UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒
Filed by a Partyparty other than the Registrant ☐
Check the appropriate box:
☐ | ||
|
☐ |
Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ |
|
☐ | |
|
☐ | ||
|
UNITIL CORPORATION
(Name of Registrant as Specified in Itsits Charter)
Not applicable.
(Name of Person(s) Filing Proxy Statement, if Other Thanother than the Registrant)
Payment of Filing Fee (Check the appropriate box)all boxes that apply):
☒ No fee required.
☐ Fee computed on table below
☒ | No fee required. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
☐ | Fee paid previously with preliminary materials. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
Unitil Corporation
Notice of Annual Meeting of Shareholders
Annual Meeting ◆ Wednesday, April 11:30 a.m. EDT Hampton, New Hampshire
March Dear Fellow Shareholder, I am pleased to invite you to the Unitil Corporation Annual Meeting of Shareholders to be held on Wednesday, April This year, we are asking shareholders to vote on the election of three directors, and on the ratification of the selection of independent registered public accountants. Also this year, shareholders will be presented with an advisory vote on executive compensation. Your vote is very important. I would like to thank you for choosing to invest in Unitil Corporation. Our Vision, Mission and Values reflect our deep commitment to our shareholders, customers, employees, local communities and partners. We provide more than just electricity and gas services and products. Energy for life is the statement we use to describe this commitment. On behalf of the Board of Directors and management of Unitil Corporation, thank you for your continued support and confidence in Sincerely,
Thomas P. Meissner, Jr. Chairman of the Board, Chief Executive Officer and President
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS The Unitil Corporation (the “Company”)
The Board of Directors set February
By Order of the Board of Directors, Sandra L. Whitney Corporate Secretary
YOUR VOTE IS IMPORTANT Your vote is important. To ensure a quorum is present at the Annual Meeting of Shareholders, please be sure your shares are represented at the meeting. You may vote in one of the following ways:
ATTENDING THE ANNUAL MEETING OF SHAREHOLDERS
All shareholders may attend the Annual Meeting of Shareholders. However, to ensure that the meeting remains orderly and secure, you must follow certain procedures for Attending in Person Shareholders of record will need to provide their name and government-issued picture identification. Beneficial owners will need to provide a copy of an account statement from the bank, broker or nominee holding the shares as proof of ownership as of the Record Date, as well as government-issued picture identification.
PROXY STATEMENT
Unitil Corporation 6 Liberty Lane West Hampton, NH 03842-1720 March PROXY STATEMENT Unitil Corporation (“Unitil” or the “Company”) is providing this proxy statement and the accompanying annual report (which includes the Company’s Annual Report on Form 10-K for fiscal year Unitil has the following subsidiaries, which are referred to throughout this proxy statement: Fitchburg Gas and Electric Light Company (“Fitchburg”); Granite State Gas Transmission, Inc. (“Granite”); Northern Utilities, Inc. (“Northern”); Unitil Energy Systems, Inc. (“Unitil Energy”); Unitil Power Corp.; Unitil Realty Corp.; Unitil Resources, Inc.; and Unitil Service Corp. We may also refer to Unitil as “we” or “our” or “us” throughout this proxy statement.
Date, Time and Place The Annual Meeting will be held on Wednesday, April
Anticipated Mailing Date We anticipate first mailing definitive copies of this proxy statement, the accompanying proxy card, and the accompanying annual report to shareholders on or about March 1 MEETING SUMMARY This year, we are seeking your vote on the following proposals:
QUORUM & REQUIRED VOTE A majority of the outstanding shares of common stock entitled to vote at the Annual Meeting must be present in person If a quorum is present, the nominees standing for election as a Director will be elected by a plurality of the votes cast by the shareholders. Votes withheld and broker non-votes will not be counted toward the achievement of a plurality. Additional information concerning the election of directors appears in the sections entitled Corporate Governance – Resignation Policy and Proposal 1 – Election of Directors. With respect to all other matters that may come before the Annual Meeting, action on a matter is approved if the votes cast favoring the action exceed the votes cast opposing the action. Therefore, abstentions and broker non-votes will have no effect on the other matters. Representatives of our transfer agent will count the votes and certify the results. 2 VOTING RIGHTS AND PROCEDURES As an owner of Unitil common stock, it is your legal right to vote (or to provide voting instructions) on all matters to be considered at a shareholder meeting. We hope you will exercise your legal right and fully participate as a shareholder in the Annual Meeting. You may cast one vote for each share of common stock that you own on all matters presented at the Annual Meeting. The Board has selected and approved Thomas P. Meissner, Jr. and Robert B. Hevert as proxies for the Annual Meeting to vote your shares in the manner that you specify on the proxy card or via the Internet, or if you do not give any specification on your proxy card or submitted proxy with respect to a matter, FOR such matter. Your designation of a proxy will not affect your right to attend the Annual Meeting and vote at the meeting.
Record Holders If your shares of common stock were registered directly in your name with our transfer agent as of the Record Date, then you are considered a shareholder of record of the shares (a “Record Holder”) and we have sent the proxy materials and the accompanying proxy card directly to you. Beneficial Holders If your shares of common stock were registered in the name of a bank, broker or other nominee as of the Record Date, then you are considered a beneficial owner (“Beneficial Holder”) of the shares that are registered in street name and your bank, broker or other nominee has sent this proxy statement and voting instructions to you. As a Beneficial Holder, your shares may be voted even if voting instructions are not provided. Brokerage firms have the authority under New York Stock Exchange rules to vote shares for which their customers do not provide voting instructions on routine matters. The ratification of the selection of our independent registered public accounting firm, Deloitte & Touche LLP, for fiscal year
3
A MESSAGE FROM TOM MEISSNER, CHAIRMAN AND
We are committed to strategies and investments reflecting the broader aspirations of our Our future prospects for delivering long-term growth have never been better. The clean energy transition offers abundant opportunities to accelerate customer growth, invest in electric and gas infrastructure, and develop new sources of renewable energy. The need to decarbonize the As we move forward in 2022, I am optimistic about the year ahead. We have a clear vision of where our Company is headed, and we are committed to continued execution on the fundamentals of our
March
ACTING ON OUR VALUES Our RISE values are the guiding principles behind our actions, but they are only as good as they are meaningful and measurable. Continued focus on the importance of these values will drive our commitment to deliver ‘energy for life’ and the achievement of our Vision of a clean and sustainable future for all of our stakeholders.
On March
The table below shows Executive Officers’ biographical information as of the date of this proxy statement, including the Named Executive Officers. MANAGEMENT INFORMATION TABLE
The following table sets forth information on the beneficial ownership of our common stock as of the Record Date, by (i) each person known to us to be the beneficial owner of more than five percent of our common stock, (ii) each Director and nominee for Director, (iii) each executive officer named in the Summary Compensation Table in the section entitled Compensation - Compensation of Named Executive Officers (the “Named Executive Officers”) and (iv) all Directors and executive officers of Unitil as a group. Except as otherwise indicated, to our knowledge, the beneficial owners listed have sole voting and sole dispositive power with respect to the shares beneficially owned by them. The address of each of Unitil’s Directors and executive officers is c/o Unitil Corporation, 6 Liberty Lane West, Hampton, New Hampshire 03842-1720.
NOTES:
10 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 (“Exchange Act”) requires our executive officers, Directors, and persons who beneficially own more than ten percent of a registered class of our equity securities to file certain reports of ownership and changes in share ownership with the Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (“NYSE”). Based upon our review of such forms that were filed in
The ethical character, integrity and principles of the Board, The Board adopted the Corporate Governance Guidelines and Policies of the Board (the The Governance Guidelines represent the current view of the Board on governance and should not be viewed as rigid restraints. We will continue to monitor new developments and
13
The Board is responsible for the oversight of management, the development of Company policy and strategy, and the ongoing assessment of the Company’s operational effectiveness and financial strength, which includes the oversight of risk. The Board’s ultimate goals are to ensure that Unitil continues as a successful and sustainable business, to optimize financial returns in light of the business risks, to increase shareholder value over time, and to protect the interests of all stakeholders.
The ERM program is a foundation for risk management that is relevant, sustainable and scalable. The ERM program is designed to identify existing and potential risks, and to manage risks within our risk appetite in order to sustain operations and achieve business and strategic objectives. In building the ERM program, the potential risks relating to our business were defined using a comprehensive set of risk disclosures which are described in Part I, Item 1A. Risk Factors of our In its oversight role, the Board is supported by the Risk and Compliance Committee (the “RCC”), a multi-function management committee Like all companies, we face a variety of risks, both internal and external, and many factors work simultaneously to affect our overall business risk. The Board recognizes that our business risk is not static, and that it is not possible to mitigate all risk and uncertainty. The Board works within a climate of respect and candor, fostering a culture of open dialog between Board members and senior management, which includes comprehensive knowledge of
The Board is responsible for oversight of cybersecurity, which is and will continue to be a primary focus. The Board recognizes the protection of our data, customer information and infrastructure is critical to the ongoing success and prosperity of our Company, and elevation to Board-level oversight is a matter of good governance. Cybersecurity awareness is a company-wide initiative, established in 2013, in which all employees participate. The Board receives quarterly cybersecurity updates as part of the Enterprise Risk Management report.
15 The Board is engaged in ongoing succession planning, which is led by the Nominating and Governance Committee. The Board Succession Plan addresses upcoming retirements, committee membership and rotation, class balancing, skill set requirements and gaps, and planning for unforeseen events. The Board Succession Plan is also directly linked to both new director recruitment actions and diversity goals.
Directors are not DIRECTORS’ STOCK OWNERSHIP AND RETENTION POLICY The Board believes that its members should own a significant number of shares of our common stock to properly align their interests with those of our shareholders. All non-employee Directors must own shares of common stock in the equivalent value of three times the current annual cash retainer for Board service. Shares of restricted stock and restricted stock units (“RSUs”) are counted towards this total. The ownership requirement is calculated annually on January 1, and as of January 1, 16 A Director is required to tender his or her resignation if he or she receives a “withhold” vote greater than 50% of the shares voted at the annual meeting of shareholders in an uncontested election. If an incumbent Director fails to receive the required vote for re-election, the Nominating and Governance Committee will act on an expedited basis to determine whether to recommend the acceptance of the Director’s resignation and will submit such recommendation for prompt consideration by the Board. The Director whose resignation is under consideration shall abstain from participating in any decision regarding that resignation. The Nominating and Governance Committee and the Board may consider any factors they deem relevant in deciding whether to accept a Director’s resignation. The Board nominates for election or re-election to the Board only candidates who agree to tender, promptly following the annual meeting at which they face election or re-election as Director, irrevocable resignations that will be effective upon (i) the failure to receive the required vote at the annual meeting at which they face re-election and (ii) Board acceptance of such resignation. In addition, the Board fills board
seat vacancies and new directorships only with candidates who agree to tender, promptly following their appointment to the Board, the same form of resignation tendered by other Directors in accordance with this policy. All candidates proposed for election or re-election at the Annual Meeting have agreed in writing to abide by this policy.
EXECUTIVE SESSIONS Non-employee members of the Board have the opportunity to meet in executive session, without members of management present, either prior to the start or following the adjournment of each Board and committee meeting. During 2021, the Board met in executive session on four occasions. Mr. Green, the Lead Director, presided at all four meetings. 18 succession plan was evaluated for gaps and other risk factors. As a result of that evaluation, in 2020, the EXECUTIVE COMPENSATION RECOVERY POLICY In the event we are required to prepare an accounting restatement of our financial statements due to the material noncompliance with any financial reporting requirement under the securities laws, we shall be entitled to recover any excess performance-based compensation received by any current or former covered executive during the three-year period immediately preceding the date on which we are required to prepare an accounting restatement. To the extent allowed by applicable law and the listing standards of the New York Stock Exchange, we may seek to recover any such excess performance-based compensation at the direction of the Compensation Committee after consideration of the costs and benefits of doing so, and as approved by Board. “Performance-based compensation” includes all annual incentives and long-term incentives (whether in cash, in equity, or otherwise) with performance features based on Unitil’s or a group’s performance, the award or size of the award of which was contingent upon such performance. The policy does not apply to restatements that the Board determines are required or permitted under generally accepted accounting principles in connection with the adoption or implementation of a new accounting standard or caused by our decision to change one or more accounting practices as permitted by applicable law.
EXECUTIVE STOCK OWNERSHIP POLICY
All Named Executive Officers are required to own shares of our common stock in the equivalent value of a multiple of base salary. All shares of our common stock that are owned directly or beneficially, shares of restricted stock that are awarded, whether vested or unvested, as well any shares of Unitil common stock held in the Tax Deferred Savings and Investment Plan |
19
Chairman, CEO and President | 4X | appointed Named Executive Officer will have four years from the date of appointment to obtain the required shares of stock. The required equivalent value for all Named Executive Officers will | ||||
Chief Financial Officer | 3X | |||||
All Other Named Executive Officers | 2X |
be recalculated annually on January 1. As of the date of this proxy statement, all current Named Executive Officers have met the stock ownership requirement, with the exception of Mr. Hevert. Mr. Hevert was appointed Senior Vice President, Chief Financial Officer and Treasurer of the Company in July 2020, and he will have until July 2024 to meet the ownership requirement.
EXECUTIVE STOCK RETENTION POLICY
The Board believes that our executive officers should own a significant number of shares of our common stock to properly align their interests with those of the shareholders. All Named Executive Officers are required to hold all forms of equity received as compensation until retirement or other separation from the Company. The Board, in its sole discretion, may approve a waiver to this policy as circumstances may warrant. To date, no such waivers have been proposed or approved.
PROHIBITION ON HEDGING AND/OR PLEDGING COMPANY STOCK POLICY
All members of our Board and our executive officers are prohibited from engaging in short sales or engaging in any hedging transaction with respect to our common stock, as well as engaging in any transactions that result in pledging, or using as collateral, shares of our common stock in order to secure personal loans or other obligations, including any shares that may be held in a margin account.
TRANSACTIONS WITH RELATED PERSONS
The Audit Committee is responsible for reviewing and approving, as appropriate, all Related Person Transactions (as defined below), in accordance with its charter (the “Audit Committee Charter”) and as prescribed in the NYSE Listed Company Manual, Section 314, Related Person Transactions. As a result, the Committee has adopted procedures for such review and approval and included such procedures in our Governance Guidelines. We had no Related Person Transactions requiring disclosure in 2021, and there are no Related Person Transactions requiring disclosure currently proposed for 2022. “Related Person” and “Related Person Transaction” are defined in Item 404(a) of SEC Regulation S-K.
Transactions between us or one or more of our subsidiaries and one or more Related Person may present risks or conflicts of interest or the appearance of conflicts of interest. Our Code of Ethics generally requires all employees, officers and Directors to avoid engagement in activities or relationships that conflict, or would be perceived to conflict, with our interests or adversely affect our reputation. It is understood, however, that certain relationships or transactions may arise that would be deemed acceptable and appropriate upon full disclosure of the transaction, following review and approval to ensure there is a legitimate business reason for the transaction and that the terms of the transaction are no less favorable to us than could be obtained from an unrelated person.
20
RELATED PERSON TRANSACTIONS Review & Approval Procedure Requirements ◾ all Related Person Transactions and all material terms of the transactions shall be communicated to the Audit Committee for evaluation, including, but not limited to the approximate dollar value of the amount involved in the transaction, and all material facts as to the Related Person’s direct or indirect interest in, or relationship to, the Related Person Transaction ◾ each Related Person Transaction, and any material amendment or modification to any Related Person Transaction, must be reviewed and approved by the Audit Committee | RELATED PERSON TRANSACTIONS Basis for Audit Committee Evaluation of Transactions ◾ information provided by members of the Board during the required annual affirmation of independence, at which the members of the Audit Committee will be present ◾ applicable responses on Directors’ and Officers’ Questionnaires submitted by Directors and officers and provided to the Audit Committee by the Corporate Secretary or Internal Auditor ◾ background information on nominees for Director provided by the Nominating and Governance Committee ◾ any other applicable information provided by any Director or officer of the Company |
In connection with the review and approval, if appropriate, of any Related Person Transaction, the Audit Committee will consider whether the transaction will compromise our professional standards included in our Code of Ethics. In the case of any Related Person Transaction involving an outside Director or nominee for Director, the Committee will also consider whether the transaction will compromise the Director’s status as an independent Director as prescribed in the NYSE Listed Company Manual, Section 303A, Independent Directors. The procedures followed by the Committee to evaluate transactions with Related Persons are also available on the Corporate Governance page of the Investor Relations section of our website at unitil.com/investors.
COMMUNICATION WITH THE BOARD
Shareholders and other interested parties who desire to communicate with the Board, a committee of the Board, the non-management or independent Directors as a group, or an individual member of the Board may do so in writing by sending a letter c/o Corporate Secretary, Unitil Corporation, 6 Liberty Lane West, Hampton, New Hampshire 03842-1720 or via email to whitney@unitil.com. The Corporate Secretary will screen all correspondence for security purposes, and will also determine whether the communication relates to business matters that are relevant to us. If the correspondence meets these standards, it will be promptly forwarded to the appropriate Director(s).
21
NOMINATIONS
The Nominating and Governance Committee is responsible for recommending to the Board the slate of Director nominees for election by our shareholders. The Board reviews and, as appropriate, approves all Director nominees to be presented to our shareholders for election. As provided in Article III of our Bylaws, any vacancy occurring in the Board, whether due to the death, resignation or other inability to serve of any Director previously elected may be filled by the affirmative vote of a majority of the remaining Directors.
21
General Nomination Process
The Nominating and Governance Committee determines the required selection criteria and qualifications of Director nominees based upon the needs of the Company at the time nominees are considered. See also the section entitled Qualifications and Skills of Directors below. Director candidates will be selected based on input from Directors, executive officers, and if the Committee deems appropriate, a third-party search firm. Minimum criteria for Director nominees are set forth below, as well as in the Corporate Governance Guidelines. A candidate must possess the ability to apply good business judgment and must be in a position to properly exercise his or her duties of loyalty and care. Candidates with potential conflicts of interest will be identified and disqualified, as appropriate. In addition, the Committee will consider criteria including independence, proven leadership capabilities, business experience, areas of expertise, and factors relating to the composition of the Board, such as size, structure, and diversity. The Board seeks to include the diversity of backgrounds, perspectives, experience and skills among its members.members, including gender and racial diversity. The Committee will consider these criteria for nominees identified by the Committee, by other Directors, by shareholders, or through another source. When current Board members are considered for nomination for reelection, the Committee also takes into consideration their prior Board contributions, performance, and meeting preparedness and attendance records.
The Committee makes a preliminary assessment of each proposed nominee based upon his or her resume and biographical information, an indication of his or her willingness to serve and other background information. This information is evaluated against the criteria set forth above as well as our specific needs at the time. Based upon a preliminary assessment of the candidate(s), those who appear best suited to meet our needs may be invited to participate in a series of interviews, which are used for further evaluation. On the basis of information collected during this process, the Committee determines which nominee(s) to recommend to the Board for approval to submit for election at the next annual meeting of shareholders, or to fill vacancies on the Board that occur between shareholder meetings. The Committee uses the same process for evaluating all nominees, regardless of the source of the nomination. The Board may elect, at its discretion, to participate in an additional round(s) of interviews with one or all candidate(s) recommended by the Committee.
The Committee’s dedicated actions and well-planned process resulted in the addition of four outstanding and highly qualified Board members inwithin the past twothree years, all of whom have varied and extensive experience in numerous important areas that have proven to enhance the Board’s strong skill set and diversity goals. The Board is dedicated to the importance of diversity in all respects, including professional experience, unique skill sets, age, race and gender for sustainability in the long-term and ongoing value creation for our shareholders.
22
Shareholder Nominations
Shareholders who wish to recommend a nominee for consideration by the Committee may do so by sending the following information to the Committee c/o the Corporate Secretary at the address listed in the section entitled Corporate Governance – Governance Policies of the Board—Communication with the Board: (1) the name of the candidate with brief biographical information and his or her resume; (2) contact information
22
for the candidate and a document evidencing the candidate’s willingness to serve as a Director if elected; and (3) a signed statement as to the submitting shareholder’s current status as a shareholder and proof of ownership of the number of shares currently held.
Additionally, nominations of persons for election to the Board made by any of our shareholders must comply with all procedures set forth in Article IV – Nomination of Directors of our Bylaws. No candidates for Director nominees were submitted to the Committee by any shareholder in connection with the Annual Meeting.
23
The Board believes there are general qualifications that all Directors must exhibit, and other qualifications, attributes, skills and experience that should be represented on the Board as a whole, but not necessarily by each Director. Qualifications Required of All Directors The Board requires that each Director be a person of high integrity and superior ethical character with a proven record of leadership and accomplishment in his or her chosen field. Each Director must demonstrate innovative and independent thinking, understand complex principles of business, finance, and utility regulation, and demonstrate familiarity with and respect for corporate governance requirements and practices. Directors must also comply unequivocally with the Code of Ethics, and be free of conflicts or potential conflicts of interest, and a sufficient number of Directors must meet the requirements of independence as set forth by the NYSE, as appropriate. Directors must be willing and able to dedicate the proper amount of time and effort to service on the Board as necessary to fulfill his or her responsibilities as a Qualifications, Attributes, Skills and Experience to be Represented on the Board
24 The Skills Matrix Summary shown above outlines certain essential key qualifications and experience that the Board believes should be represented on the Board for optimal oversight of our business and the effective exercise of its fiduciary duty to shareholders. Directors standing for re-election are also evaluated by the Committee for recommendation to the Board using a set procedure based on the expectations of Board members, which is provided to all members of the Board and reviewed annually. The evaluation includes contribution to the Board and committees served upon; unique skills, expertise and attributes; attendance and preparedness; and willingness to continue serving. Overall continuity and chemistry of the Board are also considerations, as well as factors relating to the composition of the Board, such as size and structure, and the diversity of backgrounds, perspectives, experience and skills among its members. The evaluation also includes a one-on-one meeting with Mr. Meissner to address any concerns, desire to continue serving, or any other matters. Tenure on the Board is considered to be a uniquely valuable qualification in the highly regulated utility
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE The subsection entitled Section 16(a) Beneficial Ownership Reporting Compliance within the Share Ownership section of this proxy statement is incorporated herein by reference.
Commitment to our Environment On June 21, 2021, we announced our commitment to reduce Company-wide direct greenhouse gas emissions from 2019 levels by at least 50 percent by 2030, and to achieve net-zero emissions by 2050. These goals are part of our overall commitment to environmental stewardship, sustainability and corporate responsibility, and are consistent with goals established under the Paris Climate Agreement.
26 Our Approach
Aligning Sustainability and Risk Management As climate-related risks evolve, so does the need to align sustainability and the assessment of risk. Our Our Our values state clearly that sustainability initiatives are fundamental to and firmly rooted in our culture. This top-to-bottom emphasis on the very nature of sustainability assures
27
Our
As we transform our business to meet the needs of future generations, we are fully committed to the environmental, social and governance priorities that matter most to our While change creates uncertainty for some, those who arrive prepared at these critical moments find great opportunity for growth and long-term benefits for all. With thoughtful planning, informed decision-making, and an inspired workforce dedicated to the safe and reliable delivery of energy for life, we are well-positioned to capitalize on exciting growth opportunities as our industry continues to evolve. 28 Corporate Sustainability and Responsibility Report
The Board has the following standing committees: Audit Committee; Compensation Committee; Executive Committee; and Nominating and Governance Committee. The tables below provide a summary of each committee with respect to membership and primary responsibilities. Audit Committee
The Audit Committee is a separately-designated standing audit committee established in accordance with section 3(a)(58)(A) of the Exchange Act. Each member of the Committee is financially literate, knowledgeable and qualified to review financial statements. The Committee operates under a written charter, which it reviews annually, and adopts amendments, if necessary, to reflect changes governing financial reporting and accounting requirements or its responsibilities. The Audit Committee Report, which appears in the section entitled Audit Matters, more fully describes the activities and responsibilities of the Committee. Compensation Committee
The Compensation Committee operates under a written charter, which it reviews annually and, as appropriate, amends to reflect changes in its responsibilities. The specific activities and responsibilities of the Committee are described in greater detail in the section entitled Compensation Committee Operations. Executive Committee
NOTES:
The Executive Committee operates under a written charter, which it reviews annually and, as appropriate, amends to reflect changes in its responsibilities. Committee membership includes the Chairman of the Board, the lead director, and the chairs of the Audit, Compensation, and Nominating and Governance Committees of the Board, as well as any additional Board members appointed at the discretion of the Board.
Nominating & Governance Committee
The Nominating and Governance Committee operates under a written charter, which it reviews annually and, as appropriate, amends to reflect changes in its responsibilities. All Committees
The existence and activities of all committees of the Board do not alter the traditional roles and responsibilities of Unitil’s management. All committees may delegate authority to individuals or subcommittees when they deem appropriate, subject to applicable laws, rules or regulations. However, in delegating authority, a committee shall not be absolved from the responsibilities designated under the terms of its respective charter. All committees shall undertake any other action or exercise such other powers, authority, duties and responsibilities as necessary or appropriate to the discharge of the duties and responsibilities set forth in their respective charters or our Bylaws, or otherwise required by the listing standards of the NYSE or other applicable laws, rules or regulations, or as shall otherwise be determined by or assigned by the Board. The charters for each of the standing committees are available in the Corporate Governance section of the Investor Relations section of our website at unitil.com/investors, or in print to any shareholder or other interested party, free of charge upon request to the Office of the Secretary, Unitil Corporation, 6 Liberty Lane West, Hampton, NH 03842-1720; or to InvestorRelations@unitil.com; or by calling toll free 800-999-6501.
The following report is submitted by the Audit Committee with respect to Unitil’s audited financial statements for the fiscal year ended December 31, 2021. In discharging its oversight responsibility regarding the audit process, the Audit Committee has discussed with Deloitte & Touche LLP (“Deloitte”), the Company’s independent registered public accounting firm for the fiscal year ended December 31, During Audit Committee Members
Suzanne Foster, Edward F. Godfrey, Michael B. Green,
PRINCIPAL ACCOUNTANT FEES & SERVICES The following table presents fees for professional services rendered by Deloitte, Unitil’s independent registered public accounting firm, for the fiscal years ended December 31,
Audit Fees In Audit-Related Fees In Tax Fees In All Other Fees In AUDIT COMMITTEE PRE-APPROVAL POLICY The Audit Committee has a formal policy concerning approval of audit and non-audit services to be provided by the independent registered public accounting firm engaged to audit our consolidated financial statements. The policy requires that all services to be provided by the independent registered public accounting firm, including audit services and permitted audit-related and non-audit services, must be pre-approved by the Committee. The Committee pre-approved all audit, audit-related, tax and all other services provided by Deloitte during fiscal
COMPENSATION COMMITTEE OPERATIONS The Compensation Committee is appointed annually by the Board and is responsible for oversight of the executive compensation program. The Committee has overall authority to establish goals and objectives and to interpret the terms of our compensation policies, including base salary, incentive compensation, equity compensation, and all benefits programs. The Committee discharges its oversight responsibilities by carrying out the specific functions and exercising the authority provided in its charter (the “Compensation Committee Charter”). See the section entitled Compensation - Compensation of Named Executive Officers - Compensation of Directors for information on the Nominating and Governance Committee’s work regarding Directors’ compensation. The Committee has the authority to delegate some of its responsibilities to individuals or subcommittees of the Committee’s choice, subject to applicable laws, rules or regulations. However, such delegation does not absolve the Committee from the responsibilities that it bears under the terms of the Compensation Committee Charter. The Committee has the authority to invite executive officers, members of management or other guests to attend its meetings, to perform research, or to provide relevant information or recommendations. In The Committee also has the authority to retain or obtain the advice of outside counsel, compensation consultants or other advisors to advise the Committee as it deems necessary. The Committee is directly responsible for the appointment, retention terms (including compensation), and oversight of the work of any adviser it retains. Prior to retaining or obtaining advice from an adviser, the Committee will consider factors relevant to the adviser’s independence from management to the extent required by the NYSE listing standards. The Committee has periodically engaged a compensation consultant, Willis Towers Watson (“Willis Towers”), to provide compensation study data, including data from selected peer companies and compensation marketplace survey analysis, as well as to provide various recommendations based on study findings and industry trends for the Committee’s consideration. Willis Towers is engaged by and reports directly to the Compensation Committee. Willis Towers receives compensation only for services related to executive compensation, employee benefits and general compensation matters, and neither it nor any affiliated company provides any other services to us or our subsidiaries. In
See the section entitled Compensation - Compensation Discussion and Analysis for additional information on the comprehensive compensation analysis prepared by Willis Towers in 2019 and the Committee’s work in 2019 regarding compensation-related matters for both the 2020 and 2021 compensation In In addition, we requested and received information from Willis Towers to assist the Committee in determining whether its work raised any conflict of interest. Based on the responses provided by Willis Towers in its completed Conflict of Interest Questionnaire, there were no conflicts of interest in COMPENSATION COMMITTEE INTERLOCKS & INSIDER PARTICIPATION The current members of the Compensation Committee are not current or former officers or employees of Unitil. No member of the Committee has any relationship requiring disclosure under Item 404 of Regulation S-K, Transactions with Related Persons. In addition, none of our executive officers serve on the board of directors or compensation committee of another company where an executive officer of the other company also serves on the Board or Compensation Committee. RISK AND BROAD-BASED COMPENSATION PROGRAMS We believe the risks that may arise from our compensation policies and practices, which include
COMPENSATION DISCUSSION AND ANALYSIS
|
Carbon Reduction Commitment
◾ | We announced our commitment to reduce company-wide direct greenhouse gas emissions from 2019 levels by at least 50% by 2030, and to achieve net-zero greenhouse gas emissions by 2050. This goal is essential to the long-term success and future growth of our Company, and is equally important as our contribution to the global effort to slow climate change. We have identified areas of opportunity to significantly transform our business to provide sustainable, long-term solutions and to meet our carbon reduction targets. |
Customer Service
◾ | We continued to deliver exceptional service to customers, achieving |
Safety
◾ | We achieved our best gas emergency response ever, responding to |
|
◾ | We exceeded all employee safety targets for the year, |
|
|
|
3837
Employee Satisfaction
◾ | We continued to sustain exceptionally high levels of employee pride and engagement. Our 2021 employee survey results indicated that 90% of employees are proud to work for us, and 91% of employees would recommend Unitil as a place to work. |
Sustainability
|
|
Infrastructure Investments
◾ | We |
◾ | We |
◾ | We |
Regulation
◾ | We filed two strategically important rate cases in |
◾ | We supported “fuel choice” legislation, which passed in New Hampshire, ensuring New Hampshire citizens have choices regarding how they power and heat their homes and business, including the use of natural gas and other fuels. This is the first of its kind in the northeast and provides a |
In addition to the operational successes noted above, we also continued to advance our long-term strategic planning efforts, specifically in the areas of Customer Choices,Choice, Advancing the Grid, Smart Heating and Transportation Solutions, and Future of Natural Gas. We joined the S&P Small Cap 600 Index, a premier benchmark for small market capitalization companies in the U.S. And we continued our unbroken record of annual dividend payments since Unitil common stock began trading on the open market in 1984 with an annualized dividend of $1.50$1.52 per share in 2020.2021. On January 27, 2021,26, 2022, the Board of Directors voted to increase the 20212022 annualized dividend to $1.52$1.56 per share.
EXECUTIVE COMPENSATION POLICIES
EXECUTIVE COMPENSATION RECOVERY POLICY
In the event we are required to prepare an accounting restatement of our financial statements due to the material noncompliance with any financial reporting requirement under the securities laws, we are entitled to recover any excess performance-based compensation2 received by any current or former covered executive during the three-year period immediately preceding the date on which we are required to prepare an accounting restatement. To the extent allowed by applicable law and the listing standards of the New York Stock Exchange, we may seek to recover any such excess performance-based compensation at the direction of the Compensation Committee after consideration of the costs and benefits of doing so, and as approved by Board.
2 | For the purposes of the Executive Compensation Recovery Policy, performance-based compensation is defined as all annual incentives and long-term incentives, whether in cash, in equity, or otherwise, with performance features based on Unitil’s or a group’s performance. |
|
|
3938
EXECUTIVE STOCK OWNERSHIP POLICY
All Named Executive Officers of the Company are required to own shares of our common stock in the equivalent value of a multiple of base salary. Any newly appointed Named | Chairman, CEO and President | 4X | ||||||||||
Chief Financial Officer | 3X | |||||||||||
All Other Named Executive Officers |
| 2X
|
|
appointment to obtain the required shares of stock. Additional information concerning the current share ownership of our Directors and officers can be found in the section entitled Share Ownership —Beneficial Ownership.
Executive Officer will have four years from the date of appointment to obtain the required shares of stock. Additional information concerning the current share ownership of our Directors and officers can be found in the section entitled Share Ownership —Beneficial Ownership. |
EXECUTIVE STOCK RETENTION POLICY
The Board believes that our executive officers should own a significant number of shares of our common stock to properly align their interests with those of our shareholders. All Named Executive Officers are required to hold all forms of equity received as compensation until retirement or other separation from the Company. The Board, in its sole discretion, may approve a waiver to this policy as circumstances may warrant. To date, no such waivers have been proposed or approved.
PROHIBITION ON HEDGING AND/OR PLEDGING COMPANY STOCK POLICY
All members of the Board and the executive officers are prohibited from engaging in short sales or engaging in any hedging transaction with respect to Unitil common stock, as well as engaging in any transactions that result in pledging, or using as collateral, shares of Unitil common stock in order to secure personal loans or other obligations, including any shares that may be held in a margin account.
Compensation Philosophy and Administration
The Compensation Committee is responsible for oversight of our executive compensation program. The Committee, the Board and the Company recognize the value and importance of sound principles for the development and administration of competitive compensation and benefit programs. We believe that our executive compensation program (i) is instrumental in the achievement of |
Executive Compensation – Guiding Principles
◾ Annual compensation (currently defined as base salary, cash incentive and equity compensation for the Company’s employees, including the Executive Officers) should generally target the national market median, which is defined as the middle, or the
◾ The compensation methodology for determining base pay increases should be the same for all executive positions including the CEO and other Named Executive Officers.
◾ The compensation methodology should include a consistent formula for determining each component of annual compensation based on both objective and verifiable market data and on attainment of selected performance measures from the Company’s approved strategic plan (the “Strategic Plan”).
◾ The compensation program(s) for all employees should ensure pay equity for similar jobs across the organization.
|
|
|
4039
(ii) provides appropriate rewards for the fulfillment of strong operational and financial performance and (iii) provides appropriate rewards for practicing our core values and principles, which creates lasting value for our shareholders and other stakeholders.
The Compensation Committee utilizesuses a set of guiding principles in the design and implementation of the Company’s executive compensation program, which are outlined above. The primary goal of the guiding principles is to ensure consistency and fairness in all aspects of the Committee’s oversight of compensation policy. Additional information concerning the processes and operational procedures followed by the Committee can be found in the section entitled Compensation—Compensation Committee Operations.
Compensation Policy & Process
The principal objective of our executive compensation program is to attract, motivate, retain and reward highly qualified employees who are committed to the achievement of solid financial performance, outstanding service to customers, and excellence in the management of our assets. It is our belief that a strong sense of teamwork and shared responsibility are vital to achieving strong performance. Our incentive compensation reflects and supports this philosophy with an appropriate balance of financial and operational goals that apply to the entire management team. See the section entitled Compensation - Compensation Discussion and Analysis - Elements of Compensation for a discussion of the specific goals set, and results achieved, for 2020.2021. We also believe that retention of talented and dedicated key executives will help ensure continued focus on the achievement of long-term growth in shareholder value and overall sustainability, which in turn will provide significant benefits to all of our stakeholders, including shareholders, customers and employees.
|
|
4140
Compensation Policy – What We Do and What We Don’t Do
The Compensation Committee continuously strives to make improvements to our executive compensation policies. Below is a summary of what we do and what we do not do with respect to executive compensation, the totality of which the Committee and the Board believe aligns with the long-term interests of our shareholders as well as with today’s commonly accepted best practices in the market.
WHAT WE DO
◾ Apply balanced performance metrics (financial, operations, customer satisfaction)
◾ Align performance metrics with management and shareholder interests
◾ Practice prudent goal setting aligned with the Strategic Plan
◾ Ensure a majority of the CEO’s annual compensation* is variable based on performance
◾ Enforce significant stock ownership and holding policy
◾
◾ Allow only double-trigger change of control provisions
◾ Monitor pay equity across the Company
|
WHAT WE DON’T DO
◾ Provide excise tax gross ups of any kind in any Change of Control Agreements or in Mr. Meissner’s Employment Agreement
◾ Allow hedging, pledging or short sale transactions in Company stock
◾ Encourage unreasonable risk taking
◾ Grant equity awards discounted at values below 100% fair market value
◾ Allow single-trigger change of control provisions
◾ Provide excessive executive prerequisites
◾ Allow new entrants into the SERP (the |
* The Committee defines “annual compensation” in its Guiding Principles as “base salary, cash incentive and equity compensation.”
Compensation Decisions for 20202021
In 2020, in order to prudently manage outside consulting expenses, the Committee decided to forego consulting work related to overall executive pay. Instead, the information contained in the comprehensive 2019 Compensation Analysis was used as an assessment benchmark. The Committee also used existing compensation programs and policies previously found to be reasonable and competitive to evaluate executive compensation for 2021.The Committee approved executive compensation paid in 2021 in January 2021. The 2019 Compensation Analysis is described below.
In 2019, the Committee engaged Willis Towers to conduct a comprehensive review and assessment of senior management compensation, including CEO, CFO, and other Named Executive Officers’ compensation, non-union employee compensation, employee benefits, and Directors’ compensation (the “2019 Compensation Analysis” or the “Analysis”) in the context of market practices and our Compensation Philosophy. The Committee requested Willis Towers provide an assessment of current levels of competitive compensation and broad-based benefit programs to use as a tool to assist the Committee with its decisions concerning 2020 compensation.
41
The Committee’s standard practice is to engage a compensation consultant to prepare a comprehensive study of all elements of compensation approximately every five years, with updates on executive compensation annually or as needed. The last comprehensive analysis was performed in 2014. It is anticipated that the Committee will continue to use the 2019 Compensation Analysis as a baseline benchmark until the next comprehensive analysis is completed in 2024, with annual and/or other updates as needed or requested.
42
2019 Compensation Analysis - Summary
The 2019 Compensation Analysis scope included an overall analysis of our compensation as it relates to and supports our business strategy, alignment with the compensation philosophy, peer group identification, detailed information on executive, non-union staff and Directors’ compensation, as well as a review of the research methodology and process, key findings with regard to base salary and incentive compensation, program assessment, and several recommendations for the Committee’s consideration.
General Methodology
Towers Watson used both compensation data from published compensation surveys focused on comparably sized organizations in the utility sector and general industry sector (for “cross industry” positions), and compensation data from proxy filings of our approved peer group of 13 publicly traded utility companies with annual revenues between $275 million and $1.6 billion (the “2019 Peer Group”)3, which was approved by the Compensation Committee in April 2019 for the purposes of this Analysis. | 2019 Compensation Analysis Scope
Review of Total Compensation Philosophy
Senior Management Competitive Assessment: Detailed review of total direct compensation* for approximately 20 executive positions, including the CEO, CFO and other Named Executive Officers
◾ Confirmation of competitive marketplace and peer group ◾ Assessment of pay level competitiveness and mix of total compensation ◾ Competitiveness of cash and equity incentive levels
Non-Union Staff Competitive Assessment: Competitive assessment of non-union staff cash compensation for 75 jobs covering approximately 150 incumbents
◾ Cash compensation ◾ Appropriateness of salary structure ◾ Analysis of incentive targets
Directors’ Competitive Assessment: Competitive assessment of total direct compensation* for outside Board members
◾ Confirmation of peer group ◾ Assessment of pay elements including board and committee annual retainers, meeting fees, board and committee leadership premiums
Broad Based Benefit Program Assessment: Review of program design to ensure competitiveness as an element of total compensation
*For the purposes of this analysis, total direct compensation is defined as base salary, annual incentives and long-term incentives.
|
3 | The 2019 selected group includes ALLETE, Inc., Avista Corporation, Chesapeake Utilities Corporation, El Paso Electric Company, Genie Energy, Ltd., MGE Energy, Inc., Northwestern Corporation, Northwest Natural Gas Company, ONE Gas, Inc., Otter Tail Corporation, PNM Resources, Inc., Pattern Energy Group, Inc., South Jersey Industries, Inc. |
42
Compensation Data from Published Compensation Surveys
Compensation data from published compensation surveys focused on comparably sized organizations in the utility sector and general industry sector (for “cross industry” positions)4. Published survey data were size-adjusted based on revenue, employee regression and/or scope parameters. Because the surveys are confidential, the specific data selected by Willis Towers did not indicate survey participants by company name.
|
|
43
Compensation Data from Proxy Filings
Compensation data was also extracted from the 2019 Peer Group proxy filings. The Compensation Committee used this data to analyze only the CEO’s and CFO’s compensation, with the objective of ensuring that CEO and CFO total compensation was reasonable, competitive and consistent with pay practices at peer companies.
Published compensation surveys generally provide a broader sample of data upon which to base compensation decisions, which is essential when analyzing a large number of positions as was the case with the 2019 Compensation Analysis. Data from peer company proxy filings generally validate published survey information with definitive executive compensation data from specific companies. | 2019 Compensation Analysis Pay Elements Focus
◾ Base salary
◾ Total cash compensation (base salary plus annual incentive)
◾ Total direct compensation (base salary plus annual incentive plus long-term
|
Methodology: Published Surveys
◾ | Published survey data for all positions included in the Analysis were collected. |
◾ | Survey data for both general industry and utilities market segments reflected the size and scope similar to ours through the use of regression analysis or tabular grouping, where regression data are not available. |
◾ | Survey data were aged using an annualized rate of 3% to a common date of July 1, 2019 to ensure data consistency, where 3% represents the projected movement in senior executive compensation base pay levels for 2019. |
◾ | Survey data cover a large number of benchmark positions, and the median (50th percentile) of this data set approximated the 25th percentile of the smaller proxy-based data set. |
Methodology: Peer Group Proxy Filings
◾ | A benchmarking assessment was prepared using position-specific market data to compare current compensation levels for the CEO and the CFO with compensation levels for comparable positions. |
◾ | Market data for total direct compensation elements were extracted for the 25th percentile, the 50th percentile (median), and the 75th percentile. |
◾ | Based on the size of the 2019 Peer Group companies relative to our financial profile (based on fiscal year-end 2018 revenues and number of employees), Towers Watson recommended that we focus on the 25th percentile information within this data set. |
4 | The primary sources of data were the Willis Towers Watson CDB Executive Energy Services and General Industry Compensation Databases that provide market compensation data on over 1,000 U.S. organizations, as well as other published survey sources including the Mercer Executive Compensation Survey Report. |
|
|
4443
| Willis Towers completed the 2019 Compensation Analysis in July 2019, and provided a comprehensive report outlining the findings of the Analysis and associated recommendations to the Committee for review and consideration.
|
The 2019 Compensation Analysis allowed the Committee to gain a greater understanding of current compensation in the context of market practices, establish a benchmark upon which to base its compensation decisions for the 2020 and 2021 compensation years, and accurately assess the competitiveness of each executive officer’s, including the CEO’s and CFO’s, overall compensation and alignment with the Committee’s Compensation Philosophy. It is anticipated that the Committee will use the 2019 Compensation Analysis as a baseline study, with periodic updates as needed, until the next comprehensive analysis is prepared, which will likely occur in 2024.
Salary Administration
Our Salary Administration Policy has three objectives:
◾ | to provide a compensation program equal to or better than the median of compensation programs provided by geographically comparable businesses; |
◾ | to manage base salaries in a manner that recognizes and appropriately rewards performance within prescribed budgetary limits; and |
◾ | to provide base salary opportunities that are competitive with external pay practices for substantially comparable work. |
The Salary Administration Policy includes three important components:
Job Description
Job Evaluation |
|
|
4544
Market Analysis & Salary Range
Each year weWe participate in numerous salary market studies to ensure that the competitiveness of base salaries is maintained. We adjust the salary ranges each year based upon the results of these surveys to ensure that we maintain our salary ranges at the median market level. Historically, the salary ranges are adjusted by approximately 2% annually based on market survey data. The midpoint of the base salary range is set at the median level of the broad-based published compensation survey group when compared to similar positions at comparable companies. The minimum in the salary range is determined by multiplying the midpoint by 80%, and the maximum is determined by multiplying the midpoint by 120%. In general, the salary range minimum is commonly the lowest amount we will pay a new employee in the job, with the aim of employees reaching the midpoint of the range within five years. The midpoint is where we strive to pay fully trained, fully competent employees. The midpoint to maximum range is where high-performing employees and long-term employees tend to be paid. Exceptions are occasionally made based on experience, skills, education, and other factors.
Base Salary
We set base salary ranges for every job grade and position based upon salary survey data provided by Willis Towers and in accordance with the Salary Administration Policy described above. In relation to each Named Executive Officer, base salary is set within the salary range based upon individual experience, skills, and education, as well as performance relative to individual annual goals. This process is used for both executive and non-executive positions.
Incentive Compensation – Cash Incentive
We set annual target cash incentive awards equal to the median of the broad-based published compensation survey group for the executive officers’ target cash incentive awards at other comparable companies based on data provided by Willis Towers. The Committee also used information from the proxy statements of our peer group, at the 25th percentile target, as a secondary source to set the CEO’s and CFO’s annual target cash incentive award. We have developed a “balanced score card” approach to setting goals for the annual incentive awards, which includes certain goals from the Strategic Plan that represent success in financial results, electric reliability, gas safety, customer service and distribution cost per customer. The Compensation Committee approves the quantitative goals, also referred to as performance metrics, for these awards annually. See the section entitled Compensation - Compensation Discussion and Analysis— Elements of Compensation for a discussion of the balanced score card.
Incentive Compensation – Equity Compensation
We grant shares of restricted stock to executive participants in the Stock Plan annually. The size of the annual restricted stock award is based upon our achievement of the key performance metrics, which are selected from the Strategic Plan and approved by the Compensation Committee. Each participant’s target award is based on market data for the median of the broad-based published compensation survey group size grant at peer group and other comparable companies, as calculated using data provided by Willis Towers. The Compensation Committee also uses information from the proxy statements of our peer group, at the 25th percentile target, as a secondary source to set the CEO’s and CFO’s target restricted stock award.
|
|
4645
at the 25th percentile target, as a secondary source to set the CEO’s and CFO’s target restricted stock award. The shares of restricted stock vest over a period of four years, and all Named Executive Officers are required to hold all forms of equity, vested or unvested, received as compensation until retirement or other separation from Unitil. The Board, in its sole discretion, may approve a waiver to this policy as circumstances may warrant. However, to date, no such waiver has been requested or granted.
Performance-Related Incentive Compensation | ||||||||
In addition to individual performance, Unitil’s performance is a critical component in the determination of how each individual executive is paid relative to the market median of the broad-based published compensation survey group, as described above. For |
Named Executive Officer
|
| ||||||
Mr. Meissner Mr. Hevert Mr. Black Mr. Mr.
|
| |||||||
*At risk compensation is defined as incentive compensation as a percentage of salary plus incentive compensation as reported in columns C, E and G in the Summary Compensation Table.
|
CEO Pay Ratio
Summary
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the Securities and Exchange Commission adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer. Our principal executive officer is Mr. Meissner (the “CEO”).
We believe the compensation program and salary administration policy should be consistent and internally equitable to motivate all employees to perform in ways that enhance shareholder value. We also believe that our compensation philosophy and processes yield an equitable result for all employees, which is reflected in the resulting ratio.
Methodology
To reasonably identify the median employee, we prepared a list of all active employees (excluding the CEO) as of December 31, 2020.2021. The list included part-time employees. As of December 31, 2020,2021, we employed 512508 people of which 347341 were non-union employees and 165167 were union employees covered by a collective bargaining agreement.
Next, we extracted the taxable wages number reported in Box 1 of the 20202021 Form W-2 from our payroll records for each employee, excluding the CEO. We did not annualize wages and salaries for those employees thatwho were not employed for the full year of 2020.2021. The median employee was then identified.identified based on taxable wages as reported on Form W-2. Once identified, we calculated the median employee’s total annual compensation in the same manner as the “Total Compensation” shown for the CEO in the Summary Compensation Table in the section entitled Compensation – Compensation of Named Executive Officers.
|
|
4746
Results
The table below shows the information used for the calculation of the ratio of the estimated annual total compensation of the median employee identified using the methodology described above to the annual total compensation of Mr. Meissner as calculated for the Summary Compensation Table.
2020 PAY RATIO TABLE
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 PAY RATIO TABLE
|
2021 PAY RATIO TABLE
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year | Salary ($) | Stock Awards (1) | Non-Equity Incentive Plan Compensation (2) | Change in Pension | All Other Compensation (4) | Total | Year | Salary ($) | Stock Awards (1) | Non-Equity Incentive Plan Compensation (2) | Change in Pension | All Other Compensation (4) | Total | |||||||||||||||||||||||||||||||||||||||||||
Thomas P. Meissner, Jr.
|
|
2020
|
|
|
$597,740
|
|
|
$388,210
|
|
|
$314,710
|
|
|
$2,445,349
|
|
|
$281,621
|
|
|
$3,977,630
|
|
|
2021
|
|
|
$620,398
|
|
|
$629,760
|
|
|
$466,162
|
|
|
$566,750
|
|
|
$143,680
|
|
|
$2,426,750
|
| ||||||||||||||
Median Employee
|
|
2020
|
|
|
$90,000
|
|
|
—
|
|
|
$5,226
|
|
|
—
|
|
|
$9,621
|
|
|
$104,847
|
|
|
2021
|
|
|
$87,379
|
|
|
—
|
|
|
$5,254
|
|
|
—
|
|
|
$11,239
|
|
|
$103,872
|
| ||||||||||||||
Ratio of Median Employee’s to Mr. Meissner’s Annual Total Compensation | Ratio of Median Employee’s to Mr. Meissner’s Annual Total Compensation |
| 1:38 | Ratio of Median Employee’s to Mr. Meissner’s Annual Total Compensation |
| 1:23 |
NOTES :NOTES:
(1) | The value shown represents the grant date fair value, calculated in accordance with FASB ASC Topic 718, of the award of restricted stock granted under the Stock Plan on January |
(2) | The values shown include cash incentive awarded on January |
(3) | The value shown for Mr. Meissner includes the change Pension value and the change in the SERP value. See also the Summary Compensation Table in the section entitled Compensation - Compensation of Named Executive Officers. |
(4) | The value shown for Mr. Meissner for the year |
|
|
4847
Shareholder Advisory Vote on Executive Compensation
As required by the Dodd-Frank Act, we must provide the opportunity for shareholders to vote, on an advisory basis, on the compensation of executives (commonly known as a “say-on-pay” proposal). We present the say-on-pay proposal to our shareholders annually. Our shareholders will next be asked to vote on the desired frequency of the advisory say-on-pay proposal at the 2023 annual meeting, as required. |
|
2021 Voting Result
At the 2021 annual meeting of shareholders, we presented the required non-binding advisory say-on-pay vote on the compensation of our Named Executive Officers as Proposal 3. As we reported in the Form 8-K, filed with the SEC on May 4, 2021, 94.2% of shareholders approved by advisory vote the compensation of our Named Executive Officers. The Compensation Committee continues to believe the significant compensation and governance-related policy changes initiated following the 2018 Annual Meeting are reflected in the consistently superior say-on-pay advisory vote results in 2019, 2020, and 2021.
| ||
Compensation-Related Policies
◾ No excise tax gross up provision in any Change of Control Agreements
◾ No excise tax gross up provisions in Mr. Meissner’s Employment Agreement
◾ Executive Compensation Recovery Policy
◾ Executive Stock Ownership Policy
◾ Stock Retention Policy for Directors and Executives
◾ Anti-Hedging and/or Pledging of Company Stock Policy
|
Compensation Committee Commitment
|
governance-related policies. The Compensation Committee remains committed to this objective. Details on all compensation and governance-related policies are outlined in the section of this proxy statement entitled Corporate Governance.
Our 2021
Our 2022 say-on-pay proposal is included in this proxy statement as Proposal 3: Approval, on an Advisory Basis, of the Compensation of the Company’s Named Executive Officers.
|
|
4948
ELEMENTS OF COMPENSATION
Base Salary
Every employee is paid a base salary. The purpose of base salary is to reward employees for the expertise and value they bring to their jobs. Base salary is determined according to our salary policy, which assigns each position a grade and a corresponding salary range. We set salary ranges for every position based upon comparative salary data provided by Willis Towers. The midpoint of the salary range is set at the median level of the broad-based published compensation survey group when compared to similar positions at comparable companies. The minimum parameter in the salary range is determined by multiplying the midpoint by 80%, and the maximum parameter is determined by multiplying the midpoint by 120%. The salary range is then used to manage each employee’s salary, which is based on merit, within the range. For each employee (including Named Executive Officers), base salary is set within the salary range based upon individual performance relative to individual annual goals. The elements of individual performance differ depending on the individual position, but generally include: quality of work; successful completion of established goals; ability to initiate creative solutions; adaptability to change; and impact on our overall performance. The salaries of all employees (including the Named Executive Officers) are reviewed annually, as well as at the time of a promotion or change in responsibilities.
Each position (including all executive officer positions) has a job description that outlines the accountabilities and competencies required. Merit increases are considered at the end of the year based on the evaluation of each person’s performance as related to each accountability listed in the individual job description, as well as the achievement of individual goals established at the beginning of the year. Merit increases are generally effective as of January 1 of each year. Merit increases also are one of the methods used to reach one of our competitive compensation guiding principles, which is to ensure that employees are paid at or near the market |
Named Executive Officer
|
|
Cumulative
|
| ||||||
Mr. Meissner | ||||||||||
Mr. Hevert | ||||||||||
Mr. Black | ||||||||||
Mr. | ||||||||||
Mr. Leblanc | 6.02% | |||||||||
|
|
|
| |||||||
*Mr. Hevert began his employment with us on July 23, 2020; the increase reflects partial salary paid in 2020. **Mr. Brock retired on July 1, 2021; base salary reflects prorated total based on six months of employment.
|
| |||||||||
median of the broad-based published compensation survey group. Merit increases may also be adjusted by the Compensation Committee to reflect the market value of a job when compared to similar positions at other companies within our peer group, as recommended by Willis Towers. |
of our competitive compensation guiding principles, which is to ensure that employees are paid at or near the market median of the broad-based published compensation survey group. Merit increases may also be adjusted by the Compensation Committee to reflect the market value of a job when compared to similar positions at other companies within our peer group, as recommended by Willis Towers.
The process followed to determine base salary increases for the Named Executive Officers begins with an annual summary and evaluation of Unitil’s overall performance provided to the Board by the CEO, which generally occurs in mid-January. The Compensation Committee and the Executive Committee meet jointly in executive session to discuss the evaluation of our overall performance, as well as to discuss the CEO’s performance in relation to our performance for the year, taking into account both the quantitative and qualitative aspects of the performance of both the CEO and Unitilour Company as a whole. The Compensation Committee uses the feedback gained in the joint meeting along with the market competitive salary information previously described to determine an appropriate base salary increase for the CEO based on both merit and market conditions. The CEO provides a recommendation to the Compensation Committee for base salary increases for the other Named Executive Officers. The Compensation Committee then reviews and recommends the
|
|
5049
for base salary increases for the other Named Executive Officers. The Compensation Committee then reviews and recommends the base salaries of all of the Named Executive Officers to the full Board for discussion and approval. The Committee’s recommendations are based on the performance evaluations and market information for each of the Named Executive Officers. For 2020,2021, each Named Executive Officer received the base salary increase percentage set forth opposite his or her name in the table above. Ms. Vaughan’sMr. Brock’s negative 20202021 salary increase reflects only herhis salary for the period of employment prior to resignation in 2020,retirement, which was January 1 – March 16, 2020.June 30, 2021.
Incentive Compensation
Management Incentive Plan
The Unitil Corporation Management Incentive Plan (the “Management Incentive Plan”) provides annual cash incentive payments based upon the attainment of specified goals selected from the Strategic Plan. The Compensation Committee selects participants in the plan and establishes their individual target awards. All executives (including the Named Executive Officers) are participants in the Management Incentive Plan. The purpose of the Management Incentive Plan, which is consistent with our principal compensation objective, is to provide executives with significant incentives related to performance, thereby providing motivation to
Management Incentive Plan is further intended to provide executives with competitive target levels of total compensation when considered with base salaries. For the annual incentive awards, annual quantitative performance goals are established by the Compensation Committee. These goals, which relate to key performance metrics selected from the Strategic Plan, are the same for all |
Named Executive
|
Target Award (% of Base Salary)
| ||||||
Mr. Meissner | 65% | |||||||
Mr. Hevert | 45% | |||||||
Mr. Black | 35% | |||||||
Mr. | ||||||||
Mr. | 35% | |||||||
| 45%
| |||||||
employees (including executive officers) to ensure that employees are focused on common bottom-line business, customer service, and operational results. These goals are discussed below in the subsection entitled Incentive CompensationPerformance Metrics and Goals. Under the Management Incentive Plan, executive officers receive a cash award if the quantitative goals that are set by the Committee are met. Each executive officer’s Management Incentive Plan target award is established as a percentage of base salary based on the market median of the broad-based published compensation survey group for his or her position when compared to other comparable companies, calculated using data provided by Willis Towers. The Committee also used information from the proxy statements of our peer group, at the 25th percentile target, as a secondary source to set the CEO’s and CFO’s Management Incentive Plan target award. The table above shows the Management Incentive Plan target awards for 2021 as a percentage of base salary for the Named Executive Officers. |
For the annual incentive awards, annual quantitative performance goals are established by the Compensation Committee. These goals, which relate to key performance metrics selected from the Strategic Plan, are the same for all employees (including executive officers) to ensure that employees are focused on common bottom-line business, customer service, and operational results. These goals are discussed below in the subsection entitled Incentive CompensationPerformance Metrics and Goals. Under the Management Incentive Plan, executive officers receive a cash award if the quantitative goals that are set by the Committee are met. Each executive officer’s Management Incentive Plan target award is established as a percentage of base salary based on the market median of the broad-based published compensation survey group for his or her position when compared to other comparable companies, calculated using data provided by Willis Towers. The Committee also used information from the proxy statements of our peer group, at the 25th percentile target, as a secondary source to set the CEO’s and CFO’s Management Incentive Plan target award. The table above shows the Management Incentive Plan target awards for 2020 as a percentage of base salary for the Named Executive Officers.
Actual awards may be less than or greater than the target awards depending upon actual results achieved. In addition, the Committee has the authority to increase or decrease the annual incentive award under our incentive plans, including the Management Incentive Plan, and restricted stock awards under the Stock
50
Plan. The Committee also has the authority to decide to pay no award when one would otherwise be paid. The Committee has in the past exercised its discretion to both increase and decrease award payments when
51
such calculation did not properly balance the interests of employees and shareholders, but chosedid not to do so from 2013 through 2019. With regard toexercise its discretion in connection with the awardawards for 2020 results, the Committee exercised its authority to adjust the award. For additional information on the Committee’s decision to adjust the award, please see the subsection entitled Incentive CompensationPerformance Metrics and Goals.2021 results.
Second Amended and Restated 2003 Stock Plan
Stock Plan Objectives
◾ Optimize profitability and growth through incentives that link the personal interests of participants to those of shareholders through the ownership of Unitil common stock
◾ Provide participants with an incentive for excellence in individual performance
◾ Promote teamwork among participants
◾ Encourage stock ownership in the Company for all employee participants in the Stock Plan
| The Unitil Corporation Second Amended and Restated 2003 Stock Plan (as amended, the “Stock Plan”) was initially approved by shareholders at the 2003 annual meeting of shareholders, amended and restated on March 24, 2011, and again amended and restated, effective April 19, 2012. Participation in the Stock Plan is currently limited to Directors, executive officers and other employees and consultants selected by the Compensation Committee. Restricted Stock and Restricted Stock Units (“RSUs”) may be issued to participants in the Stock Plan. The objectives of the Stock Plan are directly tied to the principal compensation objective.
|
The Committee feels that equity-based compensation ensures that executive officers have a continuing stake in our long-term success. Executive officers are subject to both stringent stock ownership requirements as well as a retention requirement which stipulates that all forms of equity received as compensation from Unitil be held until retirement or other separation from the Company. The Committee believes that the retention requirement provides an additional element of incentive to increase shareholder | ||||||||
Named Executive Officer | Stock Plan2021 Target Award Value | |||||||
Mr. Meissner Mr. Hevert Mr. Black Mr. Mr.
|
$84,222 $ $
$0 |
|
value over the long term. The details of the stock ownership and retention requirements are discussed in greater detail below.
Generally, in late January or early February of each year, the Committee approves annual awards of restricted stock to current executive officers and employee participants in the Stock Plan based upon the attainment of a set of specified goals as discussed above. As with the annual cash incentive awards, target awards are established for each participant that generally vary based upon the job grade level of each participant’s position in accordance with survey data provided by Willis Towers. Each executive officer’s target restricted stock award is set by the Committee based upon recommendations from Willis Towers, with the goal of granting a target award with a value equal to the market median of the broad-based published compensation survey group at the time of grant, which translates to the Stock Plan target award value being set as the job grade salary range midpoint.
|
|
5251
| Awards of restricted stock generally vest fully over a period of four years at a rate of 25% each year subject to continued employment with us. Participants holding restricted stock have the same rights as all shareholders, including the right to vote the restricted stock and to collect any cash dividends paid on the restricted stock prior to vesting. The Committee also used information from the proxy statements of our peer group, at the 25th percentile target, as a secondary source to set the CEO’s and CFO’s target award. The values of the target restricted stock awards based on
The value of each possible award extends from a minimum threshold of 50% of the target restricted stock award amount to a maximum of 150% of the target award amount. This award is then reduced for anticipated income taxes and Medicare taxes, with Stock Plan participants receiving the shares net of such taxes, subject to the vesting schedule. As the shares vest, they become taxable income to the participant, and the taxes, previously accounted for, are credited back to participants. This procedure |
reduces both the dilutive effect of the Stock Plan by granting fewer shares than would otherwise be granted, and the volatility of the Company’s stock in the market by eliminating stock sales that would otherwise be completed to pay personal income taxes. The net restricted stock award provides a market competitive award while minimizing both dilution and volatility.
Stock Ownership and Holding Requirement for Executive Officers
The Board believes that executive officers of the Company should own a significant number of shares of our common stock to properly align their interests with those of our shareholders. All Named Executive Officers are required to |
Chairman, CEO and President Chief Financial Officer All Other Named Executive Officers
|
4X 3X 2X
|
own shares of Unitil common stock in the equivalent value of a multiple of base salary. All shares of Unitil common stock that are owned directly or beneficially, shares of restricted stock that are awarded, whether vested or unvested, as well any shares of stock held in the Unitil Stock Fund of the Tax Deferred Savings and Investment Plan will be counted towards the required total. Any newly appointed Named Executive Officer will have four years from the date of appointment to obtain the required shares of stock. The required equivalent value for all Named Executive Officers is recalculated annually on January 1. As of the date of this proxy statement, all Named Executive Officers have met the ownership requirement, with the exception of Mr. Hevert, who began his employment with us on July 23, 2020. Mr. Hevert will have until July 2024 to meet the share ownership requirement.
All Named Executive Officers are also required to hold all forms of equity received as compensation until retirement or other separation from the Company. The Board, in its sole discretion, may approve a waiver to this policy as circumstances may warrant. To date, no such waivers have been proposed or approved.
|
|
5352
to this policy as circumstances may warrant. To date, no such waivers have been proposed or approved. Additional information concerning the share ownership of Named Executive Officers can be found in the section of this proxy statement entitled Share Ownership - Beneficial Ownership.
Incentive Compensation Performance Metrics and Goals
We have two compensation plans in which the Named Executive Officers participate where performance metrics and goals are integrally and directly linked to the compensation awarded—the Management Incentive Plan and the Stock Plan. The performance metrics and goals are also directly linked to the Strategic Plan.
Selecting the Performance Metrics and Setting the Goals
Performance metrics and goals are recommended by management annually as part of the strategic planning process. In the Strategic Plan, performance metrics and goals are aligned with the strategies defined for the coming year. The Strategic Plan includes suggested targets for each performance metric, which areis reviewed and approved by the Board each year. The Compensation Committee then selects the key performance metrics to be applied to the Management Incentive Plan and the Stock Plan.
When selecting the key performance metrics, the Committee considers a number of factors, including the appropriate mix of financial, operations, and customer-centric metrics, as well as the obligation to meet the various state public utility regulatory requirements to include a certain percentage of operations and customer-focused metrics. The Committee also reviews prior years’ goals and results to ensure stretch goals are set, and may also consider recommendations from Willis Towers when selecting the optimal combination for the coming year. The Committee believes that a prudently set and balanced mix of key performance metrics provides the opportunity, and the incentive, for all employees to contribute to our measurements of success. |
|
|
5453
The table below shows the performance metrics selected and goals set by the Committee for the
2020 2021 annual incentive awards under our incentive plans, including the Management Incentive Plan and the Stock Plan, as well as the performance results calculated for 2020.2021.
20202021 PERFORMANCE METRICS, GOALS AND RESULTS
Metric: 2020
| Award Category & Goals
| Result
| Target Weight
| Factor
|
Weighted Performance
| |||||
Earnings Per Share | Threshold: $2.19 Target: $2.31 Maximum: $2.43
| $2.24 5 (adjusted)
[above threshold, below target]
| 40% | 0.71 | 28% | |||||
Gas Safety | Threshold: 84% Target: 86% Maximum: 88%
| 87.4%
[above target, below maximum]
| 10% | 1.35 | 14% | |||||
Electric Reliability | Threshold: 150 minutes Target: 118 minutes Maximum: 85 minutes
| 125 minutes
[above threshold, below target]
| 10% | 0.88 | 9% | |||||
Customer Satisfaction | Threshold: 82% Target: 87% Maximum: 92% | 93%
[maximum] | 10% | 1.50 | 15% | |||||
Cost Per Customer | Electric Threshold: $491 Target: $395 Maximum: $374 | $377
[target] | 15% | 1.00 | 15% | |||||
Gas 6 Threshold: $258 Target: $312 Maximum: ($34)
| $471
[below threshold] | 15% | 0.00 | 0% | ||||||
TOTAL | 100% | 81% |
|
|
55
The Weighted Performance Factor of 81% for 2020 indicates the payout percentage relative to Target used to calculate the actual awards for Management Incentive Plan and Stock Plan participants using the applicable formulas described in the section entitled Incentive Compensation Formulas.
2020 Key Performance Metrics and Goals: Defined
Earnings Per Share (“EPS”)
The goals for the EPS metric are set as a target based on the approved 2020 EPS budget of $2.31 with a plus/minus 5% range to maximum and threshold, respectively, from the target value. The Compensation Committee set the 2020 EPS target equivalent to our budgeted 2020 EPS of $2.31, and agreed that a 5% range from the approved budget to the threshold and a 5% range from the approved budget to the maximum are reasonable stretch goals and provided symmetry in the goals for this metric. The goals for 2020 represent an approximate increase of 6.2% compared to those set for 2019 performance.
Metric: 2021
| Award Category & Goals
| Result
| Target Weight
| Factor
|
Weighted Performance
| |||||||||||||||||||||||||||||||
Earnings Per Share | Threshold: $2.21 Target: $2.33 Maximum: $2.45
| $2.35
[above target, below maximum]
| 40% | 1.08 | 43% | |||||||||||||||||||||||||||||||
Gas Safety |
Target: 86% Maximum: 88% | 88.2% [maximum] | 10% | 1.50 | 15% | |||||||||||||||||||||||||||||||
Electric Reliability |
Target: 122 minutes Maximum: 85 minutes | 105.76 minutes [above target, below maximum] | 10% | 1.22 | 12% | |||||||||||||||||||||||||||||||
Customer Satisfaction |
Target: 87% Maximum: 92%
Cost Per Customer |
Target: $326 Maximum: $314 | $319.93
| 15% | 1.26 | 19% | ||||||||||||||||||||||||||||||
Gas Threshold: $459 Target: $437 Maximum: $415 | $445.46 [above threshold, below target] | 15% | 0.81 | 12% | ||||||||||||||||||||||||||||||||
TOTAL | 100% | 116% |
The Weighted Performance Factor of 116% for 2021 indicates the payout percentage relative to Target used to calculate the actual awards for Management Incentive Plan and Stock Plan participants using the applicable formulas described in the section entitled Incentive Compensation Formulas.
54
2021 Key Performance Metrics and Goals: Defined
Earnings Per Share (“EPS”)
The goals for the EPS metric are set as a target based on the approved current year EPS budget with a plus/minus 5% range to maximum and threshold, respectively, from the target value. The Compensation Committee set the 2021 EPS target equivalent to our budgeted 2021 EPS of $2.33, and agreed that a 5% range from the approved budget to the threshold and a 5% range from the approved budget to the maximum are reasonable stretch goals considering, among other things, the ongoing COVID-19 pandemic. The Committee also agreed that the plus/minus 5% range provided good symmetry in the goals for this metric.
Gas Safety
Gas safety is measured as the percentage of the response time to natural gas odor calls answered within a pre-set response time window. In 2021, the response time target is based on a best in class 30-minute response standard. Similar to electric reliability, described below, the shorter the response time standard, the more rigorous the target. In defining the threshold, the Committee considered the minimum acceptable percentage to be not less than 84% and the maximum percentage to be at least 88% of the natural gas odor calls responded to in person be within 30 minutes. For 2021, we responded to 88.2% of our natural gas odor calls within the 30-minute pre-set response time window, which, to-date, is our best emergency response time ever.
Electric Reliability
Electric reliability is benchmarked using an industry standard index, SAIDI (System Average Interruption Duration Index). SAIDI represents the total length of time the average customer is without electric service during the year, measured in minutes. For added perspective on this metric, a lower number of minutes (without electric service) equates to a more stringent target. The target for reliability performance is set using the rolling five-year average of the median of peer group reliability based on the national Institute of Electrical and Electronics Engineers (“IEEE”) benchmarking survey.5 For 2021, our SAIDI was calculated as 105.76 minutes.
Customer Satisfaction
Customer satisfaction is measured using direct customer survey feedback to the question “How satisfied are you with the service, excluding price, you are receiving from Unitil?” as compared to the current national benchmark for residential customer satisfaction as compiled by Escalent, an independent human behavior and analytics firm. Escalent administers the survey twice each year from a system-generated random selection of customers from our database. The national benchmark in 2021 is 87%, which was set as the target, with maximum and threshold at plus or minus 5%, respectively. In 2021, we once again achieved the maximum goal with 92% in overall customer satisfaction. From a benchmarking perspective, we ranked in the first quartile both nationally and in all regions.
5 | The |
55
Compared to our defined utility peer groups (Eastern U.S. and Northeast U.S. regions), we ranked second among 23 eastern U.S. utilities, and first among eight northeast U.S. utilities.
Cost Per Customer
Distribution cost per customer is measured against our same-year approved operations and maintenance (“O&M”) cost per customer budget. Results are weighted 50% electric and 50% gas. The minimum and maximum range stretch factors are determined from the previous 10 years’ O&M budget variance standard deviation. Target is determined using a stretch factor of zero. For added perspective on this metric, a lower cost per customer equates to a more stringent target. For 2021, our O&M cost per customer for electric division customers was $319.93, and for gas division customers was $445.46.
The Role of the Compensation Committee
The Compensation Committee Charter provides the Committee with the authority to approve annual incentive and long-term compensation plan awards in light of the established corporate goals and strategic objectives, to determine whether annual or long-term incentive compensation plan awards have been earned, and to apply a qualitative adjustment to increase or decrease the annual incentive award under our incentive plans, including the Management Incentive Plan, and restricted stock awards under the Stock Plan. The Committee has in the past exercised its discretion to both increase and decrease award payments when such calculation did not properly balance the interests of employees and shareholders, but did not exercise its discretion in connection with the awards for 2021 results.
The Committee meets annually in the first fiscal quarter to review the performance metrics and results for the previous year, and to approve the annual cash incentive awards and the annual grant of restricted stock awards under the Stock Plan. The Committee approved the annual cash incentive awards and the annual grant of restricted stock awards under the Stock Plan for 2021 performance on January 25, 2022.
56
Incentive Compensation Formulas
Performance Factor For purposes of the restricted stock awards under the Stock Plan, |
Other Benefits Unitil Corporation Retirement Plan (the “Retirement Plan”) The Retirement Plan is a traditional Defined Benefit Pension Plan covering certain employees of Unitil and our subsidiary companies that provides retirement income benefits based upon years of service, age at retirement and final five-year average salary. The Retirement Plan is closed to new participants, effective January 1, 2010. Employees hired after January 1, 2010 participate in an enhanced 401(k) plan instead of the Retirement Plan. In addition, at the time of closure of the Retirement Plan, existing employee participants were offered a one-time opportunity to elect to remain an active participant in the Retirement Plan, or to accept a frozen Retirement Plan benefit and move to the enhanced 401(k) Plan.
57
Supplemental Executive Retirement Plan (“SERP”)
See also the Pension Benefits Table in the section entitled Compensation - Compensation of Named Executive Officers for the present value of the accumulated benefit for each Named Executive Officer. Deferred Compensation Plan The Unitil Corporation Deferred Compensation Plan (the “DC Plan”) is a non-qualified deferred compensation plan that provides a vehicle for participants to accumulate tax-deferred savings to supplement retirement income. The DC Plan is open to senior management or other highly compensated employees with a salary grade of 23 or higher and who do not participate in the SERP. The DC Plan may also be used as a tool for recruitment and retention purposes for newly hired senior executives. The DC Plan design mirrors our Tax Deferred Savings and Investment Plan formula, but provides for contributions on compensation above the IRS limit, which will allow participants to defer up to 85% of base salary, and up to 85% of any cash incentive for retirement. We may also elect to make discretionary contributions on behalf of any participant in an amount determined by the Board. Mr. Eisfeller, Mr. Leblanc and Mr. Brock Change of Control Agreements We provide certain executives with protection from job loss due to a change of control in the Company in the form of Change of Control Agreements (“COC Agreements”). This protection is primarily provided so that the executives will make decisions and take actions that are in the best interest of shareholders and not unduly influenced by the fear of job loss. We maintain both two-year (originally executed in 2001 and later) and three-year (originally executed before 2001) COC Agreements. Mr. Black All existing COC Agreements are “double trigger” agreements, meaning that two events must occur in order for payments to be made: (i) a change of control must occur; and (ii) an adverse employment action must
occur, meaning that we must terminate the executive’s employment other than for cause or disability or the executive must terminate his or her employment for good reason. Double trigger agreements were chosen to protect the shareholders from executives choosing to leave Unitil as result of a change of control where there is no adverse employment action. No existing COC Agreements contain any excise tax or other gross up provision of any kind. We believe that all COC Agreements comply with the provisions of IRS Code Section 409A. See also the section entitled Compensation - Compensation of Named Executive Officers –Potential Payments Upon Termination or Change of Control for a full description of “change of control” as defined in the COC Agreements. Employment Agreement – Thomas P. Meissner, Jr. We entered into an employment agreement (the “Employment Agreement”) with Mr. Meissner Executive Perquisites We limit the use of perquisites as a method of compensation. In INTERNAL REVENUE CODE SECTION 162(M)
In general, under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), we cannot deduct, for federal income tax purposes, compensation in excess of $1,000,000 paid to the CEO, CFO and certain executive officers. However, for prior to the 2018 tax year, this deduction limitation did not apply to compensation that constituted “qualified performance-based compensation” within the meaning of Section 162(m) of the Code and applicable regulations, as then in effect. In 2018, the “qualified performance-based compensation” exception under Section 162(m) of the Code was eliminated, other than with respect to compensation payable pursuant to a written binding contract that was in effect on November 2, 2017 and is not materially modified after that date. For the
medical premiums at the same percentage as active employees. For employees hired after December 31, 2009, this subsidy ends when the retiree attains age 65. Post-retirement benefits for employees represented by unions are administered in accordance with the applicable collective bargaining agreement. This report is submitted by the Compensation Committee of Unitil with respect to the review and approval of the Compensation Discussion and Analysis, which appears above. In discharging its oversight responsibility, the Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management, and has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement for the Annual Meeting. Compensation Committee Members
Winfield S. Brown, Lisa Crutchfield (chair), Suzanne Foster and Eben S. Moulton
COMPENSATION OF NAMED EXECUTIVE OFFICERS Summary Compensation Table
The table below shows the information specified in paragraph (c)(2) of Item 402 of Regulation S-K concerning the compensation of the CEO, the CFO, and our three other most highly compensated officers for each of fiscal years
NOTES:
62
Since total reported compensation for each Named Executive Officer in the
63
NOTES:
Grants of Plan-Based Awards
The table below provides information with respect to the grants of plan-based awards, including Management Incentive Plan awards and Stock Plan awards, made to the Named Executive Officers for the year
NOTES:
65
NON-EQUITY COMPENSATION PLAN INFORMATION
Management Incentive Plan The Management Incentive Plan, in which all Named Executive Officers participate, was established in December 1998, and specifies that the Compensation Committee shall select participants in the plan and establish their individual target awards. The plan provides cash incentive payments that are tied directly to achievement of our performance metrics and goals. If we achieve the performance metrics and goals selected by the Committee, then cash incentive payments are provided to participants early in the year following such achievement. On January EQUITY COMPENSATION PLAN INFORMATION
Stock Plan The Stock Plan is an equity-based plan in which selected management employees, including all Named Executive Officers, participate. Awards under the Stock Plan vary each year based on the achievement of the prior year’s annual incentive award performance goals. For more detailed information with regard to performance metrics and goals, see the section entitled Compensation Discussion and Analysis. Based on The Committee sets the target restricted stock awards with the goal of granting a target award with a value equal to the market median of the broad-based published compensation survey group, as recommended by Willis Towers, at the time of the grant, which translates to the Stock Plan target award value being set as the job grade salary range midpoint. The Committee also used information from the proxy statements of our peer group, at the 25th percentile target, as a secondary source to set the CEO’s and CFO’s target award. The award is then reduced for anticipated income taxes and Medicare taxes, with plan participants receiving the shares net of such taxes, subject to the vesting schedule. As the shares vest, they become
The restricted stock may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated prior to vesting. Unvested restricted stock is subject to forfeiture if the participant’s employment is terminated for any reason other than the participant’s death, disability, retirement, or in connection with a change of control. Under the terms of the Stock Plan, all unvested shares become fully vested upon retirement. According to IRS regulations, shares of restricted stock become taxable as current income when they become non-forfeitable, which is defined as having reached the age of eligibility for retirement. Participants are required to pay taxes on this additional taxable income when they become eligible for retirement. Upon the occurrence of death, disability, or a change of control of the Company, unless otherwise specifically prohibited under applicable laws, any restrictions and transfer limitations imposed on restricted stock will immediately lapse. The term “change of control” is defined in the section entitled Compensation – Compensation of Named Executive Officers—Definition of Change of Control, Cause and Good Reason. After vesting, Named Executive Officers are required to hold all forms of equity received as compensation until retirement or other separation from the Company as prescribed by the Executive Stock Retention Policy.
Proportional Compensation
The table below shows the comparison of salary and performance-based compensation in proportion to various other elements to illustrate the “at risk” compensation for Named Executive Officers for the year
68
NOTES:
Option Exercises & Stock Vested
The table below provides information with respect to the shares of stock granted under the Stock Plan in previous years that vested during
NOTES:
Outstanding Equity Awards at Fiscal Year End
The table below provides information with respect to the outstanding equity awards of the Named Executive Officers as of December 31,
NOTES:
EMPLOYMENT AGREEMENT
Mr. Meissner is currently the only employee who has an Employment Agreement, the term of which is THE RETIREMENT PLAN
Pension Benefits
The table below provides information with respect to the actuarial present value of the accumulated benefit under the Retirement Plan and the SERP for all Named Executive Officers as of December 31,
NOTES:
THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
We also maintain a SERP, a non-qualified defined benefit plan. The SERP provides for supplemental retirement benefits to executives selected by the Board. The SERP is closed to new participants. As of December 31, If a participant terminates employment for any reason prior to retirement, other than due to death or in connection with a change in control as described below, the participant will not be entitled to any benefits
under the SERP. Annual benefits are based on an amount equal to 60% of a participant’s final average earnings, which includes annual salary and annual cash incentives. The annual benefit is offset by (i) the participant’s benefits payable under the Retirement Plan; (ii) other retirement income payable to the participant by Unitil or any previous employer; (iii) income that a participant receives as a primary Social Security benefit, and (iv) the balance of the 401(k) Company match. If a change in control occurs and a participant’s employment terminates prior to the earlier to occur of the participant being eligible for retirement or early retirement, then the participant will begin to receive benefits on the earlier to occur of the date on which they would have attained normal or early retirement eligibility. In this case, the participant’s benefits would be determined by assuming the participant had remained employed and continued to accrue additional years of service. The term “change in control” as used in the SERP is defined in the section entitled Compensation – Compensation of Named Executive Officers—Definition of Change of Control, Cause and Good Reason. DEFERRED COMPENSATION PLAN
The Unitil Corporation Deferred Compensation Plan (the “DC Plan”) is an unfunded, non-qualified deferred compensation plan that provides a vehicle for participants to accumulate tax-deferred savings to supplement retirement income. The DC Plan is open to senior management or other highly compensated employees as determined by the Board of Directors, and may also be used for recruitment and retention purposes for newly hired senior executives. The DC Plan design mirrors our Tax Deferred Savings and Investment Plan formula, but provides for contributions on compensation above the IRS limit, and which allows participants to defer up to 85% of base salary, and up to 85% of any cash incentive for retirement. We may also elect to make discretionary contributions on behalf of any participant in an amount determined by the Board. As an unfunded plan, the obligation of the Company to make payments under the Plan constitutes solely an unsecured (but legally enforceable) promise of the Company to make such payments, and no person, including any participant or beneficiary shall have any lien, prior claim or other security interest in any property of the Company as a result of the Plan. Any amounts payable under the DC Plan shall be paid out of the general assets of the Company and each participant and/or beneficiary shall be deemed to be no more than a general unsecured creditor of the Company. In
Notes:
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
Upon termination of employment following a change of control of paid to the Named Executive Officers. The severance benefits for termination other than a change of control Change of Control
We maintain Change of Control Agreements (“COC Agreements”) with certain key management employees, including all Named Executive Officers, to provide continuity in the management and operation of the Company and its subsidiaries, and so that key management employees will make decisions and take actions that are in the best interest of shareholders and not unduly influenced by the fear of job loss in the event of a change of control. The Board approves all COC Agreements prior to execution. We maintain both two-year (originally executed in 2001 and later) COC Agreements and three-year (originally executed prior to 2001) COC Agreements. All existing COC Agreements are “double trigger” agreements, meaning that two events must occur in order for benefits to be paid: (i) a change of control must occur (upon which the agreement becomes effective); and (ii) an adverse employment action must occur during the term of the agreement, meaning that we must terminate the executive’s employment other than for cause or disability or the executive must terminate his employment for good reason. The term of each COC Agreement begins upon a change of control of the Company. Double trigger COC Agreements were chosen to discourage executives from choosing to leave the Company as the result of a change of control where there is no adverse employment action. There is no excise tax gross-up provision in any COC Agreement. The terms “change of control” and “cause” and “good reason” are defined in the section entitled Compensation – Compensation of Named Executive Officers—Definition of Change of Control, Cause and Good Reason.
Estimated Present Value of Benefits
The following tables show the payments and benefits the Named Executive Officers would have received in connection with a variety of employment termination scenarios, as well as upon a change of control, assuming that employment termination or the change of control was effective as of December 31,
NOTES:
Definition of Change of Control, Cause & Good Reason
Change of Control A “change of control” has the same definition in the Change of Control Agreements, the SERP, the DC Plan, and the Stock Plan, with the exception of Article (iv) as noted. Should the change of control be approved by shareholders, and if the Board determines the approved transaction will not be completed and is abandoned prior to any termination of the employee’s employment, a change of control shall no longer be in effect and the provisions of any Change of Control Agreement shall continue as if a change of control had not occurred. Cause “Cause” is defined in the Change of Control Agreements as the occurrence of any of the events noted below.
Good Reason “Good reason” is defined in the Change of Control Agreements as noted below. None of the events listed below will constitute “good reason” unless the employee has given written notice to us, specifying the event relied upon for such termination within 90 days after the occurrence of the event and we have not remedied the event within 30 days of receipt of the notice.
Employment Agreement of the Chief Executive Officer
Mr. Meissner’s Employment Agreement provides that (i) it does not affect his rights or obligations under the Change of Control Agreement (“Mr. Meissner’s COC Agreement”) and (ii) as long as Mr. Meissner’s COC Agreement is not in effect, it does not affect the Employment Agreement or Mr. Meissner’s rights or obligations under the Employment Agreement.
As discussed in the section entitled Compensation – Compensation of Named Executive Officers—Potential Payments Upon Termination or Change of Control, Mr. Meissner’s Change of Control Agreement provides for severance benefits upon termination of employment following a change in control of the Company. Mr. Meissner’s Change of Control Agreement also provides that, if it becomes effective due to a change in control, it will supersede the Employment Agreement. Under the terms of the Employment Agreement, we may terminate Mr. Meissner’s employment for any reason. If Mr. Meissner’s employment is terminated by us during the term of the Employment Agreement for any reason other than death, disability or cause, or if Mr. Meissner terminates his employment with good reason, then we shall pay Mr. Meissner (i) all accrued and unpaid salary, bonus and expense reimbursements, (ii) a lump sum cash payment equal to the present value of 24 monthly payments of base salary (as in effect at the time of termination), (iii) a lump sum cash payment equal to the present value of two annual bonus payments (assuming each bonus payment is an amount equal to the average of the annual bonus amounts received by Mr. Meissner in the two calendar years preceding the year of termination), and (iv) a lump sum cash amount equal to the present value of the cost that we would have incurred to provide group medical, dental and life insurance coverage to Mr. Meissner and his eligible dependents for two years. The Employment Agreement contains no tax gross up provisions whatsoever. The estimated amounts of the lump sum payments as of December 31,
Definitions Under the Employment Agreement “Cause” and “good reason” are defined under the Employment Agreement as noted below. None of the events noted will constitute “good reason” unless the executive gives us notice of his termination for good reason within 90 days of the initial existence of the event and the executive gives us 30 days prior written notice and we fail to cure the event condition within the 30 day period. If Mr. Meissner terminates his employment for any reason other than “good reason,” or if his employment is terminated due to his death, or if we terminate Mr. Meissner’s employment as a result of disability or cause, we shall have no obligation under the Employment Agreement except for accrued and unpaid salary, bonus and expense reimbursement. The Employment Agreement also contains provisions that prohibit Mr. Meissner from engaging in any business that is competitive with our business, soliciting any employee to leave the employment of Unitil for employment with a competitive company, or diverting any of our business to a competitive company, in each case for a period of 12 months following termination. Mr. Meissner is also prohibited under the terms of the Employment Agreement from disclosing any confidential information at any time or for any reason, and from disclosing any negative, adverse or derogatory information about us, our management, or about any product or service that we provide, or about our prospects for the future at any time or for any reason, except, in each case, Mr. Meissner may report possible violations of federal law or regulations and make disclosures protected under whistleblower provisions of federal law or regulations.
The following table shows the compensation received by the members of the Board in
NOTES:
Directors’ 2021 Compensation Review In October 2020, the Nominating and Governance Committee reviewed Directors’ compensation for the 2021 compensation year using compensation information data that, at the Committee’s request, was prepared by management using Main Data Group’s Snapshot Data executive compensation benchmarking software platform. Consistent with the Committee’s guideline, the 25th percentile of our compensation peer group was targeted as a benchmark for Directors’ compensation, including the stock-based component thereof. Based on the information provided, the Committee determined that, with two exceptions, Directors’ overall annual compensation was Directors’ 2021 Compensation
2021, as approved by the Board. For members of the Board who elected to receive RSUs in lieu of common stock, the number of RSUs to provide to each applicable Board member was calculated by dividing $70,000 by the closing market price of our common stock on October 1, 2021, rounded down to the nearest whole share, pursuant to the terms and conditions of the Stock Plan, and as approved by the Board. Directors who served on the Executive Committee received a meeting fee of $1,500 for each meeting attended. No cash retainer fee was paid to the members of the Executive Committee. Non-employee members of the Pension Committee, which is not a standing committee of the Board, received an annual retainer of $6,000, and the chair of the Pension Committee received an annual retainer of $16,000. Employee members of the Pension Committee are not compensated separately for service on this committee. No annual retainer fee was paid by Fitchburg, Granite, Northern, or Unitil Energy, and no
separate meeting fees are paid for regularly-scheduled Board meetings or standing committee meetings, or any meeting of the Fitchburg, Granite, Northern, or Unitil Energy boards of directors. Directors are also entitled to receive a meeting fee of $2,000 for each special meeting attended. There were no special meetings of the Board held in 2021. All Directors were reimbursed for expenses incurred in connection with their attendance at Board meetings and meetings of any Committee upon which they served. Directors’ 2022 Compensation Review In October 2021, the Nominating and Governance Committee reviewed Directors’ compensation for the 2022 compensation year using compensation information data that, at the Committee’s request, was prepared by management using Main Data Group’s Snapshot Data executive compensation benchmarking software platform. Consistent with the Committee’s guideline, the 25th percentile of our compensation peer group was targeted as a benchmark for Directors’ compensation, including the stock-based component thereof. Based on the information provided, the Committee determined that the equity portion of the annual retainer for Board service and the annual retainer for committee member service were not aligned with the target 25th percentile of the peer group. Both the cash portion of the annual retainer for Board service and the annual retainer for committee chair service, as well as the retainer premium for the Lead Director were generally aligned with the target 25th percentile of the peer group. The Committee recommended that the annual equity retainer for Board service should be increased from $70,000 to $80,000, and the annual retainer for committee member service should be increased from $6,000 to $7,000. The Committee recommended no other changes to Directors’ compensation for the 2022 compensation year. The Board approved the Committee’s recommendation in October 2021, effective January 1, 2022. 85
In Proposal 1, we are asking shareholders to elect three Directors in Class Article III of our Bylaws and Article 7 of our Articles of Incorporation provide for a Board of between nine and fifteen Directors divided into three classes, and that the number of Directors shall be determined by the Board. EXPECTATIONS OF DIRECTORS
As representatives of our shareholders, members of the Board of Directors are expected to:
Voting Recommendation The Board believes that each Director nominee standing for election possesses the desired qualifications, attributes, skills and experiences to effectively exercise their critical role as a fiduciary responsible for the protection of
each Director nominee because he or she has consistently exemplified the expectations of members of the Board outlined above. The Board recommends that shareholders vote FOR the election of the Director nominees listed in Proposal 1 below. 86 INFORMATION ABOUT THE NOMINEES FOR DIRECTOR
Proxies will be voted for the nominees listed above unless instructed otherwise. We have no reason to believe that any of the nominees will be unable or unwilling to serve if elected. However, if any nominee should become unable for any reason or unwilling for good cause to serve, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of
PROPOSAL 1: ELECTION OF THREE DIRECTORS
Proposal 1 is asking shareholders to elect three Directors in Class
87
88 INFORMATION ABOUT DIRECTORS WITH CONTINUING TERMS OF OFFICE The Directors listed below were elected by shareholders in either 2020 or 2021 for terms of three years.
89
90
In Proposal 2, as a matter of good corporate governance, we are asking shareholders to ratify the Audit Committee’s selection of Deloitte & Touche LLP to serve as Unitil’s independent registered public accounting firm. Voting Recommendation The Board and the Audit Committee believe that the retention of Deloitte & Touche LLP to serve as Unitil’s independent registered public accounting firm for the fiscal year ending December 31, INFORMATION ABOUT THE RATIFICATION OF DELOITTE & TOUCHE LLP
The Audit Committee annually reviews the qualifications, performance and independence of the Company’s independent registered public accounting firm in accordance with regulatory requirements and guidelines. Based on this review, the Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”), which has served as Unitil’s independent registered public accounting firm since 2014, as the independent registered public accounting firm to perform annual audit and quarterly review services for fiscal year Representatives of Deloitte will be available at the Annual Meeting and will have an opportunity to make a statement, if they wish. They will also be available to respond to questions from shareholders.
In Proposal 3, we are asking shareholders to cast a non-binding advisory vote to approve the compensation of the Named Executive Officers. Voting Recommendation In deciding how to vote on this proposal, the Board and the Compensation Committee encourage shareholders to read the Compensation Discussion and Analysis, compensation tables and narrative discussion contained in this proxy statement. The Board recommends an advisory vote FOR the approval of the compensation of our Named Executive Officers. INFORMATION ABOUT THE ADVISORY VOTE ON EXECUTIVE COMPENSATION
In accordance with Section 14A of the Exchange Act and Rule 14a-21(a), shareholders are being asked to approve the compensation of the Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, which includes the Compensation Discussion and Analysis, compensation tables and narrative discussion contained in this proxy statement. This proposal, commonly known as a “say-on-pay” vote, gives shareholders the opportunity to express their views on the compensation of the Named Executive Officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Named Executive Officers. As discussed in the section entitled Compensation - Compensation Discussion and Analysis, Unitil’s executive compensation programs are designed to attract, retain and motivate executives who are critical to our long-term growth and profitability. Under these programs, our executives are incentivized to achieve specific Company performance goals established by the Compensation Committee, without encouraging undue or unreasonable risk-taking. The Compensation Committee reviews the executive compensation programs regularly to ensure executive compensation is aligned with the interests of our shareholders, as well as with current market practices. Please see the Compensation Discussion and Analysis and the Compensation of Named Executive Officers sections for information about executive compensation programs, including information about the fiscal year The Board recommends that shareholders vote FOR the following resolution: “RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K (including the Compensation Discussion and Analysis and the Compensation of Named Executive Officers sections of this proxy statement) is hereby APPROVED.”
As an advisory vote, this proposal is not binding upon Unitil, the Compensation Committee, or the Board. Also, the outcome of the vote will not affect any compensation already paid to our Named Executive 93 Officers. However, the Board, as well as the Compensation Committee, which is responsible for designing and administering our executive compensation program, value the opinions expressed by shareholders, and will consider the outcome of the vote when making future decisions regarding executive compensation. We present the “say on pay” advisory vote on executive compensation to shareholders annually, and will next present it at the
The Board and management do not intend to bring before the Annual Meeting any matters other than those described above and know of no other matters that may properly come before the Annual Meeting or other matters incident to the conduct of the meeting. If any other matter properly comes before the Annual Meeting, it is the intention of the persons named as proxies to vote the shares represented in accordance with their judgment on such matter. Discretionary authority with respect to such other matters is granted by the execution of the enclosed proxy or the submission of a proxy via the Internet. Announcement of Voting Results We will announce the preliminary voting results at the Information Incorporated By Reference We have made previous filings under the Securities Act of 1933, as amended, and the Exchange Act that incorporate future filings, including this proxy statement, in whole or in part. However, the Compensation Committee Report and the Audit Committee Report shall not be incorporated by reference into any such filings.
Any proposal submitted by a shareholder of Unitil for inclusion in the proxy material for our Our Bylaws provide that any proposal or Director nomination submitted by a shareholder of
We anticipate first mailing definitive copies of this proxy statement on or about March We have also retained Alliance Advisors, LLC to assist in the solicitation of proxies and will bear all reasonable solicitation fees and expenses associated with such retention at an estimated fee of $12,000 plus reasonable out-of-pocket expenses, of which approximately $11,500 has been incurred as of the date hereof. Alliance Advisors, LLC and certain related persons will be indemnified against certain liabilities arising out of or in connection with the engagement. COMPANY DOCUMENTS & INFORMATION
We will promptly deliver free of charge, upon request, a copy of the Corporate Governance Guidelines, Board Committee Charters or Code of Ethics to any shareholder or other interested party requesting a copy. The All requests for our Company documents should be directed to the Office of the Secretary, Unitil Corporation, 6 Liberty Lane West, Hampton, NH 03842-1720; or to InvestorRelations@unitil.com; or by calling toll free 800-999-6501. We invite you to visit our website unitil.com for more information about
IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
03LKYD Unitil Corporation 2022 Annual Meeting of Shareholders Wednesday, April (EDT) 6 Liberty Lane West Hampton, New Hampshire 03842 Dear Shareholder: The Unitil Corporation Please review the enclosed proxy statement as it contains important information relating to the management of the Company and the business of the Annual Meeting. We hope you If you would like additional information or have questions, please contact us at InvestorRelations@unitil.com, or call us at 800-999-6501.
Notice of Proxy Solicited by Board of Directors for Annual Meeting — April Thomas P. Meissner, Jr. and Robert B. Hevert, or any of them, each with the power of substitution, are hereby authorized as Proxies to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Unitil Corporation to be held on April Shares represented by this proxy will be voted by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of the Board of Directors listed in item 1 and FOR items 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side)
|