Receiving The Proxy Materials?
The Proxy Materials are provided to stockholders of $146,042the Company on or about April 3, 2017, in connection with the solicitation of proxies by the Board of Directors of the Company for use at the Annual Meeting and any adjournments or postponements of the Annual Meeting. As a stockholder, you are invited to attend the Annual Meeting and to vote on the items of business described in this Proxy Statement. The Proxy Materials include information that we are required to provide to you under the rules of the Securities and Exchange Commission. We are providing the Proxy Materials to our stockholders by mail,e-mail, or in accordance with the Securities and Exchange Commission’s “Notice and Access” rule.
Why Did I Receive The Proxy Materials In The Mail?
We are providing some of our stockholders, including stockholders who have previously requested to receive paper copies of the Proxy Materials, with paper copies of the Proxy Materials. You may also access the Proxy Materials and vote online at the Internet address provided on the proxy card or the voter instruction form. If you do not want to receive paper copies of proxy materials on an ongoing basis, please follow the instructions for Internet voting on your proxy card or voter instruction form.
Why Did I ReceiveE-Mail Delivery Of The Proxy Materials?
We are providinge-mail delivery of the Proxy Materials to those stockholders who have previously elected electronic delivery. Those stockholders should have received ane-mail containing a link to the website where those materials are available and a link to the proxy voting website.
Why Did I Receive A Notice Of Internet Availability Of Proxy Materials?
To reduce the environmental impact of our Annual Meeting, we are providing the Proxy Materials over the Internet. As a result, we are sending many of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) instead of a paper copy of the Proxy Materials. All stockholders receiving the Notice of Internet Availability may access the Proxy Materials over the Internet and request a paper copy of the Proxy Materials by mail. Instructions on how to access the Proxy Materials over the Internet, to vote online, and to request a paper copy may be found in the Notice of Internet Availability. In addition, the Notice of Internet Availability contains instructions on how you may request delivery of proxy materials in printed form by mail or electronically on an ongoing basis.
Can I Request A Paper Copy Of The Proxy Statement And Annual Report?
The Company’s vacation pay policy. Mr. BurkeProxy Statement and Annual Report are available on our website atconedison.com/shareholders.A copy of these materials is also retains performance restricted stock unit awards thatavailable without charge upon written request to the Company’s Vice President and Corporate Secretary at the Company’s principal executive office at 4 Irving Place, New York, New York 10003.
I Share An Address With Another Stockholder, And We Received Only One Copy Of The Proxy Materials. How May I Obtain An Additional Copy?
If you are a registered holder of Company Common Stock, Computershare may deliver only one copy of the Proxy Materials or Notice of Internet Availability to multiple stockholders who share an address unless Computershare has received contrary instructions.
60 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | QUESTIONS AND ANSWERS ABOUT THE 2017 ANNUAL MEETING AND VOTING |
If you hold your Company Common Stock through a broker, bank, or other financial institution (“broker”), your broker may deliver only one copy of the Proxy Materials or Notice of Internet Availability to multiple stockholders who share an address unless contrary instructions are received. If you would like to receive a separate copy of the Proxy Materials or Notice of Internet Availability, or if you would like to receive separate copies for future meetings, please submit a request to Broadridge Householding Department by telephone at1-866-540-7095 or by mail at 51 Mercedes Way, Edgewood, NY 11717, and your requested material(s) will be pro rated baseddelivered promptly. If you currently receive separate copies of these materials and wish to receive a single copy in the future, please contact your broker.
Who Pays The Cost Of Soliciting Proxies For The Annual Meeting?
The Company will pay the expenses associated with the solicitation of proxies. The solicitation of proxies is being made by mail, telephone, the Internet, electronic transmission, or overnight delivery. The expense associated with the solicitation of proxies will include reimbursement for postage and clerical expenses to brokerage houses and other custodians, nominees or fiduciaries for forwarding Proxy Materials and other documents to beneficial owners of stock held in their names. Morrow Sodali LLC (“Morrow”), 470 West Avenue, Stamford, CT 06902, has been retained to assist in the solicitation of proxies. The estimated cost of Morrow’s services is $22,000plus distribution costs and other costs and expenses.
What Is The Record Date?
The Board of Directors has established March 21, 2017 as the record date for the determination of the Company’s stockholders entitled to receive notice of and to vote at the Annual Meeting.
How Many Votes Do I Have?
You are entitled to one vote on each proposal presented at the Annual Meeting for each outstanding share of Company Common Stock you owned on the actual periodrecord date.
How Many Votes Can Be Cast By All Stockholders Entitled To Vote At The Annual Meeting?
One vote on each proposal presented at the Annual Meeting for each of service from the grant305,274,517 shares of Company Common Stock that were outstanding on the record date.
How Many Votes Must Be Present To Hold The Annual Meeting?
To constitute a quorum to transact business at the Annual Meeting, the holders of a majority of the shares entitled to vote at the Annual Meeting must be present in person or by proxy. We urge you to vote by proxy even if you plan to attend the Annual Meeting, so that we will know as soon as possible that enough votes will be present to hold the meeting. Abstentions and brokernon-votes are counted in the determination of the quorum.
How Do I Vote?
You can vote whether or not you attend the Annual Meeting. Stockholders have a choice of voting over the Internet, by telephone, by mail using a proxy card or voter instruction form, or in person at the Annual Meeting.
If you received a printed copy of the Proxy Materials, please follow the instructions on your proxy card or voter instruction form. Your proxy card or voter instruction form provides information on how to vote over the Internet, by telephone, or by mail.
If you received a Notice of Internet Availability, please follow the instructions on the notice. The Notice of Internet Availability provides information on how to vote over the Internet, by telephone, or by mail.
If you received ane-mail notification, please click on the link provided in thee-mail notification, and follow the instructions on how to vote over the Internet or by telephone.
If you are a registered holder of the Company’s Common Stock, you may also vote in person at the Annual Meeting.
To help us reduce the environmental impact of our meeting, we ask that you vote through the Internet or by telephone, both of which are available 24 hours a day. To ensure that your vote is counted, please remember to submit your vote by the date and time indicated on your Notice of Internet Availability, proxy card or voter instruction form, as applicable.
CONSOLIDATED EDISON, INC. –Proxy Statement | 61 |
![]() | QUESTIONS AND ANSWERS ABOUT THE 2017 ANNUAL MEETING AND VOTING |
If My Shares Are Held By My Broker, Can My Shares Be Voted If I Don’t Instruct My Broker?
The Securities and Exchange Commission has approved a New York Stock Exchange rule that affects the manner in which your broker may vote your shares. Your broker may not vote on your behalf for the election of directors or compensation-related matters unless you provide specific voting instructions to your broker. For your vote to be counted, you need to communicate your voting decisions to your broker, in the manner prescribed by your broker, before the date of his retirementthe Annual Meeting.
If you have any questions about this rule or the proxy voting process in general, please contact the broker where you hold your shares. The Securities and Exchange Commission also has a website (www.sec.gov/spotlight/proxymatters.shtml) with more information about your rights as a stockholder.
If I Am A Registered Holder Of Company Common Stock, What If I Don’t Vote For One Or More Of The Matters Listed On My Proxy Card?
All shares represented by properly executed proxies received in time for the 2012-2014Annual Meeting will be voted at the Annual Meeting in the manner specified by the persons giving those proxies. If you return a signed proxy without indicating voting instructions your shares will be voted as follows:
• | for the election of the ten Director nominees; |
• | for the ratification of the appointment of independent accountants; |
• | for the advisory vote to approve Named Executive Officer compensation; and |
• | for the advisory vote (1 Year) on the frequency of future advisory votes on named executive officer compensation. |
Can I Revoke My Proxy Or Change My Vote?
Yes, depending on how your shares of Company Common Stock are held, you may revoke your proxy or change your vote by sending in a new, properly executed proxy card or voter instruction form with a later date, or by casting a new vote by Internet or telephone, or by sending a properly executed written notice of revocation to the Company’s Vice President and 2013-2015 performance cycles. See “Outstanding Equity Awards Table”Corporate Secretary at the Company’s principal executive office at 4 Irving Place, New York, New York 10003. Check the instructions on page 56.your Notice of Internet Availability, proxy card or voter instruction form for information
regarding your specific revocation options. If you are a registered holder of Company Common Stock, you may also change your vote by appearing at the Annual Meeting and voting in person. Attendance at the Annual Meeting without voting will not by itself revoke a proxy.
What Is The Location, Date, And Time Of The Annual Meeting?
The Annual Meeting will be held at the Company’s principal executive office at 4 Irving Place, New York, New York 10003, on Monday, May 15, 2017, at 10:00 a.m.
Where Can I Find Directions To The Annual Meeting?
Directions to the Annual Meeting are available on our website atconedison.com/shareholders.
Who Can Attend The Annual Meeting?
Attendance at the Annual Meeting will be limited to holders of Company Common Stock on March 21, 2017, the record date, the authorized representative (one only) of an absent stockholder, and invited guests of management.
Do I Need A Ticket To Attend The Annual Meeting?
Yes, you will need an admission ticket and proof of ownership of Company Common Stock on the record date to enter the meeting.
If you received a printed copy of the Proxy Materials and you are a registered holder of Company Common Stock, your proxy card serves as your admission ticket to the Annual Meeting.
If you received a printed copy of the Proxy Materials and you hold your shares through a broker or through an employee plan, please bring to the Annual Meeting a copy of a brokerage or other statement reflecting your stock ownership as of the record date.
If you received a Notice of Internet Availability, that Notice of Internet Availability serves as your admission ticket to the Annual Meeting.
If you received ane-mail notification, please access the Proxy Materials by clicking on the link provided inthee-mail notification and follow the instructions for downloading a copy of your admission ticket.
62 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | QUESTIONS AND ANSWERS ABOUT THE 2017 ANNUAL MEETING AND VOTING |
If you hold your shares through a broker, you can expedite your admission to the Annual Meeting by registering in advance and printing your admission ticket by visitingwww.proxyvote.com and following the instructions provided (you will need the 16 digit number included on your proxy card, voter instruction form or Notice of Internet Availability).
You may be asked to present valid picture identification to gain entrance to the Annual Meeting. Any person claiming to be an authorized representative of a stockholder must, upon request, produce written evidence of the authorization.
Are There Any Special Attendance Procedures?
In order to assure the holding of a fair and orderly meeting and to accommodate as many stockholders as possible who may wish to speak at the Annual Meeting, management will limit the general discussion portion of the meeting and permit only stockholders or their authorized representatives to address the meeting. No signs, banners, placards, handouts, cameras, recording equipment, nor similar items may be brought to the meeting room. Many cellular phones havebuilt-in digital cameras, and, while these phones may be brought into the Annual Meeting, the camera function may not be used at any time. Recording of the Annual Meeting is prohibited. Suitcases, briefcases, packages, and other items may be subject to inspection.
CONSOLIDATED EDISON, INC. –Proxy Statement | 63 |
![]() | CERTAIN INFORMATION AS TO INSURANCE AND INDEMNIFICATION |
CERTAIN INFORMATION AS TO INSURANCE AND INDEMNIFICATION
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No stockholder action is required with respect to the following information that is included to fulfill the requirements of SectionsSection 726 of the Business Corporation Law of the State of New York.
Effective December 2, 2013,2016, the Company purchased Directors and Officers (“D&O”) Liability insurance for aone-year term providing for reimbursement, with certain exclusions and deductions, to: (a) the Company and its subsidiaries for payments they make to indemnify Directors, Trustees, officers and assistant officers of the Company and its subsidiaries, (b) Directors, Trustees, officers, and assistant officers for losses, costs and expenses incurred by them in actions brought against them in connection with their acts in those capacities for which they are not indemnified by Con Edisonthe Company or its subsidiaries, and (c) the Company and its subsidiaries for any payments they make resulting from a securities claim. The insurers are: Associated Electric & Gas Insurance Services Limited, Allied World AssuranceArch Insurance Company, Ltd., ArchAxis Insurance Company, Berkley Insurance Company, Continental Casualty Company,
Endurance American Insurance Company, Federal Insurance Company, Illinois National Insurance Company, Ironshore Insurance Ltd., Bermuda, Ironshore Indemnity Inc., U.S. Specialty Insurance Company, X.L. Insurance (Bermuda) Ltd., XL Specialty Insurance Company and Zurich American Insurance Company. The total cost of the D&O Liability insurance for one year from December 2, 20132016 amounts to $4,500,037.$3,295,197. The Company also purchased from Associated Electric & Gas Insurance Services Limited, Arch Insurance Company, Axis Insurance Company, Great American Insurance Company, Illinois National Insurance Company, St. Paul Fire and MarineRLI Insurance Company, RLI InsuranceTravelers Casualty and Surety Company of America, U.S. Specialty Insurance Company and Zurich American Insurance Company, additional insurance coverage for one year effective January 1, 2014,2017, insuring the Directors, Trustees, officers, assistant officers and employees of the Company and its subsidiaries and certain other parties against certain liabilities which could arise in connection with fiduciary obligations mandated by ERISA and from the administration of the employee benefit plans of the Company and its subsidiaries. The cost of such coverage was $884,961.$776,457.
64 | CONSOLIDATED EDISON, INC. –Proxy Statement |
![]() | STOCKHOLDER PROPOSALS FOR THE 2018 ANNUAL MEETING AND OTHER MATTERS |
STOCKHOLDER PROPOSALS FOR THE 2018 ANNUAL MEETING PROPOSALS FOR INCLUSION IN 2018 PROXY STATEMENT In order to be included in the Proxy Statement and form of proxy relating to the Company’s DIRECTOR NOMINATIONS FOR INCLUSION IN 2018 PROXY STATEMENT (PROXY ACCESS) Pursuant to the Company’sBy-laws, a stockholder (or a group of up to 20 stockholders) who has owned at least three percent (3%) of the Company’s shares for at least three years and has complied with the other requirements set forth in theBy-laws may request that the Company include director nominees (up to the greater of two nominees or twenty percent (20%) of the Board) for election in the Company’s 2018 Proxy Statement and form of proxy relating to the Company’s 2018 annual meeting of stockholders. The nominations must include the information specified inthe By-laws and must be received by the Vice President and Corporate Secretary of the Company at its principal executive office no earlier than November 4, 2017 and no later than December 4, 2017. OTHER PROPOSALS OR NOMINATIONS TO COME BEFORE THE 2018 ANNUAL MEETING Under the Company’sBy-laws, written notice of any proposal to be presented by any stockholder or any other person to be nominated by any stockholder for election as a Director must include the information specified inthe By-laws and must be received by the Vice President and Corporate Secretary of the Company at its principal executive office OTHER MATTERS TO COME BEFORE THE MEETING Management intends to bring before the meeting only the election of Directors (Proposal No. 1) and Proposals No. 2, 3, and 4, and knows of no matters to come before the meeting other than the matters set forth herein. If other matters or motions come before the meeting, it is the intention of the persons named in the accompanying form of proxy to vote such proxy in accordance with their judgment on such matters or motions, including any matters dealing with the conduct of the meeting. By Order of the Board of Directors, Jeanmarie Schieler Vice President and Corporate Secretary Dated: April 3, 2017 STOCKHOLDER PROPOSALS FOR THE 201520152018 annual meeting of stockholders, stockholder proposals must be received by the Company at its principal officesexecutive office at 4 Irving Place, New York, New York 10003, Attention: Vice President and Corporate Secretary, by the close of business on December 8, 2014.4, 2017.not lessno earlier than 70 days nor moreJanuary 15, 2018 and no later than 90 days prior to the anniversary date of the previous year’s annual meeting of stockholders; provided, however, that if the date of the annual meeting is first publicly announced or disclosed less than 80 days prior to the date of the meeting, such notice must be given not more than 10 days after such date is first announced or disclosed.February 14, 2018.Carole SobinVice President and Corporate SecretaryDated: April 8, 2014THE CONSOLIDATED EDISON, INC.STOCK PURCHASE PLANAs Amended and Restated Effective May 19, 2014THE CONSOLIDATED EDISON, INC.STOCK PURCHASE PLANARTICLETITLEPAGEARTICLE 1DefinitionsCONSOLIDATED EDISON, INC. –Proxy Statement A-1ARTICLE 2Shares Subject to Plan and DurationA-2ARTICLE 3Maximum Employee InvestmentA-2ARTICLE 4Means of Payment of Employee ContributionsA-3ARTICLE 5Participating Employer ContributionsA-4ARTICLE 6Purchase of SharesA-4ARTICLE 7Custody of Shares; Distributions from AccountsA-5ARTICLE 8Termination of Status as Employee; Leave of AbsenceA-6ARTICLE 9Stock Dividends and Stock Splits; Rights Offerings; Other Non-Cash DistributionA-7ARTICLE 10Voting of SharesA-7ARTICLE 11Termination and Modification; Responsibility of Company and Plan DirectorA-7ARTICLE 12Administration, Operation and General ProvisionsA-8
PREAMBLE
The Stock Purchase Plan (“Plan”) provides a means for employees of Consolidated Edison, Inc.’s affiliated companies and members of their boards of directors to purchase shares of stock of Consolidated Edison, Inc. without any fee, commission or charges, other than the purchase price. In addition, these affiliated companies can elect to contribute one dollar for each nine dollars invested by a participating employee or board member to the purchase of his or her shares.
ARTICLE 1
ARTICLE 2
Shares Subject to Plan and Duration
ARTICLE 3
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ARTICLE 4
Means of Payment of Employee Contributions
Subject to the limitations of Article 3, an Employee may provide funds for the purchase of Shares under the Plan by any one or more of the following methods:
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ARTICLE 5
Participating Employer Contributions
ARTICLE 6
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ARTICLE 7
Custody of Shares; Distributions from Accounts
In any such event, promptly after receipt of such direction by the Agent, such distribution, or sale and distribution, shall be made by the Agent, whose judgment as to the terms of any such sale shall be conclusive and binding. All cash distributions, whether in respect of sales of full Shares or fractional Shares, shall be net of any brokerage commissions, transfer taxes and service charges incurred in connection with such sales.
ARTICLE 8
Termination of Status as Employee; Leave of Absence
ARTICLE 9
Stock Dividends and Stock Splits; Rights Offerings;
Other Non-Cash Distribution
ARTICLE 10
Each Employee shall be provided with the opportunity to direct the manner in which any Shares held in such Employee’s Account are to be voted and appropriate procedures shall be established to enable the Employee to exercise such right. The Company shall provide to each Employee for whose account Shares are held under the Plan a copy of all proxy statements and annual, quarterly and other reports distributed by the Company to holders of record of Shares.
ARTICLE 11
Responsibility of Company and Plan Director
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ARTICLE 12
Administration, Operation and General Provisions
APPENDIX A
APPENDIX B
Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 1:00 a.m., EDT, on Monday, May
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![]() | Vote by Internet
• Go towww.investorvote.com/ED
• Or scan the QR code with your smartphone
• Follow the steps outlined on the secure website | |||
Vote by telephone
• Call toll free1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone.
• Follow the instructions provided by the recorded message. |
Using ablack ink pen, mark your votes with anX as shown in this example. Please do not write outside the designated areas. | ![]() |
IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
A | Proposals — The Board of Directors recommends a vote FOR all nominees listed, | |
on Proposal 4. |
1. Election of Directors | For | Against | Abstain | For | Against | Abstain | ||||||||||||||||||||||
01 - | Against | Abstain | ||||||||||||||||||||||||||
02 - | 2. | Ratification of appointment of independent accountants. | ☐ | |||||||||||||||||||||||||
03 - | ||||||||||||||||||||||||||||
Advisory vote to approve named executive officer compensation. | ||||||||||||||||||||||||||||
☐ | ☐ | |||||||||||||||||||||||||||
| 4. | Advisory vote on the frequency of future advisory votes on named executive officer compensation. | 1 Year ☐ | 2 Years ☐ | ||||||||||||||||||||||||
3 Years ☐ | Abstain ☐ | |||||||||||||||||||||||||||
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B | Non-Voting Items |
Change of Address — Please print your new address below. | Comments — Please print your comments below. | Meeting Attendance | ||||||
Mark the box to the right if you plan to attend the Annual |
IF VOTING BY MAIL, YOUMUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.
C | Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below |
Please sign exactly as name(s) appears hereon. Full title of one signing in representative capacity should be clearly designated after signature. Names of all joint holders should be written even if signed by only one.
Date (mm/dd/yyyy) — Please print date below. | Signature 1 — Please keep signature within the box. | Signature 2 — Please keep signature within the box. | ||||||
/ / |
021NWC
20142017 Annual Meeting Admission Ticket
20142017 Annual Meeting of
Consolidated Edison, Inc. Stockholders
Monday, May 19, 2014,15, 2017, 10:00 a.m. EDT
Consolidated Edison, Inc.
4 Irving Place, New York, NY 10003
This ticket admits only the named stockholder(s).
Please bring this admission ticket and a proper form of identification with you if attending the stockholder meeting.Annual Meeting of
Stockholders.
YOUR VOTE IS IMPORTANT!
Whether or not you plan to attend the StockholderAnnual Meeting of Stockholders, please promptly vote
by telephone, through the Internet or by completing and returning the attached proxy card.
Voting early will not prevent you from voting in person at the StockholderAnnual Meeting of Stockholders if you wish to do so.
Your proxy is revocable in accordance with the procedures set forth in the proxy statement.
IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
![]() |
Consolidated Edison, Inc. 4 Irving Place New York, NY 10003 |
CONSOLIDATED EDISON, INC.
COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Kevin Burke,Vincent A. Calarco, Michael J. Del Giudice and Vincent A. CalarcoJohn McAvoy and each or any of them with power of substitution, proxies to vote all stock of the undersigned (including any shares held through the Company’s Automatic Dividend Reinvestment and Cash Payment Plan) at the Annual Meeting of Stockholders on Monday, May 19, 201415, 2017 at 10:00 a.m. at the Company’s Headquarters, 4 Irving Place, New York, NY or at any adjournments or postponements thereof, as specified on the reverse side in the election of Directors and on the proposals, all as more fully set forth in the proxy statement, and in their discretion on any matters that may properly come before the meeting or at any adjournments or postponements thereof.
Your vote for the election of Directors may be indicated on the reverse side. Nominees are: 01 - Kevin Burke, 02 - Vincent A. Calarco, 0302 - George Campbell, Jr., 0403 - Michael J. Del Giudice, 0504 - Ellen V. Futter, 06 - John F. Hennessy III, 0705 - John F. Killian, 0806 - John McAvoy, 0907 - Armando J. Olivera, 10 - Sally H. Piñero, 11 - Michael08 -Michael W. Ranger, 09 - Linda S. Sanford and 1210 - L. Frederick Sutherland.
THIS PROXY WILL BE VOTED AS DIRECTED ON THE REVERSE SIDE, BUT IF NO CHOICE IS MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED ABOVE (PROPOSAL 1) AND, “FOR” PROPOSALS 2 AND 3, AND “1 YEAR” ON PROPOSAL 4.
(Items to be voted appear on reverse side.)
Please sign exactly as name(s) appears hereon. Full title of one signing in representative capacity should be clearly designated after signature. Names of all joint holders should be written even if signed by only one.
IF VOTING BY MAIL, YOUMUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.
![]() | Vote by Internet
•Go towww.investorvote.com/ED
•Or scan the QR code with your smartphone
•Follow the steps outlined on the secure website |
Important Notice Regarding the Availability of Proxy Materials for the
Consolidated Edison, Inc. StockholderAnnual Meeting of Stockholders to be Held on Monday, May 19, 201415, 2017
Under Securities and Exchange Commission rules, you are receiving this Notice that the proxy materials for the Consolidated
Edison, Inc. stockholderannual meeting of stockholders are available on the Internet. Follow the instructions below to view the materials and vote
online or request a copy. The items to be voted on and location of the annual meeting of stockholders are on the reverse side. Your vote is important!
This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. The Consolidated Edison, Inc. proxy materials are available at:
Easy Online Access — A Convenient Way to View Proxy Materials and Vote
When you go online to view materials, you can also vote your shares.
Step 1:Go towww.investorvote.com/ED.
Step 2:Click on the icon on the right to view current meeting materials.
Step 3:Return to the investorvote.com window and follow the instructions on the screen to log in.
Step 4:Make your selection as instructed on each screen to select delivery preferences and vote.
When you go online, you can also help the environment by consenting to receive electronic delivery of future materials.
Obtaining a Copy of the Proxy Materials - If you want to receive a copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed on the reverse side on or before Friday, May 9, 20145, 2017 to facilitate timely delivery.
02INYC
Consolidated Edison, Inc. StockholderAnnual Meeting of Stockholders will be held on Monday, May 19, 201415, 2017 at Consolidated Edison, Inc., 4 Irving Place, New York, NY, 10003 at 10:00 a.m. EDT.
Proposals to be voted on at the stockholder meetingAnnual Meeting of Stockholders are listed below along with the Board of Directors’ recommendations.
The Board of Directors recommends a vote FOR all nominees listed, and FOR Proposals 2 and 3, and 1 YEAR on Proposal 4:
1. | Election of Directors - |
1. Kevin Burke
2. Vincent A. Calarco
3.2. George Campbell, Jr.
4.3. Michael J. Del Giudice
5.4. Ellen V. Futter
6. John F. Hennessy III
7.5. John F. Killian
8.6. John McAvoy
9.7. Armando J. Olivera
10. Sally H. Piñero
11.8. Michael W. Ranger
12.9. Linda S. Sanford
10. L. Frederick Sutherland
2. | Ratification of appointment of independent accountants. |
3. |
4. | Advisory vote |
PLEASE NOTE - YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must vote online or request a paper copy of the proxy materials to receive a proxy card. If you wish to attend and vote at the stockholder meeting,Annual Meeting of Stockholders, please bring this notice with you.
Directions to the Consolidated Edison, Inc. Annual Meeting of Stockholders are available in the proxy statement which can be viewed at www.investorvote.com/ED.
| THIS NOTICE IS YOUR ADMISSION TICKET TO
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Here’s how to order a copy of the proxy materials and select a future delivery preference:
Paper copies: Current and future paper delivery requests can be submitted via the telephone, Internet or email options below.
Email copies: Current and future email delivery requests must be submitted via the Internet following the instructions below. If you request an email copy of current materials you will receive an email with a link to the materials.
PLEASE NOTE: You must use the number in the shaded bar on the reverse side when requesting a set of proxy materials.
Internet - Go towww.investorvote.com/ED. Follow the instructions to log in and order a copy of the current meeting materials and submit your preference for email or paper delivery of future meeting materials.
Telephone - Call us free of charge at1-866-641-4276 and follow the instructions to log in and order a paper copy of the materials by mail for the current meeting. You can also submit a preference to receive a paper copy for future meetings.
Email - Send email toinvestorvote@computershare.com with “Proxy Materials Consolidated Edison, Inc.” in the subject line. Include in the message your full name and address, plus the number located in the shaded bar on the reverse side, and state in the email that you want a paper copy of current meeting materials. You can also state your preference to receive a paper copy for future meetings.
To facilitate timely delivery, all requests for a paper copy of the proxy materials must be received by Friday, May 9, 2014.5, 2017.
02INYC
CONSOLIDATED EDISON, INC.
ANNUAL MEETING FOR HOLDERS AS OF 3/25/1421/17
TO BE HELD ON 5/19/1415/17
Your vote is important. Thank you for voting.
Read the Proxy Statement and have the voting instruction form below at hand. Please note that
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M68024-P49938
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | E22716-P84808 |
Important Notice Regarding the Availability of Proxy Materials for the | ||||||||||||||||||
The Board of Directors recommends a vote FOR all of the nominees listed (Proposal 1): | ||||||||||||||||||
1. | Election of Directors: | For | Against | Abstain | ||||||||||||||
1a. | ☐ | ☐ | ||||||||||||||||
1b. | ☐ | ☐ | ||||||||||||||||
1c. | ☐ | ☐ | ||||||||||||||||
1d. | ☐ | ☐ | ||||||||||||||||
1e. | ☐ | ☐ | ||||||||||||||||
1f. | John | ☐ | ☐ | |||||||||||||||
1g. | ☐ | ☐ | ||||||||||||||||
1h. | ☐ | ☐ | ||||||||||||||||
1i. | ☐ | ☐ | ||||||||||||||||
1j. | ||||||||||||||||||
L. Frederick Sutherland | ☐ | ☐ |
PLEASE “X” HERE ONLY IF YOU PLAN TO ATTEND THE MEETING AND VOTE THESE SHARES IN PERSON
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vote FOR Proposals 2 | For | Against | Abstain | |||||||||||
2. | Ratification of appointment of independent accountants. | ☐ | ☐ | |||||||||||
3. | ||||||||||||||
Advisory vote to approve named executive officer compensation. | ☐ | ☐ | ||||||||||||
TheBoardofDirectorsrecommendsavote of 1 YEAR on Proposal 4: | 1 Year | 2 Years | 3 Years | Abstain | ||||||||||
4. | Advisory vote on the frequency of future advisory votes on named executive officer compensation. | ☐ | ☐ | ☐ | ☐ |
Signature [PLEASE SIGN WITHIN BOX] | Date |
*** Exercise YourRightto Vote ***
Important Notice Regarding the Availability of Proxy Materials for the
ShareholderAnnual Meeting of Stockholders to Be Held on Monday, May 19, 2014.15, 2017.
Meeting Information | ||||||||||||
CONSOLIDATED EDISON, INC. |
Meeting
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Date: May
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Location: | 4 Irving Place | |||||||||||
New York, NY 10003 | ||||||||||||
You are receiving this communication because you hold shares in the company named above. | ||||||||||||
This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online atwww.proxyvote.comor easily request a paper copy (see reverse side). | ||||||||||||
![]() | We encourage you to access and review all of the important information contained in the proxy materials before voting.
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See the reverse side of this notice to obtain proxy materials and voting instructions.
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M68012-P49938
—Before You Vote —
How to Access the Proxy Materials
Proxy Materials Available to VIEW or RECEIVE: | ||||||||||||||
NOTICE AND PROXY STATEMENT ANNUAL REPORT | ||||||||||||||
How to View Online: | ||||||||||||||
Have the information that is printed in the box marked by the arrow![]() ![]() | ||||||||||||||
How to Request and Receive a PAPER orE-MAIL Copy: | ||||||||||||||
If you want to receive a paper ore-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: | ||||||||||||||
1) BY |
www.proxyvote.com | |||||||||||||
2) BY | 1-800-579-1639 | |||||||||||||
sendmaterial@proxyvote.com | ||||||||||||||
* If requesting materials bye-mail, please send a blanke-mail with the information that is printed in the box marked by the arrow | ||||||||||||||
Requests, instructions and other inquiries sent to thise-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before Monday, May
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—How To Vote —
Please Choose One of the Following Voting Methods
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Vote By Internet: To vote now by Internet, go to
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![]() | Vote By Mail:You can vote by mail by requesting a paper copy of the materials, which will include a voting instruction form.
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M68013-P49938
Voting Items | ||||||||||||||||||||||||
The Board of Directors recommends a vote FOR all of the nominees listed (Proposal 1): | ||||||||||||||||||||||||
1. Election of
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1a. |
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1b. |
| 2. | Ratification of appointment of independent accountants. | |||||||||||||||||||||
1c. |
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| Michael J. Del Giudice | Advisory vote to approve named executive officer compensation. | ||||||||||||||||||||||
| Ellen V. Futter | The Board of Directors recommends a vote of1 YEAR on Proposal 4: | ||||||||||||||||||||||
| John F. | 4. | Advisory vote on the frequency of future advisory votes on named executive officer compensation. | |||||||||||||||||||||
1f. | John McAvoy | |||||||||||||||||||||||
1g. |
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| Armando J. Olivera | |||||||||||||||||||||||
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| Michael W. Ranger | |||||||||||||||||||||||
| Linda S. Sanford | |||||||||||||||||||||||
1j. | L. Frederick Sutherland | |||||||||||||||||||||||
Voting Instructions |
M68014-P49938
M68015-P49938
Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 1:00 a.m., EDT, on Monday, May
| ||||
![]() | Vote by Internet
• Go towww.investorvote.com/EDESP
• Or scan the QR code with your smartphone
• Follow the steps outlined on the secure website | |||
Vote by telephone
• Call toll free1-800-652-VOTE (8683) within the USA, US territories
• Follow the instructions provided by the recorded message. |
Using ablack ink pen, mark your votes with anX as shown in this example. Please do not write outside the designated areas. | ![]() |
IIFF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
A | Proposals — The Board of Directors recommends a vote FOR all nominees listed, | |
on Proposal 4. |
1. Election of Directors | For | Against | Abstain | For | Against | Abstain | ||||||||||||||||||||||
01 - | Against | Abstain | ||||||||||||||||||||||||||
02 - | 2. | Ratification of appointment of independent accountants. | ☐ | |||||||||||||||||||||||||
03 - | ||||||||||||||||||||||||||||
Advisory vote to approve named executive officer compensation. | ||||||||||||||||||||||||||||
☐ | ☐ | |||||||||||||||||||||||||||
| 4. | Advisory vote on the frequency of future advisory votes on named executive officer compensation. | 1 Year ☐ | 2 Years ☐ | ||||||||||||||||||||||||
3 Years ☐ | Abstain ☐ | |||||||||||||||||||||||||||
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B | Non-Voting Items |
Change of Address — Please print your new address below. | Comments — Please print your comments below. | Meeting Attendance | ||||||
Mark the box to the right if you plan to attend the Annual |
Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below |
Please sign exactly as name(s) appears hereon. Full title of one signing in representative capacity should be clearly designated after signature. Names of all joint holders should be written even if signed by only one.
Date (mm/dd/yyyy) — Please print date below. | Signature 1 — Please keep signature within the box. | Signature 2 — Please keep signature within the box. | ||||||
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02INZC
20142017 Annual Meeting Admission Ticket
20142017 Annual Meeting of
Consolidated Edison, Inc. Stockholders
Monday, May 19, 2014,15, 2017, 10:00 a.m. EDT
Consolidated Edison, Inc.
4 Irving Place, New York, NY 10003
This ticket admits only the named stockholder(s).
Please bring this admission ticket and a proper form of identification with you if attending the stockholder meeting.Annual Meeting of Stockholders.
YOUR VOTE IS IMPORTANT!
Please vote promptly by telephone, through the Internet or by completing and returning the attached proxy card.
q
IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
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Consolidated Edison, Inc. 4 Irving Place New York, NY 10003 |
CONFIDENTIAL VOTING INSTRUCTIONS
TO COMPUTERSHARE AS PLAN AGENT
FOR THE CONSOLIDATED EDISON, INC. STOCK PURCHASE PLAN (STOCK PURCHASE PLAN)
CONSOLIDATED EDISON, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MONDAY, MAY 19, 201415, 2017
I hereby instruct Computershare, the Plan Agent for the Stock Purchase Plan, to vote (in person or by proxy) all of the shares of common stock of Consolidated Edison, Inc. (the Company), which are credited to my account under the Stock Purchase Plan, at the Annual Meeting of Stockholders of the Company to be held on Monday, May 19, 2014,15, 2017, and at any adjournments or postponements thereof on the following matters, all as more fully set forth in the proxy statement, as checked on the reverse side, and in its discretion upon such other matters as may properly come before the meeting or at any adjournments or postponements thereof. This form provides Voting Instructions for shares held in the Stock Purchase Plan. If signed, dated and returned, the shares of common stock of the Company represented by the Voting Instructions will be voted in accordance with the specifications given.
(Items to be voted appear on reverse side.)
Please sign exactly as name(s) appears hereon. Full title of one signing in representative capacity should be clearly designated after signature. Names of all joint holders should be written even if signed by only one.
IF VOTING BY MAIL, YOUMUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.
![]() ![]() | CONSOLIDATED EDISON, INC. 4 NEW YORK, NY 10003 ATTN: | |
VOTING IS IMPORTANT. PLEASE VOTE TODAY.
Vote by Internet, phone or mail. Follow the instructions below.
VOTE BY INTERNET -www.proxyvote.com
Use the Internet to transmit these Voting Instructions and for electronic delivery of information up until 11:59 P.M. Eastern Daylight Time on Wednesday, May 14, 2014.10, 2017. Have this Voting Instruction form in hand when accessing the website and then follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use anytouch-tone telephone to transmit these Voting Instructions up until 11:59 P.M. Eastern Daylight Time on Wednesday, May 14, 2014.10, 2017. Have this Voting Instruction form in hand when calling and then follow the instructions.
VOTE BY MAIL
Mark, sign and date this Voting Instruction form and return it in the postage-paid envelope provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, by Wednesday, May 14, 2014.10, 2017. Do not vote by mail if Voting Instructions were previously transmitted by Internet or phone.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M68003-P49913E18778-TBD KEEP THIS PORTION FOR YOUR RECORDS
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
DETACH AND RETURN THIS PORTION ONLY
THIS VOTING INSTRUCTION FORM IS VALID ONLY WHEN SIGNED AND DATED.
CONSOLIDATED EDISON, INC. | ||||||||||||
The Board of Directors recommends a vote FOR all of the nominees listed (Proposal 1): | ||||||||||||
1. | Election of Directors: | For | Against | Abstain | ||||||||
1a. | ||||||||||||
1b. | ||||||||||||
1c. | ||||||||||||
1d. | ||||||||||||
1e. | ||||||||||||
1f. | John | |||||||||||
1g. | ||||||||||||
1h. | ||||||||||||
1i. | ||||||||||||
1j. | ||||||||||||
L. Frederick Sutherland |
| For | Against | Abstain | |||||||
2. | Ratification of appointment of independent accountants. | |||||||||
3. | ||||||||||
Advisory vote to approve named executive officer compensation. | ||||||||||
TheBoardofDirectorsrecommendsa vote of 1 YEAR on Proposal 4: | 1 Year | 2 Years | 3 Years | Abstain | ||||||
4. | Advisory vote on the frequency of future advisory votes on named executive officer compensation. | ☐ | ☐ | ☐ | ☐ |
Please sign exactly as the 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 |
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conEdison, inc.
ADMISSION TICKET
Annual Meeting of Stockholders of
CONSOLIDATED EDISON, INC.
MONDAY, MAY 19, 201415, 2017 10:00 a.m.
4 Irving Place
New York, NY 10003
Thisticket admitsonlythenamedstockholder(s).Pleasebringthisadmissionticket anda
properformofidentificationwithyouifattendingthemeeting.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:Meeting of Stockholders:
The Notice and Proxy Statement and Annual Report are available atwww.proxyvote.com.
M68004-P49913E18779-TBD
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CONFIDENTIAL VOTING INSTRUCTIONS
To Vanguard Fiduciary Trust Company as Trustee under the Consolidated Edison Thrift Savings Plan (Thrift Savings Plan) and the Con Edison Tax Reduction Act Stock Ownership Plan (TRASOP Plan)
CONSOLIDATED EDISON, INC. Annual Meeting of Stockholders Monday, May This proxy is solicited by the Board of Directors
Vanguard Fiduciary Trust Company, the Trustee of the Thrift Savings Plan and TRASOP Plan (together, the Plans), is instructed to vote (in person or by proxy) all of the shares of common stock of Consolidated Edison, Inc. (the Company), which are credited to the account under the Plans, at the Annual Meeting of Stockholders of the Company to be held on Monday, May
If shares are held in the Plans and these Voting Instructions are not returned to the Trustee by Wednesday, May
Continued and to be signed on reverse side
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