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. )
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| ☒ | 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
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Consolidated Edison, Inc.
4 Irving Place
New York, NY 10003
John McAvoy
Chairman of the Board
Timothy P. Cawley
Chief Executive Officer
April 9, 20185, 2021
Dear Stockholders:
You are cordially invited to attend theThe Annual Meeting of Stockholders of Consolidated Edison, Inc. We hope that you will joinwith the Board of Directors and the Company’s management at the Company’s Headquarters at 4 Irving Place, New York, New York, onis scheduled for Monday, May 21, 2018,17, 2021, at 10:00 a.m., Eastern Daylight Time, remotely by visiting www.virtualshareholdermeeting.com/ED2021. We encourage stockholders to log into the virtual meeting by following the instructions provided in the proxy materials. The virtual meeting offers the same participation opportunities as an in-person meeting.
The accompanying Proxy Statement, provided to stockholders on or about April 9, 2018,5, 2021, 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, to ratify the appointment of independent accountants for 2018,2021, and to approve, on an advisory basis, named executive officer compensation.
Whether or not you plan So as to attend the Annual Meeting, please vote as soon as possible. It is very importantensure that as many shares as possible beare represented, atwe strongly recommend that you vote in advance of the meeting.Annual Meeting, even if you plan to attend remotely.
Sincerely,
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Due to the ongoing impact of the novel coronavirus disease, Consolidated Edison, Inc.COVID-19,
we plan to hold the Annual Meeting by means of remote communications only (i.e., a virtual-only annual meeting). As of the date of this letter, a state disaster emergency has been declared relating to 4 Irving Place,COVID-19 in the State of New York, NY 10003and the requirement under New York law that annual meetings be noticed and held at a physical location has been temporarily suspended. The declaration of a state disaster emergency and the related suspension are renewed on a monthly basis. In the event that the state disaster emergency and suspension are lifted prior to the date fixed for the Annual Meeting and it is not, therefore, legally permissible for us to hold a completely virtual annual meeting under New York law, we may also hold the Annual Meeting in person. We will announce the location of the in-person
component of the meeting by press release and posting on our proxy website (www.conedison.com/shareholders), as well as the filing of additional proxy materials with the Securities and Exchange Commission.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERSSincerely,
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| John McAvoy | Timothy P. Cawley |
Consolidated Edison, Inc.
4 Irving Place, New York, NY 10003
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
| Date: | Monday, May | |||
| Virtual Annual Meeting Website Address: | www.virtualshareholdermeeting.com/ED2021. § If you hold your shares through an intermediary (i.e., a broker, bank, or other financial institution), please use the 16-digit voting control number that can be found on your voting instruction form, Notice of Internet Availability of proxy materials or email, as applicable, provided with your proxy materials to access the virtual annual meeting website. § If you are a registered holder of Company Common Stock (i.e., you hold your shares through our transfer agent, Computershare) or participate in the Company’s
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| In Person Location: | Due to the ongoing impact of COVID-19, we plan to hold the Annual Meeting by means of remote communications only (i.e., a virtual-only annual meeting). However, if required by applicable law, we may also hold the Annual Meeting in person. In the event that the state disaster emergency and related temporary suspension of the requirement under New York law that annual meetings be noticed and held at a physical location are lifted prior to the date fixed for the Annual Meeting and it is not, therefore, legally permissible for us to hold a completely virtual annual meeting under New York law, we will announce the location of the in-person component of the meeting by press release and posting on our proxy website (www.conedison.com/shareholders), as well as the filing of additional proxy materials with the Securities and Exchange Commission. | |||
| 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; and
d. 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,
Sylvia V. Dooley
Jeanmarie Schieler
Vice President and Corporate Secretary
Dated: April 9, 20185, 2021
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDERS’ MEETING TO BE HELD ON MONDAY, MAY 21, 2018.17, 2021. THE COMPANY’S PROXY STATEMENT AND ANNUAL REPORT, PROVIDED TO STOCKHOLDERS ON OR ABOUT APRIL 9, 2018,5, 2021, ARE AVAILABLE AT
CONEDISON.COM/WWW.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.
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Proposal No. 2 Ratification of the Appointment of Independent Accountants | 36 | |||
Consolidated Edison, Inc. Proxy Statement | i |
| Table of Contents |
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Forward-Looking Statements
This proxy statement contains forward-looking statements that are intended to qualify for the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements of future expectations and not facts. Words such as “forecasts,” “expects,” “estimates,” “anticipates,” “intends,” “believes,” “plans,” “will,” and similar expressions identify forward-looking statements. The forward-looking statements reflect information available and assumptions at the time the statements are made and speak only as of that time. Actual results or developments might differ materially from those included in the forward-looking statements because of various factors including, but not limited to, those discussed under “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Consolidated Edison, Inc. Proxy Statement | iii |
| Proxy Statement Summary |
| PROXY STATEMENT SUMMARY |
This section highlights the proposals to be acted upon, as well as information about Consolidated Edison, Inc. (the “Company”), that can be found in this Proxy Statement and does not contain all of the information that you need to consider. Before voting, please carefully review the complete Proxy Statement and the Annual Report to Stockholders of the Company provided to stockholders on or about April 9, 2018,5, 2021, which includes the consolidated financial statements and accompanying notes for the fiscal year ended December 31, 2017,2020, and other information relating to the Company’s financial condition and operations results.results of operations.References to “Con Edison of New York,” “Orange & Rockland,” “Clean Energy Businesses,” and “Con Edison Transmission” throughout this Proxy Statement refer to the Company’s subsidiaries, Consolidated Edison Company of New York, Inc., Orange and Rockland Utilities, Inc., Con Edison Clean Energy Businesses, Inc. and its subsidiaries, and Con Edison Transmission, Inc. and its subsidiaries, respectively.
2018 ANNUAL MEETING OF STOCKHOLDERS2021 Annual Meeting of Stockholders (“ANNUAL MEETING”Annual Meeting”)
Due to the ongoing impact of COVID-19, we plan to hold the Annual Meeting by means of remote communication only. The virtual meeting offers the same participation opportunities as an in-person meeting. In the event that the state disaster emergency and related temporary suspension of the requirement under New York law that annual meetings be noticed and held at a physical location are lifted prior to the date fixed for the Annual Meeting and it is not, therefore, legally permissible for us to hold a completely virtual annual meeting under New York law, we will announce the location of the in-person component of the meeting by press release and posting on our proxy website (www.conedison.com/shareholders), as well as the filing of additional proxy materials with the Securities and Exchange Commission (the “SEC”).
| Monday, May | |
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§ If you are (See “ | |
| If required by applicable law, the location of the in-person component of the meeting will be announced by press release and posting on our proxy website www.conedison.com/shareholders, as well as the filing of additional proxy materials with the SEC. | |
§Record Date & Voting | Stockholders of record at the close of business on March Each outstanding share of Common Stock is entitled to one vote. | |
| Please follow the instructions contained in | |
§Proxy Website | www.conedison.com/shareholders |
Consolidated Edison, Inc. Proxy Statement | 1 |
| Proxy Statement Summary |
STOCKHOLDER VOTING MATTERSStockholder Voting Matters
| Management Proposals | Board’s Voting Recommendation | Vote Required For Approval* | Broker Discretionary Voting Allowed | Page References (for more detail) | ||||||
§Proposal No. | Election of Directors | Nominee | 7 through 15 | |||||||
§Proposal No. | Ratification of the Appointment of Independent Accountants | 36 | ||||||||
§Proposal No. | Advisory Vote to Approve Named Executive Officer Compensation | |||||||||
| 38 |
Footnote:
| * | The presence at the Annual Meeting, either by means of remote communication, by proxy, or in person |
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Director Nominees | ||||||||||
Name / Age / Tenure / Independence | Primary Occupation / Career Highlight | Committee Membership | ||||||||
 | Other U.S.-Listed Public Company Boards | |||||||||
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Director since Not Independent | President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York (effective December 29, 2020); former President of Con Edison of New York (through December 31, 2020) | 0 | |||||||
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 | Ellen V. Futter, Director since 1997 Not Independent | President, American Museum of Natural History | § Executive § Safety, Environment,
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| John F. Killian, Director since 2007 Independent | Former Executive Vice President and Chief Financial Officer, Verizon Communications Inc. | §Audit (Chair) §Corporate Governance and Nominating § Executive §Management Development and Compensation | 2 | ||||||
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| Karol V. Mason, 63 Director since 2021 Independent | President, John Jay College of Criminal Justice | § Corporate Governance and Nominating (effective January 1, 2021) § Safety, Environment, Operations and Sustainability (effective January 1, 2021) | 0 | ||||||
| John McAvoy, Director since 2013 Not Independent Non-executive Chairman of the Board | Chairman of the Board; former President and Chief Executive Officer | ||||||||
 | § Executive (Chair) | 0 | ||||||||
| Dwight A. McBride, 53 Director since 2021 Independent | President, The New School | § Management Development and Compensation (effective January 1, 2021) § Safety, Environment, Operations and Sustainability (effective January 1, 2021) | 0 | ||||||
| William J. Mulrow, Director since 2017 Independent | Senior Advisory Director, The Blackstone Group |
§Finance §Management Development and Compensation § Safety, Environment, Operations and Sustainability | 1 | ||||||
| Armando J. Olivera, Director since 2014 Independent | Former President and Chief Executive Officer, Florida Power & Light Company |
§ Executive (effective immediately following the retirement of George Campbell, Jr. from the Board) §Finance § Safety, Environment, Operations | 2 | ||||||
 2 | Consolidated Edison, Inc. Proxy Statement |
| Proxy Statement Summary |
Name / Age / Tenure / Independence | Primary Occupation / Career Highlight | Committee Membership | Other U.S.-Listed Public Company Boards | |||||
| Michael W. Ranger, Director since 2008 Independent Lead Director | President and Chief Executive Officer, Covanta Holding Corporation (effective October 29, 2020); Senior Managing Director, Diamond Castle Holdings LLC | §Audit §Corporate Governance and Nominating §Executive §Finance §Management Development and Compensation | 1 | ||||
| Linda S. Sanford, Director since 2015 Independent | Former Senior Vice President, Enterprise Transformation, International Business Machines Corporation | § Audit §Corporate Governance and Nominating
§Finance | |||||
| Deirdre Stanley, Director since 2017 Independent | Executive Vice President and General Counsel, | §Corporate Governance and Nominating § Management Development and Compensation (Chair, effective immediately following the retirement of George Campbell, Jr. from the Board) § Safety, Environment,
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| L. Frederick Sutherland, Director since 2006 Independent | Former Executive Vice President and Chief Financial Officer, | §Audit §Finance (Chair) §Management Development and Compensation | 1 | ||||
Proposal No. 1: Election of Directors. The Board of Directors has nominated twelve Directors for election at the Annual Meeting and recommends the election of each of the twelve nominees. The table above provides certain information about the Director nominees. |
| § | Proposal No. 2: Ratification of the Appointment of Independent |
Proposal No. 3: Advisory Vote to Approve Named Executive Officer |
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KEY CORPORATE GOVERNANCE PRACTICESCorporate Governance Practices
Active, Year-Round, Stockholder Engagement. |
Risk |
Strategic Planning. The Board oversees and reviews, at least annually, the Company’s strategic and business plans and objectives. |
| § | Corporate Sustainability. The Company is firmly committed to sustainability, which is broadly overseen by the Board. The Board reviews and discusses various sustainability topics throughout the year and routinely considers environmental issues (including climate change) and assesses how they impact the Company’s operations, strategies and risk profile. (See “The Board of Directors—Corporate Sustainability” on pages 17 through 18 for additional information on corporate sustainability.) |
| § | Diversity, Equity, and Inclusion.The Company strives to have a diverse workforce because it believes it makes the Company stronger. The Company’s diversity, equity, and inclusion strategy drives its corporate culture and informs how |
Consolidated Edison, Inc. Proxy Statement | 3 |
| Proxy Statement Summary |
its employees engage with each other, and sets the foundation for a respectful and inclusive workplace. The Company measures its progress both quantitatively and qualitatively and has four key areas of focus: (i) advancing diversity, equity, and inclusion through learning, (ii) fostering a diverse, equitable, and inclusive environment, (iii) connecting diversity, equity and inclusion throughout the Company, and (iv) communicating and engaging with employees. (See “The Board of Directors—Diversity, Equity, and Inclusion” on page 18 for additional information on the Company’s diversity, equity, and inclusion initiatives.) |
| § | Employee Succession Planning and Talent Management. The Company has a comprehensive, formal process for identifying, assessing and developing a diverse slate of internal candidates to assume, in the future, senior roles in the organization. Its succession planning and development processes are integrated and focused on learning through experiences, leadership commitment, and targeted executive development. During succession planning and development discussions, the Company seeks to develop talented women and people of color to provide a diverse and talented group of enterprise leaders. These discussions result in development plans that are reviewed and updated annually. These succession planning and development processes apply to all upper management positions, including officer positions. The Chief Executive Officer annually reviews his succession plan with the Board. (See “The Board of Directors—Employee Succession Planning and Talent Management” on pages 26 through 27 for additional information on the succession planning process for the role of President and Chief Executive Officer of the Company.) |
| § | Annual Election of |
Voting.In uncontested elections, each Director nominee may be elected by a majority of the votes cast at a meeting of the Company’s stockholders by the holders of shares entitled to vote in the election. In contested elections, each Director nominee may be elected by a plurality of the votes cast. The Company does not have a super-majority voting provision in its Restated Certificate of Incorporation. |
| § | Board Composition. |
The Corporate Governance and Nominating Committee recommends candidates for election or re-election to the Board and reviews the qualifications of possible Director candidates. When recommending to the Board the slate of Director nominees for election at the Annual Meeting, the Corporate Governance and Nominating Committee strives to maintain an appropriate balance of tenure, diversity, and skills on the Board as evidenced by the proposed slate (which excludes Dr. Campbell) of director nominees, which are 33.3% women and 33.3% racially and ethnically diverse (as self-reported by the Director nominees). The Board and the Corporate Governance and Nominating Committee strongly believe that the Board and the Company benefit from having directors with a diversity of gender, race, ethnicity, viewpoints and experiences. The Corporate Governance and Nominating Committee identifies candidates through a variety of means, including professional search firms, recommendations from members of the Board, suggestions from senior management, and submissions by the Company’s stockholders. When a professional search firm is used, the firm is directed to provide a diverse slate of candidates, including candidates diverse with respect to gender, race, ethnicity and nationality, for the Board’s consideration. (See “The Board of Directors—Selection of Director Candidates” on page 26 for additional information on the Director nomination process.)
Independent Lead |
4 | Consolidated Edison, Inc. Proxy Statement |
| Proxy Statement Summary |
| § | Frequent Executive |
Annual Board and Committee |
Membership on Public Company |
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Special |
Changes to Executive Compensation Program for 2021
| § | Long term incentive plan changes. The Company’s Named Executive Officers, identified in the “Compensation Discussion and Analysis–Introduction” on page 40, are eligible to receive annual grants of equity-based awards under the Company’s long term incentive plan. As in prior years, the number of performance units awarded to each of the Named Executive Officers will be based on the achievement of performance measures over a three-year performance period. For the 2021 performance period that began on January 1, 2021, the Compensation Committee added a new operating objective performance measure, the Diversity and Inclusion Work Plan. The measure reflects the Company’s continuing commitment to increasing the representation of women and people of color in the Company’s leadership. There is no change to the potential maximum payout for the 2021 performance units. The maximum payout of the 2021 performance units represents the weighted average of each of the performance measures, as shown in the chart below. |
| Target Weight | Maximum Payout Relative to Target | Maximum Weighted Result | ||||||||||||||
| (%) | (%) | (%) | |||||||||||||||
| Shareholder Return | 50 | 200 | 100 | ||||||||||||||
| Adjusted EPS | 30 | 200 | 60 | ||||||||||||||
Operating Objectives (5% weight for each objective below) | 20 | 150 | 30 | ||||||||||||||
◾ Clean Energy and Electrification Work Plan | |||||||||||||||||
◾ ◾ Diversity and Inclusion Work Plan | |||||||||||||||||
◾ Growth in Renewable Portfolio | |||||||||||||||||
| TOTAL | 190 | ||||||||||||||||
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KEY FEATURES OF THE EXECUTIVE COMPENSATION PROGRAMCompensation Policies and Governance Practices
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(See “Compensation Discussion and Analysis – Executive Summary” on pages 26 to 28 for additional information.)
CHANGES TO EXECUTIVE COMPENSATION PROGRAM FOR 2017
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(See “Compensation Discussiongovernance practices that support our pay-for-performance principles and Analysis – Executive Compensation Actions – Annual Incentive Compensation” on pages 33 to 37 and “Compensation Discussion and Analysis – Executive Compensation Actions – Long-Term Incentive Compensation” on pages 38 to 42 for additional information.)closely align the executive compensation program with the interests of our stockholders.
What We Do |
- 100% of long-term incentive compensation is performance-based ✓ Mitigate compensation risk by: - balancing incentives between annual and long-term goals - tying incentives to multiple goals to reduce undue weight on any one goal - for annual incentive payouts, using non-financial performance factors to counterbalance financial performance goals - discouraging excessive focus on annual results and focusing on sustainable performance by providing significant long-term incentives - subjecting annual and long-term incentive plans to payment caps - giving Compensation Committee discretion to reduce payouts - performing an annual risk assessment for annual and long-term incentive plans ✓ Maintain stock ownership guidelines for Directors and senior officers ✓ Maintain a compensation recoupment (clawback) policy covering all officers of the Company and its subsidiaries for incentive-based compensation ✓ Hold annual say-on-pay votes (with 93.4% support in 2020) | |
What We Don’t Do | ✘ Enter into employment agreements ✘ Offer excessive executive perquisites ✘ Dilute stockholder value by issuing excessive equity compensation ✘ Grant stock options or have outstanding options ✘ Reprice options or buyout underwater options without stockholder approval ✘ Recycle shares for future awards except under limited circumstances ✘ Provide golden parachute excise tax gross-ups ✘ Offer excessive change in control severance benefits ✘ Negotiate equity awards with special treatment upon a change of control ✘ Provide single-trigger acceleration of vesting of outstanding equity awards ✘ Permit Directors, officers, financial personnel, and certain other individuals to: - short, hedge or pledge Company securities or - hold Company securities in a margin account as collateral |
6 | Consolidated Edison, Inc. Proxy Statement |
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KEY COMPENSATION GOVERNANCE PRACTICES
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| ELECTION OF DIRECTORS |
PROPOSAL NO.Proposal 1 ELECTION OF DIRECTORSElection of Directors
TenTwelve 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 7 to 12.8 through 15.) Directors are not permitted to stand for election until they reach the mandatory retirement age of 75.after having passed his or her 75th birthday. Of the Board members standing for election, John McAvoyTimothy P. Cawley is the only member who is an officer of the Company. George Campbell, Jr. has passed his 75th birthday and, as a result, is not permitted to stand for election. All of the nominees were elected Directors at the last Annual Meeting,annual meeting of stockholders, other than William J. MulrowMr. Cawley, Karol V. Mason, and Deirdre Stanley.Dwight A. McBride. Mr. Mulrow and Ms. Stanley were electedCawley was appointed to the Board of Directors by the Board effective November 16, 2017.December 29, 2020, at the time of his appointment as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York. Ms. Mason and Dr. McBride were appointed to the Board of Directors by the Board effective January 1, 2021. A professional search firm assisted the Corporate Governance and Nominating Committee in connection with its recommendation of Ms. Mason and Dr. McBride. In keeping with the process described in “The Board of Directors—Selection of Director Candidates” on page 26, the Corporate Governance and Nominating Committee directed the professional search firm to provide it with a diverse slate of candidates, which included Ms. Mason and Dr. McBride.
The Corporate Governance and Nominating Committee recommends candidates for election orre-election to the Board and reviews the qualifications of possible Director candidates. When recommending to the Board the slate of Director nominees for election at the Annual Meeting, the Corporate Governance and Nominating Committee strives to maintain an appropriate balance of tenure, diversity, and skills on the Board.Board as evidenced by the proposed slate of director nominees, which are 33.3% women and 33.3% racially and ethnically diverse (as self-reported by the Director nominees). The Corporate Governance and Nominating Committee also strives to ensure that the Board is composed of Directors who bring diverse viewpoints, perspectives, professional experiences and backgrounds, and effectively represent the long-term interests of stockholders. The Board and the Corporate Governance and Nominating Committee strongly believe that the Board and the Company benefit from having directors with a diversity of gender, race, ethnicity, viewpoints, and experiences. The Board and the Corporate Governance and Nominating Committee believe that striking an appropriate balance between fresh perspectives and ideas and the valuable experience and familiarity contributed by longer-serving Directors is critical to a forward-looking and strategic Board. The Corporate Governance and Nominating Committee identifies candidates through a variety of means, including professional search firms, recommendations from members of the Board, suggestions from senior management, and submissions by the Company’s stockholders. When a professional search firm is used, the firm is directed to provide a diverse slate of candidates, including candidates diverse with respect to gender, race and ethnicity, for the Board’s consideration. (See “The Board of Directors – Standing CommitteesDirectors—Selection of the Board – Corporate Governance
and Nominating CommitteeDirector Candidates” on page 1626 for additional information on the Director nomination process.) A professional search firm assisted the Corporate Governance and Nominating Committee in connection with its recommendation of Ms. Stanley and a member of the Board recommended Mr. Mulrow to the Corporate Governance and Nominating Committee.
Each nominee was selected by the Corporate Governance and Nominating Committee and approved by the Board for submission to the Company’s stockholders. The Company 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 as Chairman of the Board of the Company’s subsidiary, Orange and Rockland Utilities, Inc. (“Orange & Rockland”).
Michael J. Del Giudice, who retired from the Board effective January 18, 2018, and Vincent A. Calarco, who will be retiring from the Board effective May 21, 2018 having reached the mandatory retirement age, each served with distinction as Directors of the Company. Messrs. Del Giudice and Calarco will not be standing forre-election and the Board has reduced the number of Directors to ten effective immediately prior to the Annual Meeting.York.
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.
Each of the ten Director nominees must 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.
The Board recommends FOR Proposal No. 1 | ||
| Each of the twelve Director nominees must receive a majority of the votes cast at the Annual Meeting 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 broker | |
Consolidated Edison, Inc. Proxy Statement | 7 |
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Information About the Director 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 factors relating to the composition of the Board (including its size and structure), the Company’s principlesdiversity of the Board (including diversity of gender, race, ethnicity, and nationality), and the skills and characteristics of Director
nominees, including independence, integrity, judgment, business experience, areas of expertise, and availability for service to assure that the Board contains an appropriate mix of Directors to best further the Company’s long-term business interests. 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 which provide the Board, as a whole, with the skills and expertise that reflect the needs of the Company. See pages 8 to 1210 through 15 for information about each Director nominee, including their age as of the date of the Annual Meeting, business experience, period of service as a Director, public or investment company directorships, and other directorships.
The following graph displays information about the skills and experience of the Director nominees:
8 | Consolidated Edison, Inc. Proxy Statement |
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Career Highlights: Dr. Campbell, a physicist, was theNon-Executive ChairmanThe makeup of the Webb Institute, Glen Cove, NY, an all scholarship college offering degrees exclusivelyDirector nominees is set forth 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 providing degrees in engineering, architecture, and fine arts, from July 2000 to June 2011. Dr. Campbell also held various research and development and 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.pie charts below:
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(Emeritus), Rensselaer Polytechnic Institute, Institute of International Education, Inc., 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.
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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 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 also served as a Director and Chairman of the Federal Reserve Bank of New York. Ms. Futter is 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.
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| Timothy P. Cawley Director since: 2020 Age: 56 Gender: Male Race/Ethnicity: White |
| Ellen V. Futter Director since: 1997 Age: 71 Gender: Female Race/Ethnicity: White Board Committees:
§ Safety, Environment, Operations and Sustainability (Co-Chair through December 31, 2020) | |||||||||
Career Highlights: Mr. Cawley has been President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York since December 29, 2020. Mr. Cawley was President of Con Edison of New York from January 1, 2018 through December 31, 2020. Mr. Cawley was President and Chief Executive Officer of Orange & Rockland from December 2013 through November 2017. Mr. Cawley was Senior Vice President of Central Operations for Con Edison of New York from December 2012 through November 2013. Mr. Cawley joined Con Edison of New York in July 1987.
Other Directorships: Mr. Cawley is a Trustee of Con Edison of New York and Chairman of Orange & Rockland. Mr. Cawley is also a Director
| 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 was a corporate attorney at the Milbank law firm (formerly known as Milbank, Tweed, Hadley & McCloy).
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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 and Chairman of the Board 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.
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Ms. Futter has management and operations experience leading major New York not-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
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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 and Rockland Utilities, Inc. 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, the Partnership for New York City and the Puerto Rico Energy Resiliency Working Group. Mr. McAvoy is also Chair of the Electricity Information Sharing and Analysis Center Members 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.
10 | Consolidated Edison, Inc. Proxy Statement |
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| John F. Killian Director since: 2007 Age: 66 Gender: Male Race/Ethnicity: White Board Committees:
§ Corporate Governance and Nominating § Executive § Management Development and Compensation |
| Karol V. Mason Director since: 2021 Age: 63 Gender: Female Race/Ethnicity: Black/African American Board Committees: § Corporate Governance and Nominating (effective January 1, 2021) § Safety, Environment, Operations and Sustainability (effective January 1, 2021) | |||||||||
Career Highlights: Mr. Killian was the Executive Vice President and Chief Financial Officer of Verizon Communications Inc., a telecommunications company, from March 2009 to November 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 Corporation 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, a Director
| Career Highlights: Ms. Mason has been President of John Jay College of Criminal Justice, a senior liberal arts college in the City University of New York system focused on criminal justice, since August 2017. Ms. Mason was an Assistant Attorney General for the Office of Justice Programs within the United States Department of Justice from June 2013 until January 2017 and a Deputy Associate Attorney General within the United States Department of Justice from April 2009 until February 2012. Ms. Mason was an attorney at the law firm of Alston & Bird LLP from November 1983 until April 2009, where she served as a partner from January 1990 until April 2009 and served again, as a partner, from February 2012 through May 2013. Ms. Mason was a Judicial Law Clerk for The Honorable Judge John F. Grady of the United States District Court for the Northern District of Illinois from October 1982 until October 1983.
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Career Highlights:Mr. Mulrow is a Senior Advisory Director since May 2017 at The Blackstone Group, the world’s largest alternative asset management firm. Previously, he served as Secretary to New York State Governor Andrew Cuomo from January 2015 to April 2017, and was a Senior Managing Director at Blackstone from April 2011 to January 2015. From 2005 to 2011, he was a Director of Citigroup Global Markets Inc. Mr. Mulrow also held various management positions at Paladin Capital Group, Gabelli Asset Management, Inc., Rothschild Inc., and Donaldson, Lufkin & Jenrette Securities Corporation. In addition, Mr. Mulrow served in a number of other government positions including Chairman of the New York State Housing Finance Agency and State of New York Mortgage Agency.
Other Directorships:Mr. Mulrow is a Trustee of Con Edison of New York, and a Director of JBG Smith Properties since July 2017, and Arizona Mining Inc. since June 2017.
Attributes and Skills:Mr. Mulrow has business and leadership experience in both the public and the private sector. He also has financial, accounting and asset management experience from his leadership positions at Blackstone, New York State government, and his service on other boards which supports the Board in its oversight of the Company’s financial and strategic planning activities.
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Ms. Mason has experience leading a prominent public liberal arts college that focuses on criminal justice and forensics. Ms. Mason also has legal experience. Ms. Mason’s experience from her leadership position at John Jay College of Criminal Justice, City University of New York and her legal experience support the Board
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Career Highlights: Mr. Olivera was President of Florida Power & Light Company, an electric utility that is a subsidiary of a publicly traded energy 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 May 2012. Mr. Olivera is Trustee Emeritus of Cornell University and also a Trustee and Vice Chair of 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.
Consolidated Edison, Inc. Proxy Statement | 11 |
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| John McAvoy Director since: 2013 Age: 60 Gender: Male Race/Ethnicity: White Board Committee:
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| Dwight A. McBride Director since: 2021 Age: 53 Gender: Male Race/Ethnicity: Black/African American Lesbian, Gay, Bisexual, Transgender + : Yes Board Committees: § Management Development and Compensation (effective January 1, 2021) § Safety, Environment, Operations and Sustainability (effective January 1, 2021) | |||||||||
Career Highlights: Mr. McAvoy has been Non-executive Chairman of the Board of the Company and the Board of Con Edison of New York since December 2020. Mr. McAvoy served as Chairman of the Board of the Company and Con Edison of New York from May 2014 until December 2020. Mr. McAvoy was President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York from December 2013 through December 28, 2020. 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 has had 40 years of experience with the Company.
Other Directorships: Mr. McAvoy is the Non-executive Chairman and a Trustee of Con Edison of New York. Mr. McAvoy is also a Trustee of the Intrepid Sea, Air & Space Museum and of Manhattan College. Mr. McAvoy previously served as a Director
| Career Highlights: Dr. McBride became President of The New School in April 2020. Prior to joining The New School, Dr. McBride served as Provost and Executive Vice President for Academic Affairs at Emory University, Dean and Associate Provost for Graduate Education at Northwestern University, Dean of Liberal Arts & Sciences at the University of Illinois at Chicago, Chair of the Department of African American Studies at Northwestern University, and Head of the Department of African American Studies at the University of Illinois at Chicago—academic leadership roles that all together span more than two decades. Dr. McBride has also held faculty positions at the University of Pittsburgh, the University of Illinois at Chicago, Northwestern University, Emory University, and The New School, where he has taught various courses in English and American literatures, African American studies, gender and sexuality studies, cultural studies, and performance studies. Dr. McBride has published six books, numerous essays, and is the Founding Co-Editor of the James Baldwin Review.
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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 KDC Solar LLC and Professional Directional Enterprises, Inc., and is a Trustee and Vice Chair of St. Lawrence University. Mr. Ranger also served as a Trustee of Morristown-Beard School through 2017 and Director of Bonten Media Group Inc. through 2017.
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 and his service on other boards supports the Board in its oversight of the Company’s corporate governance and financial and strategic planning activities.
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Dr. McBride has extensive experience in higher education and leadership experience in universities and other large and complex organizations with diverse stakeholders. Dr. McBride’s executive experience from the leadership positions he has held at The New School and Emory University and his service on other boards support the Board
relationships with stakeholders. |
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. Ms. Sanford also served as a Trustee of St. John’s University through May 2015 and Rensselaer Polytechnic Institute through December 2016.
Attributes and Skills: Ms. Sanford has leadership experience at an international technology company, including experience with information technology, cybersecurity, manufacturing, customer relations, and corporate planning and transformation. 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.
12 | Consolidated Edison, Inc. Proxy Statement |
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Director since: 2017 Age: 65 Gender: Male Race/Ethnicity: White Board Committees: § Finance § Management Development and Compensation § Safety, Environment, Operations and Sustainability |
| Armando J. Olivera Director since: 2014 Age: 71 Gender: Male Race/Ethnicity: Hispanic/Latino Board Committees: § Audit § Executive (effective immediately following the retirement of Dr. Campbell from the Board) § Finance § Safety, Environment, Operations and Sustainability (Chair, effective January 1, 2021) | ||||||||
Career Highlights: Mr. Mulrow is a Senior Advisory Director since May 2017 at The Blackstone Group, the world’s largest alternative asset management firm. Previously, he served as Secretary to New York State Governor Andrew Cuomo from January 2015 to April 2017 and was a Senior Managing Director at Blackstone from April 2011 to January 2015. From 2005 to 2011, he was a Director of Citigroup Global Markets Inc. Mr. Mulrow also held various management positions at Paladin Capital Group, Gabelli Asset Management, Inc., Rothschild Inc., and Donaldson, Lufkin & Jenrette Securities Corporation. In addition, Mr. Mulrow served in a number of other government positions, including Chairman of the New York State Housing Finance Agency and State of New York Mortgage Agency.
Attributes and Skills: Mr. Mulrow has business and leadership experience in both the public and the private sector. He also has financial, accounting and asset management experience from his leadership positions at Blackstone, New York State government, and his service on other boards which supports the Board
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Career Highlights: Ms. Stanley has been Executive Vice President and General Counsel to Thomson Reuters, a leading source of news and information for professional markets, since 2008 where she also currently serves as Corporate Secretary to the Board of Directors, chairs the Disclosure Committee and oversees the company’s enterprise risk management process and reporting. Ms. Stanley was Senior Vice President and General Counsel to The Thomson Corporation from 2002 to 2008 when it combined with Reuters PLC to form Thomson Reuters. Prior to 2002, Ms. Stanley held various legal and senior executive positions at InterActive Corporation (previously USA Networks, Inc.), and GTE Corporation (a predecessor company to Verizon). She was also an attorney with the law firm of Cravath, Swaine & Moore.
Other Directorships: Ms. Stanley is a Trustee of Con Edison of New York. Ms. Stanley is also Vice Chairman of the Board of Trustees of the Hospital for Special Surgery. During the past five years, Ms. Stanley also served as a Director of the Association of Corporate Counsel.
Attributes and Skills: Ms. Stanley has leadership, legal and operations experience at an international news and information company, including experience with mergers and acquisitions, corporate governance and risk management. Ms. Stanley’s experience from her leadership positions at Thomson Reuters and InterActive Corporation, her legal experience and service on other boards support the Board in its oversight of the Company’s operations, risk management, strategic planning and relationships with stakeholders.
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Other Directorships: Mr. Olivera is a Trustee of Con Edison of New York. Mr. Olivera also serves as a Director
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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 Duke University, 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.
Consolidated Edison, Inc. Proxy Statement | 13 |
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| Michael W. Ranger Director since: 2008 Age: 63 Gender: Male Race/Ethnicity: White Board Committees: § Audit § Corporate Governance and Nominating (Chair and Lead Director) § Executive § Finance § Management Development and Compensation |
| Linda S. Sanford Director since: 2015 Age: 68 Gender: Female Race/Ethnicity: White Board Committees: § Audit § Corporate Governance and Nominating § Finance | |||||||||
Career Highlights: Mr. Ranger has been President and Chief Executive Officer of Covanta Holding Corporation since October 29, 2020. Mr. Ranger has also been Senior Managing Director of Diamond Castle Holdings LLC, New York, NY, a private equity investment firm, since 2004. 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 Chairman of the Board of Trustees and a Trustee of St. Lawrence University. Mr. Ranger also served as a Trustee of Morristown-Beard School through 2017 and Director of Bonten Media Group Inc. through 2017, Professional Directional Enterprises, Inc. through 2018, and KDC Solar LLC through 2019. Attributes and Skills: Mr. Ranger has leadership experience at a private equity firm he co-founded and at various investment banking companies. Mr. Ranger has extensive investment and investment banking experience in the energy, utility, and power sector. Mr. Ranger’s experience from his investment activities in the energy and power sector and his service on other boards supports the Board in its oversight of the Company’s corporate governance and financial and strategic planning activities. | 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. Ms. Sanford was also a consultant to The Carlyle Group serving as an Operating Executive from 2015 to July 2018. Other Directorships: Ms. Sanford is a Trustee of Con Edison of New York, and a Director of Pitney Bowes Inc., RELX PLC (formerly Reed Elsevier PLC) and The Interpublic Group of Companies, Inc. Ms. Sanford also served as a Director of ITT Corporation. Ms. Sanford is also a Trustee of New York Hall of Science. Ms. Sanford also serves as a Trustee Emeriti of St. John’s University and Rensselaer Polytechnic Institute. Ms. Sanford also served as a Director or Trustee of the Partnership for New York City through January 2015, the State University of New York through May 2015, the Business Council of New York State through May 2015, and the ION Group through January 2021. Attributes and Skills: Ms. Sanford has leadership experience at an international technology company, including experience with information technology, cybersecurity, manufacturing, customer relations, and corporate planning and transformation. 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. | |||||||||||
14 | Consolidated Edison, Inc. Proxy Statement |
| Election of Directors |
| Deirdre Stanley Director since: 2017 Age: 56 Gender: Female Race/Ethnicity: Black/African American Board Committees: § Corporate Governance and Nominating § Management Development and Compensation (Chair, effective immediately following the retirement of Dr. Campbell from the Board) § Safety, Environment, Operations and Sustainability (through December 31, 2020) |
| L. Frederick Sutherland Director since: 2006 Age: 69 Gender: Male Race/Ethnicity: White Board Committees: § Audit § Finance (Chair) § Management Development and Compensation | |||||||||
Career Highlights: Ms. Stanley has been Executive Vice President and General Counsel to The Estée Lauder Companies, Inc., one of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance, and hair care products, since October 28, 2019. Ms. Stanley was Executive Vice President and General Counsel to Thomson Reuters from 2008 until October 9, 2019 where she also served as Corporate Secretary to the Board of Directors. Ms. Stanley was Senior Vice President and General Counsel to The Thomson Corporation from 2002 to 2008, when it combined with Reuters PLC to form Thomson Reuters. Prior to 2002, Ms. Stanley held various legal and senior executive positions at InterActive Corporation (previously USA Networks, Inc.) and GTE Corporation (a predecessor company to Verizon). She was also an attorney with the law firm of Cravath, Swaine & Moore. Other Directorships: Ms. Stanley is a Trustee of Con Edison of New York. Ms. Stanley is also a Trustee of the Hospital for Special Surgery and a Trustee of The Dalton School. Ms. Stanley also served as a Director of Refinitiv from October 2018 through October 2019. Attributes and Skills: Ms. Stanley has leadership, legal and operations experience at an international news and information company and a global consumer products company, including experience with mergers and acquisitions, corporate governance, and risk management. Ms. Stanley’s experience from her leadership positions at The Estée Lauder Companies and Thomson Reuters Corporation, her legal experience and service on other boards support the Board in its oversight of the Company’s operations, risk management, strategic planning, and relationships with stakeholders. | Career Highlights: Mr. Sutherland was the Executive Vice President and Chief Financial Officer of Aramark Corporation, Philadelphia, PA, a provider of food services, facilities management, and uniform and career apparel, from 1997 to 2015. Prior to joining Aramark in 1980, Mr. Sutherland was Vice President, Corporate Banking, at 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. and Sterling Talent Solutions. Mr. Sutherland is also a Director of WHYY, Philadelphia’s public broadcast affiliate, Board President of Episcopal Community Services, a Philadelphia-based anti-poverty agency, and a Trustee of Duke University, the National Constitution Center, and Peoples Light, a non-profit theater. 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. | |||||||||||
Consolidated Edison, Inc. Proxy Statement | 15 |
| The Board of Directors |
| THE BOARD OF DIRECTORS |
MEETINGS AND BOARD MEMBERS’ ATTENDANCEMeetings and Board Members’ Attendance
During 2017,2020, the Board consisted of the following members: Vincent A. Calarco, George Campbell, Jr., Michael J. Del Giudice,Timothy P. Cawley (effective December 29, 2020), Ellen V. Futter, John F. Killian, John McAvoy, William J. Mulrow, (effective November 16, 2017), Armando J. Olivera, Michael W. Ranger, Linda S. Sanford, Deirdre Stanley, (effective November 16, 2017), and L. Frederick Sutherland. The Board of Directors held nine9 meetings in 2017.2020. 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, human capital management, diversity, equity, and inclusion, sustainability, 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. Ranger, who succeeded Mr. Del Giudice following his retirement from the Board on January 18, 2018) serves as independent Lead Director and, as such, chairs the executive sessions of thenon-management Directors and the independent Directors. 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. The Company’s independent Directors met four2 times in executive session and thenon-management Directors met eight8 times in executive session during 2017.2020.
During 2017,2020, each member of the Board attended more than 75% of the combined meetings of the Board of Directors and the Board Committees on which he or she served held during the period that he or she served. Directors are expected to attend the Annual Meeting. All of the Directors who then served on the Board attended the 20172020 annual meeting of stockholders.stockholders, which was held remotely due to the impact of COVID-19.
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 atconedison.com/www.conedison.com/shareholders.The Standards of Business Conduct apply to all Directors, officers, and employees. The Company intends to post on its website atconedison.com/www.conedison.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. To date, there have been no such waivers.
LEADERSHIP STRUCTURELeadership Structure
The Board consists of a substantial majority of independent Directors. (See “The Board of Directors—Board Members’ Independence” on pages 14 to 15.page 20.) As discussed in the Corporate Governance Guidelines, the Board selects the Company’s chief executive officer and chairman of the Board in the manner that it determines to be in the best interest of the Company’s stockholders. The Company’s leadership structure combinesHistorically, the roles of the chairmanCompany’s Chief Executive Officer and chief executive officer.Chairman have been combined. To promote an effective and orderly Chief Executive Officer transition, the Board determined that Mr. McAvoy should continue to serve as Chairman of the Board after his retirement as Chief Executive Officer of the Company on December 28, 2020. Mr. McAvoy has been nominated to the Board for election at the Company’s Annual Meeting. The Board believes thatmade this leadership structure is appropriate for the Company due todetermination based on a variety of factors, including Mr. McAvoy’s long-standing knowledge of the Company and the utility industry, and his extensive engineering, financial, and operations experience. In addition, effective December 29, 2020, Mr. McAvoy no longer serves as Chief Executive Officer of Con Edison of New York, although he serves as its Non-executive Chairman of the Board, and no longer serves as the Chairman of the Board of Orange & Rockland. As Non-executive Chairman, Mr. McAvoy presides at meetings of the Company’s Board, facilitates communication between the Company’s 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.
Mr. Cawley was promoted to the position of the President and Chief Executive Officer of the Company (and Chief Executive Officer of Con Edison of New York) effective December 29, 2020, upon Mr. McAvoy’s retirement, and was appointed to the
16 | Consolidated Edison, Inc. Proxy Statement |
| The Board of Directors |
Company’s Board (and the Board of Con Edison of New York), also effective December 29, 2020. In addition, Mr. Cawley was appointed Chairman of the Board of Orange & Rockland, effective December 29, 2020. Mr. Cawley has been nominated to the Board of the Company for election at the Company’s Annual Meeting. As President and Chief Executive Officer, Mr. Cawley has day-to-day management responsibility for the Company and he reports to the Company’s Board.
The Board haswill also continue to have 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.appropriate; and (vi) performs such other duties assigned to the Lead Director by the Board.
Pursuant to the Company’s Corporate Governance Guidelines, the Board has oversight responsibility for reviewing the Company’s strategic plans, objectives, and risks.risks, including sustainability, environmental, social, and governance matters. Each of the standing committees of the Board, other than the Executive Committee, is chaired bynon-management Directors. (See “The Board of Directors—Standing Committees of the Board” on pages 15 to 18)21 through 25).
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
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Committees that 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 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. Those risks have been assessed by the Company as important to it, and are reported to the Board on a regular cadence. Among those risks, cybersecurity has been identified as a key enterprise risk for the Company. An annual presentation on cybersecurity risks is provided to the Board and the Audit Committee reviews more in-depth cybersecurity matters on a semi-annual basis. In addition, the Board receives regular updates as to cybersecurity risks from management. A description of the various risks facing the Company can be found under “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
PROXY ACCESSCorporate Sustainability
The Company developedis firmly committed to sustainability, which is broadly overseen by the Board. The Board reviews and discusses various sustainability topics throughout the year and routinely considers environmental issues (including climate change) and assesses how they impact the Company’s operations, strategies and risk profile. In 2020, the Board received reports or presentations on several sustainability and climate change-related topics, including advancing the Company’s clean energy future, diversity, equity, and inclusion and supply chain diversity and sustainability. In addition, a presentation regarding the Company’s immediate response and long-term plans to address racism, bias, and inequity following the killing of George Floyd and the Black Lives Matter protests was provided to the Board during 2020. In 2020, the Board’s strategy meeting focused on ESG topics. The Board received a presentation on the role of ESG considerations in the investment process from a large institutional investor in the Company, as well as a presentation that addressed ESG matters and the Company’s strategy with respect thereto, including its commitments to a clean energy future, pursuing a zero-harm culture, and maintaining a diverse and engaged workforce. During its strategy session, the Board also received: (i) an update on the utilities’ strategy that covered New York and New Jersey’s clean energy goals and the Company’s plans for achieving these, (ii) a strategy update for its Clean Energy Businesses subsidiary, that addressed, among other ESG topics, the evolving renewables market and the Clean Energy Businesses’ role therein, and (iii) a strategy update for its Con Edison Transmission subsidiary that focused on its steps to contribute to the Company’s decarbonization plan. In addition, the Board has delegated to the appropriate committees responsibility for the specific sustainability categories relating to the oversight of risks with which such committees are charged. The Safety, Environment, Operations and Sustainability Committee oversees sustainability matters relating to safety and the environment (including climate change) and reviews the Company’s Annual Sustainability Report prior to its publication. In discharging its responsibilities, the
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| The Board of Directors |
Safety, Environment, Operations and Sustainability Committee reviews, at each of its meetings, certain key performance indicators relating to climate risk, including energy efficiency and environmental beneficial electrification. In 2020, the Safety, Environment, Operations and Sustainability Committee also reviewed and discussed an update on transportation electrification, the impact of new technology on preventing high hazard injuries and an ESG update and Sustainability Report review. The Corporate Governance and Nominating Committee is charged with sustainability matters relating to governance and in 2020 reviewed and discussed general governance matters. The Management, Development, and Compensation Committee’s responsibilities include oversight of sustainability matters relating to human capital management and in 2020 reviewed and discussed compensation governance during COVID-19 and proposed diversity, equity, and inclusion metrics for executive compensation purposes. The Management, Development, and Compensation Committee annually reviews performance results as well as proposed performance indicators for the following year. Committees not specifically tasked with oversight of sustainability also periodically review matters related to sustainability.
Diversity, Equity, and Inclusion
The Company strives to be a workplace where the diversity of its employees creates a stronger, higher performing organization. The Company’s diversity, equity, and inclusion strategy sets out priorities that demonstrate the value it places on differences across all demographic dimensions. The diversity, equity, and inclusion strategy drives its corporate culture through four key areas of focus: (i) advancing diversity, equity, and inclusion through learning, (ii) fostering a diverse, equitable, and inclusive environment, (iii) connecting diversity, equity, and inclusion throughout the Company, and (iv) communicating and engaging with employees.
On December 31, 2020, the Company and its subsidiaries had 14,071 employees, based entirely in the United States, including 12,477 at Con Edison of New York, 1,118 at Orange & Rockland, 468 at the Clean Energy Businesses, and 8 at Con Edison Transmission. The gender, racial, and ethnic composition of the workforce as compared to upper management and officers as of the end of 2020 are set forth in the bar charts below.
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The Company is committed to attracting, developing, and retaining a talented and diverse workforce. It values and supports a wide range of employee needs and interests. The Company’s skilled and experienced workforce enables it to maintain best-in-class reliability and progress towards achieving a clean energy future. Human capital measures focus on employee safety, hiring the right talent, employee development and retention, diversity, equity, and inclusion, emergency response, and providing essential services to customers while protecting employees during the COVID-19 pandemic.
As a result of the COVID-19 pandemic, 60% of the total workforce was working remotely as of December 31, 2020. The viability of a mobile workforce was made possible by digital software and smart device capabilities that helped employees collaborate with each other and remain productive while complying with health requirements. Even as the Company continues to respond to the pandemic, the entire Con Edison of New York and Orange & Rockland workforce is available in the event of an emergency that requires on-site presence. During 2020, the Company and its subsidiaries managed their operations and resources while avoiding lay-offs and furloughs and continued to recruit, interview, and hire internal and external applicants to fill critical positions. The Company and its subsidiaries support employee health through mandatory pre-entry symptom surveys for employees arriving at all company locations, regular cleaning and disinfecting of all work and common areas, promoting social distancing, requiring face coverings, and directing employees to work remotely whenever possible.
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| The Board of Directors |
Despite the uncertainty and upheaval as a result of COVID-19, the Company’s employees continued to give their time and resources to support those in need. The Company launched virtual volunteer opportunities throughout the year, and once it was safe to gather in person with the appropriate safety measures and in keeping with applicable public health guidelines, the Company adapted small, outdoor events to serve the needs of its employees and communities. In 2020, 163 Company employees collectively volunteered 1,256 hours at various community service events and programs throughout the Company’s service territory. The virtual events included mentoring and tutoring, mock interviewing and judging at constitutional debate programs. When employees were safely able to volunteer outdoors, they cleaned up parks and planted tulips.
The Company has 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%)3% of the outstanding shares of the Company for at least three years to submit nominees for up to twenty percent (20%)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 the Company’sBy-laws.
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 of the Company’s Common Stock, 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.$120,000 per year.
The policy provides that the Corporate Governance and Nominating Committee review certain transactions subject to the policy and determine 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 party under the same or similar circumstances, and the extent of the related person’s interest in the transaction, whether the transaction would impair the independence of an otherwise independent director and the business reason for the company to enter into the transaction. Transactions are brought to the attention of the Corporate Governance and Nominating Committee by the Company. Annually and as needed, the Company distributes questionnaires to executive officers, directors and director nominees. The Company reviews the disclosures made by these individuals to identify all transactions requiring the approval. In addition, the Company distributes previously submitted disclosures to executive officers quarterly for review and requests that any and all updates be provided so that responses can be reviewed. All new transactions requiring approval following the quarterly review are identified and brought to the Corporate Governance and Nominating Committee’s attention. In addition, the Board has delegated authority to the Chair of the Corporate Governance and Nominating Committee topre-approve or ratify transactions whereany transaction with a related person in which the aggregate amount involved is expected to be less than $1.0 million.million per year. The Corporate Governance and Nominating Committee ratified and approved the 2020 compensation of David Sanchez and John DeLaBastide on November 19, 2020 and Jennifer Ketschke on February 18, 2021, each as disclosed below. A summary of any new transactionspre-approved or ratified by the Chair is provided to the full Corporate Governance and Nominating Committee for its review in connection with a regularly scheduled committee 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) | transactions with other companies at which a related person’s only relationship is as an employee (other than an executive officer), if the amount involved is less than $1.0 million, or two percent (2%) of |
| (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 2017, Ellen V. Futter’sDavid Sanchez, the brother received approximately $145,000 for providing legal services toof Robert Sanchez, President and Chief Executive Officer of Orange & Rockland, is employed by Con Edison of New York, serving as a project specialist. In 2020, he was paid approximately $135,000. This amount includes salary and short-term incentive payments. Jennifer Ketschke, the spouse of Matthew Ketschke, President of Con
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| The Board of Directors |
Edison of New York effective January 1, 2021, is providing legal servicesemployed by Con Edison of New York, serving as a project manager. In 2020, she was paid approximately $213,000. This amount includes salary, and long-term and short-term incentive payments. John DeLaBastide, the brother-in-law of Lore de la Bastide, Senior Vice President—Utility Shared Services of Con Edison of New York, was employed by Con Edison of New York until March 31, 2021 and served as an assistant controller. In 2020, he was paid approximately $363,000. This amount includes salary, and long-term and short-term incentive payments. Each individual participated in 2018. The provisionother regular and customary employee benefit programs generally available to all Con Edison of these services by Ms. Futter’s brother was approved byNew York employees. In addition, the Committee.amount of salary and incentive payments were determined in accordance with the Company’s standard compensation practices applicable to similarly-situated employees.
BOARD MEMBERS’ INDEPENDENCEBoard Members’ Independence
The Company’s Corporate Governance Guidelines provide that the Board of Directors consist 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 below. The Board of Directors has affirmatively determined that the following Directors are “independent” as defined in the New York Stock Exchange’s listing standards: Vincent A. Calarco, George Campbell, Jr., Michael J. Del Giudice (until his retirement on January 18, 2018)retirement), John F. Killian, Karol V. Mason, Dwight A. McBride, William J. Mulrow, Armando J. Olivera, Michael W. Ranger, Linda S. Sanford, Deirdre Stanley, and L. Frederick Sutherland.
The Board monitors the independence of its members on an ongoing basis using standards set forth in the Company’s Corporate Governance Guidelines.
Toand, to assist it in making determinations of Director independence, the Board has adopted independence standards. These standards which are set forth in itsthe Company’s Corporate Governance Guidelines, available on the Company’s website atconedison.com/www.conedison.com/shareholders. Under these standards, the Board has determined that each of the following relationships 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 |
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| 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; |
| (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 BOARD
Audit Committee
The Audit Committee, currently Vincent A. Calarco, Chair, John F. Killian, Michael W. Ranger, and L. Frederick Sutherland, is composed of four independent Directors. Michael J. Del Giudice ceased being a member of the Audit Committee upon his retirement on January 18, 2018. The Audit Committee 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 2018. If the appointment of PwC 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 its 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 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 the term is defined in Item 407(d)(5) of RegulationS-K of the Securities and Exchange Act of 1934. The Audit Committee held seven meetings in 2017.
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Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee, currently Michael W. Ranger, Chair (effective January 18, 2018), Vincent A. Calarco, George Campbell, Jr., John F. Killian, Linda S. Sanford, and Deirdre Stanley (effective November 16, 2017), is composed of six independent Directors. Michael J. Del Giudice ceased being a member and the Chair of the Corporate Governance and Nominating Committee upon his retirement on January 18, 2018. The Corporate Governance and Nominating Committee 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 sizeStanding Committees of the Board
Audit Committee Members John F. Killian (Chair) Armando J. Olivera Michael W. Ranger Linda S. Sanford L. Frederick Sutherland Independent Directors: 5 Meetings Held in 2020: 6 | Role & Responsibilities The primary responsibility of the Audit Committee is to assist the Board in fulfilling its oversight responsibility for: § The integrity of the Company’s financial statements; § The Company’s compliance with legal, regulatory, and ethical requirements; § The qualifications, independence, and performance of the Company’s independent auditors; and § The performance of the Company’s internal audit function. The Audit Committee’s responsibilities also include: § The appointment, compensation, retention, oversight, and termination of the work of the Company’s independent auditors; § Pre-approving all auditing services and non-audit services permitted by law to be provided to the Company by its independent auditors; § Evaluating, at least once every five years, whether it is appropriate to rotate the Company’s independent auditors; § Meeting with the Company’s management, including the General Counsel, Con Edison of New York’s General Auditor, and the Company’s independent auditors, several times a year to discuss internal controls and accounting matters, the Company’s financial statements, filings with the SEC, earnings press releases and the scope and results of the auditing programs of the Company’s independent auditors and of Con Edison of New York’s internal auditing department; § Overseeing the Company’s risk assessment, risk management processes and the management of such risks that have been identified through the Company’s enterprise risk management program, relating to the purpose, duties, and responsibilities of the Audit Committee; and § Reviewing, at least semi-annually, cybersecurity matters. Financial Expertise The Board of Directors of the Company has determined that each member of the Audit Committee is financially literate and that John F. Killian, Armando J. Olivera, Michael W. Ranger, and L. Frederick Sutherland are each an “audit committee financial expert” as the term is defined in Item 407(d)(5) of Regulation S-K of the Securities Exchange Act of 1934. Independence The Board has affirmatively determined that each member of the Audit Committee meets the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. In addition, each member of the Audit Committee is “independent” as defined in Rule 10A-3 of the Securities Exchange Act of 1934. Appointment of Independent Accountants The Audit Committee is directly responsible for the appointment of the Company’s independent accountants, subject to stockholder ratification at the Annual Meeting. The Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent accountants for the fiscal year 2021. If the appointment of PwC is not ratified, the Audit Committee will take this into consideration in the future selection of independent accountants. |
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| The Board of Directors |
Corporate Governance and Nominating Committee Members Michael W. Ranger George Campbell, Jr. (until retirement) John F. Killian Karol V. Mason (effective January 1, 2021) Linda S. Sanford Deirdre Stanley Independent Directors: 6 until Dr. Campbell’s retirement; 5 following his retirement Meetings Held in 2020: 5 | Role & Responsibilities The responsibilities of the Corporate Governance and Nominating Committee include: § Annually reviewing the Company’s Corporate Governance Guidelines adopted by the Board that address the size, composition and responsibilities of the Board and making recommendations, if appropriate, for revisions or additions thereto; § Annually reviewing the Board Committee charters and proposed changes thereto; § Establishing and recommending to the Board criteria for selecting new Directors, which will, among other things, reflect factors relating to the diversity of the Board (including gender, ethnicity, race and national origin); § Reviewing the qualifications of possible Director candidates against the criteria developed, including candidates duly suggested by stockholders; § Recommending to the Board candidates to fill vacancies on the Board; § Recommending to the Board candidates for election or re-election to the Board; § Recommending to the Board whether to accept any Director resignations; § Recommending to the Board candidates and chairs for appointment to the Board’s committees; § Recommending to the Board standards to assist it in making determinations of independence in accordance with the New York Stock Exchange listing standards; § Overseeing related person transactions and the related policies; § Bi-annually reviewing Board and Committee compensation and recommending changes, if appropriate, to the Board; § Overseeing the evaluation of the Board and management, including the establishment of criteria and processes for the annual performance self-evaluation of the Board and each committee of the Board; § Overseeing the Company’s management of risks that have been identified through the Company’s enterprise risk management program, relating to the purpose, duties, and responsibilities of the Corporate Governance and Nominating Committee; and § Reviewing and making recommendations to the Board on any stockholder proposals and other practices relative to stockholder engagement and corporate governance matters. Independence The Board has affirmatively determined that each member of the Corporate Governance and Nominating Committee meets the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. In addition, each member of the Corporate Governance and Nominating Committee meets the additional, heightened independence criteria required by law and the New York Stock Exchange’s listing standards. |
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| The Board of Directors |
Executive Committee Members John McAvoy (Chair) George Campbell, Jr. (until retirement) Ellen V. Futter John F. Killian Armando J. Olivera (effective immediately following the retirement of Dr. Campbell from the Board) Michael W. Ranger Independent Directors: 3 until Dr. Campbell’s retirement; 3 following his retirement and Mr. Olivera’s appointment Meetings Held in 2020: 0 | Role & Responsibilities The Executive Committee may exercise, during intervals between Board meetings, all the powers vested in the Board, except for certain specified matters. Independence The Board has affirmatively determined that the following members of the Executive Committee meet the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines: George Campbell, Jr. (until his retirement), John F. Killian, Armando J. Olivera (effective immediately following the retirement of Dr. Campbell from the Board), and Michael W. Ranger. | |
Finance Committee Members L. Frederick Sutherland (Chair) William J. Mulrow Armando J. Olivera Michael W. Ranger Linda S. Sanford Independent Directors: 5 Meetings Held in 2020: 7 | Role & Responsibilities The primary responsibility of the Finance Committee is to review and make recommendations to the Board with respect to the Company’s financial condition and plans. The Finance Committee’s responsibilities also include: § Reviewing the annual operating and capital budgets of the Company; § Reviewing and approving certain expenditures; § Reviewing the Company’s five-year forecast; § Reviewing periodic financial reports to be submitted to the Board; § Reviewing dividend policy and actions; § Annually reviewing the Company’s arrangements for credit; § Annually reviewing the Company’s and its subsidiaries’ plans for issuances of securities and other proposed financings; § Consistent with Board authorization of such transaction, approving the specific terms of each Company security issue, financing, redemption or repurchase of securities; § Reviewing the Company’s and its subsidiaries’ investment policies for cash investments; § Overseeing the Company’s strategic business plan; § Reviewing certain procurement contracts and purchases and sales of assets; § Reviewing certain real estate transactions and litigation settlements; and § Overseeing the Company’s management of risks that have been identified through the Company’s enterprise risk management program, relating to the purpose, duties and responsibilities of the Finance Committee. Independence The Board has affirmatively determined that each member of the Finance Committee meets the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. |
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| The Board of Directors |
Management Development and Compensation Committee Members George Campbell, Jr. (Chair, until retirement) John F. Killian Dwight A. McBride William J. Mulrow Michael W. Ranger Deirdre Stanley (Chair, effective immediately following the retirement of Dr. Campbell from the Board) L. Frederick Sutherland Independent Directors: 7 until Dr. Campbell’s retirement; 6 following his retirement Meetings Held in 2020: 6 (with Mercer attending 3 meetings) | Role & Responsibilities The responsibilities of the Management Development and Compensation Committee (the “Compensation Committee”) include: § Reviewing and approving, at least annually, the Company’s goals and objectives relevant to the compensation of the Company’s Named Executive Officers, including the Chief Executive Officer; § Leading the performance evaluation and setting the compensation level of the Company’s Chief Executive Officer and other executives; § Reviewing and making recommendations to the Board relating to officer and senior management appointments; § Reviewing and making recommendations to the Board regarding the Company’s annual incentive plan and equity plans; § Reviewing the recommendations of management with respect to new plans, plan amendments and plan terminations; § Reviewing the Company’s Compensation Discussion and Analysis (“CD&A”), related disclosures that are required, by SEC rules, to be included in the Company’s annual report and proxy statement and other disclosures that may be necessary or desirable; § Recommending whether the Company’s CD&A should be included in the Company’s annual report and proxy statement; § Providing the compensation committee report the SEC rules require to be included in the Company’s annual report and proxy statement; § Assessing the independence of compensation consultants; § Overseeing the Company’s management of risks that have been identified through the Company’s enterprise risk management program, relating to the purpose, duties and responsibilities of the Management Development and Compensation Committee; § Reviewing and making recommendations as necessary to provide for orderly succession and transition in the senior management of the Company, including leadership training; § Receiving reports and reviewing the Company’s human capital management systems and policies; § Making recommendations to help maintain equal employment opportunity, a diverse and inclusive workforce, adequate executive management and compensation, and orderly management succession; § Overseeing the Company’s policies and strategies relating to talent development and human capital management, including diversity and inclusion; § Reviewing reports of plan officials and the Company’s General Auditor and General Counsel as to the plan’s compliance with ERISA; and § Reviewing the audited financial statements of the plans and reports of management and plan officials with respect to the administration and performance of the pension and other benefit funds. Independence The Board has affirmatively determined that each member of the Management Development and Compensation Committee meets the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. In addition, each of the members of the Compensation Committee is “independent,” as defined in the New York Stock Exchange’s listing standards under Rule 10C-1 of the Securities Exchange Act of 1934, and meets the “outside director” criteria of Section 162(m) of the Internal Revenue Code and the “Non-Employee” Director criteria of Rule 16b-3 under the Securities Exchange Act of 1934. |
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| The Board of Directors |
Safety, Environment, Operations and Sustainability Committee Members Armando J. Olivera (Chair, effective January 1, 2021) George Campbell, Jr. (until retirement) Ellen V. Futter (Co-Chair through December 31, 2020) Karol V. Mason (effective January 1, 2021) Dwight A. McBride (effective January 1, 2021) William J. Mulrow Deirdre Stanley (through December 31, 2020) Independent Directors: 6 until Dr. Campbell’s retirement; 5 following his retirement Meetings Held In 2020: 5 | Role & Responsibilities The primary responsibility of the Safety, Environment, Operations and Sustainability Committee is to oversee the Company’s efforts relating to corporate responsibility and sustainability, which includes operating in a safe, environmentally sensitive and socially responsible manner, guarding the health and safety of Company employees and the public, supporting the development and success of Company employees, delivering value to customers and fostering growth to meet the expectations of investors. The Safety, Environment, Operations and Sustainability Committee’s responsibilities also include: § Reviewing significant issues identified by the Company relating to: (i) the Company’s subsidiaries’ environment, health and safety programs, (ii) the Company’s subsidiaries’ compliance with environment, health and safety laws and regulations, (iii) the Company’s corporate environment, health and safety policies and procedures, and (iv) the Company’s subsidiaries’ operating systems; § Providing advice and counsel to the Company’s management on: (i) corporate environment, health and safety policies and matters, and (ii) other sustainability matters; § Providing oversight to the Company’s management on the design, operation, maintenance and performance of the Company’s operating systems and reviewing significant issues identified by the Company relating to the reliable operation of the Company’s operating systems; § Reviewing significant developments and emerging issues and risks identified by the Company relating to the Company’s sustainability priorities; § Annually reviewing the Company’s Annual Sustainability Report; and § Overseeing the Company’s management of risks that have been identified through the Company’s enterprise risk management program, relating to the purpose, duties and responsibilities of the Safety, Environment, Operations and Sustainability Committee. Independence The Board has affirmatively determined that the following members of the Safety, Environment, Operations and Sustainability Committee meet the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines: Armando J. Olivera, George Campbell, Jr. (until his retirement), Karol V. Mason (effective January 1, 2021), Dwight A. McBride (effective January 1, 2021), William J. Mulrow, and Deirdre Stanley (through December 31, 2020). |
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| The Board of Directors |
Selection 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 Committee oversees the Company’s management of risks, relating to its duties and responsibilities that have been identified through the Company’s enterprise risk management program.Director Candidates
Among its duties, theThe Corporate Governance and Nominating Committee reviews the skills and characteristics of Director candidates, including their independence, integrity, judgment, business experience, areas of business expertise, and availability for service, and diversity (including, but not limited to, gender, race, ethnicity, and nationality) and such other factors as it deems appropriate. The Company values diversity and respect within the Board, and affirms its policy of non-discrimination based on race, color, religion, creed, national origin, sex, age, marital status, sexual orientation, pregnancy, genetic information, gender identity, disability, citizenship, veteran status, or other legally protected characteristics. Director candidates are also evaluated in light of their service on other boards, as well as considerations relating to the compositionsize, structure, and needs of the Board (including its size and structure) and the Company’s principles of diversity.Board.
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 identifies director candidates through a variety of means, includingincluding: (i) professional search firms, (ii) recommendations from members of the Board, (iii) suggestions from senior management, and (iv) submissions by the Company’s stockholders.
When using a professional search firm, the Corporate Governance and Nominating Committee directs the firm to include in each director search qualified candidates who reflect diverse backgrounds, including diversity of gender, race, ethnicity, and nationality. The firm assists in developing criteria for potential Board members to complement the Board’s existing strengths. Based on such criteria, the firm also provides,is directed to provide for review and consideration listsa diverse slate of potential candidates, including candidates diverse with background information.respect to gender, nationality, race, and ethnicity. After consulting with the Corporate Governance and Nominating Committee, the firm further screens and interviews candidates as directed to determine their qualifications, interest and any
potential conflicts of interest and provides its results to the Committee. In keeping with this established process, the Corporate Governance and Nominating Committee directed a professional search firm to provide it with a diverse slate of candidates, which included Karol V. Mason and Dwight A. McBride, who were both appointed to the Board of Directors effective January 1, 2021.
The Corporate Governance and Nominating Committee also considers candidates recommended by stockholders. There are no differences in the manner in which the Corporate Governance and Nominating Committee will evaluateevaluates candidates recommended by stockholders.stockholders versus those recommended through other means. The Corporate Governance and Nominating Committee will makemakes an initial determination as to whether a particular candidate meets the Company’s criteria for Board membership, and will then further considerconsiders 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.
Employee Succession Planning and Talent Management
The Company has a comprehensive, formal process for identifying, assessing and developing a diverse slate of internal candidates to assume, in the future, senior roles in the organization. Its succession planning and development processes are integrated and focused on learning through experiences, leadership commitment, and targeted executive development. During succession planning and development discussions, the Company seeks to develop high potential women and people of color to ensure a diverse and talented group of enterprise leaders. Development plans are reviewed and updated annually. Succession planning and development processes apply to all upper management positions, including officer positions. The Chief Executive Officer annually reviews his succession plan with the Board.
26 | Consolidated Edison, Inc. Proxy Statement |
| The Board of Directors |
The gender, racial and ethnic composition of promotions in the workforce as compared to upper management and officers that occurred during 2020 are set forth in the bar charts below.
 |  | |
| 1Hawaiian/Other Pacific Islander is less than 0.50% and therefore is rounded to zero. |
The Board is committed to diversity and directs any search firm retained in connection with chief executive officer succession planning to provide a diverse slate of candidates for the Board’s consideration. In keeping with this process, the Board retained a search firm from 2019 to 2020, to assist it with identifying a diverse slate of candidates for the chief executive officer position formerly held by John McAvoy. After reviewing the candidates identified by the search firm, the Board determined that, based upon Timothy P. Cawley’s extensive experience in the energy industry, his proven leadership abilities, and his understanding of the needs of the Company’s customers, employees and stakeholders, he was the best candidate to guide the Company into the future.
Director Compensation Consultant
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 it by providing competitive market information on the design of the director compensation program,program; (ii) advise it on the design of the director compensation program and also provide advice on the administration of the program,program; and (iii) brief it 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. 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 Corporate Governance and Nominating Committee held four meetings in 2017.
Environment, Health and Safety CommitteeExecutive Compensation Consultant
The Environment, Health and Safety Committee, currently Ellen V. Futter, Chair, William J. Mulrow (effective November 16, 2017), Armando J. Olivera, Linda S. Sanford, and Deirdre Stanley (effective November 16, 2017), is composed of fivenon-management Directors.
The Environment, Health and Safety Committee provides advice and counsel to the Company’s management on corporate environment, health and safety policies and on such
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other environment, health, safety, and sustainability matters as it fromtime-to-time 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 its duties and responsibilities that have been identified through the Company’s enterprise risk management program. The Environment, Health and Safety Committee held four meetings in 2017.
Executive Committee
The Executive Committee, currently John McAvoy, Chair, and three independent Directors, Vincent A. Calarco, George Campbell, Jr., and Michael W. Ranger (effective January 18, 2018), may exercise, during intervals between the meetings of the Board, all the powers vested in the Board, except for certain specified matters. Michael J. Del Giudice ceased being a member of the Executive Committee upon his retirement on January 18, 2018. No meetings of the Executive Committee were held in 2017.
Finance Committee
The Finance Committee, currently L. Frederick Sutherland, Chair, William J. Mulrow (effective November 16, 2017), Armando J. Olivera, Michael W. Ranger, and Linda S. Sanford, is composed of five independent Directors. The Finance Committee 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 its duties and responsibilities that have been identified through the Company’s enterprise risk management program. The Finance Committee held six meetings in 2017.
Management Development and Compensation Committee
The Management Development and Compensation Committee (the “Compensation Committee”), currently George Campbell,
Jr., Chair, Vincent A. Calarco, John F. Killian, William J. Mulrow (effective November 16, 2017), Michael W. Ranger (effective January 18, 2018), and L. Frederick Sutherland, is composed of six independent Directors. Michael J. Del Giudice ceased being a member of the Compensation Committee upon his retirement on January 18, 2018. The Compensation Committee 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 compensation relating to the Named Executive Officers under the Company’s executive compensation program, with the exception of the salary of the President of Orange & Rockland which is approved by the Board of Directors of Orange & Rockland. Additionally, the Compensation Committee oversees the Company’s management of risks, relating to its 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 our executive compensation.compensation program. The Compensation Committee directs Mercer to: (i) assist it inwith the development and assessment of the Company’s compensation peer group for the purposes of providing competitive market information for the design of the executive compensation program,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,industry; (iii) advise it on the level of officers’ base salaries, and target award levels within the annual incentives, and long-term incentive plans,incentives; (iv) advise it on the design of the Company’s annual and long-term incentive plans and on the administration of the plans,plans; (v) brief itadvise on executive compensation trends among the Company’s compensation peer group and broader industry,industry; and (vi) assist with the preparation of the Compensation Discussion and Analysis for this Proxy Statement. The Compensation Committee held six meetings in 2017 and Mercer attended three 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” beginning on page 26.
| 27 |
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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.
The 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,” as defined in the New York Stock Exchange’s listing standards under Rule10C-1 of the Securities Exchange Act of 1934, and meets the “outside director” criteria of Section 162(m) of the Internal Revenue Code and the“Non-Employee” Director criteria of Rule16b-3 under the Securities Exchange Act of 1934.
Operations Oversight CommitteeCompensation Consultant Disclosure
The Operations Oversight Committee, currently Armando J. Olivera, Chair (effective January 18, 2018), George Campbell, Jr., Ellen V. Futter, and Deirdre Stanley (effective November 16, 2017), is composed of fournon-management Directors. Michael W. Ranger ceased being a member and the Chair of the Operations Oversight Committee effective on January 18, 2018. The Operations Oversight Committee oversees the Company’s efforts 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 its duties and responsibilities that have been identified through the Company’s enterprise risk management program. The Operations Oversight Committee held four meetings in 2017.
COMPENSATION CONSULTANT DISCLOSURE
The Compensation Committee has retained Mercer, a wholly-owned subsidiary of Marsh & McLennan Companies, Inc., to
assist with its responsibilities related to the Company’s executive compensation programs and the Corporate Governance and Nominating Committee has retained Mercer to assist with its responsibilities related to the director compensation program, including the design and structure of the Company’s long term incentive plan. Mercer’s fees for executive and director compensation consulting to the committees in 20172020 were approximately $540,000.
During 2017, 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 auction services and employee benefit guides, were approximately $30,000.$622,800.
The Compensation Committee considered the independence of Mercer under the rules of the Securities and Exchange CommissionSEC and the listing standards of the New York Stock Exchange. The 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 Consultant Interlocks and Insider Participation
Vincent A. Calarco, George Campbell, Jr. (Chair)(Chair, until retirement), Michael J. Del Giudice, John F. Killian, William J. Mulrow, (effective November 16, 2017)Michael W. Ranger, Deirdre Stanley (Chair, effective immediately following the retirement of Dr. Campbell from the Board), and L. Frederick Sutherland were on the Company’s Compensation Committee during 2017. Michael W. Ranger became a member of the Compensation Committee effective upon the retirement of Michael J. Del Giudice on January 18, 2018.2020. The Company believes that there are no interlocks with the members of the Compensation Committee.
COMMUNICATIONS WITH THE BOARD OF DIRECTORSCommunications 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 office at 4 Irving Place, New York, New York 10003. The Vice President and Corporate Secretary will forward communications to the Director or the Directors indicated.
28 |
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Recognizing that regular communication with our stockholders enables the Company to better understand their viewpoints and to obtain feedback regarding issues that are of interest to them, the Company continued to engage virtually with stockholders due to COVID-19. The Company values stockholder input and is committed to taking such input into consideration in making executive compensation and governance decisions.
The chart below represents certain actions that the Company takes before, during and after the annual meeting.
Stockholder Engagement Highlights
During 2020, the Company held its inaugural ESG webinar, participated in 22 investor conferences and 12 virtual roadshows targeting the U.S., Europe, Japan, Australia, and Canada, engaging with a broad range of stockholders, including index funds, union and public pension funds, actively-managed funds, and stockholder advisory firms.
During 2020, the Company engaged virtually with stockholders holding in aggregate 43% of shares outstanding and 30% of the Company’s debentures.
Consolidated Edison, Inc. Proxy Statement | 29 |
| Stockholder Engagement |
Key topics of shareholder engagement included Con Edison of New York’s Climate Change Vulnerability Study, the Company’s corporate strategy, diversity, equity, and inclusion, disclosure practices, corporate governance, executive compensation, political spending and lobbying practices, operations and financial matters (including issues raised by COVID-19), and ESG standardized reporting. In response to stockholder feedback received during 2020, the Company: (i) enhanced disclosures concerning political contributions and lobbying, resulting in an increase in the Company’s CPA-Zicklin Index for Corporate Political Disclosure and Accountability score to 94.3 from 90; (ii) added new standardized ESG reporting formats: Task Force on Climate-Related Financial Disclosures (“TCFD”), Sustainability Accounting Standards Board (“SASB”), and the Carbon Disclosure Project (“CDP”); (iii) added a new operating objective performance measure, Diversity and Inclusion Work Plan, to its long term incentive plan for 2021; and (iv) further refined the disclosures in its proxy to, among other things, provide clearer and more accessible information on Board diversity, tenure, skills, and experience. In addition, in 2020, the Company’s subsidiary, Con Edison of New York, completed a Climate Change Implementation Plan following the Climate Change Vulnerability Study.
| Members of Core Stockholder Engagement Team | Others Included in Stockholder Engagement Efforts | |
§ Chief Financial Officer § Treasurer § Investor Relations | § Finance § Office of the Corporate Secretary § Environment, Health & Safety Department § Corporate Affairs § Strategic Planning |
In addition, the Company’s Lead Director, the Chief Executive Officer of the Company, the Presidents of each of the Company’s subsidiaries, and other senior Company officers participate in meetings with stockholders during the year.
Throughout the year, the Company communicates stockholder feedback to the Board and its committees and the Board considers this feedback in making its decisions.
30 | Consolidated Edison, Inc. Proxy Statement |
| Director Compensation |
The Corporate Governance and Nominating Committeebi-annually reviews director compensation.compensation bi-annually. The Corporate Governance and Nominating Committee reviewed director compensation in 2020. The Corporate Governance and Nominating Committee considers information, analyses, and objective advice regarding director compensation provided by Mercer. Director compensation is assessed relative to the Company’s compensation peer group (the same group used to evaluate executive compensation), general industry trends, and the total cost of governance. The Board reviews the recommendations of the Corporate Governance and Nominating Committee when determining whether changes, if any, will be made. To better align
In February 2020, at the request of the Corporate Governance and Nominating Committee, Mercer conducted an in-depth analysis of each element of compensation and the compensation program structure relative to the compensation peer group. Mercer’s review found that the amount of the retainer provided to the Chair of the Management Development and Compensation Committee was below the median paid to non-employee directors in the assessment group. Following the recommendation and effective April 1, 2020, the Board approved an increase in the annual retainer for the Chair of the Management Development and Compensation Committee.
In connection with the transition of John McAvoy from Executive Chairman to Non-executive Chairman, in November 2020, the Corporate Governance and Nominating Committee and the Management Development and Compensation Committee requested that Mercer conduct an in-depth analysis of market practices in 2018, Committeerelated to board leadership structures and non-executive chairman compensation. Mercer’s review found that non-executive chairman compensation is typically calibrated at a premium to general Board member meeting fees are being eliminated and stock ownership guidelines are being increased. Eliminating meeting fees is consistent with a trend incompensation. Based on Mercer’s review, the decline of their use as companies focus on compensating DirectorsBoard approved an annual retainer for their expertise more than their time. Certain retainers and the value ofNon-executive Chairman at approximately the annual equity award are being increased to replace the Committee member meeting fees. median, effective December 29, 2020.
Compensation for individual Directors will continue to approximateapproximates the median of compensation for Directors in similar positions at the compensation peer group.
ELEMENTS OF COMPENSATIONElements of Compensation
In 2017,2020, non-employee Directors were eligible to receive the following:
| Amount | ||||
Annual Retainer(1) | $ | 100,000 | ||
Lead Director Retainer | $ | 35,000 | ||
Chair of Audit Committee Retainer(2) | $ | 25,000 | ||
Member of Audit Committee Retainer (excluding the Audit Committee Chair)(3) | $ | 10,000 | ||
Chair of Corporate Governance and Nominating Committee Retainer(4) | $ | 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)(5) | $ | 2,000 | ||
Committee member meeting fee (for each Committee meeting attended)(5) | $ | 1,500 | ||
Annual equity award (deferred stock units)(6) | $ | 135,000 | ||
Footnotes:
| Amount | ||||||||||
| ($) | ||||||||||
Annual Retainer | 115,000 | |||||||||
Non-executive Chairman Retainer(1) | 160,000 | |||||||||
Lead Director Retainer | 35,000 | |||||||||
Chair of Audit Committee | ||||||||||
| 30,000 | ||||||||||
Member of | ||||||||||
| 15,000 | ||||||||||
Chair of Corporate Governance and Nominating Committee Retainer | 15,000 | |||||||||
Chair of Finance Committee Retainer | 15,000 | |||||||||
Chair of Management Development and Compensation Committee Retainer(2) | 20,000 | |||||||||
Retainers for each of the Co-Chairs of the Safety, Environment, Operations and Sustainability Committee(3) | 7,500 | |||||||||
Acting Committee Chair Fee (where the regular Chair is absent) | 200 | |||||||||
Annual equity award (deferred stock units) | 150,000 | |||||||||
Footnotes:
| (1) | Effective December 29, 2020. |
| (2) | Effective April 1, |
Consolidated Edison, Inc. Proxy Statement | 31 |
| Director Compensation |
| (3) | Effective |
In 2017,2020, the Company reimbursednon-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. Directors who are employees of the Company or its subsidiaries do not receive retainers meeting fees, or annual equity awards for their service on the Board.
STOCK OWNERSHIP GUIDELINESStock Ownership Guidelines
The Company has stock ownership guidelines fornon-employee Directors which provide that, within five years of joining the Board, each Director should own, and continue to hold during his or her tenure on the Board, shares (including stock equivalents and restricted stock units) with a value (measured at the time the shares are acquired) equal to five times (increase in 2018 from four times) the annual retainer (not including committee and/or committee chair fees) paid to such Director during the previous fiscal year. As of December 31, 2020, all Directors have either exceeded their stock ownership guideline requirement or are in the five year grace period and making satisfactory progress towards meeting the requirement.
LONG TERM INCENTIVE PLANLong Term Incentive Plan
Non-employee Directors participate in the Company’s long term incentive plan. Pursuant to the long term incentive plan, eachnon-employee Director then serving was allocated an annual equity award of $135,000$150,000 of deferred stock units on the first business day following the 20172020 Annual Meeting (increased to $150,000 effective April 1, 2018).Meeting. If anon-employee Director is first appointed to the Board after an annual meeting, his or her first annual equity award will be pro rated.prorated.
Settlement of the 20172020 annual equity awards of stock units was automatically deferred until the Director’s termination of
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service from the Board of Directors. Eachnon-employee Director may elect to receive some or all of his or her 20172020 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 such prior annual equity awardawards of stock units.
Eachnon-employee Director may also elect to defer all or a portion of his or her 2017 retainers and meeting fees2020 retainer(s) into additional deferred stock units, which are deferred until the Director’s termination of service.
Dividend equivalents are payable on 20172020 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, annual equity awards, and 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 60 days following separation from Board service, unless the directorDirector has elected to defer distribution to another date.
STOCK PURCHASE PLANStock Purchase Plan
Directors are eligible to participate in the stock purchase plan, which is described in Note MN to the financial statements in the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2017.2020.
32 | Consolidated Edison, Inc. Proxy Statement |
| Director Compensation |
DIRECTOR COMPENSATION TABLEDirector Compensation Table
The following table sets forth the compensation for the members of the Company’s Board of Directors for the fiscal year ended December 31, 2017.2020.
Fees Earned or Paid in Cash | Stock Awards(1) | All Other Compensation(2) | Total | |||||||||||||||||||||||||||||||||||||||||
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | All Other Compensation(2) ($) | Total ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||||||||||||
Vincent A. Calarco | $ | 157,000 | $ | 135,000 | — | $ | 292,000 | |||||||||||||||||||||||||||||||||||||
Timothy P. Cawley(4) |
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| — | — | — | — | ||||||||||||||||||||||||||||||||||||
George Campbell, Jr. | $ | 139,000 | $ | 135,000 | $ | 5,000 | (3) | $ | 279,000 |
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| 133,750 | 150,000 | 5,000 | (3) | 288,750 | ||||||||||||||||||||||||||
Michael J. Del Giudice | $ | 185,000 | $ | 135,000 | — | $ | 320,000 | |||||||||||||||||||||||||||||||||||||
Ellen V. Futter | $ | 118,500 | $ | 135,000 | $ | 5,000 | $ | 258,500 |
|
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| 122,500 | 150,000 | 5,000 | 277,500 | ||||||||||||||||||||||||||||
John F. Killian | $ | 142,000 | $ | 135,000 | — | $ | 277,000 |
|
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| 145,000 | 150,000 | — | 295,000 | |||||||||||||||||||||||||||||
John McAvoy(4) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
John McAvoy(5) |
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| 2,260 | 62,600 | 5,000 | 69,760 | ||||||||||||||||||||||||||||||||||||
William J. Mulrow | $ | 14,103 | $ | 67,500 | — | $ | 81,603 |
|
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| 115,000 | 150,000 | 5,000 | 270,000 | |||||||||||||||||||||||||||||
Armando J. Olivera | $ | 119,500 | $ | 135,000 | $ | 5,000 | $ | 259,500 |
|
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| 137,500 | 150,000 | 5,000 | 292,500 | ||||||||||||||||||||||||||||
Michael W. Ranger | $ | 144,000 | $ | 135,000 | — | $ | 279,000 |
|
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| 180,000 | 150,000 | — | 330,000 | |||||||||||||||||||||||||||||
Linda S. Sanford | $ | 119,500 | $ | 135,000 | — | $ | 254,500 |
|
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| 130,000 | 150,000 | — | 280,000 | |||||||||||||||||||||||||||||
Deirdre Stanley | $ | 12,603 | $ | 67,500 | — | $ | 80,103 |
|
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| 115,000 | 150,000 | — | 265,000 | |||||||||||||||||||||||||||||
L. Frederick Sutherland | $ | 147,000 | $ | 135,000 | — | $ | 282,000 |
|
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| 145,000 | 150,000 | — | 295,000 | |||||||||||||||||||||||||||||
Footnotes:Footnotes:
| (1) | On May |
| (2) | The “All Other Compensation” column includes matching contributions made by the Company to qualified institutions under its matching gift program. All directors and employees are eligible to participate in this program. Under the Company’s matching gift program, the Company matches up to a total of $5,000 per eligible participant on aone-for-one basis to qualified institutions per calendar year. |
| (3) | The amounts reported in the “All Other Compensation” column include amounts matched by the Company at the end of |
| (4) | Mr. |
| (5) | Mr. McAvoy retired as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York effective December 28, 2020. He became a non-employee Director effective December 29, 2020 and the Non-executive Chairman of the Board of the Company and Con Edison of New York. |
Consolidated Edison, Inc. Proxy Statement | 33 |
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STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERSStock Ownership of Directors and Executive Officers
The following table provides, as of February 28, 2018,2021, the amount of shares of the Company’sCompany Common Stock beneficially owned by each Director, each Named Executive Officer, and by all Directors and executive officers of the Company as a group, and information about the amount of their other Company equity-based holdings.
| Name | Shares Beneficially Owned(1) | Other Equity-Based Holdings(2) | Total(3) | Shares Beneficially Owned(1) | Other Equity-Based Holdings(2) | Total(3) | ||||||||||||||||||||||||||||||||||||
Vincent A. Calarco | 36,973 | — | 36,973 | |||||||||||||||||||||||||||||||||||||||
| Name | (#) | (#) | (#) | |||||||||||||||||||||||||||||||||||||||
George Campbell, Jr. | 28,120 | 11,880 | 40,000 |
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| 33,575 | 13,911 | 47,486 | |||||||||||||||||||||||||||||||||
Michael J. Del Giudice(4) | — | 2,082 | 2,082 | |||||||||||||||||||||||||||||||||||||||
Ellen V. Futter | 25,448 | 7,724 | 33,172 |
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| 31,255 | 7,724 | 38,979 | |||||||||||||||||||||||||||||||||
John F. Killian | 12,927 | 9,143 | 22,070 |
|
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| 18,019 | 11,323 | 29,342 | |||||||||||||||||||||||||||||||||
Karol V. Mason |
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| 138 | 554 | 692 | ||||||||||||||||||||||||||||||||||||
John McAvoy(4) |
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| 10,998 | 129,838 | 140,836 | ||||||||||||||||||||||||||||||||||||
Dwight A. McBride |
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| 692 | — | 692 | ||||||||||||||||||||||||||||||||||||
William J. Mulrow | — | 773 | 773 |
|
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| — | 7,063 | 7,063 | |||||||||||||||||||||||||||||||||
Armando J. Olivera | 9,451 | — | 9,451 |
|
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| 16,687 | — | 16,687 | |||||||||||||||||||||||||||||||||
Michael W. Ranger | 46,834 | — | 46,834 |
|
|
| 65,556 | — | 65,556 | |||||||||||||||||||||||||||||||||
Linda S. Sanford | 8,904 | — | 8,904 |
|
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| 15,857 | — | 15,857 | |||||||||||||||||||||||||||||||||
Deirdre Stanley | 148 | 773 | 921 |
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| 8,690 | 3,107 | 11,797 | |||||||||||||||||||||||||||||||||
L. Frederick Sutherland | 45,494 | 6,809 | 52,303 |
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| 62,077 | 7,597 | 69,674 | |||||||||||||||||||||||||||||||||
John McAvoy | 7,712 | 116,366 | 124,078 | |||||||||||||||||||||||||||||||||||||||
Timothy P. Cawley |
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| 3,860 | 12,499 | 16,359 | ||||||||||||||||||||||||||||||||||||
Robert Hoglund | 8,300 | 30,000 | 38,300 |
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| 12,480 | 30,000 | 42,480 | |||||||||||||||||||||||||||||||||
Craig Ivey(5) | 67 | 35,306 | 35,373 | |||||||||||||||||||||||||||||||||||||||
Elizabeth D. Moore | 2,427 | 36,523 | 38,950 | |||||||||||||||||||||||||||||||||||||||
Timothy P. Cawley | 2,441 | 11,202 | 13,643 | |||||||||||||||||||||||||||||||||||||||
| Directors and Executive Officers as a group, including the above-named persons (25 persons) | 257,492 | 339,128 | 596,620 | |||||||||||||||||||||||||||||||||||||||
Deneen L. Donnley |
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| 640 | — | 640 | ||||||||||||||||||||||||||||||||||||
Robert Sanchez |
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| 3,668 | 3,369 | 7,037 | ||||||||||||||||||||||||||||||||||||
Mark Noyes |
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| 18 | 8,242 | 8,260 | ||||||||||||||||||||||||||||||||||||
| Directors and Executive Officers as a group, including the above-named persons (26 persons) |
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| 307,154 | 289,458 | 596,612 | ||||||||||||||||||||||||||||||||||||
Footnotes:Footnotes:
| (1) | The number of shares shown includes shares of Company Common Stock that are individually or jointly owned, as well as shares over which the individual has sole or shared investment or sole or shared voting power. The number of shares shown also includes vested stock units, as to which the individual may obtain investment or voting power within 60 days following separation from service: |
| (2) | Represents vested stock units, as to which the individual may not, within 60 days after February 28, |
| (3) | As of February 28, |
| (4) | Mr. |
34 | Consolidated Edison, Inc. Proxy Statement |
|
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERSStock Ownership of Certain Beneficial Owners
The following table provides information, as of December 31, 2017,2020, with respect to persons who are known to the Company to beneficially own more than five percent (5%)5% of Company Common Stock.
| Shares of Common Stock Beneficially Owned | Percent of Class | |||||||||||||||||||||||
| Name and Address of Beneficial Owner | (#) | (%) | ||||||||||||||||||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 37,296,050(1) | |||||||||||||||||||||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | 29,884,610(2) | |||||||||||||||||||||||
State Street Corporation State Street Financial Center One Lincoln Street Boston, MA 02111 | 22,381,107(3) | |||||||||||||||||||||||
Footnotes:
| (1) | BlackRock, Inc. stated in its Schedule 13G/A, filed on |
| (2) | The Vanguard Group stated in its Schedule 13G/A, filed on February |
| (3) | State Street Corporation stated in its Schedule 13G, filed on February |
SECTION 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 2017 pursuant to Section 16(a) of the Act, the Company believes that all of the reports were filed on a timely basis.
Consolidated Edison, Inc. Proxy Statement | 35 |
|
PROPOSAL NO.Proposal No. 2 RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTSRatification 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 2018.2021. 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 2018.2021. 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 24.37.) Based on this review, the Audit Committee believes that the appointment of PwC as independent accountants for the Company for 20182021 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 are voted neither “for” nor “against,” and have no effect on the vote. Brokernon-votes are voted “for” the proposal.
The Board recommends | ||
| Ratification of Proposal No. 2 requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting or by proxy. Abstentions are voted neither “for” nor “against,” and have no effect on the vote. | |
36 | Consolidated Edison, Inc. Proxy Statement |
|
AUDIT COMMITTEE REPORTAudit Committee Report
The Company’s Audit Committee is composed of fourfive directors, all of whom meet the qualifications required by the New York Stock Exchange and Securities and Exchange Commission, and the Company’s Corporate Governance Guidelines. The Audit Committee operates under a written charter adopted by the Board of Directors that is available on the Company’s website.
The Audit Committee has reviewed and discussed with management the audited financial statements of the Company for the year ended December 31, 2017.2020. 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. The Audit Committee also considered whether PwC’s provision of limited tax andnon-audit services to the Company is compatible with PwC’s independence and concluded that it was.
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, 20172020 for filing with the Securities and Exchange Commission.
Audit Committee:
Vincent A. Calarco (Chair)
John F. Killian (Chair)
Armando J. Olivera
Michael W. Ranger
Linda S. Sanford
L. Frederick Sutherland
FEES PAID TO PRICEWATERHOUSECOOPERSFees Paid to PricewaterhouseCoopers LLP
Fees paid or payable to PwC for services related to 20172020 and 20162019 are as follows:
| 2017 | 2016 | |||||||
Audit Fees | $ | 5,400,697 | $ | 5,285,173 | ||||
Audit-Related Fees(a) | $ | 1,487,246 | $ | 1,053,925 | ||||
Tax Fees[(b)] | $ | 0 | $ | 25,000 | ||||
All Other Fees | $ | 0 | $ | 0 | ||||
TOTAL FEES | $ | 6,887,943 | $ | 6,364,098 | ||||
| 2020 | 2019 | |||||||||||||
| ($) | ($) | |||||||||||||
Audit Fees |
|
|
| 5,120,760 | 5,205,590 | |||||||||
Audit-Related Fees(a) |
|
|
| 2,863,950 | 765,000 | |||||||||
TOTAL |
|
|
| 7,984,710 | 5,970,590 | |||||||||
Footnote:Footnote:
| (a) | 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 |
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.
Consolidated Edison, Inc. Proxy Statement | 37 |
| Advisory Vote to Approve Named Executive Officer Compensation |
ADVISORY VOTE |
PROPOSAL NO.Proposal No. 3 ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATIONAdvisory 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”“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 26 to 57.39 through 80 and Appendix A. 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 2017,2020, the Company held a say on paysay-on-pay vote and 93.5%93.4% of the shares voted were voted “for” the proposal. Following this year’s say on paysay-on-pay vote, the next such vote will be at the Company’s 20192022 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 to 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 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. 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.
The Board recommends | ||
| Approval of Proposal No. 3 requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting or by proxy. Abstentions and broker non-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 will consider the voting results when making future compensation decisions for the Named Executive Officers. | |
38 | Consolidated Edison, Inc. Proxy Statement |
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| 42 | ||||
| 43 | ||||
| 44 | ||||
Role of Compensation Committee and Others in Determining Executive Compensation | ||||
| 48 | ||||
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| 53 | ||||
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Consolidated Edison, Inc. Proxy Statement | 39 |
| Compensation Discussion and Analysis |
This section of the Proxy Statement provides an overview of the Company’s 20172020 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 CommissionSEC rules). The executive compensation program covers the Company’s Named Executive Officers. For 2017,As of December 31, 2020, the Company’s Named Executive Officers were:
John McAvoy, Chairman, President and Chief Executive Officer
| § | Timothy P. Cawley, President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York effective December 29, 2020, former President of Con Edison of New York (until December 31, 2020) |
Robert Hoglund, Senior Vice President and Chief Financial Officer
| § | Robert Hoglund, Senior Vice President and Chief Financial Officer of the Company and Con Edison of New York |
Craig Ivey, President, Con Edison of New York, who retired on December 31, 2017
| § | Deneen L. Donnley, Senior Vice President and General Counsel of the Company and Con Edison of New York |
Elizabeth D. Moore, Senior Vice President and General Counsel
| § | Robert Sanchez, President and Chief Executive Officer, Orange & Rockland |
| § | Mark Noyes, President and Chief Executive Officer, Clean Energy Businesses |
Timothy P. Cawley, President and Chief Executive Officer, Orange & Rockland through November 30, 2017 (President of Con Edison of New York effective January 1, 2018)
| § | John McAvoy, Non-executive Chairman of the Company, former President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York (retired effective December 28, 2020) |
| Executive Summary |
The Company’s executive compensation program is designed to assist in attractingattract and retainingretain key executives critical to itsthe Company’s 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 base salary and performance-based compensation including target annual cash incentive compensation and target long-term equity-based incentive compensation that areis competitive with the median level of compensation provided by the Company’s compensation peer group companies. (See “Compensation Discussion and Analysis—Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention” on page 2843 and “Compensation Discussion and Analysis—Executive Compensation Actions—Philosophy and Objectives—Competitive Positioning—Attraction and Retention—Compensation Peer Group” on page 32.43.) The Compensation Committee believes that performance-based compensation should represent the most significant portion of each Named Executive Officer’s target total direct compensation (which includes base salary, and target annual incentive and long-term incentive 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 | ||||
|
| Objective | ||
Performance-Based Compensation | Annual Incentive | Achievement of financial and operating objectives for which the Named Executive Officers have individual and collective responsibility. | ||
Long-Term Incentive
| Achievement, over a | |||
Fixed & Other
| Base Salary,
Programs,
Perquisites | Differentiate | ||
40 | Consolidated Edison, Inc. Proxy Statement |
| Compensation Discussion and Analysis |
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 |
Long-Term Incentive |
Long-Term Incentive |
Risk |
| ○ |
|
| ○ |
|
| ○ |
|
| ○ |
|
|
|
| ○ |
|
Stock Ownership |
No Hedging and No Pledging. |
Recoupment |
Stockholder Engagement and Say on PaySay-on-Pay
The Company proactively engages with stockholders and accepts invitations to discuss matters of interest to them. Throughout the year, the Company discussed numerous issues with stockholders including, disclosure practices, corporate governance, political spending and lobbying practices, and environmental, health, and safety matters. The Company shares with the Board the feedback it receives from institutional investors and stockholders. The Company’s engagement with institutional investors resulted in the Board’s
adoption of proxy access, which enables certain 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 if the stockholders and the nominees proposed by the stockholders meet the requirements set forth in the Company’sBy-laws.
In 2017,2020, the Company held its annual say on pay vote to approve named executive officer compensation (commonly referred to as set forth in the 2017 proxy statement,a “say-on-pay” vote) and 93.5%93.4% of the shares voted were voted “for” the proposal. The 2020 say-on-pay voting result was
Consolidated Edison, Inc. Proxy Statement | 41 |
| Compensation Discussion and Analysis |
consistent with the results of the prior three years where 92.83% (in 2019), 93.95% (in 2018), and 93.5% (in 2017) of the shares voted were voted “for” the proposal. Though our say-on-pay results continue to be very strong, the Company continued its year-round stockholder engagement efforts through 2020 and early 2021. An overview of what the Company heard from stockholders during its engagement efforts and how it responded with respect to executive compensation matters is described in “Year-Round, Stockholder Engagement” below.
In addition, in 2017, the Company held a stockholder vote on the frequency of future say on paysay-on-pay votes. Consistent with the recommendation of theThe Board recommended holding an annual say-on-pay vote and 85% of shares voted were voted in favor of holding annual say on pay votes.such a vote. The Company intends to hold an annual say on paysay-on-pay vote unless stockholders advise the Company to change the frequency of the vote at the Company’s 2023 annual meeting of stockholders.
Year-Round, Stockholder Engagement
Stockholder engagement is a key priority of the Company and the Board. The Company engages with its investors to gain valuable insight into current and emerging issues that are of interest to them, including with respect to Con Edison of New York’s Climate Change Vulnerability Study, the Company’s corporate strategy, diversity, equity, and inclusion, disclosure practices, corporate governance, executive compensation, political spending and lobbying practices, operations and financial matters (including issues raised by COVID-19), and ESG standardized reporting. A complete discussion of the Company’s stockholder engagement process and efforts is set forth in the section titled “Stockholder Engagement” on pages 29 through 30. During 2020, the Company engaged virtually with stockholders holding in aggregate 43% of shares outstanding and 30% of the Company’s debentures. Feedback from these discussions is a key element in the development of the Company’s governance, sustainability, and executive compensation policies, as well as the ongoing evaluation of the Company’s business strategy and performance. For example, as a result of feedback received from stockholders this year, the Company: (i) enhanced its disclosures concerning political contributions and lobbying, resulting in an increase in the Company’s CPA-Zicklin Index for Corporate Political Disclosure and Accountability score to 94.3 from 90; (ii) added new standardized ESG reporting formats: TCFD, SASB, and the CDP; (iii) added a new operating performance objective, Diversity and Inclusion Work Plan, to its long term incentive plan for 2021; and (iv) further refined the disclosures in its proxy to, among other things, provide clearer and more accessible information on Board diversity, tenure, skills, and experience. In addition, in 2020, the Company’s subsidiary, Con Edison of New York, completed a Climate Change Implementation Plan following the Climate Change Vulnerability Study. The Company will continue to seek investor input in furtherance of its commitment to enhancing its executive compensation and disclosure practices and building long-term stockholder value.
EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVESExecutive Compensation Philosophy and Objectives
The Compensation Committee’s philosophy and objectives governing the development and implementation of the executive compensation program are to provide competitive, performance-based compensation.set forth in the table below. There are no material differences in the Company’s compensation policies for each Named Executive Officer.
Our executive compensation philosophy is to provide competitive, performance-based pay | ||
Motivate executives to create sustainable stockholder value and promote safe, reliable and efficient service for customers | Performance-based compensation represents the most significant portion of each Named Executive Officer’s total direct compensation | |
| Support the Company’s short- and long-term business plans and strategies | Annual and long-term incentive plan awards are based on achieving financial and operating objectives critical to the Company’s business plans and strategies | |
| Reward increased shareholder value | The largest portion of executive pay is delivered in long-term incentives based in part on the Company’s cumulative total shareholder return relative to the total shareholder return of the Company’s compensation peers Long-term incentives are 100% performance-based | |
42 | Consolidated Edison, Inc. Proxy Statement |
| Compensation Discussion and Analysis |
Competitive Positioning—Attraction and Retention
The executive compensation program is designed to attract and retain key executives critical to the Company’s long-term success. The Compensation Committee seeks to align pay to performance and provide base“target total direct compensation” (base salary, target annual cash incentives, and target long-term equity-based incentivesincentives) that areis competitive with the median level of compensation provided by the Company’s compensation peer group companies. The Company also seeks to provide retirement and other benefits that are competitive with those provided by the industryCompany’s compensation peer group companies and to provide limited perquisites.
For 2020, the Compensation Committee used a compensation peer group of publicly-traded utility companies of comparable size and specific perquisites.scope to that of the Company. The purpose of the compensation peer group is to provide benchmark information on compensation levels provided to the Company’s officers and to measure relative total shareholder returns for the vesting of performance-based equity awards. The Compensation Committee annually reviews the composition of the compensation peer group companies and the impact of acquisitions. For 2020, the Compensation Committee made no changes to the compensation peer group. The Company’s 2019 revenues approximated the 62nd percentile of the compensation peer group.
For 2020, the Company’s compensation peer group consisted of the following companies:
| Company Name | 2019 Revenue(1) | ||||
| ($ in millions) | |||||
§ Duke Energy Corporation | 24,658 | ||||
§ The Southern Company | 21,419 | ||||
§ NextEra Energy, Inc. | 19,204 | ||||
§ PG&E Corporation | 17,129 | ||||
§ Dominion Energy, Inc. | 16,572 | ||||
§ American Electric Power Company, Inc. | 15,561 | ||||
§ DTE Energy Company | 12,669 | ||||
§ Edison International | 12,347 | ||||
§ CenterPoint Energy, Inc. | 12,301 | ||||
§ Xcel Energy Inc. | 11,529 | ||||
§ Entergy Corporation | 10,879 | ||||
§ FirstEnergy Corp. | 10,844 | ||||
§ Sempra Energy | 10,829 | ||||
§ Eversource Energy | 8,526 | ||||
§ PPL Corporation | 7,769 | ||||
§ WEC Energy Group, Inc. | 7,523 | ||||
§ Ameren Corporation | 5,646 | ||||
§ NiSource Inc. | 5,209 | ||||
Median | 11,915 | ||||
Consolidated Edison, Inc. | 12,574 | ||||
Percentile Rank | 62% | ||||
Footnote:
| (1) | Source: Capital IQ (represents net revenues, restated if applicable). |
For 2021, the Compensation Committee made no change to the compensation peer group.
Consolidated Edison, Inc. Proxy Statement | 43 |
|
In 2017,2020, the Named Executive Officers’ target total direct compensation comparedawarded to the Named Executive Officers was competitive with the median for functionally comparable positions at the Company’s compensation peer group median was as follows:(as disclosed in proxy statements filed in 2020).
| 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) | 102 | % | 98 | % | 94 | % | 96 | % | ||||||||
| Other Named Executive Officers (Average)(2) | 112 | % | 105 | % | 111 | % | 106 | % | ||||||||
Base Salary as of 12/31/2020 |
Target Total | Target Long-Term Incentive Compensation | Target Total Direct Compensation | |||||||||||||||||||||
| Company | Peer Group Median | Company | Peer Group Median | Company | Peer Group Median | Company | Peer Group Median | |||||||||||||||||
| ($) | (%) | ($) | (%) | ($) | (%) | ($) | (%) | |||||||||||||||||
Timothy P. Cawley(1) | 1,250,000 | 94% | 2,812,500 | 96% | 5,625,000 | 90% | 8,437,500 | 92% | ||||||||||||||||
Robert Hoglund | 814,000 | 123% | 1,424,500 | 120% | 1,628,000 | 110% | 3,052,500 | 113% | ||||||||||||||||
Deneen L. Donnley | 612,000 | 102% | 1,040,400 | 102% | 918,000 | 77% | 1,958,400 | 89% | ||||||||||||||||
Robert Sanchez | 515,000 | 97% | 927,000 | 99% | 1,030,000 | 116% | 1,957,000 | 105% | ||||||||||||||||
Mark Noyes | 440,000 | 83% | 792,000 | 84% | 880,000 | 99% | 1,672,000 | 90% | ||||||||||||||||
John McAvoy | 1,380,000 | 104% | 3,105,000 | 106% | 6,900,000 | 110% | 10,005,000 | 109% | ||||||||||||||||
Footnotes:Footnote:
| (1) | Mr. Cawley was promoted to President and Chief Executive Officer of the |
(See “Executive Compensation Actions—Compensation Peer Group” on page 32.)
Pay-for-Performance Alignment and Pay Mix
The executive compensation program is designed to motivate the Company’s key executives to create sustainable stockholder value and promote safe, reliable and efficient service for its customers. The Compensation Committee seeks to balance theprovides target total direct compensation ofto each Named Executive Officer betweenthrough a combination of base salary (fixed compensation) and annual cash incentive compensation and long-term equity-based incentive compensation (performance-based 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 compensation should represent the most significant portion of each Named Executive Officer’s target total direct compensation and 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.
Target annual cash incentive and target long-term equity-based incentive awards reflect the Compensation Committee’s desired balance between these elements, relative to the base
salary paid to each Named Executive Officer. Awards under the Company’s annual incentive plan are based on the achievement of financial and operating objectives for which the Named Executive Officers have individual and collective responsibility. Awards under the Company’s long term incentive plan are based on the 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 companies.
For 2017,2020, the mix of target total direct compensation for the Named Executive Officers meets the Compensation Committee’s objectives by being weighted heavily toward performance-based compensation, with the largest portion delivered in long-term equity-based incentives. The target total direct compensation mix of the Named Executive Officers is in line with that of the Company’s compensation peer group companies (except that the Company does not providenon-performance-based long-term incentive compensation)compensation, such as time-based restricted stock). (See “Compensation Discussion and Analysis—Executive Compensation Actions—Philosophy and Objectives—Competitive Positioning—Attraction and Retention—Median Level Compensation Peer Group” on page 32.above.)
44 | Consolidated Edison, Inc. Proxy Statement |
|
The following charts illustrate the average mix of target total direct compensation for the Company’s Chief Executive Officer, Mr. Cawley, and the Company’s former Chief Executive Officer, Mr. McAvoy, and for chief executive officers in the Company’s compensation peer group companies for 2017:2020:
Consolidated Edison, Inc. Proxy Statement | 45 |
| Compensation Discussion and Analysis |
The following charts illustrate the average mix of target total direct compensation for the Company’s other Named Executive Officers and other named executive officers in the Company’s compensation peer group companies for 20172020 (see footnote (2) to the table in “Compensation Discussion and Analysis—Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and RetentionRetention—Median Level Compensation” on page 29)44):
|
The following charts illustrate that all Named Executive Officer long-term incentive compensation is performance-based and that, based on proxy statements filed in 2017,2020, over half50% of the Company’s compensation peer group companies granted some form ofnon-performance-based long–term incentive compensation (such as time-based restricted stock) to their named executive officers:
 |  |
46 | Consolidated Edison, Inc. Proxy Statement |
| Compensation Discussion and Analysis |
The Compensation Committee chooses performance goals under the annual incentive and long-term incentive plans to support the Company’s short- and long-term business plans and strategies. In setting the 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 pay practices of the compensation peer group companies. The Compensation Committee setsincents performance by setting challenging, but achievable, goals for the Company and its key executives to drive the achievement of short- and long-term objectives.executives.
ROLE OF COMPENSATION COMMITTEE AND OTHERS IN DETERMINING EXECUTIVE COMPENSATIONRole 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 determiningThe Compensation Committee determines the amount orand form of compensation for each of the Named Executive Officers under the executive compensation program are made by the Compensation Committee with the exception of thean annual base salary above $500,000. The base salary of the President and Chief Executive Officer of Orange & Rockland whichthe Clean Energy Businesses is less than $500,000 and, as a result, is approved by the BoardChief Executive Officer of Directors of Orange & Rockland.the Company.
The role of the Company’s Chief Executive Officer in determining the amount and form of the other Named Executive Officers’ compensation is to provide 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 factors in making his compensation recommendations for each of the other Named Executive Officers’ compensation:Officers:
Individual performance;
Contributions toward the Company’s long-term performance;
The scope of each individual’s responsibilities; and
individual performance;
|
| § | contributions toward the Company’s long-term performance; |
| § | the scope of each individual’s responsibilities; and |
Compensation peer group company proxy statement data provided by the Compensation Committee’s independent compensation consultant.
| § | 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.
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 Board—Management Development and Compensation CommitteeConsultant—Executive Compensation Consultant” on page 17.27.
EXECUTIVE COMPENSATION ACTIONSCompensation Elements
For 2017, the Compensation Committee used a compensation peer group of publicly-traded utility companies of comparable size and scope to that of the Company. 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-based equity awards. The Compensation Committee annually reviews the composition of the compensation peer group companies and the impact of acquisitions. For 2017, the Compensation Committee made no changes to the compensation peer group. The Company’s 2016 revenues approximated the 64th percentile of the compensation peer group.
For 2017, the Company’s compensation peer group consisted of the following companies:
| Company Name | 2016 Revenue(1) | |||
| (in millions) | ||||
Duke Energy Corporation | $ | 22,754 | ||
The Southern Company | $ | 19,896 | ||
PG&E Corporation | $ | 17,666 | ||
American Electric Power Company, Inc. | $ | 16,380 | ||
NextEra Energy, Inc. | $ | 16,155 | ||
FirstEnergy Corp. | $ | 14,562 | ||
Edison International | $ | 11,869 | ||
Dominion Energy, Inc. | $ | 11,737 | ||
Xcel Energy Inc. | $ | 11,107 | ||
Entergy Corporation | $ | 10,846 | ||
DTE Energy Company | $ | 10,630 | ||
Sempra Energy | $ | 10,183 | ||
Eversource Energy | $ | 7,639 | ||
CenterPoint Energy, Inc. | $ | 7,528 | ||
PPL Corporation | $ | 7,517 | ||
WEC Energy Group, Inc. | $ | 7,472 | ||
Ameren Corporation | $ | 6,076 | ||
NiSource Inc. | $ | 4,493 | ||
Median | $ | 10,976 | ||
Consolidated Edison, Inc. | $ | 12,075 | ||
Percentile Rank | 64th | |||
Footnote:
For 2018, 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 annually to recognize individual performance as well asand at the time of a promotion or other change in responsibilities.
In setting base salary for the Named Executive Officers, including the Chief Executive Officer, the Compensation Committee, or, in the case of the President and Chief Executive Officer of the Clean Energy Businesses, the Chief Executive Officer of the Company, considers various factors, including:
Recommendations from the Chief Executive Officer for each of the other Named Executive Officers;
| § | 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 companies.
| § | a general assessment of each Named Executive Officer’s performance of his or her responsibilities; and |
Consolidated Edison, Inc. Proxy Statement | 47 |
|
| § | the level of base salary compared to key executives holding equivalent positions in the Company’s compensation peer group companies. (See table in “Compensation Discussion and Analysis—Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention—Median Level Compensation” on page 44.) |
Effective February 1, 2017,Excluding Mr. Cawley, whose base salary reflects his promotion on December 29, 2020, base salary merit increases for the other Named Executive Officers were effective February 1, 2021 and, as a group, increased by an average of 3.0%averaged 4.5%. The 2017 base salary of each Named Executive Officer as of February 1, 2020 and 2021, including their individual percentage increase, is set forth in the “Salary” column of the Summary Compensation Table on page 46.table below.
| Base Salary as of 2/1/2020 | Base Salary as of 2/1/2021 | Percentage Increase | ||||
| ($) | ($) | (%) | ||||
Timothy P. Cawley | 1,250,000(1) | 1,250,000 | 0 | |||
Robert Hoglund | 814,000 | 838,400 | 3.0% | |||
Deneen L. Donnley | 612,000 | 630,400 | 3.0% | |||
Robert Sanchez | 515,000 | 530,500 | 3.0% | |||
Mark Noyes | 440,000 | 490,000 | 11.4% | |||
John McAvoy | 1,380,000(2) | Not Applicable | Not Applicable | |||
Footnotes:
| (1) | Reflecting the base salary that was in effect for Mr. Cawley following his promotion as Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York, effective December 29, 2020. |
| (2) | Reflecting the base salary that was in effect for Mr. McAvoy as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York until his retirement on December 28, 2020. |
A significant portion of the annual cash incentive compensation paid to the Named Executive Officers directly relates to the Company’s financial and operating performance, factors that the Compensation Committee believes influence stockholder value.
Individual performance is considered 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.
Potential AwardsAward Opportunity
For 2017,2020, 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
| § | recommendations from the Chief Executive Officer for each of the other Named Executive Officers; |
|
| § | the level of annual incentive compensation compared to key executives in the Company’s compensation peer group companies. (See |
The range of awards included threshold,minimum, 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,minimum, target, and maximum levels. The range of each Named Executive Officer’s potential award is set forth in the “Grants of Plan-Based Awards Table” on page 48.69. Awards under the annual incentive plan are designed to provide a competitive level of compensation if the Named Executive Officers achieve the target financial and operating objectives. Pursuant to the terms of the annual incentive plan, theThe Compensation Committee has discretion but did not exercise it in 2020 to adjust (upward or
downward) the annual incentive award to be paid to each Named Executive Officer. Named Executive Officers may elect to defer the receipt of the cash value of the award into the Company’s deferred income plan.
48 | Consolidated Edison, Inc. Proxy Statement |
| Compensation Discussion and Analysis |
Awards under the annual incentive plan are calculated as follows:
For each Named Executive Officer other than Timothy P. Cawley, “Base Salary” is their annual rate of base salary as of December 31, 2020. “Base Salary X Target Percentage” for Mr. Cawley is his annual rate of base salary as of December 28, 2020, the day before his promotion as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York.
X Weighting Earned
“Target Percentage” is a percentage of Base Salary that varies based on the Named Executive Officer’s position as follows:
| Target Percentage | ||||
| (%) | ||||
| ||||
Robert Hoglund
| ||||
| 70 | |||
Robert Sanchez | 80 | |||
Mark Noyes | 80 | |||
John McAvoy | 125(2) | |||
Footnotes:
| (1) | Reflecting the target percentage that was established for Mr. Cawley based on his position as President of Con Edison of New York for 2020. |
| (2) | ||||
| ||||
Reflecting the target percentage that was established for Mr. McAvoy based on his position as President and Chief Executive Officer |
Consolidated Edison, Inc. Proxy Statement | 49 |
| Compensation Discussion and Analysis |
“Weighting Earned” is the sum of the target weightings earned for the following components: adjusted net income, other financial performance, and operating objectives. Forobjectives, including any adjustments (upward or downward) as a result of performance relative to target. Target weightings for each Named Executive Officer target weightings, totalingtotal 100%, and are assigned for each component as follows: 50% for adjusted net income, 25% for other financial performance, and 25% for operating objectives. Weightings earned vary from zero to 200% for adjusted net income, operating objectives, and forcomprised of the other operating budget component of other financial performance, and from zero to 120% for the capital budget component of other financial performance.following three components:
Subject to actual performance relative | ||||
 | § adjusted net income § operating objectives § other financial performance Ø operating budget component for Con Edison of New York, Orange & Rockland, and Con Edison Transmission Ø Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”) component for the Clean Energy Businesses | 0 to 200% | ||
Ø capital budget component of other financial performance (excluding the impact of modifiers) | 0 to 120% | |||
The financial objectives under the annual incentive plan are key performance measures that support the Company’s short- and long-term business plans and strategies and create value for the Company’s stockholders. For 2017,2020, 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 Officers are responsible and accounting for 50% of each Named Executive Officer’s potential annual incentive award, asaward. Performance relative to this component is shown on the “Executive Compensation Actions—Discussion and Analysis—Compensation Elements—Annual Incentive Compensation—Achievement of 20172020 Financial and Operating Objectives” table on page 54.
“Company Adjusted Net Income” consists of adjusted net income for the Company and its subsidiaries. “Regulated Adjusted Net Income” is the sum of Con Edison of New York’s and Orange & Rockland’s adjusted net income from ongoing operations, as applicable, after subtracting all expenses incurred, including federal and state income taxes. In all cases, net income excludes extraordinary non-recurring items identified by the Company after the applicable net income target is established and is net of the reserve that is established for the target annual incentive awards during the year-end closing. (See footnotes to the following table.) Information on how the Company calculates adjusted net income is disclosed in the “Non-GAAP Financial Measures” section (on pages 11 through 13) of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020; It is referred to as adjusted earnings.
50 | Consolidated Edison, Inc. Proxy Statement |
|
Financial and Operating Objectives”The following table on page 37, was comprised of “Adjusted Company Net Income” and “Adjusted Regulated Net Income.” “Adjusted Company Net Income” isshows the Company’s net income as reported under generally accepted accounting principles (GAAP) in the Company’s financial statements excluding the impact of certain items. (See footnote (1)targets assigned to the following table.) “Adjusted Regulated Net Income” is“adjusted net income as reported under GAAP inincome” component and, for each Named Executive Officer, the financial statements of Con Edison of New York and Orange & Rockland.
For 2017, target adjusted net income and actual adjusted net income were as follows:weighting earned based on achieving those targets.
| Target | Actual | Performance Relative to Target | Payout Relative to Target | |||||||||||||
| (in millions) | ||||||||||||||||
Adjusted Company Net Income | $ | 1,221.1 | $ | 1,264 | (1) | 103.5 | % | 135 | % | |||||||
Adjusted Regulated Net Income | $ | 1,151.8 | $ | 1,168 | 101.4 | % | 114 | % | ||||||||
Adjusted Con Edison of New York Net Income | $ | 1,090.0 | $ | 1,104 | 101.3 | % | 113 | % | ||||||||
Adjusted Orange & Rockland Net Income | $ | 61.8 | $ | 64 | 103.6 | % | 136 | % | ||||||||
| Performance Relative to Adjusted Net Income Target | Payout Relative to Adjusted Net Income Target(1) | Company (95.3%)(2) | Regulated (93.2%)(2) |
Con Edison of (92.7%)(2) | Orange & Rockland (101.4%)(2) | Performance Relative to Adjusted Net Income Target | Payout Relative to Adjusted Net Income Target(1) | Clean Energy (119.3%)(2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted Net Income | Weight for McAvoy, Hoglund, and Donnley | Weight for Noyes | Adjusted Net Income | Weight for Cawley | Adjusted Net Income | Weight for Sanchez | Adjusted Net Income | Weight for Sanchez | Adjusted Net Income | Weight for Noyes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (%) | (%) | ($ in millions) | (%) | (%) | ($ in millions) | (%) | ($ in millions) | (%) | ($ in millions) | (%) | ($ in millions) | (%) | ($ in millions) | (%) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maximum | ³ 110 | 200 | 1,614.8 | 100 | 20 | 1,482.8 | 100 | 1,405.8 | 20 | 77 | 80 | ³ 125 | 200 | 103.8 | 80 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Target | 100 | 100 | 1,468.0 | 50 | 10 | 1,348.0 | 50 | 1,278.0 | 10 | 70 | 40 | 100 | 100 | 83.0 | 40 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Minimum | 90 | 0 | 1,321.2 | 0 | 0 | 1,213.2 | 0 | 1,150.2 | 0 | 63 | 0 | 75 | 0 | 62.3 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACTUAL | — | — | 1,399.0 | 26.5 | 5.3 | 1,256.0 | 16.0 | 1,185.0 | 2.7 | 71 | 45.6 | — | — | 99.0 | 70.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Footnote:Footnotes:
| (1) | The payout relative to the |
| (2) | Actual performance relative to adjusted net income target. |
The Compensation Committee has also established an adjusted net income “circuit breaker” for the annual incentive plan. If actual adjusted net income for 20172020 had been less than 90% of the target adjusted net income, the achievement of all other financial and operating performance measures would have been disregarded and no annual incentive awards would have been made.
The weightings earned for the 50% “adjusted net income” component were determined based on the following scale:
| Performance Relative to Target | Weighting Earned(1) | Payout Relative to Target | ||
³ 110% | 100% | 200% | ||
(Target) 100% | 50% | 100% | ||
< 90% | 0% | 0% |
The “other financial performance” component, reflecting the Company’s business for which its Named Executive Officers are responsible and accounting for 25% of each Named Executive Officer’s potential annual incentive award aswas comprised of one or more of the budgets for Con Edison of New York, Orange & Rockland, and Con Edison Transmission, and was comprised of Adjusted EBITDA for the Clean Energy Businesses. See Appendix B for information on how the Company calculates Adjusted EBITDA for the Clean Energy Businesses. Performance relative to this component is shown on the “Executive Compensation Actions—Discussion and Analysis—Compensation Elements—Annual Incentive Compensation—Achievement of 20172020 Financial and Operating Objectives” table on page 37, was comprised of one or more of the Con Edison of New York, Orange & Rockland, Con Edison Clean Energy Businesses, Inc. and its subsidiaries (the “Clean Energy Businesses”) Con Edison Transmission, Inc. and its subsidiaries (“Con Edison Transmission”) budgets. With respect to Orange & Rockland, the Clean Energy Businesses, and Con Edison Transmission, the “other financial performance” component is up to 25%, 1%, and 1%, respectively.54.
Con Edison of New York’s “other financial performance” component is allocated 10% for capital budget performance and up to 15% for operating budget performance, subject to a maximum 25% upward or downward adjustment based on the achievement ofpre-established targets for 25 capital projects and programs 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.
The target budgets and actual expenditures for 2017 were as follows:
Target (in millions) | Actual (in millions) | Performance Relative to Target | Payout Relative to Target | |||||||||||||
Con Edison of New York | ||||||||||||||||
Operating Budget | $ | 1,540.4 | $ | 1,528 | 99.2 | % | 100 | % | ||||||||
Capital Budget | $ | 2,962.4 | $ | 2,909 | 98.2 | % | 102 | % | ||||||||
Orange & Rockland | ||||||||||||||||
Operating Budget | $ | 207.3 | $ | 201 | 97.0 | % | 120 | % | ||||||||
Clean Energy |
| |||||||||||||||
Operating Budget | $ | 83.0 | $ | 82.8 | 99.8 | % | 100 | % | ||||||||
Con Edison |
| |||||||||||||||
Operating Budget | $ | 8.0 | $ | 6.7 | 83.8 | % | 200 | % | ||||||||
|
The weightings earned for Con Edison of New York’s and Orange & Rockland’sfollowing table shows the targets assigned to the “other financial performance” component were determinedfor operating budget and, for each Named Executive Officer, the weighting earned based on the following scales:achieving those targets.
Con Performance Operating | Weighting McAvoy, | Weighting Earned for Ivey(1) | Payout Relative to Target | |||
£ 89% | 24% | 30% | 200% | |||
(Target) | 12% | 15% | 100% | |||
³ 111% | 0% | 0% | 0% |
Performance Relative to | Payout Relative to Operating Budget Target(1) | Con Edison of New York (97.2%)(2) |
Orange & Rockland (99.2%)(2) | Con Edison Transmission (89.0%)(2) | ||||||||||||||||||
| Operating Budget | Weight for McAvoy, Hoglund, and Donnley | Weight for Cawley | Operating Budget | Weight for McAvoy, Hoglund, and Donnley | Weight for Sanchez | Operating Budget | Weight for McAvoy, Hoglund, and Donnley | |||||||||||||||
| (%) | (%) | ($ in millions) | (%) | (%) | ($ in millions) | (%) | (%) | ($ in millions) | (%) | |||||||||||||
| Maximum | £ 89 | 200 | 1,470.3 | 24 | 30 | 196.0 | 2 | 50 | 7.5 | 2 | ||||||||||||
| Target | > 99 - < 101 | 100 | 1,652.0 | 12 | 15 | 220.2 | 1 | 25 | 8.4 | 1 | ||||||||||||
| Minimum | ³ 111 | 0 | 1,833.7 | 0 | 0 | 244.4 | 0 | 0 | 9.3 | 0 | ||||||||||||
| ACTUAL | — | — | 1,606.0 | 15.6(3) | 19.5(3) | 218.5 | 1.0 | 25.0 | 7.5 | 2.0 | ||||||||||||
Footnote:Footnotes:
| (1) | The |
| (2) | Actual performance |
| (3) | In |
Con Edison of New York Performance Capital Budget Target | Weighting Earned for McAvoy, Hoglund, Ivey, and Moore(1) | Payout Relative to Target | ||
£ 89% | 12% | 120% | ||
(Target) 99-101% | 10% | 100% | ||
³ 111% | 0% | 0% |
Consolidated Edison, Inc. Proxy Statement | 51 |
Footnote:
| Compensation Discussion and Analysis |
The following table shows the targets assigned to the “other financial performance” component for capital budget and, for each Named Executive Officer indicated, the weighting earned based on achieving those targets.
| Performance Relative to Capital Budget Target | Payout Relative to Capital Budget Target(1) | Con Edison Company of New York (97.5%)(2) | ||||||||||||||||||
| Capital Budget | Weight for McAvoy, Hoglund, Cawley, and Donnley | |||||||||||||||||||
| (%) | (%) | ($ in millions) | (%) | |||||||||||||||||
Maximum | £ 89 | 120 | 2,932.6 | 12 | ||||||||||||||||
Target | > 99 - < 101 | 100 | 3,295.0 | 10 | ||||||||||||||||
Minimum | ³ 111 | 0 | 3,657.5 | 0 | ||||||||||||||||
ACTUAL | — | — | 3,212.0 | 9.3 | (3) | |||||||||||||||
Footnotes:
| (1) | The |
| (2) | Actual performance |
| (3) | In |
Orange & Performance to Operating Budget Target | Weighting Earned for McAvoy, Hoglund, and Moore(1) | Weighting Earned for Cawley | Payout Relative to Target | |||
| £ 89% | 2% | 50% | 200% | |||
| (Target) 99-101% | 1% | 25% | 100% | |||
| ³ 111% | 0% | 0% | 0% |
Footnote:The following table shows the targets assigned to the “other financial performance” component for Adjusted EBITDA and, for each Named Executive Officer indicated, the weighting earned based on achieving those targets.
| Performance Relative to Adjusted EBITDA Target | Payout Relative to Adjusted EBITDA Target(1) | Clean Energy Businesses (98.8%)(2) | ||||||||||||||||
| Adjusted EBITDA | Weight for McAvoy, Hoglund, and Donnley | Weight for Noyes | ||||||||||||||||
| (%) | (%) | ($ in millions) | (%) | (%) | ||||||||||||||
Maximum | ³ 115 | 200 | 563.8 | 2 | 50 | |||||||||||||
Target | 100 | 100 | 490.3 | 1 | 25 | |||||||||||||
Minimum | £ 85 | 0 | 416.8 | 0 | 0 | |||||||||||||
ACTUAL | — | — | 484.2 | 0.9 | 23.0 | |||||||||||||
Footnotes:
| (1) | The |
| (2) | Actual performance relative to Adjusted EBITDA target. |
52 | Consolidated Edison, Inc. Proxy Statement |
| Compensation Discussion and Analysis |
The “operating objectives” component, reflecting the responsibilities of the Named Executive Officer and accounting for 25% of each Named Executive Officer’s potential annual incentive award as shown on the “Executive Compensation Actions—Annual Incentive Compensation—Achievement of 2017 Financial and Operating Objectives” table on page 37, was comprised of a number of key indicators that guide Con Edison of New York, Orange & Rockland, the Clean Energy Businesses, and Con Edison Transmission to serve their customers in aand support the Company’s goal of providing safe, reliable, and efficient service to customers in an environmentally sound manner. Each of theThe operating objectives includeare directly linked to specific,pre-established, targetsand measurable goals that are selected to encourage superior performance in multiple areasfour main areas:
Employee and Public Safety | We are committed to achieving a zero harm workplace. We work as a team to protect the safety of the public and each one of us. | |
Environment and Sustainability | We value environmental stewardship and strive to make wise and effective use of natural resources while controlling costs for our customers and creating long-term value for our stockholders. | |
Operational Excellence | We stand behind our work and look for new ways to excel at our jobs. We talk openly about ethical choices, follow all laws, rules, and regulations, adapt to change, and invest in the skills of our employees. | |
Customer Experience | We consider the customer’s point of view, make customer priorities our own, and seek to elevate the experience of doing business with us. |
The Compensation Committee believes that impact theday-to-day operations of operating objectives support the Company’s businesses.mission and priorities –providing a workplace that allows employees to realize their full potential, providing investors with a fair return, and improving the quality of life in the communities served by the Company. Performance relative to this component is shown on the “Compensation Discussion and Analysis—Compensation Elements—Annual Incentive Compensation—Achievement of 2020 Financial and Operating Objectives” table on page 54.
The operating objectives achieved for Con Edison of New York’s andYork, Orange & Rockland’s operating objectives for 2017, each accounting for up to 25%, are shown in the following tables. Operating objectives for theRockland, Clean Energy Businesses and Con Edison Transmission (each accountingare summarized in the table below. The operating objectives for upeach entity are described in detail in Appendix A to 1%) include those that are important to the success of their business: compliance, risk management and various operational metrics.this proxy statement.
Operating Objectives(1) | Key Indicators Achieved | |||||||||||||||||||
Con Edison of New York | Orange & Rockland | Clean Energy Businesses | Con Edison Transmission | |||||||||||||||||
| (#) | (#) | (#) | (#) | |||||||||||||||||
§ Employee and Public Safety | 4/5 | 4/5 | 1/1 | 2/2 | ||||||||||||||||
§ Environment and Sustainability | 4/4 | 5/5 | 1/1 | 2/2 | ||||||||||||||||
§ Operational Excellence | 6/7 | 5/5 | 8/8 | 6/6 | ||||||||||||||||
§ Customer Experience | 4/4 | 5/5 | — | — | ||||||||||||||||
TOTAL | 18/20 | 19/20 | 10/10 | 10/10 | ||||||||||||||||
PAYOUT RELATIVE TO TARGET (%) | 150 | 175 | 200 | 200 | ||||||||||||||||
Footnote:
| (1) | Operating objectives were weighted equally. |
| 53 |
|
Con Edison of New York Operating | Unit of Measure | Target | Actual | |||||
Employee and Public Safety | ||||||||
Injury/Illness Incidence Rate | Rate | £ 1.20 | 1.17 | |||||
SignificantHigh-Hazard Injuries | # | 0 | 2 | |||||
Public Safety-Related Equipment Failures | # | £ 170 | 185 | |||||
Motor Vehicle Collisions | # | £ 310 | 298 | |||||
Operating Errors | # | £ 74 | 52 | |||||
Environment and Sustainability | ||||||||
Dielectric Fluid Released to the Environment | Gallons | £ 22,000 | 30,998 | |||||
Late Spill Notifications | # | £ 9 | 4 | |||||
SF6 Gas Emissions | Pounds | £ 10,000 | 8,015 | |||||
Customer Emissions (through Energy Efficiency MWh Reductions) | # | ³ 198,000 | 359,759 | |||||
Customer Emissions (throughOil-to-Gas Conversions) | # | ³ 468 | 244 | |||||
Operational Excellence | ||||||||
Steam System Reliability Measures | # | 2 | 2 | |||||
Reliability Performance Measures | # | 0 | 2 | |||||
Gas Made Safe Time | % | ³ 79 | 86.4 | |||||
Workable Gas Leak Inventory | # | £ 20 | 9 | |||||
Cyber Security | # | 0 | 0 | |||||
Physical Security | # | 0 | 0 | |||||
Customer Experience | ||||||||
Customer Project Completion Date | % | ³ 90 | 96.2 | |||||
First Call Resolution | % | ³ 82.5 | 82.9 | |||||
Estimated Time for Restoration—Blue Sky Days | % | ³ 55 | 59.5 | |||||
Customer Appointments | % | ³ 95 | 98.7 | |||||
Footnote:
The weightingspayout relative to target was determined based on the number of key operating objectives indicators achieved and the weighting earned for each of Con Edison of New York’s, Orange & Rockland’s, Clean Energy Businesses’ and Con Edison Transmission’s “operating objectives” component were determined based onas indicated in the following scales:table below.
Performance Indicators Achieved | Weighting Hoglund, | Weighting Earned Ivey(1) | Payout Relative to Target | |||
20/20 | 44% | 50% | 200% | |||
(Target) 16/20 | 22% | 25% | 100% | |||
£ 12/20 | 0% | 0% | 0% |
| Payout Relative to Target(1) | Key Operating Objectives Indicators Achieved | Weight | Weight | |||||||||||||||||||
| Con Edison of New York | Orange & Rockland | Key Operating Objectives Indicators Achieved | Clean Energy Businesses | Clean Energy Businesses | Con Edison Transmission | |||||||||||||||||
| McAvoy, Hoglund, and Donnley | Cawley | McAvoy, Hoglund, and Donnley | Sanchez | McAvoy, Hoglund, and Donnley | Noyes | McAvoy, and Donnley | ||||||||||||||||
| (%) | (#) | (%) | (%) | (%) | (%) | (#) | (%) | (%) | (%) | |||||||||||||
Maximum | 200 | 20/20 | 44 | 50 | 2 | 50 | 10/10 | 2 | 50 | 2 | ||||||||||||
Target | 100 | 16/20 | 22 | 25 | 1 | 25 | 8/10 | 1 | 25 | 1 | ||||||||||||
Minimum | 0 | £ 12/20 | 0 | 0 | 0 | 0 | £ 5/10 | 0 | 0 | 0 | ||||||||||||
Actual | — | — | 33.0 | 37.5 | 1.8 | 43.8 | — | 2.0 | 50.0 | 2.0 | ||||||||||||
Footnote:
| (1) | The |
Orange & Rockland | Unit of Measure | Target | Actual | |||||||
Employee and Public Safety | ||||||||||
Injury/Illness Incidence Rate | Rate | £ 1.50 | 1.93 | |||||||
SignificantHigh-Hazard Injuries | # | 0 | 1 | |||||||
Motor Vehicle Collisions | # | £ 44 | 41 | |||||||
System Safety—Operating Errors | # | £ 30 | 10 | |||||||
Damage Prevention | Rate | £ 2.5 | 1.77 | |||||||
Environment and Sustainability | ||||||||||
PCB Transformer Removals | # | ³ 35 | 35 | |||||||
Reduce Customer Emissions (through Energy Efficiency MWh Reductions) | # | ³ 19,300 | 22,159 | |||||||
Reduce Customer Emissions (throughOil-to-Gas Conversions) | # | ³ 220 | 223 | |||||||
Solar Connection— Initial Screening Coordinated Review | % % | | ³ 90 ³ 80 |
| | 100.0 100.0 |
| |||
Operational Excellence | ||||||||||
Outage Frequency | # | £ 1.20 | 0.88 | |||||||
Outage Duration | # | £ 115.5 | 105.1 | |||||||
Gas Leak Response | % | ³ 85 | 89.2 | |||||||
Gas Leak Backlog | # | £ 40 | 15 | |||||||
Cyber Security | # | 0 | 0 | |||||||
Physical Security | # | 0 | 0 | |||||||
Customer Experience | ||||||||||
Customer Service Appointments Kept | % | ³ 95 | 95.5 | |||||||
New Business Electric Services Energized | % | ³90 | 98 | |||||||
PSC Transactional Survey | % | ³ 91 | 96.2 | |||||||
AMI Implementation | % | 100 | 100 | |||||||
Storm Scorecard | # | ³ 90 | 91.1 | |||||||
Footnote:objective indicators.
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 | |||
20/20 | 2% | 50% | 200% | |||
(Target) 16/20 | 1% | 25% | 100% | |||
£ 12/20 | 0% | 0% | 0% |
Footnote:
|
Achievement of 20172020 Financial and Operating Objectives
The following table shows, for each Named Executive Officer, the target weightingsweight assigned to the financial and operating objectives and the weightings earned based on achieving those objectives.
McAvoy, Hoglund, and Moore | Ivey | Cawley | ||||||||||||||||||||||
| Target | Earned | Target | Earned | Target | Earned | |||||||||||||||||||
Financial Objectives | ||||||||||||||||||||||||
Adjusted Net Income | ||||||||||||||||||||||||
Adjusted Company Net Income | 50 | % | 67.5 | % | — | — | — | — | ||||||||||||||||
Adjusted Regulated Net Income | — | — | 50 | % | 57.0 | % | — | — | ||||||||||||||||
Adjusted Con Edison of New York Net Income | — | — | — | — | 10 | % | 11.3 | % | ||||||||||||||||
Adjusted Orange & Rockland Net Income | — | — | — | — | 40 | % | 54.4 | % | ||||||||||||||||
Other Financial Performance | ||||||||||||||||||||||||
Con Edison of New York Operating Budget | 12 | % | 15.0 | % | 15 | % | 18.8 | % | — | — | ||||||||||||||
Con Edison of New York Capital Budget | 10 | % | 10.7 | % | 10 | % | 10.7 | % | — | — | ||||||||||||||
Orange & Rockland Operating Budget | 1 | % | 1.2 | % | — | — | 25 | % | 30.0 | % | ||||||||||||||
Clean Energy Businesses Operating Budget | 1 | %�� | 1.0 | % | — | — | — | — | ||||||||||||||||
Con Edison Transmission Operating Budget | 1 | % | 2.0 | % | — | — | — | — | ||||||||||||||||
Operating Objectives | ||||||||||||||||||||||||
Con Edison of New York | 22 | % | 16.5 | % | 25 | % | 18.8 | % | — | — | ||||||||||||||
Orange & Rockland | 1 | % | 1.5 | % | — | — | 25 | % | 37.5 | % | ||||||||||||||
Clean Energy Businesses | 1 | % | 2.0 | % | — | — | — | — | ||||||||||||||||
Con Edison Transmission | 1 | % | 1.0 | % | — | — | — | — | ||||||||||||||||
Total | 100 | % | 118.4 | % | 100 | % | 105.3 | % | 100 | % | 133.2 | % | ||||||||||||
McAvoy, Hoglund, and Donnley | Cawley | Sanchez | Noyes | |||||||||||||||||||||||||||||
| Weight | Weight | Weight | Weight | |||||||||||||||||||||||||||||
| Target | Earned | Target | Earned | Target | Earned | Target | Earned | |||||||||||||||||||||||||
| (%) | (%) | (%) | (%) | (%) | (%) | (%) | (%) | |||||||||||||||||||||||||
| Financial Objectives | ||||||||||||||||||||||||||||||||
Adjusted Net Income | ||||||||||||||||||||||||||||||||
§ Company Adjusted Net Income | 50 | 26.5 | — | — | — | — | 10 | 5.3 | ||||||||||||||||||||||||
§ Regulated Adjusted Net Income | — | — | 50 | 16.0 | — | — | — | — | ||||||||||||||||||||||||
§ Con Edison of New York Adjusted Net Income | — | — | — | — | 10 | 2.7 | — | — | ||||||||||||||||||||||||
§ Orange & Rockland Adjusted Net Income | — | — | — | — | 40 | 45.6 | — | — | ||||||||||||||||||||||||
§ Clean Energy Businesses Adjusted Net Income | — | — | — | — | — | — | 40 | 70.5 | ||||||||||||||||||||||||
Other Financial Performance | ||||||||||||||||||||||||||||||||
§ Con Edison of New York Operating Budget | 12 | 15.6 | 15 | 19.5 | — | — | — | — | ||||||||||||||||||||||||
§ Con Edison of New York Capital Budget | 10 | 9.3 | 10 | 9.3 | — | — | — | — | ||||||||||||||||||||||||
§ Orange & Rockland Operating Budget | 1 | 1.0 | — | — | 25 | 25.0 | — | — | ||||||||||||||||||||||||
§ Clean Energy Businesses Adjusted EBITDA | 1 | 0.9 | — | — | — | — | 25 | 23.0 | ||||||||||||||||||||||||
§ Con Edison Transmission Operating Budget | 1 | 2.0 | — | — | — | — | — | — | ||||||||||||||||||||||||
| Operating Objectives | ||||||||||||||||||||||||||||||||
§ Con Edison of New York | 22 | 33.0 | 25 | 37.5 | — | — | — | — | ||||||||||||||||||||||||
§ Orange & Rockland | 1 | 1.8 | — | — | 25 | 43.8 | — | — | ||||||||||||||||||||||||
§ Clean Energy Businesses | 1 | 2.0 | — | — | — | — | 25 | 50.0 | ||||||||||||||||||||||||
§ Con Edison Transmission | 1 | 2.0 | — | — | — | — | — | — | ||||||||||||||||||||||||
TOTAL | 100 | 94.1 | 100 | 82.3 | 100 | 117.1 | 100 | 148.8 | ||||||||||||||||||||||||
54 | Consolidated Edison, Inc. Proxy Statement |
| Compensation Discussion and Analysis |
20172020 Annual Incentive Awards
In February 2018,2021, 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 the 20172020 annual incentive awards. The Compensation Committee did not exercise discretion to adjust (upward or downward) the annual incentive award to be paid to each Named Executive Officer.
The following table shows the calculation of the 20172020 annual incentive awards for each Named Executive Officer.
| Name & Principal Position | Base Salary | × | Target Percentage | × | Weighting Earned | = | 2017 Award | |||||||||||||||||||||
John McAvoy Chairman, President and Chief Executive Officer | $ | 1,260,000 | 125 | % | 118.4 | % | $ | 1,864,800 | ||||||||||||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | $ | 744,700 | 50 | % | 118.4 | % | $ | 440,900 | ||||||||||||||||||||
Craig Ivey President, Con Edison of New York | $ | 821,200 | 80 | % | 105.3 | % | $ | 691,800 | ||||||||||||||||||||
Elizabeth D. Moore Senior Vice President and General Counsel | $ | 627,800 | 50 | % | 118.4 | % | $ | 371,700 | ||||||||||||||||||||
Timothy P. Cawley President and Chief Executive Officer, Orange & Rockland | $ | 422,000 | 80 | % | 133.2 | % | $ | 449,700 | ||||||||||||||||||||
| Base Salary | × | Target Percentage | × | Weight Earned | = | 2020 Award | |||||||||||||||||||||||||||||
| ($) | (%) | (%) | ($) | ||||||||||||||||||||||||||||||||
Timothy P. Cawley | 750,000(1) | 80 | 82.3 | 493,800 | |||||||||||||||||||||||||||||||
Robert Hoglund | 814,000 | 75 | 94.1 | 574,500 | |||||||||||||||||||||||||||||||
Deneen L. Donnley | 612,000 | 70 | 94.1 | 403,100 | |||||||||||||||||||||||||||||||
Robert Sanchez | 515,000 | 80 | 117.1 | 482,500 | |||||||||||||||||||||||||||||||
Mark Noyes | 440,000 | 80 | 148.8 | 523,800 | |||||||||||||||||||||||||||||||
John McAvoy | 1,380,000 | 125 | 94.1 | 1,623,200 | |||||||||||||||||||||||||||||||
| (1) | ||
Reflects the base salary in effect for Mr. Cawley as President of Con Edison of New York, Inc.
|
Long-Term Incentive Compensation
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
| § | recommendations from the Chief Executive Officer for each of the other Named Executive Officers; |
|
| § | the level of long-term incentive compensation compared to key executives in the Company’s compensation peer group companies. (See |
Performance-Based Equity Awards
It is the Compensation Committee’s practice in the first quarter of each year to approve performance-based equity awards 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 stockholdersstockholders’ interests by directly linking pay to the achievement of strong, sustained long-term financial and operating performance.
The performance units awarded to the 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 unit awarded, subject to the satisfaction of certainpre-established long-term performance objectives.measures. Named Executive Officers may elect to defer the receipt of the cash value of the award into the Company’s deferred income plan and/or to defer the receipt of the shares. Dividends are not paid and do not accrue on the units duringuntil after the vesting period.
The number of performance units awarded toCompensation Committee has approved the Named Executive Officers in 2017 for the 2017-2019 performance period is shown in the Grants of Plan-Based Awards Table
on page 48. Payouts of performance units, if any, are calculated by anon-discretionary formula as follows:
Award X 30% X Adjusted 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 units under the long term incentive plan. The target award of performance units is a percentage of base salary that varies based on each Named Executive Officer’s position as follows:
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
“Adjusted EPS Percentage” is the payout relative to target over the performance period beginning January 1, 2017 and ending December 31, 2019 based on attainmentresults 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 2017.pre-established objectives.
Three-Year Cumulative Adjusted EPS (weighting 30%)(1) | ||||||
Performance Relative to Target | Performance Goal | Payout Relative to Target(2) | ||||
³ 112% | ³$13.92 | 200% | ||||
(Target) 100% | $12.43 | 100% | ||||
< 88% | < $10.94 | 0% | ||||
Footnotes:
Consolidated Edison, Inc. Proxy Statement | 55 |
|
“Operating Objectives Percentage”The target award of performance units awarded to each of the Named Executive Officers in 2020 for the performance period that began on January 1, 2020 and ends December 31, 2022 is shown in the payout relativetable below.
| Base Salary as of December 31, 2019 | x
| 2020 Target Award as a Percentage of Base Salary | = | 2020 Target Award | ÷ | Share Price(1) | = | 2020 Target Award of Performance Units (rounded) | |||||||||||||||||||||||||||||||||||||
| ($) | (%) | ($) | ($) | (#) | |||||||||||||||||||||||||||||||||||||||||
Timothy P. Cawley | 630,400 | 250 | 1,576,000 | 88.52 | 17,800 | ||||||||||||||||||||||||||||||||||||||||
Robert Hoglund | 790,000 | 200 | 1,580,000 | 88.52 | 17,800 | ||||||||||||||||||||||||||||||||||||||||
Deneen L. Donnley | 600,000 | 150 | 900,000 | 88.52 | 10,200 | ||||||||||||||||||||||||||||||||||||||||
Robert Sanchez | 459,600 | 200 | 919,200 | 88.52 | 10,400 | ||||||||||||||||||||||||||||||||||||||||
Mark Noyes | 391,000 | 200 | 782,000 | 88.52 | 8,800 | ||||||||||||||||||||||||||||||||||||||||
John McAvoy | 1,340,000 | 500 | 6,700,000 | 88.52 | 75,700 | ||||||||||||||||||||||||||||||||||||||||
Footnote:
| (1) | The share price is determined by taking 50% of the stock price excluding dividends and 50% of the Total Shareholder Return. The Total Shareholder Return is comprised of Monte Carlo Simulations which include volatility, risk-free rate of return, dividend yield, and grant price. Volatility is determined using daily closing stock prices over the period equal to the remaining term of the awards. The risk-free free rate of return is the U.S. Department of the Treasury (“U.S. Treasury”) bill rate for the length of time equal to the remaining term of the awards. |
The actual number of performance units that may be awarded to each Named Executive Officer for the 2020–2022 performance period may vary, from zero to a maximum of 190% of the 2020 target award, based on the achievement of three performance measures over the performance period beginning January 1, 2017 and ending December 31, 2019 based onas shown in the attainmentchart below. The maximum payout of the 2020 performance units (if any) represents the weighted average of each of the performance measures.
| Target Weight | Maximum Payout Relative to Target | Maximum Weighted Result | |||||||||
| (%) | (%) | (%) | ||||||||||
Shareholder Return | 50 | 200 | 100 | |||||||||
Adjusted EPS | 30 | 200 | 60 | |||||||||
Operating Objectives | 20 | 150 | 30 | |||||||||
TOTAL | 190 | |||||||||||
The Compensation Committee (i) determines the actual weighted result at the end of the 2020–2022 performance period and (ii) may exercise negative discretion to adjust the actual performance unit awards to be paid to a Named Executive Officer. The minimum, target, and maximum number of performance units that may be awarded to the Named Executive Officers for the 2020–2022 performance period are shown in the “Grants of Plan-Based Awards Table” on page 69.
“Shareholder Return.” A 50% target weight is assigned to the cumulative change in the Company’s operating performance goals,total shareholder return measure, set forth in the following table that were established in the first quarter of 2017. These performance goals further long-term reliability and foster environmental sustainability.
| Operating Objectives | Performance Goals(1) | |||||||||||
| Threshold | Target | Maximum | ||||||||||
Advanced Meter Infrastructure Work Plan | < 5 | 7 | 9 | |||||||||
Cyber Security Work Plan | < 3 | 4(2) | 5 | |||||||||
Gas Main Replacement (Number of Miles Completed) | < 279 | 317 | ³ 355 | |||||||||
Growth in Renewable Portfolio (MW (AC)) (Weighting 5.0%) | < 110 | 220(3) | ³ 330 | |||||||||
Footnotes:
“Shareholder Return Percentage” is the payout relative to target based on the cumulative change in Company total shareholder return over the performance period beginning January 1, 2017 and ending December 31, 2019below, compared with the Company’s compensation peer group as constituted on the date the performance units were granted in 2017.2020. In the event that the companies that make upin 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 unit 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
56 | Consolidated Edison, Inc. Proxy Statement |
| Compensation Discussion and Analysis |
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 levellevels of performance units will beare earned as follows:
Shareholder Return | ||||
| Company Percentile | Payout Relative to Target(1) | |||
| Rating | (%) | |||
| 200 | |||
| 100 | |||
| ||||
| | |||
Footnote:
| Below 25th | 0 |
Footnote:
| (1) | Interpolated for actual performance between |
The actual payout of the performance unit awards“Adjusted EPS.” A 30% target weight is assigned to the Named Executive Officers forCompany’s three-year cumulative Adjusted EPS performance measure, set forth in the 2017-2019table below, that was established in the first quarter of 2020. The Compensation Committee believes that Adjusted EPS furthers the achievement of strong, sustained long-term financial performance. The levels of performance period may vary from zero to a maximum of 190% of such award, based on actual performance over the performance period. The maximum payout of the performance unit awards represents the weighted average under each of the performance objectivesunits are earned 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 | % | ||||||||||
| Three-Year Cumulative Adjusted EPS(1) | ||||
| Performance Goal | Payout Relative to Target(2) | |||
| ($) | (%) | |||
Maximum | ³ 15.05 | 200 | ||
Target | 13.44 | 100 | ||
Minimum | < 11.83 | 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. Information on how the Company calculates Adjusted EPS is disclosed in the “Non-GAAP Financial Measures” section (on pages 11 through 13) of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020; It is referred to as adjusted earnings per share. |
| (2) | Interpolated for actual performance between minimum, target, and maximum performance. |
“Operating Objectives.” A 20% target weight is assigned to the Company’s operating objectives measure, set forth in the table below, that was established in the first quarter of 2020. The Compensation Committee may exercise negative discretion to adjustbelieves that the actualoperating objectives further long-term reliability and foster environmental sustainability. The levels of performance unit awards to be paid to a Named Executive Officer.units are earned as follows:
| Operating Objectives (5% weight for each objective below) | Performance Goals | ||||||||||||||
| Minimum | Target | Maximum | |||||||||||||
Customer Service System Work Plan Milestones/Tasks | < 6 | 8 | 10 | ||||||||||||
Cyber Security Work Plan Milestones/Tasks | < 3 | 4(2) | 5 | ||||||||||||
Clean Energy and Electrification Work Plan Milestones/Tasks | < 2 | 3(2) | 5 | ||||||||||||
Growth in Renewable Portfolio (MW (AC))(1) | < 52.5 | 105(3) | ³ 157.5 | ||||||||||||
Payout Relative to Target (%) | 0 | 100 | 150 | ||||||||||||
| 57 |
|
Footnotes:
| (1) | Payout for Growth in Renewable Portfolio is interpolated for actual performance between minimum, target, and maximum performance. |
| (2) | The Compensation Committee approves the annual work plan. Performance results are based on average achievement over the three-year period. The target approved by the Compensation Committee for 2020 applies to the first year of the three-year performance period for the 2020 performance units for both Cyber Security and Clean Energy and Electrification Work Plans. For Cyber Security only, the work plan represents the second year of the three-year performance period for the 2019 performance units, and the third year of the three-year performance period for the 2018 performance units. |
| (3) | The Compensation Committee approves annual plan levels on a three-year cumulative basis. The target approved by the Compensation Committee for 2020 applies to the first year of the three-year performance period for the 2020 performance units, the second year of the three-year performance period for the 2019 performance units, and the third year of the three-year performance period for the 2018 performance units. |
Calculation of Payout of 20152018 Performance Unit Awards
Following the end of the relevant performance period for each outstanding performance unit, award, the Compensation Committee reviews the Company’s achievement of the performance goals.measures. The Compensation Committee evaluates and approves the Company’s performance relative to target and pays out the performance units in either cash and/or shares of Company Common Stock (as elected by the Named Executive Officer), based on the attainment of the performance goals.measures. In addition, each Named Executive Officer may elect to defer the receipt of the cash value of the performance units into the Company’s deferred income plan and/or to defer the receipt of the shares.
For the 2015-20172018-2020 performance period, payouts of the performance units for each of the Named Executive Officers except Mr. Noyes were calculated based on the followingnon-discretionary formula:
Award X 30% X Adjusted EPS Percentage
plus
Award X 20% XThe performance units received by Mr. Noyes for the 2018-2020 performance period were based on a non-discretionary formula that did not include weighted results for Operating Objectives Percentage
plus
Award Xor Adjusted EPS. For Mr. Noyes, his 2018-2020 performance award was based on 50% Xweighted result for Shareholder Return Percentageand 50% weighted result for the 3-year average calculated payouts of his Annual Incentive Plan results.
“Award” was the annual award of performance units under the long term incentive plan. The target award of performance units wasas a percentage of base salary that varies based onand the target number of performance units awarded to each of the Named Executive Officer’s position as follows:Officers in 2018 for the 2018–2020 performance period are shown in the table below.
| 2018 Target Award as a Percentage of Base Salary | 2018 Target Award | |||||||||
| (%) | (#) | |||||||||
Timothy P. Cawley(1) | 250 | 18,100 | ||||||||
Robert Hoglund | 200 | 18,000 | ||||||||
Deneen L. Donnley(2) | — | — | ||||||||
Robert Sanchez | 200 | 10,400 | ||||||||
Mark Noyes(3) | 100 | 4,500 | ||||||||
John McAvoy | 475 | 72,400 | ||||||||
Footnotes:
| (1) |
| |||
| ||||
| ||||
| ||||
| ||||
|
“Adjusted EPS Percentage” was the payout relative to target over the performance period that began January 1, 2015 and ended December 31, 2017 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 2015.
Three-Year Cumulative Adjusted EPS (weighting 30%) | ||||||
Performance Relative to Target | Performance Goal | Payout Relative to Target(1) | ||||
³ 112% | ³ $13.48 | 200% | ||||
(Target) 100% | $12.04 | 100% | ||||
< 88% | < $10.60 | 0% | ||||
ACTUAL | $12.19(2) | 110.4% | ||||
Footnotes:
“Operating Objectives Percentage” was the payout relative to target over the performance period that began January 1, 2015 and ended December 31, 2017 based on the attainment of the Company’s operating performance goals, set forth in the following table.
| Operating Objectives | Performance Goals | Achievement/ Payout Relative to Target(1) | ||||||||||||||
| Threshold | Target | Maximum | ||||||||||||||
2015-2017 | ||||||||||||||||
Physical Security |
| < 3
|
|
| 4
|
|
| 5
|
| 5 / 150.0% | ||||||
Gas Main Replacement |
| < 174
|
|
| 205
|
|
| ³ 236
|
|
| 234 / 146.6%
|
| ||||
SF6 Gas Emissions |
| > 49,220
|
|
| 42,800
|
|
| £ 36,380
|
|
| 31,006 / 150.0%
|
| ||||
Opacity Occurrences |
| > 197
|
|
| 171
|
|
| £ 145
|
|
| 76 / 150.0%
|
| ||||
58 |
|
|
Performance Goals | Achievement/ Payout Relative to Target(1) | |||||||||||||||||||
| Operating Objectives | Threshold | Target | Maximum | |||||||||||||||||
2015-2017 (individually) |
| |||||||||||||||||||
Growth in Renewable for each year) |
| |||||||||||||||||||
| 2015 | < 84.5 | 169 | ³ | 253.5 | 302 | |||||||||||||||
| 2016 | < 127.5 | 255 | ³ | 382.5 | 372 | |||||||||||||||
| 2017 | < 110.0 | 220 | ³ | 330.0 | 264 | |||||||||||||||
Cumulative |
| < 322.0 | 644 | ³ | 966.0 | 938 / 146% | ||||||||||||||
Cyber Security(3) (Weighting 2.5% for 2015, 5.0% for 2016 and 5.0% for 2017) |
| |||||||||||||||||||
| 2015 | < 4 | 5 | 6 | 6 / 150% | ||||||||||||||||
| 2016 | < 5 | 6 | 7 | 7 / 150% | ||||||||||||||||
| 2017 | < 3 | 4 | 5 | 5 / 150% | ||||||||||||||||
| Average | 150% | |||||||||||||||||||
TOTAL | 149% | |||||||||||||||||||
Footnotes:
| (2) | Ms. Donnley was not an employee of the |
| (3) | Mr. Noyes was President of Clean Energy Businesses at the time the 2018 performance units were awarded. Mr. Noyes assumed the position of President and |
“Shareholder Return PercentageReturn.” For each of the Named Executive Officers, a 50% target weight was the payout relativeassigned to target based on the cumulative change in Companythe Company’s total shareholder return overmeasure, set forth in the performance period that began January 1, 2015 and ended December 31, 2017table below, compared with the Company’s compensation peer group as
constituted on the date the performance units were granted in 2015. 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 end2018.
| Shareholder Return | ||||||
Company Percentile Rating | Payout Relative to Target(1) | Weight | ||||
| (%) | (%) | |||||
Maximum | 90th or greater | 200 | 100 | |||
Target | 50th | 100 | 50 | |||
Minimum | 25th | 25 | 25 | |||
| Below 25th | 0 | 0 | ||||
Actual | 16th percentile | 0 | 0 | |||
Footnote:
| (1) | Interpolated for actual performance between minimum, target, and maximum performance. |
“Adjusted EPS.” For each of the Named Executive Officers except Mr. Noyes, a 30% target weight was assigned to the Company’s three-year cumulative Adjusted EPS performance period, that company’s total shareholder returns was not used to calculatemeasure, set forth in the total shareholder return portion of the performance unit awards.table below.
The level of performance units earned was as follows:
| Three-Year Cumulative Adjusted EPS | ||||||||||||||||
Performance Relative to Target | Performance Goal | Payout Relative to Target(1) | Weight | |||||||||||||
| (%) | ($) | (%) | (%) | |||||||||||||
Maximum | ³ 112 | ³ 14.80 | 200 | 60 | ||||||||||||
Target | 100 | 13.21 | 100 | 30 | ||||||||||||
Minimum | < 88 | < 11.62 | 0 | 0 | ||||||||||||
Actual | 97.6 | 12.89(2) | 84.9 | 25.5 | ||||||||||||
Footnotes:
| (1) | Interpolated for actual performance between minimum, target, and maximum performance. |
| (2) | Excludes effects of the Hypothetical Liquidation at Book Value and net mark-to-market accounting of the Clean Energy Businesses. |
Consolidated Edison, Inc. | ||
| ||
| ||
| ||
| ||
| 59 |
| Compensation Discussion and Analysis |
Footnote:
“Operating Objectives.” For each of the Named Executive Officers except Mr. Noyes, a 20% target weight was assigned to the Company’s operating objectives measure, set forth in the table below.
| Performance Goals | Achievement Relative to Target(1) | Payout Relative to Target | |||||||||||||||||||||||||||||||||
| Operating Objectives | Minimum | Target | Maximum | ||||||||||||||||||||||||||||||||
| 2018-2020 (each 5% weight) | (#) | (#) | (#) | (#) | (%) | (%) | |||||||||||||||||||||||||||||
Advanced Metering Infrastructure Work Plan |
| ||||||||||||||||||||||||||||||||||
| < 7 | 9 | 11 | 11 | 150 | 7.5 | ||||||||||||||||||||||||||||||
Cyber Security(2) |
| ||||||||||||||||||||||||||||||||||
| 2018 | < 4 | 5 | 6 | 6 | 150 | — | |||||||||||||||||||||||||||||
| 2019 | < 3 | 4 | 5 | 5 | 150 | — | |||||||||||||||||||||||||||||
| 2020 | < 3 | 4 | 5 | 5 | 150 | — | |||||||||||||||||||||||||||||
Average | — | — | — | — | 150 | 7.5 | |||||||||||||||||||||||||||||
Gas Main Replacement (Con Edison of New York and Orange & Rockland) Number of Miles Completed |
| ||||||||||||||||||||||||||||||||||
| < 298 | 334 | ³ 370 | 329 | 93.4 | 4.7 | ||||||||||||||||||||||||||||||
Growth in Renewable Portfolio (MW (AC))(3) |
| ||||||||||||||||||||||||||||||||||
| 2018 | < 125.0 | 250 | ³ 375.0 | 252 | — | — | |||||||||||||||||||||||||||||
| 2019 | < 22.0 | 44 | ³ 66.0 | 54 | — | — | |||||||||||||||||||||||||||||
| 2020 | < 52.5 | 105 | ³ 157.5 | 185 | — | — | |||||||||||||||||||||||||||||
| Cumulative | < 199.5 | 399 | ³ 598.5 | 491 | 123 | 6.2 | |||||||||||||||||||||||||||||
ACTUAL |
| — | — | — | — | 129.5 | 25.9 | ||||||||||||||||||||||||||||
Footnotes:
| (1) | Payouts for Gas Main Replacement and Growth in Renewable Portfolio were interpolated for actual performance between |
| (2) | The Compensation Committee approved annual work plans in 2018, 2019, and 2020. The performance results are based on the average achievement at the end of the three-year period. |
| (3) | The Compensation Committee approved annual work plans in 2018, 2019, and 2020. The performance results are based on the cumulative achievement over the three-year period. |
“Incentive Plan.” For Mr. Noyes, a 50% target weighting was assigned based on the 3-year average calculated payouts under the Clean Energy Businesses annual incentive plan for 2018 and 2019 and the Company’s annual incentive plan for 2020.
| 2018 | 2019 | 2020 | Average | Target Weight | Weighted Result | |||||
| (%) | (%) | (%) | (%) | (%) | (%) | |||||
146.0 | 127.7 | 148.8 | 140.5 | 50 | 70.3 |
60 | Consolidated Edison, Inc. Proxy Statement |
| Compensation Discussion and Analysis |
For each of the Named Executive Officers except Mr. Noyes, the payout of the performance unit awardsunits represents the weighted average of the percentage payout under each of the performance objectives as follows:
| Maximum Percentage Payout | Target Weight | Payout Relative to Target | Weighted Result | Payout Relative to Target | Target Weight | Weighted Result | |||||||||||||||||||||||||
| (%) | (%) | (%) | |||||||||||||||||||||||||||||
Shareholder Return | 0 | 50 | 0 | ||||||||||||||||||||||||||||
Adjusted EPS | 200 | % | 30 | % | 110.4 | % | 33.1 | % | 84.9 | 30 | 25.5 | ||||||||||||||||||||
Operating Objectives | 150 | % | 20 | % | 149 | % | 29.8 | % | 129.5 | 20 | 25.9 | ||||||||||||||||||||
Shareholder Return | 200 | % | 50 | % | 170 | % | 85.0 | % | |||||||||||||||||||||||
TOTAL | 190 | % | 147.9 | % | — | 100 | 51.4 | ||||||||||||||||||||||||
For Mr. Noyes, the payout of the performance units represents the weighted average of the percentage payout under each of the performance objectives as follows:
| Payout Relative to Target | Target Weight | Weighted Result | |||||||||||||
| (%) | (%) | (%) | |||||||||||||
Shareholder Return | 0 | 50 | 0 | ||||||||||||
Incentive Plan | 140.5 | 50 | 70.3 | ||||||||||||
TOTAL | — | 100 | 70.3 | ||||||||||||
The table below shows, for each Named Executive Officer, the calculation of the payout with respect to the performance units for the 2018-2020 performance period. The Compensation Committee did not exercise negative discretion to adjust the actual performance unit awards to be paid to aany Named Executive Officer.
2018 Target (in Units) | Weighted Result | 2018 Actual Award Paid in 2021 | |||||||||||||
| (#) | (%) | (#) | |||||||||||||
Timothy P. Cawley | 18,100 | 51.4 | 9,303 | ||||||||||||
Robert Hoglund | 18,000 | 51.4 | 9,252 | ||||||||||||
Deneen L. Donnley | — | — | — | ||||||||||||
Robert Sanchez | 10,400 | 51.4 | 5,346 | ||||||||||||
Mark Noyes | 4,500 | 70.3 | 3,164 | ||||||||||||
John McAvoy(1) | 72,400 | 51.4 | 37,214 | ||||||||||||
Footnote:
| (1) | Mr. McAvoy was the President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York until his retirement on December 28, 2020. He currently serves as Non-executive Chairman of the Board of the Company and Con Edison of New York. As per the terms of the Company’s long term incentive plan, Mr. McAvoy is eligible for a full award subject to the achievement of the performance measures. |
Total Actual Direct Compensation
The Company’s executive compensation program is primarily performance based and seeks to align the performance goals with our overall business strategy and objectives. The information shown below supplements the information in the “Summary Compensation Table” on pages 67 through 68. The Summary Compensation Table includes several items that reflect accounting or actuarial assumptions rather than compensation actually received by the Named Executive Officers for the performance periods that ended on December 31, 2020. For example, the Summary Compensation Table combines pay actually received or earned (base salary and annual cash incentive awards) with the accounting value of equity compensation granted in 2020, which may be realized in the future or not at all. The Summary Compensation Table is also required to include the change in pension values that are based on actuarial assumptions and not compensation realized until retirement.
| 61 |
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The following table shows, for eachand bar graphs below present elements of pay that Timothy P. Cawley, John McAvoy, and the other Named Executive Officer,Officers (as a group) actually received (base salary and all other compensation) plus the calculationgross amounts earned under the annual incentive plan for 2020, and upon the vesting of the payout with respect to the performance units for the 2015–20172018-2020 performance period:period, as shown in the “Option Exercises and Stock Vested Table” on page 72.
| Name & Principal Position | 2015 Award (in Units) | Weighted Result | 2015-2017 Payout (in Units) Total | |||||||||
John McAvoy Chairman, President and Chief Executive Officer | 68,200 | 147.9 | % | 100,868 | ||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | 21,700 | 147.9 | % | 32,094 | ||||||||
Craig Ivey President, Con Edison of New York | 29,167 | (1) | 147.9 | % | 43,138 | |||||||
Elizabeth D. Moore Senior Vice President and General Counsel | 13,700 | 147.9 | % | 20,262 | ||||||||
Timothy P. Cawley President and Chief Executive Officer, Orange & Rockland | 12,400 | 147.9 | % | 18,340 | ||||||||
| Year | Base Salary | Annual Cash Incentive | Long-term Stock Incentives | All Other Compensation(1) | Total | |||||||
| (#) | ($) | ($) | ($) | ($) | ($) | |||||||
Timothy P. Cawley(2) | 2020 | 745,242 | 493,800 | 651,675 | 43,762 | 1,934,479 | ||||||
John McAvoy(3) | 2020 | 1,362,292 | 1,623,200 | 2,606,840 | 71,954 | 5,664,286 | ||||||
All Other NEOs (as a group) | 2020 | 2,365,216 | 1,983,900 | 1,244,228 | 445,855 | 6,039,199 |
Footnotes:
| (1) | Please refer to |
| (2) | Mr. Cawley’s pay elements reflect his position as President, Con Edison of New York for 2020. Mr. Cawley became President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York effective December 29, 2020, upon Mr. McAvoy’s retirement. |
| (3) | Mr. McAvoy’s pay elements reflect his position as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York until his retirement on December 28, 2020. He serves as Non-executive Chairman of the Board of the Company and Con Edison of New York. |
62 | Consolidated Edison, Inc. Proxy Statement |
| Compensation Discussion and Analysis |
RETIREMENT AND OTHER BENEFITSRetirement and Other Benefits
The Company provides employees with a range of retirement and welfare benefits that reflectsreflect 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 retirement benefits under certain of the following Company plans depending on their date of hire and subsequent elections:
| § | tax-qualified defined benefit pension plan and its related non-qualified supplemental retirement income plan (collectively, the “defined benefit pension plans”) (closed to new and rehired management employees as of December 31, 2016); |
| § | tax-qualified defined contribution pension plan and its related non-qualified defined contribution supplemental pension plan (collectively, the “defined contribution pension plans”); and |
| § | tax-qualified savings plan and its related non-qualified deferred income plan (collectively, the “savings plans”). |
Named Executive Officers are also eligible for additional benefits under the following Company plans:
Tax-qualified retirement plan and its relatednon-qualified supplemental retirement income plan (collectively, the “retirement plans”);
| § | stock purchase plan; and |
Tax-qualified savings plan and its relatednon-qualified deferred income plan;
Stock purchase plan; and
Health and welfare plans.
| § | health and welfare plans. |
The Company maintains atax-qualified retirementdefined benefit pension plan that covers substantially all of the Company’s employees.employees, including some of the Named Executive Officers, hired before 2017. All management employees, including some of the Named Executive Officers, whose benefits under the pension plan are limited by the Internal Revenue Code, are eligible to participate in anon-qualified
supplemental retirement income plan. The retirement plans and the estimated retirementpension benefits payable to thefor those Named Executive Officers (determined on a present value basis) under the pension plans are described in the “DefinedBenefit Pension Benefits Table” and the narrative to the “Defined BenefitPension Benefits Table on pages 51 to 52. All changes to
the retirement plans for plan year 2017 with respect to the Named Executive Officers are described in the narrative to the Pension Benefits Table” on page 51.74.
As required by Securities and Exchange CommissionSEC rules, the “Change in Pension Value andNon-Qualified Deferred Compensation Earnings” column of the “Summary Compensation Table” on page 46pages 67 through 68 sets forth the year-over-year change in the actuarial present value of the accumulated pension benefits for each Named Executive Officer under the retirementdefined benefit pension 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 benefit 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 in 2017.2020. Instead, the amounts represent changes in the estimated retirementpension benefits payable to the Named Executive Officers based on the year-over-year difference between the amounts required to be disclosed in the “Defined Benefit Pension Benefits Table” on page 5274 as of December 31, 20172020 and the amounts reported in the “Pension BenefitsTable” in the 20172020 proxy statement on page 5465 as of December 31, 2016.2019.
ForThe change in the actuarial present value of the Company’s President and Chief Executive Officer and Con Edison of New York’s Chief Executive Officer, Mr. Cawley’s, accumulated pension benefit in 2020 was $4,696,808, which was primarily due to the decrease in the assumed discount rate from 3.35% to 2.55%.
The change in the actuarial present value of the Company’s former President and Chief Executive Officer and Con Edison of New York’s former Chief Executive Officer, Mr. McAvoy’s, accumulated pension benefit in 2020 was $6,390,264, which was primarily due to the decrease in the assumed discount rate from 3.35% to 2.55%.
The Company also maintains, effective as of January 1, 2017, a defined contribution pension formula within the tax qualified savings plan that, following the closure of the tax-qualified qualified defined benefit pension plan to new management participants, covers all new and rehired management employees who participateof the Company. Effective January 1, 2019, the Company established a supplemental defined contribution pension formula which covers all eligible management employees. All Company contributions allocated to the Named Executive Officers under the defined contribution pension formula and the supplemental defined contribution plan are included in the retirement plan and who were hired before January 1, 2001, including Messrs. McAvoy and Cawley, a “final average salary” formula“All Other Compensation” column of the “Summary Compensation Table” on pages 67 through 68.
Consolidated Edison, Inc. Proxy Statement | 63 |
|
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. 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 51.
The Company maintains atax-qualified savings plan that covers substantially all of the Company’s employees.employees, including the Named Executive Officers. All management employees, including the Named Executive Officers, whose benefits under the savings plan are limited bysubject to the compensation limit in the Internal Revenue Code, are eligible to participate in a deferred income plan, anon-qualified deferred compensation plan. The Internal Revenue Code compensation limit for 2020 was $285,000. Named Executive Officers may elect to defer a portion of their salary into the deferred income plan. The deferred income plan is described in the narrative to the “Non-Qualified Deferred Compensation Table” on page 53.76. All Company matching contributions allocated to the Named Executive Officers under the savings plan and credited under the deferred income plan are included in the “All Other Compensation” column of the “Summary Compensation TableTable” on page 46.pages 67 through 68.
Eligibility for Pension Plans and Savings Plan
Employees who participate inThe table below indicates the pension plans and savings plan, including theplans that each Named Executive Officers, may contribute up to 50% of their compensation on abefore-tax basis and/Officer participates in or anafter-tax basis, into their savings plan accounts. For participating employees whosewill accumulate retirement plan benefit isbenefits under based on the final average salary formula, including Messrs. McAvoydate of hire 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.subsequent elections.
Pursuant to the Internal Revenue Code, effective for 2017, the savings plan limits the “additions” that can be made to a participating employee’s account to $54,000 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 $270,000 of annual compensation may be taken into account in computing benefits under the savings plan.
| Defined Benefit Pension Plans | Defined Contribution Plans | |||||||||||||||||||||||||||||
| Final Average Pay Formula | Cash Balance Formula | Supplemental Retirement Income Plan | Thrift Savings Plan | Defined Contribution Pension Formula | Supplemental Defined Contribution Pension Formula | |||||||||||||||||||||||||
| Timothy P. Cawley | ● | ● | ● | |||||||||||||||||||||||||||
| Robert Hoglund | ● | ● | ● | ● | ● | |||||||||||||||||||||||||
| Deneen L. Donnley | ● | ● | ● | |||||||||||||||||||||||||||
| Robert Sanchez | ● | ● | ● | |||||||||||||||||||||||||||
| Mark Noyes | ● | ● | ● | |||||||||||||||||||||||||||
| John McAvoy | ● | ● | ● | |||||||||||||||||||||||||||
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 MtoNto the financial statements in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2017.2020.
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 toward the cost of most 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.basis. The Company also provides all employees with paidtime-off benefits, such as vacation and sick leave.
Perquisites and Personal Benefits
The 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 2017,2020, are set forth in the “All Other Compensation” column of the “Summary Compensation Table” on page 46:pages 67 through 68:
Supplemental health insurance;
| § | supplemental health insurance; |
Reimbursement for reasonable costs of financial planning; and
| § | reimbursement for reasonable costs of financial planning; and |
A company vehicle and, in the case of the Chief Executive Officer, a company vehicle and driver.
| § | a company vehicle and, in the case of the Chief Executive Officer, a company vehicle and driver. |
64 | Consolidated Edison, Inc. Proxy Statement |
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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 stockholder 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 described in footnotes (2) and (3) to the “Potential Payments Upon Termination of Employment or Change of Control” table on page 55.78. 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 “Potential Payments Upon Termination of Employment or Change of Control” table beginning on page 55.78.
STOCK OWNERSHIP GUIDELINESRisk Mitigation
The Company has stock ownership guidelines for senior officers, including the Named Executive Officers. TheFor 2020, the stock ownership guidelines for the Company’s Named Executive Officers arewere as follows:
| Multiple of Base Salary | |||||||
Timothy P. Cawley(1) | 3 × | ||||||
Robert Hoglund | 2 × | ||||||
Deneen L. Donnley | 1 × | ||||||
Robert Sanchez | 2 × | ||||||
Mark Noyes | 2 × | ||||||
John McAvoy(2) | 3 × | ||||||
Footnotes:
| (1) | Mr. Cawley’s ownership guideline reflects his new position as President and Chief Executive Officer of | ||||
| the Company and Chief Executive Officer of Con Edison of New York. Mr. Cawley’s ownership guideline was 2x as President, Con Edison of New York. |
| (2) | Mr. McAvoy’s ownership guideline reflects his position as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York until his retirement on December 28, 2020. He serves as Non-executive Chairman of the Board of the Company and Con Edison of New York. |
Officers of the Company subject to the guidelines have five years from January 1st1st after their appointment to one of the covered titles or promotionto achieve the guideline. Officers who are promoted to a position with a higher ownership requirement have five years from January 1st after their appointment to meet the guidelines.higher guideline. In January 2018,2021, it was determined that, as of December 31, 2017, these officers have2020, the Named Executive Officers either met their ownership milestonesguideline or are making reasonable progress toward their milestones.
The officers covered by the guidelines are expected to retain for at least one year a minimum of 25% of the net shares acquired upon exercise of stock options and 25% 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.guideline.
For purposes of the guidelines:
| § | “Stock ownership” includes the value of the officers’ individually-owned shares, the value of vested restricted shares and performance-based restricted 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 after the end of the performance period and performance is determined by the Compensation Committee. |
| § | “Net shares” means the shares remaining after sale of shares necessary to pay the related tax liability and, if applicable, exercise price. |
Consolidated Edison, Inc. Proxy Statement | 65 |
| Compensation Discussion and Analysis |
| § | While stock options may be granted under the Company’s long term incentive plan, the Company has no outstanding stock options. |
| § | The officers covered by the guidelines are expected to retain for at least one year a minimum of 25% of the net shares acquired upon exercise of stock options and 25% of the net shares acquired pursuant to vested restricted stock and restricted stock unit grants until their holdings of Company Common Stock equal or exceed their applicable ownership guidelines. |
| § | The one-year period is measured from the date the stock options are exercised or the restricted stock or restricted stock units vest, as applicable. |
No Hedging and performance-based restricted 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 after 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.
NO HEDGING NOR PLEDGINGNo Pledging
To encourage a long-term commitment to the Company’s sustained performance, the Company’s policiesHedging and Pledging Policy and Insider Trading Policy prohibit all directors officers, includingand the Named Executive Officers, financial personnel, and certain other individualsrespectively, from shorting, hedging, and pledging Company securities or holding Company securities in a margin account.account as collateral for a loan. All officers, finance department employees, employees who receive or review drafts of the Company’s financial statements, employees who work in the Corporate Secretary’s office, and any other employee specifically designated by the General Counsel are also covered by the Insider Trading Policy’s prohibition on hedging and pledging.
RECOUPMENT POLICYRecoupment (Clawback) Policy
In 2010, the Company adopted a Recoupment Policy (commonly referred to as a “clawback policy”). The Recoupment Policy allows the Company 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 under the Company’s long term incentive plan, and the incentive-based compensation payments made under the Company’s annual incentive plan.
Section 162(m) of the Internal Revenue Code generally precludes a public corporation from taking an income tax deduction for compensation in excess of $1 million payable in any fiscal year to the corporation’s chief executive officer and other “covered employees,” as defined in Section 162(m). Prior to January 1, 2018, an exception to this deduction limit was available for “performance-based” compensation that was approved by stockholders and otherwise satisfied certain other requirements under Section 162(m). As a result of tax legislation enacted in December 2017, the performance-based compensation exception is no longer available to public corporations for taxable years beginning after December 31, 2017, other than pursuant to certain “grandfathered” compensation arrangements that were in effect on, and not materially modified after, November 2, 2017. While our executive compensation program has sought to maximize the tax deductibility of compensation payable to the Named Executive Officers to the extent permitted by law, the Compensation Committee continues to retain flexibility to make compensation decisions that are driven by market competitiveness and based on the other factors discussed in this Compensation Discussion and Analysis when necessary or appropriate (as determined by the Compensation Committee in its sole discretion) to enable the Company to continue to attract, retain, reward, and motivate its highly-qualified executives.
66 |
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Section 162(m) of the Internal Revenue Code precludes a public corporation from taking an income tax deduction in any one year for compensation in excess of $1 million payable to its named executive officers (excluding the Chief Financial Officer) who are employed on the last day of the fiscal year, unless certain specific performance goals are satisfied. Until January 1, 2018, there was an exception to the $1 million limitation for performance-based compensation meeting certain requirements. This exception was repealed, effective for taxable years beginning after December 31, 2017 and the limitation on deductibility generally was expanded to include all Named Executive Officers. As a result, compensation paid to the Named Executive Officers in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of and not modified after November 2, 2017. While the Compensation Committee considers the tax impact of Section 162(m), it 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 million may not be deductible under Section 162(m). Accordingly, while the Compensation Committee strives to award executive compensation that meets the deductibility requirements, it has reserved the right to enter into compensation arrangements under which payments are not deductible on account of Section 162(m). For 2017, the Company estimates that approximately $3,008,000 and $285,000 of the compensation paid to Mr. McAvoy and Ms. Moore, respectively, was not deductible for federal income tax purposes.
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The following table sets forth certain information with respect to the compensation for the Named Executive Officers for the fiscal years ended December 31, 2017, 20162020, 2019, and 2015.2018. Information for Deneen L. Donnley and Mark Noyes for fiscal years ended December 31, 2018 and 2019 is not provided because they were not Named Executive Officers in those years.
| 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 | 2017 | $ | 1,257,083 | $ | — | $ | 5,507,622 | $ | 1,864,800 | $ | 7,346,614 | $ | 71,792 | $ | 16,047,911 | $ | 8,701,297 | |||||||||||||||||||||
Chairman, President and Chief Executive Officer | 2016 | $ | 1,220,767 | $ | — | $ | 6,176,408 | $ | 2,237,200 | $ | 5,103,773 | $ | 64,256 | $ | 14,802,404 | $ | 9,698,631 | |||||||||||||||||||||
| 2015 | $ | 1,171,350 | $ | — | $ | 3,987,654 | $ | 1,776,600 | $ | 4,030,677 | $ | 59,392 | $ | 11,025,673 | $ | 6,994,996 | ||||||||||||||||||||||
| Robert Hoglund | 2017 | $ | 742,892 | $ | — | $ | 1,441,970 | $ | 440,900 | $ | 277,846 | $ | 60,418 | $ | 2,964,026 | $ | 2,686,180 | |||||||||||||||||||||
Senior Vice President and Chief Financial Officer | 2016 | $ | 721,242 | $ | — | $ | 1,739,205 | $ | 528,200 | $ | 134,593 | $ | 59,272 | $ | 3,182,512 | $ | 3,047,919 | |||||||||||||||||||||
| 2015 | $ | 700,200 | $ | — | $ | 1,268,799 | $ | 531,100 | $ | 142,890 | $ | 55,970 | $ | 2,698,959 | $ | 2,556,069 | ||||||||||||||||||||||
Craig Ivey(7) President, Con Edison of New York | 2017 | $ | 819,208 | $ | — | $ | 1,990,622 | $ | 691,800 | $ | 248,554 | $ | 64,985 | $ | 3,815,169 | $ | 3,566,615 | |||||||||||||||||||||
| 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 | ||||||||||||||||||||||
| Elizabeth D. Moore | 2017 | $ | 626,275 | $ | — | $ | 914,420 | $ | 371,700 | $ | 144,744 | $ | 52,623 | $ | 2,109,762 | $ | 1,965,018 | |||||||||||||||||||||
Senior Vice President and General Counsel | 2016 | $ | 608,017 | $ | — | $ | 1,100,010 | $ | 445,300 | $ | 125,952 | $ | 51,049 | $ | 2,330,328 | $ | 2,204,376 | |||||||||||||||||||||
| 2015 | $ | 590,267 | $ | — | $ | 801,039 | $ | 447,700 | $ | 108,323 | $ | 49,290 | $ | 1,996,619 | $ | 1,888,296 | ||||||||||||||||||||||
| Timothy P. Cawley(8) | 2017 | $ | 420,975 | $ | — | $ | 815,944 | $ | 449,700 | $ | 1,296,529 | $ | 30,984 | $ | 3,014,132 | $ | 1,717,603 | |||||||||||||||||||||
President and Chief Executive Officer, Orange & Rockland | 2016 | $ | 409,033 | $ | — | $ | 995,955 | $ | 401,500 | $ | 559,125 | $ | 30,587 | $ | 2,396,200 | $ | 1,837,075 | |||||||||||||||||||||
| 2015 | $ | 400,725 | $ | — | $ | 725,028 | $ | 233,000 | $ | 550,075 | $ | 30,074 | $ | 1,938,902 | $ | 1,388,827 | ||||||||||||||||||||||
| 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) | |||||||||||||||||||||||||||||||||
| (#) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||||||||||
Timothy P. Cawley(7) | 2020 | 745,242 | — | 1,483,852 | 493,800 | 4,696,808 | 43,762 | 7,463,464 | 2,766,656 | |||||||||||||||||||||||||||||||||
President and Chief | 2019 | 628,867 | — | 1,464,760 | 491,700 | 4,381,349 | 40,905 | 7,007,581 | 2,626,232 | |||||||||||||||||||||||||||||||||
Executive Officer of the Company and President, Con Edison of New York | 2018 | 611,000 | — | 1,242,203 | 494,500 | 307,835 | 37,951 | 2,693,489 | 2,385,654 | |||||||||||||||||||||||||||||||||
Robert Hoglund | 2020 | 812,000 | — | 1,483,452 | 574,500 | 67,818 | 191,650 | 3,129,420 | 3,061,602 | |||||||||||||||||||||||||||||||||
Senior Vice President | 2019 | 788,083 | — | 1,464,760 | 382,400 | 75,101 | 808,645 | 3,518,989 | 3,443,888 | |||||||||||||||||||||||||||||||||
and Chief Financial Officer of the Company and Con Edison of New York | 2018 | 765,142 | — | 1,235,340 | 395,400 | (110,367 | ) | 171,838 | 2,457,353 | 2,567,720 | ||||||||||||||||||||||||||||||||
Deneen L. Donnley | 2020 | 611,000 | — | 850,068 | 403,100 | — | 108,626 | 1,972,794 | 1,972,794 | |||||||||||||||||||||||||||||||||
Senior Vice President | ||||||||||||||||||||||||||||||||||||||||||
and General Counsel of the Company and Con Edison of New York | ||||||||||||||||||||||||||||||||||||||||||
Robert Sanchez | 2020 | 510,383 | — | 866,736 | 482,500 | 1,203,531 | 36,314 | 3,099,464 | 1,895,933 | |||||||||||||||||||||||||||||||||
President and Chief | 2019 | 457,850 | — | 838,908 | 509,200 | 1,787,377 | 19,624 | 3,612,959 | 1,825,582 | |||||||||||||||||||||||||||||||||
Executive Officer, Orange & Rockland | 2018 | 437,883 | — | 713,752 | 420,000 | 378,160 | 19,647 | 1,969,442 | 1,591,282 | |||||||||||||||||||||||||||||||||
Mark Noyes | 2020 | 431,833 | — | 733,392 | 523,800 | — | 109,265 | 1,798,290 | 1,798,290 | |||||||||||||||||||||||||||||||||
President and Chief | ||||||||||||||||||||||||||||||||||||||||||
Executive Officer, Clean Energy Businesses | ||||||||||||||||||||||||||||||||||||||||||
John McAvoy | 2020 | 1,362,292 | — | 6,308,838 | 1,623,200 | 6,390,264 | 71,954 | 15,756,548 | 9,366,284 | |||||||||||||||||||||||||||||||||
Non-executive | 2019 | 1,336,667 | — | 5,912,304 | 1,621,400 | 6,398,445 | 76,469 | 15,345,285 | 8,946,840 | |||||||||||||||||||||||||||||||||
Chairman, and Former President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York(8) | 2018 | 1,296,667 | — | 4,968,812 | 1,675,400 | 1,750,204 | 74,775 | 9,765,858 | 8,015,654 | |||||||||||||||||||||||||||||||||
Footnotes:
| (1) | Dividends and dividend equivalents are not paid and do not accrue on awards |
Consolidated Edison, Inc. Proxy Statement | 67 |
| Summary Compensation Table |
| (2) | The amounts paid were awarded under the annual incentive plan. |
| (3) | Amounts do not represent actual compensation |
|
| (4) | For |
| Timothy P. Cawley | Robert Hoglund | Deneen L. Donnley | Robert Sanchez | Mark Noyes | John McAvoy | |||||||||||||||||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||||||||||||||
| McAvoy | Hoglund | Ivey | Moore | Cawley | ||||||||||||||||||||||||||||||||||||||||
Personal use of Company provided vehicle | $ | 9,514 | $ | 3,204 | $ | 1,767 | $ | 6,379 | $ | 7,555 | 8,007 | 3,815 | 8,236 | 8,002 | — | 7,986 | ||||||||||||||||||||||||||||
Transportation Allowance |
|
|
|
| 20,400 |
| ||||||||||||||||||||||||||||||||||||||
Driver costs | $ | 2,800 | $ | — | $ | — | $ | — | $ | — | — | — | — | — | — | 2,488 | ||||||||||||||||||||||||||||
Financial planning | $ | 18,500 | $ | 10,800 | $ | 10,800 | $ | 10,800 | $ | 10,800 | 11,800 | 11,800 | 13,000 | 13,000 | — | 18,500 | ||||||||||||||||||||||||||||
Supplemental health insurance | $ | 3,265 | $ | 3,265 | $ | 3,265 | $ | 1,603 | $ | — | 2,947 | 2,947 | 654 | — | — | 2,194 | ||||||||||||||||||||||||||||
Company matching contributions: Qualified savings plan | $ | 8,100 | $ | 14,775 | $ | 16,200 | $ | 12,465 | $ | 8,100 | ||||||||||||||||||||||||||||||||||
Non-qualified savings plan | $ | 29,613 | $ | 28,374 | $ | 32,953 | $ | 21,376 | $ | 4,529 | ||||||||||||||||||||||||||||||||||
Company matching contributions: | ||||||||||||||||||||||||||||||||||||||||||||
Qualified savings plan | 7,201 | 16,032 | 17,100 | 8,550 | 17,100 | 8,467 | ||||||||||||||||||||||||||||||||||||||
Non-qualified deferred income plan | 13,807 | 31,620 | 19,560 | 6,762 | 8,810 | 32,319 | ||||||||||||||||||||||||||||||||||||||
Company non-elective contributions | ||||||||||||||||||||||||||||||||||||||||||||
Qualified defined contribution pension formula | — | 21,468 | 19,420 | — | 8,550 | — | ||||||||||||||||||||||||||||||||||||||
Non-qualified defined contribution pension formula | — | 103,968 | 30,656 | — | 54,405 | — | ||||||||||||||||||||||||||||||||||||||
Total | $ | 71,792 | $ | 60,418 | $ | 64,985 | $ | 52,623 | $ | 30,984 | 43,762 | 191,650 | 108,626 | 36,314 | 109,265 | 71,954 | ||||||||||||||||||||||||||||
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. The Company did not provide above-market or preferential earnings with respect to the non-qualified deferred compensation arrangements.
| (5) | As per the applicable |
| (6) | To show the effect that the year-over-year change in pension value had on total compensation, this column is included to show total compensation minus the change in pension value. The amounts reported in the “Securities and Exchange Commission Total Without Change in Pension Value” column may differ substantially from the amounts reported in the “Securities and Exchange Commission Total” column required under SEC rules and are not a substitute for total compensation. The “Securities and Exchange Commission Total Without Change in Pension Value” column represents total compensation, as required under applicable SEC rules, minus the change in pension value reported in the “Change in Pension Value andNon-Qualified Deferred Compensation Earnings” column. See “Compensation Discussion and Analysis—Retirement and Other Benefits— |
| (7) |
Mr. Cawley was promoted to President and Chief Executive Officer |
| (8) | Mr. McAvoy retired as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York effective December 28, 2020. He serves as Non-executive Chairman of the Board of the Company and Con Edison of New York. |
68 | Consolidated Edison, Inc. Proxy Statement |
|
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, 2017.2020.
| 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 | 2/1/2017 | $ | 196,875 | $ | 1,575,000 | $ | 3,071,250 | 1,958 | 78,300 | 148,770 | $ | 5,507,622 | ||||||||||||||||||||
Robert Hoglund Senior Vice President and | 2/1/2017 | $ | 46,550 | $ | 372,400 | $ | 726,180 | 513 | 20,500 | 38,950 | $ | 1,441,970 | ||||||||||||||||||||
Craig Ivey(4) President, Con Edison of | 2/1/2017 | $ | 82,125 | $ | 657,000 | $ | 1,281,150 | 708 | 28,300 | 53,770 | $ | 1,990,622 | ||||||||||||||||||||
Elizabeth D. Moore Senior Vice President and | 2/1/2017 | $ | 39,238 | $ | 313,900 | $ | 612,105 | 325 | 13,000 | 24,700 | $ | 914,420 | ||||||||||||||||||||
Timothy P. Cawley(5) President and Chief Executive Officer, Orange & Rockland | 2/1/2017 | $ | 42,200 | $ | 337,600 | $ | 675,200 | 290 | 11,600 | 22,040 | $ | 815,944 | ||||||||||||||||||||
| 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 (#) | |||||||||||||||||||||||||||||||||
Timothy P. Cawley President and Chief Executive Officer of the Company and President, Con Edison of New York | 2/19/2020 | 75,000 | 600,000 | 1,170,000 | 445 | 17,800 | 33,820 | 1,483,452 | ||||||||||||||||||||||||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer of the Company and Con Edison of New York | 2/19/2020 | 76,313 | 610,500 | 1,190,475 | 445 | 17,800 | 33,820 | 1,483,452 | ||||||||||||||||||||||||||||||||
Deneen L. Donnley Senior Vice President and General Counsel of the Company and Con Edison of New York | 2/19/2020 | 53,550 | 428,400 | 835,380 | 255 | 10,200 | 19,380 | 850,068 | ||||||||||||||||||||||||||||||||
Robert Sanchez President and Chief Executive Officer, Orange & Rockland | 2/19/2020 | 51,500 | 412,000 | 824,000 | 260 | 10,400 | 19,760 | 866,736 | ||||||||||||||||||||||||||||||||
Mark Noyes President and Chief Executive Officer, Clean Energy Businesses | 2/19/2020 | 44,000 | 352,000 | 704,000 | 220 | 8,800 | 16,720 | 733,392 | ||||||||||||||||||||||||||||||||
John McAvoy(4) Non-executive Chairman, and Former President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York | 2/19/2020 | 215,625 | 1,725,000 | 3,363,750 | 1,893 | 75,700 | 143,830 | 6,308,838 | ||||||||||||||||||||||||||||||||
Footnotes:
| (1) | Represents annual cash incentive award opportunity awarded under the Company’s annual incentive plan. (See “ |
| (2) | Represents grants of performance units for the |
Consolidated Edison, Inc. Proxy Statement | 69 |
| Grants of Plan-Based Awards Table |
| values of the performance units for the |
| (3) | The “Grant Date Fair Value of Stock Awards” column reflects the grant date fair value of the performance units for the |
| (4) | Mr. |
70 |
|
|
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, 2017.2020.
| STOCK AWARDS(1) | ||||||||
| Name & Principal Position | Equity Incentive Number of unearned | Equity Incentive Market or Payout Value | ||||||
| John McAvoy | 83,100 | (2) | $ | 7,059,345 | ||||
Chairman, President and Chief Executive Officer | 78,300 | (3) | $ | 6,651,585 | ||||
| Robert Hoglund | 23,400 | (2) | $ | 1,987,830 | ||||
Senior Vice President and Chief Financial Officer | 20,500 | (3) | $ | 1,741,475 | ||||
| Craig Ivey(4) | 32,200 | (2)(5) | $ | 2,735,390 | ||||
President, Con Edison of New York | 28,300 | (3)(5) | $ | 2,404,085 | ||||
| Elizabeth D. Moore | 14,800 | (2) | $ | 1,257,260 | ||||
Senior Vice President and General Counsel | 13,000 | (3) | $ | 1,104,350 | ||||
| Timothy P. Cawley(6) | 13,400 | (2) | $ | 1,138,330 | ||||
President and Chief Executive Officer, Orange & Rockland | 11,600 | (3) | $ | 985,420 | ||||
| STOCK AWARDS(1) | ||||||||||
Equity Incentive Number of unearned | Equity Incentive Market or Payout Value | |||||||||
| Name & Principal Position | (#) | ($) | ||||||||
Timothy P. Cawley | 22,000 | (2) | 1,589,940 | |||||||
President and Chief Executive Officer of the Company and President, Con Edison of New York | 17,800 | (3) | 1,286,406 | |||||||
Robert Hoglund | 22,000 | (2) | 1,589,940 | |||||||
Senior Vice President and Chief Financial Officer of the Company and Con Edison of New York | 17,800 | (3) | 1,286,406 | |||||||
Deneen L. Donnley | — | — | ||||||||
Senior Vice President and General Counsel of the Company and Con Edison of New York | 10,200 | (3) | 737,154 | |||||||
Robert Sanchez | 12,600 | (2) | 910,602 | |||||||
President and Chief Executive Officer, Orange & Rockland | 10,400 | (3) | 751,608 | |||||||
Mark Noyes | 11,000 | (2) | 794,970 | |||||||
President and Chief Executive Officer, Clean Energy Businesses | 8,800 | (3) | 635,976 | |||||||
John McAvoy(4) | 88,800 | (2)(5) | 6,417,576 | |||||||
Non-executive Chairman, and Former President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York | 75,700 | (3) | 5,470,839 | |||||||
Footnotes:
| (1) | Value of unvested performance-based equity awards using the closing price of |
| (2) | The number of performance units and payment amount of the performance units will be determined as of December 31, |
| (3) | The number of performance units and payment amount of the performance units will be determined as of December 31, |
| (4) | Mr. |
| (5) | The amounts shown for Mr. |
| 71 |
|
The following table sets forth certain information with respect to all stock awards vested in 20172020 for the Named Executive Officers.
| STOCK AWARDS(1) | ||||||||
| Name & Principal Position | Number of Shares Acquired on Vesting | Value Realized on Vesting | ||||||
John McAvoy Chairman, President and Chief Executive Officer | 100,868 | $ | 7,769,862 | |||||
Robert Hoglund Senior Vice President and Chief Financial Officer | 32,094 | $ | 2,472,201 | |||||
Craig Ivey(2) President, Con Edison of New York | 43,138 | $ | 3,322,920 | |||||
Elizabeth D. Moore Senior Vice President and General Counsel | 20,262 | $ | 1,560,782 | |||||
Timothy P. Cawley(3) President and Chief Executive Officer, Orange & Rockland | 18,340 | $ | 1,412,730 | |||||
| STOCK AWARDS(1) | ||||||||||
| Number of Shares Acquired on Vesting | Value Realized on Vesting | |||||||||
| Name & Principal Position | (#) | ($) | ||||||||
Timothy P. Cawley President and Chief Executive Officer of the Company and President, Con Edison of New York | 9,303 | 651,675 | ||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer of the Company and Con Edison of New York | 9,252 | 648,103 | ||||||||
Deneen L. Donnley Senior Vice President and General Counsel of the Company and Con Edison of New York | 0 | 0 | ||||||||
Robert Sanchez President and Chief Executive Officer, Orange & Rockland | 5,346 | 374,487 | ||||||||
Mark Noyes President and Chief Executive Officer, Clean Energy Businesses | 3,164 | 221,638 | ||||||||
John McAvoy(2) Non-executive Chairman, and Former President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York | 37,214 | 2,606,841 | ||||||||
Footnote:Footnotes:
| (1) | Represents the vesting of each Named Executive Officer’s performance unit award for the |
| (2) | Mr. |
72 |
|
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RetirementPension Plan Benefits
The retirement plan, a tax qualified retirementtax-qualified defined benefit pension plan covers substantially allthe Named Executive Officers hired before 2017 with the exception of Mr. Noyes because employees of the Company’s employees.Clean Energy Businesses are not eligible for the plan. The defined benefit pension plan was closed to new management and rehired management employees as of December 31, 2016 and, as a result, excludes Ms. Donnley. The supplemental retirement income plan provides certain highly compensated employees, including the Named Executive Officers, whose benefits are limited by the Internal Revenue Code, with that portion of their retirementdefined benefit pension benefit that represents the difference between: (i) the amount they would have received under the retirementdefined benefit pension plan absent Internal Revenue Code limitations on the amount of final average salary that may be considered in calculating pension benefits and the amount of pension benefits payable;limitations; and (ii) the amount actually paid from the retirementdefined benefit pension plan. All amounts under the supplemental retirement income plan are paid out of the Company’s general assets.
For management employees who participate in the defined benefit pension plan and who were hired before January 1, 2001, including Messrs. McAvoyCawley, Sanchez, and Cawley, the retirement plan providesMcAvoy, pension benefits are 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 baseWage Base ($137,700 for 2020) in the year of retirement; and (iii) the participant’s length of service. For purposes of the supplemental retirement plan,income plan’s final average salary formula, a participant’s salary for a year is deemed to include any award under the Company’s annual incentive plans paid for that year. Participants in the retirement plansplan’s final average salary formula whose age and years of service equal 75, including Messrs. Cawley, Sanchez, and McAvoy, are entitled to an annual pension benefit for life, payable in monthly installmentsimmediate or effective June 1, 2017, indeferred lifetime annuity or a lump sum. Participants may earn increasedEmployees receiving retirement benefits under the final average salary formula are eligible to receive subsidized retiree medical benefits upon retirement.
For management employees who participate in the defined benefit 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 one 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 participants 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 2013plan and who retire between ages 55 and 59 are subject to an early retirement reduction. The reduction applied to benefits earned after 2012 is five percent (5%) for each full year of retirement before age 60. The retirement plan provides
an annual adjustment equal to the lesser of three percent (3%) or three-quarters (3/4) of the annual increase in the Consumer Price Index to offset partially the effects of inflation.
For management employeeswere hired on or after January 1, 2001 but before January 1, 2017, including Messrs.Mr. Hoglund, and lvey and Ms. Moore, the retirement plan provides pension benefits are based on a cash balance formula underthat is expressed as a hypothetical account balance. Under the defined benefit pension plan’s cash balance formula, the Company provides each participant with two allocations: (i) an allocation based on the participant’s annual compensation (a compensation credit) and (ii) an allocation based on an interest percentage (an interest credit). The compensation credit percent, which benefits accruecan range from 4% to 7% depending on the participant’s age and years of service, is applied to the participant’s compensation during the quarter. In addition, a participant whose compensation exceeds the Social Security Wage Base ($137,700 for 2020) will receive a 4% credit on the amount of his or her compensation that exceeds the Social Security Wage Base. Cash balance accounts receive a quarterly interest credit at a rate equal to one-quarter (1/4) of the endannual interest rate payable on the 30-year U.S. Treasury bond, subject to a minimum annual rate of each calendar quarter.3% and a maximum annual rate of 9%. Benefit distributions are made in the form of an immediate or deferred lifetime annuity, butalthough participants may also elect a lump sum payment. The crediting percent, which can range from four percent (4%) to seven percent (7%), depending
Management employees hired or rehired by Con Edison of New York, Orange & Rockland, or Con Edison Transmission, 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 ($127,200 for 2017) 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 (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 | |||||||||
| Under 35 | 4 | % | 4 | % | ||||||||
| 35–49 | 5 | % | 4 | % | ||||||||
| 50–64 | 6 | % | 4 | % | ||||||||
| Over 64 | 7 | % | 4 | % | ||||||||
From Julyafter January 1, 2017, throughincluding Ms. Donnley, participate in the defined contribution pension formula within the savings plan. Management employees employed by Clean Energy Businesses on or after January 1, 2019, including Mr. Noyes, are also eligible to participate in the defined contribution pension formula within the savings plan. Until June 30, 2021, management employees hired between January 1, 2001 and January 1, 2017, including Mr. Hoglund and Ms. Moore, maycovered under the cash balance formula in the defined benefit plan can make an irrevocable election to haveearn future company contributions made toretirement benefits under the defined contribution pension formula in the savings plan in lieurather than the defined benefit pension plan. Effective January 1, 2018, after 14 years of the Retirement Plan. Supplemental benefits will be providedcredited service under the deferred incomecash balance formula in the defined benefit plan, if qualifiedMr. Hoglund made this election and his first contribution to the defined contribution pension formula in the savings plan benefits are restricted by Internal Revenue Service limits.took effect on April 1, 2018. The Company continues to provide Mr. Hoglund’s cash balance account in the defined benefit pension plan with interest credits attributable to his account balance prior to January 1, 2018.
The defined contribution pension formula in the savings plan for employees of Con Edison of New York, Orange & Rockland, and Con Edison Transmission provides the same level of Company compensation credits for a participant as the cash balance formula in the defined benefit pension plan. Employees of Clean Energy Businesses, including Mr. Noyes, receive a fixed three percent compensation credit. Under the defined contribution pension formula in the savings plan,
| 73 |
|
participating employees make their own investment elections and are responsible for their own investment results. The following table shows how the compensation credit is calculated for Mr. Hoglund and Ms. Donnley.
| Age Plus Years of Service | Crediting Rate on Compensation | Plus | Crediting Rate on Compensation Above Social Security Wage Base | |||||||||||||||||||||||||||
| (%) | + | (%) | ||||||||||||||||||||||||||||
At Least 50 but less than 65 |
|
|
| 6 |
| 4 | ||||||||||||||||||||||||
65 and Over |
|
|
| 7 |
| 4 | ||||||||||||||||||||||||
Defined Benefit Pension Benefits Table
The following table shows certain pension benefits information for each Named Executive Officer except Ms. Donnley and Mr. Noyes as of December 31, 2017.2020.
| Number of Years Credited Service | Present Value of Accumulated Benefit(1) | Payments during Last Fiscal Year | |||||||||||||||||||||||||
| Name & Principal Position | Plan Name | (#) | ($) | ($) | |||||||||||||||||||||||
Chief Executive Officer of the Company and President, Con Edison of New York | Retirement Plan Supplemental Retirement | 34 34 | |
|
|
|
| 0 0 | |||||||||||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer |
|
|
|
|
|
| |||||||||||||||||||||
of New York | Retirement Plan Supplemental Retirement | 14 19(2) | |
|
|
|
| 0 0 | |||||||||||||||||||
|
|
|
|
|
| ||||||||||||||||||||||
President and Chief Executive Officer, Orange & Rockland | Retirement Plan Supplemental Retirement | 31 31 | |
|
|
|
| 0 0 | |||||||||||||||||||
John McAvoy(3) Non-executive Chairman, and Former President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York | Retirement Plan Supplemental Retirement | 41 41 | 3,520,177 35,047,778 | 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 |
| (3) | Mr. |
74 |
|
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The savings plan, atax-qualified savings plan, covers substantially all of the Company’s employees. The savings plan is described on page 43. All management employees, including the Named Executive Officers, whose benefits under the tax-qualifiedsavings plan, described on page 64, are limited bysubject to the compensation limit in the Internal Revenue Code, are eligible to deferparticipate in a portion of their salary into the deferred income plan, anon-qualified deferred compensation plan. (The Internal Revenue Code limit for 2020 was $285,000.) The deferred income plan permits participating officersemployees, including the Named Executive Officers, to defer on abefore-tax basis: (i) up to 50% of their base salary; (ii) all or a portion of their annual incentive 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, underawards. Under the deferred income plan, the Company will creditcredits participating employees with a Company matching contribution on that portion of their contributions that cannot be matched under the tax-qualifiedsavings plan because of Internal Revenue Code limitations. Participants whose benefits under the defined contribution pension formula in the savings plan who were subject to the compensation limits in the Internal Revenue Code in 2018, received those benefits in the deferred income plan.
Earnings on amounts contributed under the deferred income plan reflect investment in accordance with participating employees’ investment elections. Deferrals and any earnings thereon are always 100% vested. Company matchingnon-elective 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 deferred income plan. Individuals participating in the deferred income plan may elect to receive the performance of institutionally managed funds. Participants may change their investment allocation once per calendar quarter. All amounts distributed from the deferred income plan are paid out of the Company’s general assets.
Employees who participate in the savings plan, including the Named Executive Officers, may contribute up to 50% of their compensation on a before-tax basis and/or an after-tax basis, into their savings plan accounts. For Messrs. Cawley, Sanchez, and McAvoy, whose pension benefit is based on the final average salary formula in the defined benefit pension plan, the Company matches 50% for each dollar contributed by participating employees on the first 6% of their regular earnings. For Mr. Hoglund, Ms. Donnley, and Mr. Noyes, who participate in the defined contribution pension formula in the savings plan, the Company matches 100% for each dollar contributed by such participating employees on the first 4% of their regular earnings plus an additional 50% for each dollar contributed on the next 4% of their regular earnings.
Under the defined contribution pension formula in the savings plan, the Company makes non-elective employer contributions for employees of Con Edison of New York, Orange & Rockland, and Con Edison Transmission at the same level as it would under the cash balance formula in the defined benefit pension plan. Contributions for employees of Clean Energy Businesses are fixed at 3% of eligible compensation. Effective January 1, 2018, Robert Hoglund made an election to earn future retirement benefits under the defined contribution pension formula in the savings plan instead of the cash balance formula under the defined benefit pension plan.
Management employees who participate in the defined contribution pension formula and are subject to Internal Revenue Code limits, are eligible to participate in the supplemental defined contribution pension formula.
The cash balance formula and the defined contribution pension formula are both described in the narrative to the “Defined Benefit Pension Table” on page 74.
Amounts deferred if any, under the savings plan and the deferred 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 46.pages 67 through 68. Company matching contributions allocatedand non-elective contributions under the defined contribution pension formula to the Named Executive Officers under the savings plan and the deferred income plan are shown in the “All Other Compensation” column of the “Summary Compensation Table” on page 46.pages 67 through 68. Amounts realized upon vesting of stock awards that were deferred into the deferred income plan, if any, are shown on the “Value Realized on Vesting” column of the “Option Exercises and Stock Vested Table” on page 50.72.
| 75 |
|
Non-Qualified Deferred Compensation Table
The following table sets forth certain information with respect tonon-qualified deferred compensation for each Named Executive Officer as of December 31, 2017.2020.
| 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 | $ | 59,225 | $ | 29,613 | $ | 149,833 | $ | 0 | $ | 1,296,569 | ||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | $ | 301,931 | $ | 28,374 | $ | 220,473 | $ | 0 | $ | 1,405,548 | ||||||||||
Craig Ivey(5) President, Con Edison of New York | $ | 1,217,373 | $ | 32,953 | $ | 465,894 | $ | 0 | $ | 3,902,463 | ||||||||||
Elizabeth D. Moore Senior Vice President and General Counsel | $ | 28,502 | $ | 21,376 | $ | 204,041 | $ | 0 | $ | 1,904,769 | ||||||||||
Timothy P. Cawley(6) President and Chief Executive Officer, | $ | 9,059 | $ | 4,529 | $ | 14,963 | $ | 0 | $ | 183,789 | ||||||||||
| Plan Name | Executive Contributions in Last FY(1) | Registrant Contributions in Last FY(2) | Aggregate in Last | Aggregate Distributions | Aggregate Balance at Last FYE(4) | ||||||||||||||||||||||
| Name & Principal Position | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||
Timothy P. Cawley President and Chief Executive Officer of the Company and President, Con Edison |
Deferred Income Plan |
|
27,615 |
|
|
13,807 |
|
|
347,065 |
|
|
0 |
|
|
1,853,025 |
| |||||||||||
Robert Hoglund Senior Vice President Con Edison of New York | Deferred Income Plan
Supplemental Defined |
| 233,360
— |
|
| 31,620
103,968 |
|
| 828,934
242,671 |
|
| 0
0 |
|
| 3,569,986
1,131,120 |
| |||||||||||
Deneen L. Donnley Senior Vice President Company and Con Edison of New York | Deferred Income Plan
Supplemental Defined Contribution Pension Formula in Savings Plan | 26,080 |
| 19,560
30,656 |
|
| 4,682
4,465 |
| 0 |
| 50,322
35,121 |
| |||||||||||||||
Robert Sanchez President and Chief |
Deferred Income Plan |
|
13,523 |
|
|
6,762 |
|
|
37,626 |
|
|
0 |
|
|
171,010 |
| |||||||||||
Mark Noyes President and Chief | Deferred Income Plan
Supplemental Defined Contribution Pension Formula in Savings Plan(5) | 11,747 |
| 8,810
54,405 |
|
| 36,293
17,686 |
| 0 |
| 161,195
75,462 |
| |||||||||||||||
John McAvoy(5) Non-executive Chairman, and Former President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York |
Deferred Income Plan |
|
64,638 |
|
|
32,319 |
|
|
256,393 |
|
|
0 |
|
|
3,998,774 |
| |||||||||||
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” on |
| (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 |
| (3) | Represents earnings or losses on accounts for fiscal year |
| McAvoy | Hoglund | Ivey | Moore | Cawley | ||||||||||||||||
Executive Contributions | $ | 925,056 | $ | 691,221 | $ | 2,893,272 | $ | 1,295,892 | $ | 110,896 | ||||||||||
Company Matching Contributions | $ | 121,946 | $ | 211,143 | $ | 184,618 | $ | 124,305 | $ | 19,687 | ||||||||||
Earnings | $ | 249,567 | $ | 503,184 | $ | 824,573 | $ | 484,572 | $ | 53,206 | ||||||||||
Total | $ | 1,296,569 | $ | 1,405,548 | $ | 3,902,463 | $ | 1,904,769 | $ | 183,789 | ||||||||||
76 |
|
|
| (4) | Aggregate account balances in the non-qualified deferred compensation plans as of December 31, 2020: |
| Timothy P. Cawley | Robert Hoglund | Deneen L. Donnley | Robert Sanchez | Mark Noyes | John McAvoy | |||||||||||||||||||||||||
| Deferred Income Plan | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||
Executive contributions | 1,168,514 | 1,419,633 | 26,080 | 83,327 | 71,277 | 3,056,860 | ||||||||||||||||||||||||
Company matching contributions | 54,040 | 302,656 | 19,560 | 18,867 | 32,606 | 216,615 | ||||||||||||||||||||||||
Company non-elective contributions | — | 89,089 | — | — | — | — | ||||||||||||||||||||||||
Earnings | 630,471 | 1,758,608 | 4,682 | 68,815 | 57,312 | 725,299 | ||||||||||||||||||||||||
Total | 1,853,025 | 3,569,986 | 50,322 | 171,009 | 161,195 | 3,998,774 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
Supplemental Defined Contribution Pension Plan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Company non-elective contributions | 0 | 193,417 | 30,656 | 0 | 57,678 | 0 | ||||||||||||||||||||||||
Earnings | 0 | 234,906 | 4,465 | 0 | 17,686 | 0 | ||||||||||||||||||||||||
Total | 0 | 428,323 | 35,121 | 0 | 75,364 | 0 | ||||||||||||||||||||||||
Mr. Noyes receives an annual contribution of $50,000 to his supplemental defined contribution pension formula account in the savings plan as part of his compensation package. |
| (5) | Mr. McAvoy retired as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York effective December 28, 2020. He serves as Non-executive Chairman of the Board of the Company and Con Edison of New York. |
Consolidated Edison, Inc. Proxy Statement | 77 |
| Potential Payments Upon Termination of Employment or Change of Control |
POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL |
The Severance Program for Officers of the Company and its subsidiaries (the “Severance Program”) provides compensation to officers, including the Named Executive Officers, 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 in each situation is listed in the 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 table reflects the amount that could be payable under the Severance Program assuming such termination occurred at December 31, 2017.2020. The price per share of Company Common Stock on December 31, 20172020 was $84.95$72.27 per share.
| 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 | $ | 4,410,000 | $ | 0 | $ | 7,245,000 | $ | 0 | |||||||||||||
| Chairman, President and Chief Executive Officer | Long-term plan incentives(4) | $ | 0 | $ | 13,710,930 | (5) | $ | 13,710,930 | (5) | $ | 0 | $ | 13,710,930 | (5) | $ | 13,710,930 | (5) | |||||||||
| Benefits and Perquisites | $ | 0 | $ | 0 | $ | 1,468,320 | $ | 0 | $ | 2,911,639 | $ | 1,260,000 | ||||||||||||||
| Total(6) | $ | 0 | $ | 13,710,930 | $ | 19,589,250 | $ | 0 | $ | 23,867,569 | $ | 14,970,930 | ||||||||||||||
| Robert Hoglund | Severance | $ | 0 | $ | 0 | $ | 1,489,500 | $ | 0 | $ | 2,606,600 | $ | 0 | |||||||||||||
| Senior Vice President and Chief Financial Officer | Long-term plan incentives(4) | $ | 0 | $ | 3,729,305 | (5) | $ | 3,729,305 | (5) | $ | 0 | $ | 3,729,305 | (5) | $ | 3,729,305 | (5) | |||||||||
| Benefits and Perquisites | $ | 0 | $ | 0 | $ | 182,131 | $ | 0 | $ | 339,262 | $ | 744,700 | ||||||||||||||
| Total(6) | $ | 0 | $ | 3,729,305 | $ | 5,400,936 | $ | 0 | $ | 6,675,167 | $ | 4,474,005 | ||||||||||||||
Elizabeth D. Moore | Severance | $ | 0 | $ | 0 | $ | 1,255,600 | $ | 0 | $ | 2,197,300 | $ | 0 | |||||||||||||
| Senior Vice President and General Counsel | Long-term plan incentives(4) | $ | 0 | $ | 2,361,610 | (5) | $ | 2,361,610 | (5) | $ | 0 | $ | 2,361,610 | (5) | $ | 2,361,610 | (5) | |||||||||
| Benefits and Perquisites | $ | 0 | $ | 0 | $ | 151,979 | $ | 0 | $ | 278,957 | $ | 627,800 | ||||||||||||||
| Total(6) | $ | 0 | $ | 2,361,610 | $ | 3,769,189 | $ | 0 | $ | 4,837,867 | $ | 2,989,410 | ||||||||||||||
| Timothy P. Cawley(6) | Severance | $ | 0 | $ | 0 | $ | 1,097,200 | $ | 0 | $ | 1,856,800 | $ | 0 | |||||||||||||
| President and Chief Executive Officer, Orange & Rockland | Long-term plan incentives(4) | $ | 0 | $ | 2,123,750 | (5) | $ | 2,123,750 | (5) | $ | 0 | $ | 2,123,750 | (5) | $ | 2,123,750 | (5) | |||||||||
| Benefits and Perquisites | $ | 0 | $ | 0 | $ | 230,443 | $ | 0 | $ | 435,886 | $ | 422,000 | ||||||||||||||
| Total(6) | $ | 0 | $ | 2,123,750 | $ | 3,451,393 | $ | 0 | $ | 4,416,436 | $ | 2,545,750 | ||||||||||||||
| 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 | |||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||
| Timothy P. Cawley | Severance | 0 | 0 | 4,375,000 | 0 | 7,187,500 | 0 | |||||||||||||||||
| President and Chief Executive | Long-term plan incentives(4) | 0 | 2,876,346 | (5) | 2,876,346 | (5) | 0 | 2,876,346(5) | 2,876,346 | (5) | ||||||||||||||
| Officer of the Company and | ||||||||||||||||||||||||
| President, Con Edison of | ||||||||||||||||||||||||
| New York | Benefits and Perquisites | 0 | 0 | 3,000,374 | 0 | 5,975,747 | 1,250,000 | |||||||||||||||||
Total(6) | 0 | 2,876,346 | 10,251,720 | 0 | 16,039,593 | 4,126,346 | ||||||||||||||||||
| Robert Hoglund | Severance | 0 | 0 | 2,035,000 | 0 | 3,459,500 | 0 | |||||||||||||||||
| Senior Vice President and Chief Financial Officer of the Company and Con Edison of New York | Long-term plan incentives(4) | 0 | 2,876,346 | (5) | 2,876,346 | (5) | 0 | 2,876,346(5) | 2,876,346 | (5) | ||||||||||||||
| Benefits and Perquisites | 0 | 0 | 217,151 | 0 | 409,302 | 814,000 | ||||||||||||||||||
Total(6) | 0 | 2,876,346 | 5,128,497 | 0 | 6,745,148 | 3,690,346 | ||||||||||||||||||
| Deneen L. Donnley | Severance | 0 | 0 | 1,468,800 | 0 | 2,509,200 | 0 | |||||||||||||||||
| Senior Vice President and | Long-term plan incentives(4) | 0 | 737,154 | (5) | 737,154 | (5) | 0 | 737,154(5) | 737,154 | (5) | ||||||||||||||
| General Counsel of the | ||||||||||||||||||||||||
| Company and Con Edison of | ||||||||||||||||||||||||
| New York | Benefits and Perquisites | 0 | 0 | 138,536 | 0 | 252,072 | 612,000 | |||||||||||||||||
Total(6) | 0 | 737,154 | 2,344,490 | 0 | 3,498,426 | 1,349,154 | ||||||||||||||||||
| Robert Sanchez | Severance | 0 | 0 | 1,339,000 | 0 | 2,266,000 | 0 | |||||||||||||||||
| President and Chief Executive | Long-term plan incentives(4) | 0 | 1,662,210 | (5) | 1,662,210 | (5) | 0 | 1,662,210(5) | 1,662,210 | (5) | ||||||||||||||
| Officer, Orange & Rockland | Benefits and Perquisites | 0 | 0 | 782,119 | 0 | 1,539,238 | 515,000 | |||||||||||||||||
Total(6) | 0 | 1,662,210 | 3,783,329 | 0 | 5,467,448 | 2,177,210 | ||||||||||||||||||
| Mark Noyes | Severance | 0 | 0 | 1,144,000 | 0 | 1,936,000 | 0 | |||||||||||||||||
| President and Chief Executive Officer, Clean | Long-term plan incentives(4) | 0 | 1,430,946 | (5) | 1,430,946 | (5) | 0 | 1,430,946(5) | 1,430,946 | (5) | ||||||||||||||
| Energy Businesses | Benefits and Perquisites | 0 | 0 | 139,727 | 0 | 254,454 | 440,000 | |||||||||||||||||
Total(6) | 0 | 1,430,946 | 2,714,673 | 0 | 3,621,400 | 1,870,946 | ||||||||||||||||||
Footnotes:
| (1) | Assumes the compensation of Messrs. |
| (2) | As per the Severance Program, the |
78 | Consolidated Edison, Inc. Proxy Statement |
| Potential Payments Upon Termination of Employment or Change of Control |
| compensation at |
| (3) | As per the Severance Program, the |
| (4) | Potential payments under the long term incentive plan require the occurrence of a (i) CIC and (ii) qualifying termination of employment (a “CIC Separation from Service”) unless the Compensation Committee determines otherwise. |
| (5) | For disclosure purposes, the Compensation Committee is assumed to have taken action pursuant to the long term incentive plan to fully accelerate the vesting of target performance unit awards. |
|
| (6) | The total amounts are in addition |
A description of the assumptions that were used in creating the table for Messrs. McAvoy, Hoglund, and Cawley, and Ms. Moore (each defined as the “Executive”)Named Executive Officers is as follows:
Separation from Service
With respect to unvested performance-based equity awards under the long term incentive plan, in the event of a Termination, retirement,Retirement, death, or Disability, the Compensation Committee has discretion to determine the terms of the awards (including, without limitation, to accelerate the vesting of unvested awards). Unless otherwise provided by the Compensation Committee, in the event of a retirement,Retirement, death, or Disability, performance-based equity awards vestpro-rata pro rata through the date of the event.
For the purposes of the long term incentive plan: (i) “Termination” means a resignation or discharge from employment, except death, disabilityDisability or retirement,Retirement; (ii) “retirement”“Retirement” means resignation on or after age 55 with at least five years of service,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.
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, pro rata, assuming targeted performance was achieved.
For purposes of the long term incentive plan, “Change in Control” has the same meaning as “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.
“Cause” means the conviction of the Named Executive Officer of a felony or the entering by the Named Executive Officer 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 Named Executive Officer resigns for any of the following reasons: (i) any material decrease in base compensation,compensation; (ii) any material breach by the Company of any material provisions of the long term incentive plan,plan; (iii) a requirement by the Company for the Named Executive Officer to be based at any office or location more than 50 miles from the location the Named Executive Officer is employed prior to the Change in Control,Control; or (iv) the assignment of any duties materially inconsistent in any respect with the Executive’sNamed Executive Officer’s position, authority, duties, or responsibilities.
Incremental Retirement Amounts
As per the Severance Program, the amounts relating to the incremental retirement amounts in the table are based on the net present value of one additional year of service credit under the Company’s retirement plans following a termination without Cause or a resignation for Good Reason (two additional years if such termination is in connection with a Change in Control)
Consolidated Edison, Inc. Proxy Statement | 79 |
| Potential Payments Upon Termination of Employment or Change of Control |
assuming compensation at the Executive’sNamed Executive Officer’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 2017.2020.
The assumptions for Messrs. McAvoyCawley and CawleySanchez, include interest rates of 1.96%0.51% for the first five years, 3.58%2.31% for the next 15 years, and 4.35%3.15% thereafter (adjusted to 0.26%1.17%, 1.85%0.60% and 2.61%1.43%, respectively, to reflect cost of living adjustments) and theRP-2000 mortality table projected for 20172020 (50% male/50% female blend).
The assumptions for Mr. Hoglund’sHoglund, Ms. Donnley, and Ms. Moore’sMr. Noyes’s retirement amount are in accordance with the “cash balance” formula.applicable defined contribution pension formula within the savings plan and reflect only additional compensation credits. All amounts payable pursuant to an incrementalnon-qualified retirement plan are assumed to be paid as a lump sum.
|
Termination withoutWithout Cause or a Resignation for Good Reason
As per the Severance Program, the Named Executive Officer will receive certain benefits as described in the table 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,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,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 Named Executive Officer 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,Program; (iii) a requirement by the Company for the Named Executive Officer to be based more than 50 miles from the location the Named Executive Officer is employed prior to the Change of Control,Control; or (iv) the assignment of any duties materially inconsistent in any respect with the Executive’sNamed Executive Officer’s position, authority, duties, or responsibilities.
Payments uponUpon Termination of Employment in Connection with a Change of Control
As per the Severance Program, the Named Executive Officer will receive certain benefits as described in the 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 ana Named Executive Officer 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 of the Internal Revenue Code. If any such payment or distribution subjects the Named Executive Officer to such taxes and the Named Executive Officer 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 Named Executive Officer 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, participating officers, including the Named Executive isOfficers, are entitled to a death benefit equal to his or hertheir individual base salary. The benefits are payable in a lump sum.
Payment Upon Retirement for Mr. IveyJohn McAvoy
Mr. IveyJohn McAvoy retired effective December 31, 2017.28, 2020. Pursuant to the terms of the Company’s Long Term Incentive Plan, Mr. IveyMcAvoy retains his outstanding performance unit awards for the 2016-20182019–2021 and the 2017-20192020–2022 performance cycles. Payment of the performance units will be based on the attainment of the relevant performance goals and will be pro rated based on his actual service from the grant date to the date of his retirement, December 31, 2017.28, 2020. No other payments were made to Mr. McAvoy in connection with his retirement. See “Outstanding Equity Awards Table” on page 49.71.
80 | Consolidated Edison, Inc. Proxy Statement |
|
The Management Development and Compensation Committee of the Board of Directors of the Company has reviewed and discussed the Compensation Discussion and Analysis (the “CD&A”) for 20172020 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, 20172020 and this Proxy Statement.
Management Development and Compensation Committee:
George Campbell, Jr. (Chair)
Vincent A. Calarco
John F. Killian
Dwight A. McBride
William J. Mulrow
Michael W. Ranger
Deirdre Stanley
L. Frederick Sutherland
|
In 2017,2020, the 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:
A recoupment policy applicable to all Company officers with respect to incentive-based compensation;
Annual and long-term incentives under the Company’s compensation programs appropriately balanced between
| § | a recoupment policy applicable to all Company officers with respect to incentive-based compensation; |
| § | annual and long-term incentives under the Company’s compensation programs appropriately balanced between annual and long-term financial performance 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;
| § | 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;
| § | 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;
| § | compensation programs designed to deliver a significant portion of compensation in the form of long-term incentives, discouraging excessive focus on annual results; |
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;
| § | 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; |
Annual and long-term incentive awards that are subject to appropriate payment caps and Compensation Committee discretion to reduce payouts; and
| § | annual and long-term incentive awards that are subject to appropriate payment caps and Compensation Committee discretion to reduce payouts; and |
| § | share ownership guidelines that further the long-term interests of executives and stockholders, and restrictions on shorting, hedging, and pledging Company securities. |
Consolidated Edison, Inc. Proxy Statement | 81 |
Share ownership guidelines that further the long-term interests of executives and stockholders, and restrictions on shorting, hedging, and pledging Company securities.
| Pay Ratio and Certain Information as to Insurance and Indemnification |
The Company is required by Securities and Exchange Commission (“SEC”)SEC rules to disclose the median of the annual total compensation of all employees of the Company (excluding the Chief Executive Officer), the annual total compensation of the Chief Executive Officer, and the ratio of these two amounts (the “pay ratio”). The pay ratio below is a reasonable estimate based on the Company’s payroll records and the methodology described below, and was calculated in a manner consistent with SEC rules. Because SEC rules for identifying the median employee and calculating the pay ratio allow companies to adopt a variety of methodologies, the pay ratio reported by other companies may not be comparable to the pay ratio reported below, as other companies may have different employment and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
The Company reviewed its entire workforce (excluding the Chief Executive Officer)Officer, Timothy P. Cawley), consisting of 15,60314,210 full and part-time employees of the Company and its subsidiaries as of December 1, 2017.31, 2020. The Company’s median employee was identified by a consistently applied compensation measure using
earnings as reported on Internal Revenue Service FormW-2 for 2017.2020. In making this determination, the Company annualized the compensation of all employees hired during 2017.2020, and did not make any cost of living adjustments. This was the same methodology used in 2017 to identify the Company’s median employee, except that the determination date is now December 31 to align with the end of the Company’s fiscal year. The employee identified in 2020 is based in New York and is represented by a collective bargaining unit.
TheFor 2020, the annual total compensation of the Company’s median employee, as calculated using Summary Compensation Table requirements, was $168,028$259,289 and the annualannualized total compensation of the Chief Executive Officer as disclosed in the column “Securities and Exchange Commission Total” in the Summary Compensation Table on page 46, was $16,047,911.$7,463,293. The resulting pay ratio of the Chief Executive Officer’s annual total compensation to the annual total compensation of the Company’s median employee was 9629 to 1.
Subtracting the change in pension value from the median employee’s annual total compensation, as was done for the Chief Executive Officer’s annual total compensation and shown in the column “Securities and Exchange Commission Total Without Change in Pension Value” in the Summary Compensation Table, the pay ratio of the Chief Executive Officer’s compensation to the Company’s median employee would be 80 to 1.
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No stockholder action is required with respect to the following information that is included to fulfill the requirements of Section 726 of the Business Corporation Law of the State of New York.
Effective December 2, 2017,2020, the Company purchased Directorsdirectors and Officersofficers liability insurance (“D&O”)&O Liability insuranceInsurance”) for aone-year term providing for reimbursement, with certain exclusions and deductions, to: (a)(i) the Company and its subsidiaries for payments they make to indemnify Directors, Trustees, officers, and assistant officers of the Company and its subsidiaries, (b)(ii) 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 the Company or its subsidiaries, and (c)(iii) the Company and its subsidiaries for any payments they make resulting from a securities claim. The insurers are: ACE American Insurance Company, Allianz Global Risks US Insurance Company, Associated Electric & Gas Insurance Services Limited, Arch Insurance Company, Axis Insurance Company, Berkshire Hathaway SpecialtyBeazley Insurance Company, Inc., Continental Casualty Company, Endurance American Insurance Company, FederalEndurance American Specialty Insurance
Company, IllinoisEverest National Insurance Company, National Union Fire Insurance Company of Pittsburgh, Pa., Travelers Casualty and Surety Company of America, U.S. Specialty Insurance Company, X.L. Insurance (Bermuda)XL Bermuda Ltd., XL Specialty Insurance Company, and Zurich AmericanZurich-American Insurance Company. The total cost of the D&O Liability insuranceInsurance for one year from December 2, 20172020 amounts to $2,960,507.$3,559,087. The Company also purchased from Associated Electric & Gas Insurance Services Limited, Arch Insurance Company, Axis Insurance Company, Energy Insurance Mutual, Great American Insurance Company, Illinois National Insurance Company, RLI Insurance Company, Travelers 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, 2018,2021, 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 $769,438.$884,815.
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QUESTIONS AND ANSWERS ABOUT THE |
PROXY MATERIALSProxy Materials
What Are The Proxy Materials?
The Proxy Materials include the following:
The Proxy Statement.
| § | The Proxy Statement. |
The Annual Report to Stockholders of the Company, which includes the consolidated financial statements and accompanying notes for the year ended December 31, 2017, and other information relating to the Company’s financial condition and results of operations.
| § | The Annual Report to Stockholders of the Company, which includes the consolidated financial statements and accompanying notes for the year ended December 31, 2020, 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 20182021 Annual Meeting.
Why Am I Receiving The Proxy Materials?
The Proxy Materials are provided to stockholders of the Company on or about April 9, 2018,5, 2020, 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.SEC. We are providing the Proxy Materials to our stockholders by mail,e-mail, or in accordance with the Securities and Exchange Commission’sSEC’s “Notice and Access” rule.
Why Did I Receive The Proxy Materials In The Mail?
We are providing somepaper copies of our stockholders, includingthe Proxy Materials to stockholders who have previously requested to receive paper copies of the Proxy Materials, with paper copies of the Proxy Materials.copies. 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 followsign up for electronic delivery by following 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 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 atconedison.com/shareholderwww.conedison.com/shareholderss.. A copy of these materials is also available without charge upon written request to the Company’s Vice President and CorporateCorporate Secretary at the Company’s principal executive office at 4 Irving Place, New York, New York 10003.
Consolidated Edison, Inc. Proxy Statement | 83 |
| Questions and Answers About the 2021 Annual Meeting and Voting |
I Share An Address With Another Stockholder, And We Received Only One Copy Of The Proxy Materials. How May I Obtain An Additional Copy?
We have adopted a procedure approved by the SEC called “householding.” Under this procedure, registered holders of Company Common Stock who have the same address and last name and who receive either a Notice of Internet Availability or a paper copy of the Proxy Materials in the mail will receive only one copy of the Proxy Materials, or a single envelope containing the Notice of Internet Availability, for all stockholders at that address. This consolidated method of delivery will continue unless we are notified from a stockholder at that address that individual copies are preferred. Householding allows us to realize significant cost savings and reduces the amount of duplicate information stockholders receive.
If you are a registered holder of Company Common Stock and wish to discontinue householding, please notify 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.
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If you hold yourare a beneficial holder of Company Common Stock who holds Company Common Stock through an intermediary, such as a broker, bank, or other financial institution, (“broker”), your broker may deliver only one copy of the Proxy Materials or Notice of Internet Availabilityand wish 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,discontinue householding, 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 delivered promptly. If you currently receive separate copies of these materials and wish to receive a single copy in the future, please contact your broker.11717.
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$22,000plus distribution costs and other costs and expenses.
VOTING AND RELATED MATTERSVoting and Related Matters
What Is The Record Date?
The Board of Directors has established March 23, 201822, 2021 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 310,620,526342,688,334 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 of Company Common Stock entitled to vote at the Annual Meeting must be present at the Annual Meeting, either by means of remote communication, by proxy, or in person or by proxy.if it is not legally permissible for us to hold a completely virtual annual meeting under New York law. We urgestrongly recommend that you to vote by proxy even if you plan to attendin advance of 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.
84 | Consolidated Edison, Inc. Proxy Statement |
| Questions and Answers About the 2021 Annual Meeting and Voting |
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. |
| § | 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. |
| § | 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. |
| § | If you are a beneficial holder of Company Common Stock who holds Company Common Stock through an intermediary, such as a broker, bank, or other financial institution, you may vote at the Annual Meeting. Your 16-digit control number will grant you access to the virtual annual meeting website (www.virtualshareholdermeeting.com/ED2021). Online check in will be available approximately 15 minutes before the meeting starts. In order to vote your shares at the Annual Meeting, you must click on the link www.proxyvote.com and input the 16-digit control number you received in your proxy materials. |
| § | If you are a registered holder of Company Common Stock or participate in the Company’s Stock Purchase Plan, you must request a 16-digit virtual meeting access (“VMA”) control number in advance to access the virtual annual meeting website (www.virtualshareholdermeeting.com/ED2021) and ask questions at the Annual Meeting. Online check in will be available approximately 15 minutes before the meeting starts. To obtain a VMA control number, please call Computershare at 1-800-522-5522 to initiate the request for a VMA control number. Advanced registration requests for VMA control numbers must be received no later than 5:00 p.m., EDT, on Monday, May 10, 2021 to allow adequate time for processing. Please note that, although the VMA control number will enable you to access the virtual annual meeting website and ask questions during the Annual Meeting, it cannot be used to vote. Registered holders of Company Common Stock may vote their shares prior to and during the Annual Meeting at www.investorvote.com/ED using the 15-digit control number displayed on your proxy card, Notice of Internet Availability, or meeting materials e-mail for the Annual Meeting. Follow the instructions at www.investorvote.com/ED to vote. Holders of Company Common Stock through the Company’s Stock Purchase Plan may not vote at the Annual Meeting as the voting cut-off time for the Company’s Stock Purchase Plan at www.investorvote.com/EDESP is 1:00 a.m., EDT, on May 13, 2021. |
(See “Questions and Answers About the Proxy Materials, please follow the instructions2021 Annual Meeting and Voting—Annual Meeting Information” beginning 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.page 86 for additional information.)
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 proxy card, voter instruction form, Notice of Internet Availability, proxy card or voter instruction form,e-mail notification, as applicable.
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If My Shares Are Held By My Broker,An Intermediary, Can My Shares Be Voted If I Don’t Instruct My Broker?Without Instruction?
The Securities and Exchange CommissionSEC has approved a New York Stock Exchange rule that affects the manner in which your broker, bank, or other financial Institution may vote your shares. Your broker, bank, or other financial Institution may not vote on your behalf for the election of directors or compensation-related matters unless you provide specific voting instructions to your broker.them. For your vote to be counted, you need to communicate your voting decisions to your broker, bank, or other financial Institution, in the manner prescribed by your broker,them, 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, bank, or other financial Institution where you hold your shares. The Securities and Exchange CommissionSEC also has a website (www.sec.gov/spotlight/proxymatters.shtml) with more information about your rights as a stockholder.
Consolidated Edison, Inc. Proxy Statement | 85 |
| Questions and Answers About the 2021 Annual Meeting and Voting |
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:
for the election of the |
for the ratification of the appointment of independent accountants; and |
for the advisory vote to approve 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 Corporate Secretary at the Company’s principal executive office at 4 Irving Place, New York, New York 10003. Check the instructions on your proxy card, voter instruction form, Notice of Internet Availability, proxy card or voter instruction forme-mail notification for information regarding your specific revocation options. If you are a beneficial holder of Company Common Stock who holds Company Common Stock through an intermediary, such as a broker, bank or other financial institution, you may also revoke or change your vote by attending the Annual Meeting, clicking on the link www.proxyvote.com and inputting your 16-digit control number. If you are a registered holder of Company Common Stock, you may also revoke or change your vote
by appearing during the Annual Meeting at www.investorvote.com/ED using the 15-digit control number displayed on your proxy card, Notice of Internet Availability, or meeting materials e-mail for the Annual Meeting. If you are a holder of Company Common Stock through the Company’s Stock Purchase Plan, you may not vote, revoke or change your vote at the Annual Meeting andas the voting in person.cut-off time for the Company’s Stock Purchase Plan at www.investorvote.com/EDESP is 1:00 a.m., EDT, on May 13, 2021. Attendance at the Annual Meeting without voting will not by itself revoke a proxy.
Who Tabulates The Votes?
Votes will be tabulated by Computershare Trust Company, N.A., as inspector of election for the Annual Meeting.
ANNUAL MEETING INFORMATIONAnnual Meeting Information
What Is The Virtual 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 21, 2018,17, 2021, at 10:00 a.m., Eastern Daylight Time.
Due to the ongoing impact of Where Can I Find Directions To The Annual Meeting?COVID-19,
Directions we plan to hold the Annual Meeting by means of remote communication only at www.virtualshareholdermeeting.com/ED2021. The virtual meeting offers the same participation opportunities as an in-person meeting. Online check in will be available approximately 15 minutes before the Annual Meeting starts. If you encounter any difficulties accessing the virtual annual meeting website during the check-in or Annual Meeting time, please call the technical support number that will be posted on the log-in page.
As of the date of this Proxy Statement, a state disaster emergency has been declared relating to COVID-19 in the State of New York and the requirement under New York law that annual meetings be noticed and held at a physical location has been temporarily suspended. The declaration of a state disaster emergency and the related suspension are availablerenewed on a monthly basis. In the event that the state disaster emergency and suspension are lifted prior to the date fixed for the Annual Meeting and it is not, therefore, legally permissible for us to hold a completely virtual annual meeting under New York law, we will announce the location of the in-person component of the meeting by press release and posting on our proxy website at(conedison.com/www.conedison.com/shareholders.), as well as the filing of additional proxy materials with the SEC.
Who Can Attend The Annual Meeting?
Attendance at the Annual Meeting will be limited to holders of Company Common Stock on March 23, 2018,22, 2021, the record date, the authorized representative (one only) of an absent stockholder, and invited guests of management.
86 | Consolidated Edison, Inc. Proxy Statement |
| Questions and Answers About the 2021 Annual Meeting and Voting |
If Required By Applicable Law And The Annual Meeting Is Also Held In Person, Where Can I Find The Location and Directions To The Annual Meeting?
The location and directions to any in-person component of the Annual Meeting will be announced by press release and posting on our proxy website at www.conedison.com/shareholders, as well as the filing of additional proxy materials with the SEC.
How Do I Attend The Annual Meeting Virtually, Vote and Submit Questions Or Make Comments?
The 2021 Annual Meeting will be held virtually at www.virtualshareholdermeeting.com/ED2021.
If you are a beneficial holder of Company Common Stock who holds Company Common Stock through an intermediary, such as a broker, bank, or other financial institution, you may attend the Annual Meeting virtually by using your 16-digit control number to gain access to the virtual annual meeting website. You may submit a question or comment to the Company through the virtual annual meeting website. In order to vote your shares at the Annual Meeting, you must click on the link www.proxyvote.com and input the 16-digit control number you received in your proxy materials.
If you are a registered holder of Company Common Stock or a participant in the Company’s Stock Purchase Plan, you may attend the Annual Meeting virtually with a VMA control number. To obtain a VMA control number, please call Computershare at 1-800-522-5522 to initiate the request for a VMA control number. Advanced registration requests for VMA control numbers must be received no later than 5:00 p.m., EDT, on Monday, May 10, 2021 to allow adequate time for processing. Please note that, although the VMA control number will enable you to access the virtual annual meeting website and ask questions during the Annual Meeting, it cannot be used to vote. Registered holders of Company Common Stock may vote their shares prior to and during the Annual Meeting at www.investorvote.com/ED using the 15-digit control number displayed on your proxy card, Notice of Internet Availability or meeting materials e-mail for the Annual Meeting. Follow the instructions at www.investorvote.com/ED to vote. Holders of Company Common Stock through the Company’s Stock Purchase Plan may not vote at the Annual Meeting as the voting cut-off time for the Company’s Stock Purchase Plan at www.investorvote.com/EDESP is 1:00 a.m., EDT, on May 13, 2021.
Online check in for the virtual annual meeting website will be available approximately 15 minutes before the Annual Meeting starts. If you encounter any difficulties accessing the virtual annual meeting website during the check-in or Annual Meeting time, please call the technical support number that will be posted on the log-in page.
All stockholders may submit a question or comment to the Company through the virtual annual meeting website. Questions or comments pertinent to meeting matters will be addressed during the Annual Meeting, subject to time constraints. Questions or comments that relate to proposals that are not properly before the Annual Meeting, relate to matters that are not proper subject for action by stockholders, are irrelevant to the Company’s business, relate to material non-public information of the Company, relate to personal concerns or grievances, are derogatory to individuals or that are otherwise in bad taste, are in substance repetitious of a question or comment made by another stockholder, or are not otherwise suitable for the conduct of the Annual Meeting as determined in the sole discretion of the Company, will not be answered. Additional rules of conduct and procedures may apply during the Annual Meeting and will be available for you to review in advance of the meeting at www.virtualshareholdermeeting.com/ED2021. Any questions pertinent to meeting matters that cannot be answered during the Annual Meeting due to time constraints will be posted online and answered at www.conedison.com/shareholders. The questions and answers will be available as soon as practical after the meeting and will remain available until one week after posting.
What If I Have Trouble Accessing The Annual Meeting Virtually?
The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. We encourage you to access the virtual annual meeting website 15 minutes prior to the start of the Annual Meeting to check-in online. If you encounter any difficulties accessing the virtual annual meeting website during the check-in or Annual Meeting time, please call the technical support number that will be posted on the log-in page.
Consolidated Edison, Inc. Proxy Statement | 87 |
| Questions and Answers About the 2021 Annual Meeting and Voting |
If Required By Applicable Law And The Annual Meeting Is Also Held In Person, 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 in person 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 in thee-mail notification and follow the instructions for downloading a copy of your admission ticket.
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.
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| § | If you received a printed copy of the Proxy Materials and you hold your shares through an intermediary, such as a broker, bank, or other financial institution, 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. |
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.
If Required By Applicable Law And The Annual Meeting Is Also Held In Person, Are There Any Special Attendance Procedures?
Due to the ongoing impact of COVID-19, we plan to hold the Annual Meeting by means of remote communications only. However, if required by applicable law, we may also hold the Annual Meeting in person. In the event that the state disaster emergency and related temporary suspension of the requirement under New York law that annual meetings be noticed and held at a physical location are lifted prior to the date fixed for the Annual Meeting and it is not, therefore, legally permissible for us to hold a completely virtual annual meeting under New York law, we will announce the location of the in-person component of the meeting by press release and posting on our proxy website (www.conedison.com/shareholders), as well as the filing of additional proxy materials with the SEC.
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 room, the camera function may not be used at any time. Recording of the Annual Meeting is prohibited. Suitcases, briefcases, packages, and other items brought to any in-person meeting required by law may be subject to inspection. Attendance at any in-person meeting required by law will require following any applicable public health guidelines, which may include wearing masks and practicing social distancing.
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PROPOSALS FOR INCLUSION IN 2019 PROXY STATEMENTProposals for Inclusion in 2022 Proxy Statement
In order to be included in the Proxy Statement and form of proxy relating to the Company’s 20192022 annual meeting of stockholders, stockholder proposals must be received by the Company at its principal executive office at 4 Irving Place, New York, New York 10003, Attention: Vice President and Corporate Secretary, by the close of business on December 10, 2018.6, 2021.
DIRECTOR NOMINATIONS FOR INCLUSION IN 2019 PROXY STATEMENT (PROXY ACCESS)Director Nominations for Inclusion in 2022 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%)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%)20% of the Board) for election in the Company’s 20192022 Proxy Statement and form of proxy relating to the Company’s 20192022 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 10, 20186, 2021 and no later than December 10, 2018.6, 2021.
OTHER PROPOSALS OR NOMINATIONS TO COME BEFORE THE 2019 ANNUAL MEETINGOther Proposals or Nominations to Come Before the 2022 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 no earlier than January 21, 201917, 2022 and no later than February 20, 2019.16, 2022.
Management intends to bring before the meeting only the election of Directors (Proposal No. 1) and Proposals No. 2 and 3 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, |
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Vice President and Corporate Secretary |
Dated: April |
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IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
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| APPENDIX A | ||||||||||||||||||||||||||||
For 2020, the operating objectives for Con Edison of New York are shown in the following table:
| Con Edison of New York Operating Objectives(1) | Unit of Measure | Target | Actual | ||||||||||||
Employee and Public Safety | |||||||||||||||
§ Significant High-Hazard Injuries | # | 0 | 1 | ||||||||||||
§ Public Safety-Related Equipment Failures | # | £ 170 | 115 | ||||||||||||
§ Motor Vehicle Collisions | # | £ 283 | 246 | ||||||||||||
§ Operating Errors | # | £ 58 | 31 | ||||||||||||
§ Gas Made Safe Time | % | ³ 92.5 | 95.6% | ||||||||||||
Environment and Sustainability | |||||||||||||||
§ Measure Dielectric Fluid Management | Gallons and trench feet | £ 22,400 and ³ 2,000 TF | | 11,212 and 2,879 TF | |||||||||||
§ Late Spill Notifications | # | £ 9 | 0 | ||||||||||||
§ SF6 Gas Emissions | Pounds | £ 8,000 | 6,172 | ||||||||||||
§ Electric Energy Efficiency (LMMBTU Reduction) | # | ³ 20,084,450 | 22,039,296 | ||||||||||||
Operational Excellence | |||||||||||||||
§ Steam System Reliability Measures | # | 2 | 2 | ||||||||||||
§ Reliability Performance Measures | % | ³ 98.5 | 100% | ||||||||||||
§ Electric Reliability Performance—Network Metrics | # | 2 | 1 | ||||||||||||
§ Electric Reliability Performance—Non-Network Metrics | # | 2 | 2 | ||||||||||||
§ Workable Gas Leak Inventory | # | £ 20 | 5 | ||||||||||||
§ Cyber Security | # | 0 | 0 | ||||||||||||
§ Physical Security | # | 0 | 0 | ||||||||||||
Customer Experience | |||||||||||||||
§ Customer Project Completion Dates | % | ³ 90 | 93.7 | ||||||||||||
§ First Call Resolution | % | ³ 83.0 | 83.4 | ||||||||||||
§ Estimated Time for Restoration | % | ³ 65.5 | 74.8 | ||||||||||||
§ Customer Appointments | % | ³ 95 | 98.3 | ||||||||||||
Footnote:
| (1) | ||||||||||||||||||||||||||||
Operating objectives were weighted equally. | ||||||||||||||||||||||||||||
90 | Consolidated Edison, Inc. Proxy Statement |
| Appendix A |
For 2020, the operating objectives for Orange & Rockland are shown in the following table:
| Orange & Rockland Operating Objectives(1) | Unit of Measure | Target | Actual | |||
Employee and Public Safety | ||||||
§ Significant High-Hazard Injuries | # | 0 | 1 | |||
§ Motor Vehicle Collisions | # | £ 38 | 25 | |||
§ Operating Errors | # | £ 18 | 4 | |||
§ Damage Prevention | Rate | £ 2.10 | 1.68 | |||
§ Gas Made Safe Time | % | ³ 80% | 90% | |||
Environment and Sustainability | ||||||
§ Electric Energy Efficiency (MWH Reduction) | # | ³ 49,557 | 59,369 | |||
§ Gas Energy Efficiency (Dth Reduction) | # | ³ 26,860 | 32,563 | |||
§ Environmentally Beneficial Electrification (Carbon Reduction) | Tons | ³ 44,855 | 56,789 | |||
§ Written Notice of Violations | # | 0 | 0 | |||
§ Solar Connections— CompleteInitial Application Screening CompleteCoordinated Review | % % | ³ 92 ³ 80 | 100 100 | |||
Operational Excellence | ||||||
§ Outage Frequency - SAIFI (frequency of outages per average customer) | # | £ 1.20 | 0.93 | |||
§ Outage Duration - CAIDI (restoration time in minutes per average customer) | # | £ 115.5 | 105.3 | |||
§ Cyber Security | # | 0 | 0 | |||
§ Physical Security | # | 0 | 0 | |||
§ Gas Leak Inventory | # | £ 40 | 23 | |||
Customer Experience | ||||||
§ Customer Service Appointments Kept | % | ³ 95 | 96 | |||
§ New Business Electric Services Energized | % | ³ 95 | 96 | |||
§ First Call Resolution | % | ³ 85 | 93 | |||
§ Customer Service Performance Incentive Mechanism | # | 3 | 3 | |||
§ Storm Scorecard | # | ³ 90 | 95 | |||
Footnote:
| (1) | ||||||||
Operating objectives were weighted equally. |
| 91 |
| Appendix A |
For 2020, the operating objectives for the Clean Energy Businesses and Con Edison Transmission are shown in the following tables:
| Clean Energy Businesses Operating Objectives(1) | Unit of Measure | Target | Actual | ||||||||||||
Employee and Public Safety |
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§ Significant High Hazard Injury | # | 0 | 0 | ||||||||||||
Environment and Sustainability |
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§ Renewable Portfolio Production | % | 100 | 100 | ||||||||||||
Operational Excellence |
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§ Annual Availability for Financed Projects | % | 99 | 99.9 | ||||||||||||
§ Retail Energy Services Profit Margin | % | 22 | 22 | ||||||||||||
§ Material Financial Weaknesses, Significant Deficiencies, Significant Risk Limit Violations and Ethical Violation | # | 0 | 0 | ||||||||||||
§ Complete Required Training | % | 100 | 100 | ||||||||||||
§ Meet Contractual Requirements of PPA (TWh) | # | 5.0 | 6.5 | ||||||||||||
§ Implement IT Strategic Plan | # | 3 | 3 | ||||||||||||
§ Cybersecurity Intrusions | # | 0 | 0 | ||||||||||||
§ Cybersecurity Performance | % | 92 | 95 | ||||||||||||
Footnote:
| (1) | Operating objectives were weighted equally. |
| Con Edison Transmission Operating Objectives(1) | Unit of Measure | Target | Actual | ||||||||||||
Employee and Public Safety |
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§ Significant High Hazard Injury | # | 0 | 0 | ||||||||||||
§ Operating Incidents | # | 0 | 0 | ||||||||||||
Environment and Sustainability |
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§ Late Spill Notifications | # | 0 | 0 | ||||||||||||
§ Regulatory Violations | # | 0 | 0 | ||||||||||||
Operational Excellence |
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§ Cyber Security Plan | Completion | Y | Y | ||||||||||||
§ Risk Reduction Plans | Completion | Y | Y | ||||||||||||
§ System Reliability | Completion | Y | Y | ||||||||||||
§ Construction Oversight Plan | Completion | Y | Y | ||||||||||||
§ Material Weakness or Significant Deficiencies | # | 0 | 0 | ||||||||||||
§ Complete Required Training | % | 100 | 100 | ||||||||||||
Footnote:
| (1) | Operating objectives were weighted equally. |
92 | Consolidated Edison, Inc. Proxy Statement |
| Appendix B |
| APPENDIX B |
Reconciliation of Adjusted EBITDA for the Clean Energy Businesses (Non-GAAP)
This proxy statement contains a financial measure for the Clean Energy Businesses, adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), that is not determined in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Adjusted EBITDA for the Clean Energy Businesses refers to the Clean Energy Businesses’ net income for common stock, excluding the effects of hypothetical liquidation at book value (“HLBV”) and mark-to-market accounting, before interest, taxes, depreciation and amortization plus the pre-tax equivalent of production tax credits. Management uses the Clean Energy Businesses’ adjusted EBITDA for, among other things, determining performance-based compensation for certain employees. Non-GAAP financial measures should not be considered as an alternative to the Company’s reported results prepared in accordance with GAAP.
| Con Edison of New York | Orange & Rockland | Clean Energy Businesses | Con Edison Transmission | Other | Company Total | |||||||||||||||||||||||||
($ in millions) | ($ in millions) | ($ in millions) | ($ in millions) | ($ in millions) | ($ in millions) | |||||||||||||||||||||||||
Net income for common stock |
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For the Clean Energy Businesses, the reconciliation of net income for common stock to Adjusted EBITDA (Non-GAAP) is as follows:
| Clean Energy Businesses | |||||
| ($ in millions) | |||||
Net income for common stock | $ | 24 | |||
Mark-to-market pre-tax loss/(gain) |
| 57 | |||
HLBV pre-tax loss/(gain) |
| 44 | |||
Interest expense/(income), excluding mark-to-market effects of interest rate swaps |
| 135 | |||
Income tax (benefit)/expense |
| (44 | ) | ||
Pre-tax equivalent of production tax credits (25%) |
| 37 | |||
Depreciation and amortization |
| 231 | |||
Adjusted EBITDA (non-GAAP) | $ | 484 | |||
Consolidated Edison, Inc. Proxy Statement | 93 |
01—Timothy P. Cawley 02—Ellen V. Futter 03—John F. Killian 06—Dwight A. McBride 07—William J. Mulrow 08—Armando J. Olivera For Against Abstain For Against Abstain 1 P C F 04—Karol V. Mason 09—Michael W. Ranger 05—John McAvoy 10—Linda S. Sanford 11—Deirdre Stanley 12—L. Frederick Sutherland For Against Abstain Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. 03E3RE + + Proposals — The Board of Directors recommends a vote FOR A all nominees listed, and FOR Proposals 2 and 3. 2. Ratification of appointment of independent accountants. 3. Advisory vote to approve named executive officer compensation. 1. Election of Directors: For Against Abstain 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. B Authorized Signatures — | ||||||||
02SG3B
2018 Annual Meeting Admission Ticket
2018 Annual Meeting of
Consolidated Edison, Inc. Stockholders
Monday, May 21, 2018, 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 ticketsection must be completed for your vote to be counted. — Date and a proper form of identification with you if attending the Annual Meeting of Stockholders.
YOUR VOTE IS IMPORTANT!
Whether or not you plan to attend the Annual 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 Annual 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,Sign Below qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.ENVELOPE.q Consolidated Edison, Inc. Annual Meeting of Stockholders Proxy Card For Against Abstain You may vote online or by phone instead of mailing this card. Online Go to www.investorvote.com/ED or scan the QR code — login details are located in the shaded bar below. Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/ED. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada. Your vote matters – here’s how to vote!
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Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/ED qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q C Non-Voting Items + + Change of Address — Please print new address below. Comments — Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting of Stockholders. CONSOLIDATED EDISON, INC.
COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John F. Killian, John McAvoy and Michael W. Ranger 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 21, 201817, 2021 at 10:00 a.m. at the Company’s Headquarters, 4 Irving Place, New York, NY,www.virtualshareholdermeeting.com/ED2021, 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 - George Campbell, Jr., 02 - 01—Timothy P. Cawley, 02—Ellen V. Futter, 03 - 03—John F. Killian, 04 - 04—Karol V. Mason, 05—John McAvoy, 05 - 06—Dwight A. McBride, 07—William J. Mulrow, 06 - 08—Armando J. Olivera, 07 - 09—Michael W. Ranger, 08 - 10—Linda S. Sanford, 09 - 11—Deirdre Stanley, and 10 - 12—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.
(Items (Items to be voted appear on reverse side.)
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Important Notice Regarding the Availability of Proxy Materials for the
Consolidated Edison, Inc. 2021 Annual Meeting 2021 Annual Meeting of Stockholders to be Held on Monday, May 21, 2018
Under Securities and Exchange Commission rules, you are receiving this Notice that the proxy materials for the Consolidated Edison, Inc. annual 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 4, 2018 to facilitate timely delivery.
02SG5A
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Consolidated Edison, Inc. Annual Meeting of Stockholders will be held on Monday, May 21, 2018 at Consolidated Edison, Inc., 4 Irving Place, New York, NY, 10003 at 10:00 a.m. EDT.
Proposals to be voted on at the Annual 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:
1. George Campbell, Jr.
2. Ellen V. Futter
3. John F. Killian
4. John McAvoy
5. William J. Mulrow
6. Armando J. Olivera
7. Michael W. Ranger
8. Linda S. Sanford
9. Deirdre Stanley
10. L. Frederick Sutherland
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 Annual Meeting of Stockholders, please bring this notice with you.
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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.
Emailcopies: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.
PLEASENOTE:You must use the number in the shaded bar on the reverse side when requesting a set of proxy materials.
To facilitate timely delivery, all requests for a paper copy of the proxy materials must be received by Friday, May 4, 2018.
02SG5A
CONSOLIDATED EDISON, INC.
ANNUAL MEETING FOR HOLDERS AS OF 3/23/18
TO BE HELD ON 5/21/18
Your vote is important. Thank you for voting.
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*** Exercise YourRightto Vote ***
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to Be Held on Monday, May 21, 2018.
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—Before You Vote —
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IFYOUHAVENOTVOTEDVIATHEINTERNETORTELEPHONE,FOLDALONGTHEPERFORATION,DETACHANDRETURNTHEBOTTOMPORTIONINTHEENCLOSEDENVELOPE.
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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.
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02SG6A
2018 Annual Meeting Admission Ticket
2018 Annual Meeting of
Consolidated Edison, Inc. Stockholders
Monday, May 21, 2018,17, 2021, 10:00 a.m. EDT
Consolidated Edison, Inc.
4 Irving Place, Available via live webcast at www.virtualshareholdermeeting.com/ED2021. To access the Annual Meeting via the webcast, you must obtain a virtual meeting access (“VMA”) control number as described in the proxy statement no later than 5:00 p.m., EDT, on May 10, 2021. The VMA control number is a 16-digit number that will provide you access to the Annual Meeting. It does NOT replace the 15-digit Computershare control number that allows you to vote your shares. Due to the ongoing impact of the novel coronavirus disease, COVID-19, we plan to hold the Annual Meeting by means of remote communications only (i.e. a virtual-only annual meeting). As of the date of this mailing, a state disaster emergency has been declared relating to COVID-19 in the State of New York, NY 10003
and the requirement under New York law that annual meetings be noticed and held at a physical location has been temporarily suspended. The declaration of a state disaster emergency and the related suspension are renewed on a monthly basis. In the event that the state disaster emergency and suspension are lifted prior to the date fixed for the Annual Meeting and it is not, therefore, legally permissible for us to hold a completely virtual annual meeting under New York law, we may also hold the Annual Meeting in person. We will announce the location of the in-person component of the meeting by press release and posting on our proxy website (www.conedison.com/shareholders), as well as the filing of additional proxy materials with the Securities and Exchange Commission. If the Annual Meeting is also held in person, you may use this document, along with proper form of identification, to attend the Annual Meeting. This ticket admitsdocument will admit only the named stockholder(s).
Please bring this admission ticket and a proper form YOUR VOTE IS IMPORTANT! We strongly recommend that you vote in advance of identification with you if attending the Annual Meeting of Stockholders.
YOUR VOTEISIMPORTANT!
Pleasevotepromptlybytelephone,throughtheInternetorbycompletingandreturningtheattachedproxycard.
IFYOUHAVENOTVOTEDVIATHEINTERNETORTELEPHONE,FOLDALONGTHEPERFORATION,DETACHANDRETURNTHEBOTTOMPORTIONINTHEENCLOSEDENVELOPE.
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CONFIDENTIALVOTINGINSTRUCTIONS
TOCOMPUTERSHAREASPLANAGENT
FORTHECONSOLIDATEDEDISON,INC.STOCKPURCHASEPLAN (STOCKPURCHASEPLAN)
CONSOLIDATEDEDISON,INC.
PROXYSOLICITEDBY THEBOARDOFDIRECTORSFORTHE
ANNUALMEETINGOFSTOCKHOLDERSTOBEHELD ONMONDAY,MAY21,2018
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 21, 2018, 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.)
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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 16, 2018. Have this Voting Instruction form in hand when accessing the website and then follow the instructions.
VOTE BY PHONE -1-800-690-6903Meeting.
Use any touch-tone telephone to transmit these Voting Instructions up until
11:59 P.M. Eastern Daylight Time on Wednesday, May 16, 2018. 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 16, 2018. 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:
E39497-P04848 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS VOTING INSTRUCTION FORM IS VALID ONLY WHEN SIGNED AND DATED.
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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.
ADMISSION TICKET
Annual Meeting of Stockholders of
CONSOLIDATED EDISON, INC.
MONDAY, MAY 21, 2018 10:00 a.m.
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 meeting.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders:
The Notice and Proxy Statement and Annual Report are available atwww.proxyvote.com.
E39498-P04848
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CONFIDENTIAL VOTING INSTRUCTIONS
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