UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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UGI Corporation
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Notice of Annual Meeting
Annual Meeting of Shareholders Wednesday, January 22, 2020 |
BOX 858 VALLEY FORGE, PA 19482 —610-337-1000
MARVIN O. SCHLANGER
ChairmanChair
December 8, 201613, 2019
Dear Shareholder,
On behalf of our entire Board of Directors, I cordially invite you to attend our Annual Meeting of Shareholders on Tuesday,Wednesday, January 24, 2017.22, 2020. At the meeting, we will review UGI’s performance for the 20162019 fiscal year and our expectations for the future.
I would like to take this opportunity to remind you that your vote is important. On December 8, 2016,13, 2019, we mailed our shareholders a notice containing instructions on how to access our 2016 proxy statementProxy Statement and annual reportAnnual Report on Form10-K for the 2019 fiscal year and how to vote online. Please read the proxy materials and take a moment now to vote online or by telephone as described in the proxy voting instructions. Of course, if you received these proxy materials by mail, you may also vote by completing the proxy card and returning it by mail.
I look forward to seeing you on January 24th22nd and addressing your questions and comments.
Sincerely,
Marvin O. Schlanger
BOX 858 VALLEY FORGE, PA 19482 —610-337-1000
December 8, 201613, 2019
NOTICEOF
ANNUAL MEETINGOF SHAREHOLDERS
The Annual Meeting of Shareholders of UGI Corporation will be held on Tuesday,Wednesday, January 24, 2017,22, 2020, at 10:9:00 a.m., Eastern Standard Time, at The Desmond HotelInn at Villanova University, 601 County Line Road, Wayne, Pennsylvania.Please note the change of venue and Conference Center, Ballrooms A and B, One Liberty Boulevard, Malvern, Pennsylvania. time from previous years’ meetings.
Shareholders will consider and take action on the following items of business:
1. the election of eightten directors to serve until the next annual meeting of shareholders;
2. an advisory vote on a resolution to approve UGI Corporation’s executive compensation;
3. an advisory vote on the frequency of future advisory votes on executive compensation;
4. the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for Fiscal 2017;2020; and
5.4. the transaction of any other business that may properly come before the meeting.
Monica M. Gaudiosi
Corporate Secretary
Important Notice Regarding the Availability of Proxy Materials for the |
This Proxy Statement and the Company’s 20162019 Annual Report on Form10-K are available atwww.ugicorp.com.
TABLE OF CONTENTS |
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1 | ||||
QUESTIONSAND ANSWERS A | ||||
7 | ||||
7 | ||||
15 | ||||
18 | ||||
18 | ||||
STOCK OWNERSHIP GUIDELINESAND EQUITY PLAN LIMITSFOR INDEPENDENT DIRECTORS | 20 | |||
REPORTOFTHE COMPENSATIONAND MANAGEMENT DEVELOPMENT | ||||
EXECUTIVE COMPENSATION | ||||
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60 | ||||
ITEM | ||||
DIRECTIONSTOTHE |
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This summary highlights information contained elsewhere in this Proxy Statement. The summary does not contain all of the information that you should consider. Please read the entire Proxy Statement carefully before voting.
Annual Meeting of Shareholders
Please note the change in venue and time from previous years’ meetings. | ||
Time and Date: |
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Place: | The
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Record Date: | November | |
Voting: | Shareholders as of the close of business on the record date are entitled to vote. Each share of common stock is entitled to one vote for each matter to be voted on. |
Voting Matters and Board Recommendations
Proposal | Required Approval | Board Recommendation | ||
Election of | Majority of Votes Cast | FOR | ||
Advisory Vote on Executive Compensation | Majority of Votes Cast | FOR | ||
Ratification of Independent Registered Public Accounting Firm for 2020 | Majority of Votes Cast | FOR |
How to Cast Your Vote
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By Telephone | By Mail or in Person | |||
If your shares are registered in your name: Vote your shares over the Internet by accessing the Computershare proxy online voting website at: www.envisionreports.com/UGI and following theon-screen instructions. You will need the control number that appears on your Notice of Availability of Proxy Materials when you access the web page. If your shares are held in the name of a broker, bank or other nominee: Vote your shares over the Internet by following the voting instructions that you | If your shares are registered in your name: Vote your shares over the If your shares are held in the | If you received these annual meeting materials by mail: Vote by signing and dating the proxy card(s) and returning the card(s) in Shareholders may vote in person at the meeting. You may also be represented by another person at the meeting by executing a proper proxy designating that person. If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or other holder of record and |
Performance Highlights – Fiscal 20162019
The Board of Directors increased the annual dividend rate during Fiscal 2019 by approximately 25% (the 32nd consecutive year of annual dividend increases).
Significant progress was made on strategic initiatives during Fiscal 2019, including (i) the AmeriGas Merger, (ii) the enhancement of the Company’s midstream capabilities through an acquisition in France,the southwest Appalachian Basin, expanding the Company’s midstream assets and gathering rights (the “CMG Acquisition”), (iii) loss on extinguishmentsrecord capital investment and completion of debt)our first rate case as a merged gas utility at UGI Utilities, Inc. and (iv) the refinancing of UGI International’s debt portfolio.
In addition, both of our LPG businesses launched transformation initiatives to promote greater efficiencies, optimize our business model, and leverage technology to increase profitability and deliver an improved customer experience.
Advisory Vote to Approve Named Executive Officer Compensation
Proposal | Board Recommendation | |||
We are asking shareholders to approve, on an advisory basis, the Company’s executive compensation, including our executive compensation policies and practices and the compensation of | At our 2019 Annual Meeting, over 92% of our shareholders voted to approve the This result clearly demonstrated strong support for our executive compensation policies and practices and the alignment of executive pay to Company performance. | FOR Our Board recommends aFOR vote because it believes the Company’s compensation policies and practices are effective in achieving the Company’s goals of paying for performance and aligning the executives’ long-term interests with those of our shareholders. |
Objectives and Components of Our one-year stock performance (33% total shareholder return) significantly exceeded both the S&P 500 Utilities Index and the peer group used for purposes of the Company’s long-term compensation plan (S&P 500 Utilities Index total shareholder return ~ 17%; and peer group total shareholder return ~ 19%)Compensation Program
Objectives | Components | |
The compensation program for our named executive officers is designed to provide a competitive level of total compensation necessary to attract and retain talented and experienced executives. Additionally, our compensation program is intended to motivate and encourage our executives to contribute to our success and reward our executives for leadership excellence and performance that promotes sustainable growth in shareholder value. | In Fiscal 2019, the components of our executive compensation program included salary, annual bonus awards, long-term incentive compensation (performance unit awards and UGI Corporation stock option grants), limited perquisites, retirement benefits and other benefits, all as described in greater detail in the Compensation Discussion and Analysis of this Proxy Statement. We believe that the elements of our compensation program are essential components of a balanced and competitive compensation program to support our annual and long-term goals. |
Pay for Performance
Our executive compensation program allows the Compensation and Management Development Committee of the Board and the Board to determine pay based on a comprehensive view of quantitative and qualitative factors designed to enhance shareholder value and align the long-term interests of executives and shareholders. We believe that the performance-based components of our compensation program, namely our stock options and performance units, have effectively linked our executives’ compensation to our financial performance. The Company allocates a substantial portion of compensation to performance-based compensation. In Fiscal 2019, 82% of the principal compensation components, in the case of Mr. Walsh, and 69% to 74% of the principal compensation components, in the case of all other | named executive officers, were variable and tied to financial performance. For example, for the 2016-2018 performance period, UGI Corporation’s total shareholder return compared to its peer group was in the 90th percentile (UGI ranked 4th out of the 30 companies in its peer group) and Mr. Walsh received a performance unit payout equal to 199.1% of target in Fiscal 2019. For the 2017-2019 performance period (estimated as of October 31, 2019), UGI Corporation’s total shareholder return compared to its peer group was in the 15th percentile and Mr. Walsh would receive no performance unit payout in Fiscal 2020. For additional information on the alignment between our financial results and executive officer compensation, see the Compensation Discussion and Analysis in this Proxy Statement. |
Corporate Governance and Executive Compensation Practices
Advisory Vote to Approve Named Executive Officer Compensation
We are asking shareholders to approve, on an advisory basis, UGI Corporation’s executive compensation, including our executive compensation policies and practices and the compensation of our named executive officers, as described in this Proxy Statement beginning on page 21.
Corporate Governance | ||
✓Annual ✓Majority voting with a director resignation policy for directors not receiving a majority of votes cast in uncontested elections ✓The Board is led by an independent chair ✓Majority of current directors are independent (11 of 12) ✓Regularly scheduled executive sessions ofnon-management directors ✓Independent Board Committees (except for the Executive Committee), each with authority to ✓Compensation and Management Development Committee advised by independent compensation consultant ✓Annual Board and Committee self-assessment process ✓No supermajority voting provisions ✓Annual limit of $500,000 on individual director equity awards ✓Meaningful director stock ownership requirements ✓Mandatory retirement age of 75 years for directors | ✓Meaningful executive officer stock ownership requirements ✓Policy prohibiting hedging and pledging of Company securities, including the ✓Termination of employment is required for payment underchange-in-control agreements (“double trigger”) ✓Double trigger for the accelerated vesting of equity awards in the event of a change in control ✓Taxgross-ups have been eliminated fromchange-in-control agreements for all of our named executive ✓A substantial portion of executive compensation is allocated to performance-based compensation, including long-term awards, in order to align executive officers’ interests with shareholders’ interests and to enhance long-term performance (82% of the principal components, in the case of Mr. Walsh, and 69% to 74%, in the case of all other named executive officers) ✓Recoupment policy for incentive-based compensation paid or awarded to current and former executive officers in the event of a restatement of financial results due to materialnon-compliance with any financial reporting requirement ✓Board-reviewed succession plan for CEO and other senior management |
This result clearly demonstrated strong support
Overview of Director Qualifications and Experience
The following matrix reflects areas of qualifications and experience that are relevant to our long-term strategy beyond the minimum qualifications that our Board believes are necessary for all directors. The Corporate Governance Committee of the Board and our executive compensation policiesBoard believe that each director-nominee also brings his/her unique background, personal attributes and practicesa range of expertise and knowledge not reflected in the alignmentmatrix that provides our Board with an appropriate and diverse mix of executive payskills and attributes necessary for the Board to Company performance.fulfill its oversight responsibilities to our shareholders. More detailed information is provided in each director-nominee’s biography beginning on page 7.
Qualifications/Experience | Bort | Dosch | Harris | Hermance | Marrazzo | Romano | Schlanger | Stallings | Turner | Walsh | ||||||||||
Senior Executive Management | X | X | X | X | X | X | X | X | X | X | ||||||||||
Financial Expertise/Audit | X | X | X | X | X | X | X | |||||||||||||
Corporate Finance/Financial | X | X | X | X | X | X | X | X | X | |||||||||||
Strategic Planning/Business | X | X | X | X | X | X | X | X | X | X | ||||||||||
Industry Experience (including natural gas distribution and transmission) | X | X | X | X | ||||||||||||||||
Logistics & Distribution | X | X | X | X | X | X | ||||||||||||||
Operational Expertise | X | X | X | X | X | X | X | |||||||||||||
International Operations | X | X | X | X | X | X | ||||||||||||||
Asset Management | X | X | X | X | X | X | ||||||||||||||
IT Infrastructure/Technology | X | X | X | X | ||||||||||||||||
Risk Management | X | X | X | X | X | X | X | X | X | X | ||||||||||
Government Regulation/Regulated Industry | X | X | X | X | X | |||||||||||||||
Public Company Board | X | X | X | X | X | X | X | X | ||||||||||||
Corporate Governance | X | X | X | X | X | X | X | |||||||||||||
Executive Compensation/HR/ | X | X | X | X | X | X | ||||||||||||||
Sales/Marketing/Retail | X | X | X | X |
Objectives and Components of Our Compensation Program
The compensation program for our named executive officers is designed to provide a competitive level of total compensation necessary to attract and retain talented and experienced executives. Additionally, our compensation program is intended to motivate and encourage our executives to contribute to our success and reward our executives for leadership excellence and performance that promotes sustainable growth in shareholder value.
In Fiscal 2016, the components of our executive compensation program included salary, annual bonus awards, long-term incentive compensation (performance unit awards, UGI Corporation stock option grants and a restricted unit award to one named executive officer), limited perquisites, retirement benefits and other benefits, all as described in greater detail in the Compensation Discussion and Analysis of this Proxy Statement. We believe that the elements of our compensation program are essential components of a balanced and competitive compensation program to support our annual and long-term goals.
Pay for Performance
Our executive compensation program allows the Compensation and Management Development Committee and the Board to determine pay based on a comprehensive view of quantitative and qualitative factors designed to enhance shareholder value and align the long-term interests of executives and shareholders.
For example, for the 2011-2013 performance period, UGI Corporation’s total shareholder return compared to its peer group was in the 50th percentile (UGI ranked 20th out of the 40 companies in its peer group) and Mr. Walsh received a performance unit payout equal to 100 percent of target in Fiscal 2014. For the 2013-2015 performance period, UGI Corporation’s total shareholder return compared to its peer group was in the 88th percentile and Mr. Walsh received a performance unit payout equal to 196 percent of target in Fiscal 2016. For additional information on the alignment between our financial results and executive officer compensation, see the Compensation Discussion and Analysis.
QUESTIONS AND ANSWERS ABOUT PROXY MATERIALS, ANNUAL MEETING AND VOTING |
This proxy statement contains information related to the Annual Meeting of Shareholders of UGI Corporation to be held on Tuesday,Wednesday, January 24, 2017,22, 2020, beginning at 10:9:00 a.m., Eastern Standard Time, at The Desmond Hotel and Conference Center, Ballrooms A and B, One Liberty Boulevard, Malvern,Inn at Villanova University, 601 County Line Road, Wayne, Pennsylvania, and at any postponements or adjournments thereof. Directions to The Desmond Hotel and Conference CenterInn at Villanova University appear on page 62.64. This proxy statement was prepared under the direction of the Company’s Board of Directors to solicit your proxy for use at the Annual Meeting. It was made available to shareholders on or about December 8, 2016.13, 2019.
Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of printed proxy materials?
The Company has elected to provide access to the proxy materials over the Internet. We believe that this initiative enables the Company to provide proxy materials to shareholders more quickly, reduces the impact of our Annual Meeting on the environment and reduces costs.
Who is entitled to vote?
Only shareholders of record at the close of business on November 14, 2016,13, 2019, the record date, are entitled to vote at the Annual Meeting. On November 14, 2016,13, 2019, there were 173,056,812209,011,039 shares of common stock outstanding. Each shareholder has one vote per share on all matters to be voted on.
What am I voting on?
You are voting on:
How do I vote?
Voting instructions appear on the proxy card. You may vote in one of three ways:
Over the Internet
If your shares are registered in your name: Vote your shares over the Internet by accessing the Computershare proxy online voting website at:www.envisionreports.com/UGI and following the on-screen instructions. You will need the control number that appears on your Notice of Availability of Proxy Materials when you access the web page.
If your shares are held in the name of a broker, bank or other nominee: Vote your shares over the Internet by following the voting instructions that you receive from such broker, bank or other nominee.
By Telephone
If your shares are registered in your name: Vote your shares over the telephone by accessing the telephone voting system toll-free at 800-652-8683 and following the telephone voting instructions. The telephone instructions will lead you through the voting process. You will need the control number that appears on your Notice of Availability of Proxy Materials when you call.
If your shares are held in the name of a broker, bank or other nominee: Vote your shares over the telephone by following the voting instructions you receive from such broker, bank or other nominee.
By Mail
If you received these annual meeting materials by mail: Vote by signing and dating the proxy card(s) and returning the card(s) in the prepaid envelope.
How can I vote my shares held in the Company’s Employee Savings Plans?
You can instruct the trustee for the Company’s Employee Savings Plans to vote the shares of stock that are allocated to your account in the UGI Stock Fund. If you do not vote your shares, the trustee will vote them in proportion to those shares for which the trustee has received voting instructions from participants.
How can I change my vote?
You can change or revoke your vote at any time before polls close at the 20172020 Annual Meeting:
If you returned a paper proxy card, you can write to the Company’s Corporate Secretary at our principal offices,office, 460 North Gulph Road, King of Prussia, Pennsylvania 19406, stating that you wish to revoke your proxy and that you need another proxy card.
You can vote again, either over the Internet or by telephone.
If you hold your shares through a broker, bank or other nominee, you can revoke your proxy by contacting the broker, bank or other nominee and follow its procedure for revocation.
contacting the broker, bank or other nominee and following its procedure for revocation. |
If you attend the meeting, you may vote by ballot, which will cancel your previous proxy vote. However, if your shares are held through a broker, bank or other nominee, and you wish to vote by ballot at the meeting, you will need to contact your bank, broker or other nominee to obtain a legal proxy form that you must bring with you to the meeting to exchange for a ballot.
Your last vote is the vote that will be counted.
What is a quorum?
A “quorum” is the presence at the meeting, in person or represented by proxy, of the holders of a majority of the outstanding shares entitled to vote. A quorum of the holders of the outstanding shares must be present for the Annual Meeting to be held. Abstentions and brokernon-votes are counted for purposes of determining the presence or absence of a quorum.
How are votes, abstentions and brokernon-votes counted?
Abstentions and brokernon-votes are counted for purposes of determining the presence or absence of a quorum, but are not considered a vote cast under Pennsylvania law.
When a broker, bank or other nominee holding shares on your behalf does not receive voting instructions from you, the broker, bank or other nominee may vote those shares only on matters deemed “routine” by the New York Stock Exchange. Onnon-routine matters, the broker, bank or other nominee cannot vote those shares unless they receive voting instructions from the beneficial owner. A “brokernon-vote” means that a broker has not received voting instructions and either declines to exercise its discretionary authority to vote on routine matters or is barred from doing so because the matter isnon-routine.
As a result, abstentions and brokernon-votes are not included in the tabulation of the voting results on issues requiring approval of a majority of the votes cast and, therefore, do not have the effect of votes in opposition in such tabulation.
What vote is required to approve each item?
The director-nominees will be elected by a majorityElection of the votes cast at the Annual Meeting. Directors:Majority of Votes Cast
Under the Company’sour Bylaws and Principles of Corporate Governance, Directors must be elected by a majority of the votes cast in uncontested elections, such as the election of Directors at the Annual Meeting. This means that a director-nominee will be elected to the Company’sour Board of Directors if the votes cast “FOR” such Director nominee exceed the votes cast “AGAINST” him or her. In addition, an incumbent Director will be required to tender his or her resignation if a majority of the votes cast are not in his or her favor in an uncontested election of Directors. The Corporate Governance Committee would then be required to recommend to the Board of Directors whether to accept the incumbent Director’s resignation, and the Board will have ninety (90) days from the date of the election to determine whether to accept such resignation.
Advisory Approval of Executive Compensation:Majority of Votes Cast
The approval, by advisory vote, of the Company’s executive compensation requires the affirmative vote
of a majority of the shares present in person or by proxy and entitled to vote at the 20172020 Annual Meeting. This vote is advisory in nature and therefore not binding on UGI Corporation, the Board of Directors or the Compensation and Management Development Committee. However, our Board of Directors and the Compensation and Management Development Committee value the opinions of the Company’sour shareholders and will consider the outcome of this vote in their future deliberations on the Company’s executive compensation programs.
Shareholders may vote for “one year,” “two years,” or “three years,” or may abstain from voting, forRatification of the advisory vote on the frequencyselection of future advisory votes on executive compensation. The optionErnst & Young LLP:Majority of one year, two years, or three years that receives a majority of all the votes cast by shareholders will be the frequency for the advisory vote on executive compensation selected by our shareholders. In the absence of a majority of votes cast in support of any one frequency, the option of one year, two years, or three years that receives the greatest number of votes will be considered the frequency selected by our shareholders. This vote is advisory in nature and therefore not binding on UGI Corporation or the Board of Directors. However, the Board of Directors will consider the outcome of this vote in its deliberations on the frequency of future advisory votes on the Company’s executive compensation programs.Votes Cast
The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for Fiscal 20172020 requires the affirmative vote of a majority of the votes cast at the meeting to be approved.
Who will count the vote?
Representatives of Computershare Inc., our Transfer Agent, will tabulate the votes cast by proxy or in person at the Annual Meeting.Meeting and act as inspectors of election.
What are the deadlines for Shareholder proposals for next year’s Annual Meeting?
Shareholders may submit proposals on matters appropriate for shareholder action as follows:
Shareholders who wish to include a proposal in the Company’s proxy statement for the 20182021 annual meeting must comply in all respects with the rules of the U.S. Securities and Exchange Commission (“SEC”) relating to such inclusion and must submit the proposals to the Corporate Secretary at our principal offices,office, 460 North Gulph Road, King of Prussia, Pennsylvania 19406, no later than August 10, 2017.14, 2020.
If any shareholder wishes to shareholderpresent a proposal at the 2021 Annual Meeting that is not included in our proxy statement for that meeting, the proposal must be received by the Corporate Secretary at the above address by October 29, 2020. For proposals that are not intended for inclusion in the Company’s proxy materials for the 2018 annual meeting, if such a proposal is raised at the meeting,received by October 29, 2020, the proxy holders will have discretionary authority to vote on the matter if the Company does not receive notice of the proposal by October 24, 2017 or, if the proposal is so received by October 24, 2017, either the Company does not includewithout including advice on the nature of the matter andproposal or on how the proxy holders intend to vote on the proposal or the proposal is made in connection with certainour proxy contests. statement.
All proposals and notifications should be addressed to the Corporate Secretary at our principal offices,office, 460 North Gulph Road, King of Prussia, Pennsylvania 19406.
How much did this proxy solicitation cost?
The Company has engaged Georgeson Inc. to solicit proxies for the Company for a fee of $7,500 plus reasonable expenses for additional services. We also reimburse banks, brokerage firms and other institutions, nominees, custodians and fiduciaries for their reasonable expenses for sending proxy materials to beneficial owners and obtaining their voting instructions. Certain Directors, officers and regular employees of the Company and its subsidiaries may solicit proxies personally or by telephone or facsimile without additional compensation.
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EightTen directors have been nominated by the Board of Directors to stand for election as directors at the Annual Meeting of Shareholders based upon recommendations from the Corporate Governance Committee. Each director-nominee has consented to serve, if elected, until the next annual meeting or until his or her earlier resignation or removal. If any director-nominee is not available for election, proxies will be voted for another person nominated by the Board of Directors or the size of the Board will be reduced. AllAt this time, the Board of Directors knows no reason why any of the director-nominees may not be able to serve as a director if elected.
Other than William J. Marrazzo and K. Richard Turner, who were both elected by the Board of Directors to serve as Directors effective September 5, 2019, all of the director-nominees were elected to the Board by our shareholders at last year’s annual meeting. The Board of Directors has unanimously nominated M. Shawn Bort, Richard W. Gochnauer,Theodore A. Dosch, Alan N. Harris, Frank S. Hermance, Anne Pol,William J. Marrazzo, Kelly A. Romano, Marvin O. Schlanger, James B. Stallings, Jr., Roger B. VincentK. Richard Turner and John L. Walsh for re-electionelection as directors at the Annual Meeting. Ernest E. Jones, a current director, isAs previously announced, both Anne Pol and Richard W. Gochnauer informed the Company of their intent not standingto stand for re-election in accordance withreelection to the Company’s mandatory retirement policy for directors.Board of Directors at the Company’s 2020 Annual Meeting.
Information about Director-Nominees
Biographical information for each of the director-nominees standing for re-electionelection is set forth below, as well as a description of the specific experience, qualifications, attributes and skills that led the Board to conclude that, in light of the Company’s business and structure, the individual should serve as a director. The Board believes that each director-nominee has valuable individual skills and experience that, taken as a whole, provide the depth of knowledge, judgment and strategic vision necessary to provide effective oversight of the Company.
The Board of Directors recommends that you vote “FOR” the election of each of the |
| M. SHAWN BORT Retired Senior Vice President, Finance Saint-Gobain Corporation
Director since 2009 Age
Chair, Audit Committee |
Principal Occupation and Business Experience:Ms. Bort retired in 2015 as Senior Vice President, Finance of Saint-Gobain Corporation, the North American business of Compagnie de Saint-Gobain (a global manufacturer and distributor of flat glass, building products, glass containers and high performance materials) (2006 to 2015). Ms. Bort was formerly Vice President, Finance (2005 to 2006) and Vice President, Internal Control Services (2002 to 2005) of Saint-Gobain. Prior to joining Saint-Gobain, she was a partner with PricewaterhouseCoopers LLP, a public accounting firm (1997 to 2002), having joined Price Waterhouse in 1984. Ms. Bort also serves as a Director of UGI Utilities, Inc., a subsidiary of the Company.
Key Skills and Qualifications:Ms. Bort’s qualifications to serve as a director include her senior financial executive management experience with a global company, andas well as her extensive public accounting knowledge and experience. Her education (Ms. Bort has a bachelor’s degree in accounting from Marquette University and a Master of Business Administration degree in finance and operations management from the
Wharton School of the University of Pennsylvania) and experience provide her with financial expertise and a well-developed awareness of IT infrastructure, financial strategy, asset management and risk management. Ms. Bort also possesses international experience by virtue of her former executive position at a large global company.
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Mr. Gochnauer retired in May 2011 as Chief Executive Officer and Director of United Stationers Inc. (a wholesale distributor of business products) (2002 to 2011). He previously served as President and Chief Operating Officer and Vice Chairman and President, International, of Golden State Foods Corporation (a food service industry supplier) (1994 to 2002). Mr. Gochnauer also serves as a Director of AmerisourceBergen Corporation (a wholesale distributor of business products in the U.S. and internationally), Golden State Foods Corporation, and UGI Utilities, Inc., a subsidiary of the Company.
Mr. Gochnauer’s qualifications to serve as a director include his extensive senior management experience as Chief Executive Officer of a large public company and his operational, strategic planning, technology, and business development expertise. Mr. Gochnauer’s education (Mr. Gochnauer has a Bachelorcorporate governance experience by virtue of Science degree from Northwestern University and a Masterher position on the advisory board at Drexel University’s LeBow College of Business, Administration from Harvard University) and experience provide him with financial expertise.Center for Corporate Governance.
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Anixter International Inc.
Director since Age
Member, |
Principal Occupation and Business Experience:Mr. HermanceDosch is ChairmanExecutive Vice President of the BoardFinance and Chief Financial Officer of AMETEK,Anixter International Inc. (a leading global manufacturerdistributor of network & security solutions, electrical & electronic instrumentssolutions and electromechanical devices)utility power solutions) (since 2001)2011). He previously served as AMETEK’s Chief Executive OfficerAnixter International’s Senior Vice President, Global Finance (2009 to 2011). Prior to joining Anixter International, Mr. Dosch held a number of executive positions with Whirlpool Corporation, including CFO – North America and Vice President, Finance, of Maytag Integration (2006 to 2008), Corporate Controller (2004 to 2006) and CFO – North America (1999 – 2016) and as President and Chief Operating Officer (1996 to 1999)2004). Mr. Hermance is a member of the Board of Trustees of the Rochester Institute of Technology. HeDosch also serves as a Director of UGI Utilities, Inc., a subsidiary of the Company,Company.
Key Skills and Qualifications:Mr. Dosch’s qualifications to serve as a director include his senior financial executive management experience at both Anixter International and Whirlpool Corporation. His education (Mr. Dosch has a bachelor’s degree in accounting from Ohio University and is a certified public accountant) and experience provide him with financial expertise. Mr. Dosch possesses extensive international expertise by virtue of his positions at Anixter International and Whirlpool Corporation, companies with global operations, as well asin-depth experience in the areas of strategic planning, asset management, distribution and logistics, and risk management.
ALAN N. HARRIS Retired Senior Advisor and Chief Development and Operations Officer Spectra Energy Corporation Director since 2018 Age 66 Member, Safety, Environmental and Regulatory Compliance Committee |
Principal Occupation and Business Experience:Mr. Harris retired in January 2015 from Spectra Energy Corporation (an operator in the transmission and storage, distribution and gathering and processing of natural gas) where he served in multiple roles since 2007, including as Senior Advisor to the Chairman, President and Chief Executive Officer on project execution efforts (2014 to 2015), Chief Development Officer and Chief Operations Officer (2008 to 2014) and Chief Development Officer (2007 to 2008). Prior to Spectra Energy Corporation’sspin-off from Duke Energy Gas Transmission, Mr. Harris held various positions of increasing responsibility at Duke Energy, including Group Vice President, Chief Financial Officer (2004 to 2006), Executive Vice President (2003 to 2004), Senior Vice President, Strategic Development and Planning (2002 to 2003), Vice President, Controller, Treasurer, Strategic Planning (2000 to 2002) and Vice President, Controller, Strategic Planning (1999 to 2000). Mr. Harris currently serves as a Director of Enable Midstream Partners, LP. (an owner, operator and developer of midstream energy infrastructure assets in the U.S.) and UGI Utilities, Inc., a subsidiary of the Company.
Key Skills and Qualifications:Mr. Harris’ extensive background in the energy industry, and in particular natural gas distribution and transmission, provide him with industry expertise. Additionally, Mr. Harris’ experience provides him with strategic planning and business development experience. As a former senior financial executive, Mr. Harris also possesses experience in corporate finance and accounting. His education (Mr. Harris has a bachelor’s degree in accounting from Northeastern Oklahoma State University and an MBA from the University of Tulsa and is a certified public accountant) and experience provide him with financial expertise. Mr. Harris also possesses operational expertise in the energy sector by virtue of his senior executive experience at Spectra Energy and his director experience at Enable Midstream Partners.
FRANK S. HERMANCE Retired Chairman and Chief Executive Officer AMETEK, Inc. Director since 2011 Age 70 Chair, Safety, Environmental and Regulatory Compliance Committee Member, Compensation and Management Development Committee Member, Corporate Governance Committee |
Principal Occupation and Business Experience:Mr. Hermance is the retired Chairman (2001 to 2017) and Chief Executive Officer (1999 to 2016) of AMETEK, Inc. (a global manufacturer of electronic instruments and electromechanical devices). He previously served as AMETEK’s President and Chief Operating Officer (1996 to 1999). Mr. Hermance serves as Director Emeritus of the Greater Philadelphia Alliance for Capital and Technologies.Technologies, as Vice Chairman of the World Affairs Council of Philadelphia, and as an advisory board member at American Securities LLP (a private equity firm). He previously served as a member of the Board of Trustees of the Rochester Institute of Technology (until November 2016) and as a Director of IDEXAmeriGas Propane, Inc., a subsidiary of the Company, until its merger into UGI Corporation ending in April 2012.August 2019. Mr. Hermance also serves as a Director of UGI Utilities, Inc., a subsidiary of the Company. As previously announced, Mr. Hermance has been nominated to succeed Marvin O. Schlanger as Chair of the Board following the Company’s 2020 Annual Meeting.
Key Skills and Qualifications:Mr. Hermance’s qualifications to serve as a director include his extensive senior management experience in the roles of Chairman, Chief Executive Officer, President and Chief Operating Officer of a large global public company. The Board also considered Mr. Hermance also providesHermance’s relevant experience in the areas of corporate governance, mergers and acquisitions, human resources management,international operations, logistics, distribution, risk management, mergers and acquisitions, corporate governance, human resources management and executive compensation. As an executive of a company with global operations, Mr. Hermance also provides the Board with international experience.
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Mrs. Pol retired in 2005 as President and Chief Operating Officer of Trex Enterprises Corporation (a high-technology research and development company), a position she had held since 2001. She previously served as Senior Vice President (1998 to 2001) and Vice President (1996 to 1998) of Thermo Electron Corporation (an environmental monitoring and analytical instruments company and a major producer of recycling equipment, biomedical products and alternative energy systems). Mrs. Pol also served as President of Pitney Bowes Shipping and Weighing Systems Division, a business unit of Pitney Bowes Inc. (a mailing and related business equipment company) (1993 to 1996); Vice President of New Product Programs in the Mailing Systems Division of Pitney Bowes Inc. (1991 to 1993); and Vice President of Manufacturing Operations in the Mailing Systems Division of Pitney Bowes Inc. (1990 to 1991). Mrs. Pol also serves as a Director of UGI Utilities, Inc. and AmeriGas Propane, Inc., both of which are subsidiaries of UGI Corporation.
Mrs. Pol’s qualifications to serve as a director include her strategic planning, business development and technology experience as a senior-level executive with a diversified high-technology company. Mrs. Pol also possesses an important understanding of, and extensive experience in, the areas of executive compensation, human resource management, corporate governance and government regulation.
| WILLIAM J. MARRAZZO Chief Executive Officer and President WHYY, Inc. Director since September 2019 Age 70 |
Principal Occupation and Business Experience:Mr. Marrazzo is Chief Executive Officer and President of WHYY, Inc., a public television and radio company in the nation’s fourth largest market (since 1997). Previously, he was Chief Executive Officer and President of Roy F. Weston, Inc., a publicly traded corporation (1988 to 1997), served as Water Commissioner for the Philadelphia Water Department (1971 to 1988) and was Managing Director for the City of Philadelphia (1983 to 1984). Mr. Marrazzo previously served as a member of the board of American Water Works Company, Inc. (2003 to 2016), and as a director of Woodard and Curran (a national engineering firm) (2001 to 2011). Additionally, Mr. Marrazzo was a
director of AmeriGas Propane, Inc., a subsidiary of the Company, from 2001 until its merger with UGI Corporation in August 2019. Mr. Marrazzo also serves as a Director of UGI Utilities, Inc., a subsidiary of the Company.
Key Skills and Qualifications:Mr. Marrazzo’s qualifications to serve as a director include his extensive experience as Chief Executive Officer of bothnon-profit and public companies, and his city government leadership experience. Mr. Marrazzo’s senior-level executive experience in both the public and private sectors provide him with financial, strategic planning, risk management, business development and operational expertise. Additionally, by virtue of his 18 years as a member, including six as Chair, of the AmeriGas Propane, Inc. Audit Committee and his 16 years as a member of its Compensation/Pension Committee, Mr. Marrazzo possesses extensive executive compensation, human resources management and audit committee financial expertise.
KELLY A. ROMANO Founder and Chief Executive Officer, BlueRipple Capital, LLC Director since January 2019 Age 57 Member, Audit Committee Member, Safety, Environmental and Regulatory Compliance Committee |
Principal Occupation and Business Experience:Ms. Romano is the Founder and Chief Executive Officer of BlueRipple Capital, LLC, a consultancy firm focused on strategy, acquisitions, deal structure, and channel development for high technology companies. Ms. Romano retired from United Technologies Corporation (a diversified company that provides high technology products and services to the building and aerospace industries) in 2016 after serving in various positions of increasing responsibility since 1984. From 1993 to 2016, Ms. Romano held a number of senior executive positions at United Technologies Corporation, including President, Intelligent Building Technologies, Building Systems & Services (2014 to 2016), Corporate Vice President, Business Development, UTC Corporate Headquarters (2012 to 2014), President, Global Security Products, UTC Fire & Security (2011 to 2012), Senior Vice President, Global Sales & Marketing, UTC Fire & Security (2010 to 2011), and President, Building Systems & Services, Carrier Corporation (2006 to 2009). Ms. Romano has been an executive advisory board member of Gryphon Investors (a private equity firm focused on middle-market investment opportunities) since December 2016; a senior advisory partner of Sand Oak Capital Partners, LLC (a private equity firm focused on investments in U.S. industrial and manufacturing companies) since May 2016; managing partner of Xinova, LLC (an innovation and development firm) since May 2016; and a director andco-chair of the Board of Potter Electric Signal (a leading sprinkler monitoring and fire-life safety company) since December 2017. Ms. Romano is currently a director of Dorman Products, Inc. (an aftermarket automotive supplier). Ms. Romano also serves as a Director of UGI Utilities, Inc., a subsidiary of the Company.
Key Skills and Qualifications: Ms. Romano’s qualifications to serve as a director include her extensive global senior executive management experience at United Technologies Corporation and her operational, technology, sales, marketing, distribution, strategic planning and leadership, business development, corporate governance and executive compensation and management knowledge and expertise.
MARVIN O. SCHLANGER Principal, Cherry Hill Chemical Investments, L.L.C.
Director since 1998 Age
Chair, Corporate Governance Committee Chair, Executive Committee
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Principal Occupation and Business Experience:Mr. Schlanger currently serves as the Company’s ChairmanChair of the Board (since January 2016). He is a Principal in the firm of Cherry Hill Chemical Investments, L.L.C. (a management services and capital firm for chemical and allied industries) (since 1998). Mr. Schlanger served as Chief Executive Officer of CEVA Holdings BV and CEVA Holdings, LLC, an international logistics supplier (2012 to 2013). Mr. Schlanger is currently serves as a directorDirector of AmeriGas Propane, Inc., and UGI Utilities, Inc., botha subsidiary of which are subsidiariesthe Company, and on the advisory board of UGI Corporation.the Kleinman Center for Energy Policy at the University of Pennsylvania. He is alsopreviously served as a director of CEVA Logistics AG (2018 to 2019), CEVA Holdings, LLC where he serves as chairman,(2009 to 2018), CEVA Group, plc where he serves as non-executive chairman,(2009 to 2018), Hexion, Inc. (2014 to 2019), Momentive Performance Materials, Inc. (2010 to 2019), and VECTRA Company.Company (2015 to 2018). Mr. Schlanger also served as a Director of AmeriGas Propane, Inc. (2009 to 2019), a subsidiary of the Company, until its merger into UGI Corporation in August 2019. As previously disclosed, Mr. Schlanger has announced his intention to retire from the Company’s Board of Directors, effective as of the Company’s Annual Meeting of Shareholders to be held in January 2021. Mr. Schlanger has been nominated to serve as the Company’s Vice Chair of the Board following the Company’s 2020 Annual Meeting to facilitate the transition to Mr. Hermance as the incoming Chair of the Board.
Key Skills and Qualifications:Mr. Schlanger’s qualifications to serve as a director include his senior management, strategic planning, business development, risk management, and general operationsoperational experience. Additionally, by virtue of his prior experience throughout his career as Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer of Arco Chemical Company, a large public company. By virtue ofcompany, ARCO Chemical Company, and his senior executive leadership at companies with global operations, Mr. Schlanger also provides the Board with international experience. The Board also considered Mr. Schlanger’s experience serving as chairman,Chair, director and committee member on the boards of directors of large public and private international companies.
| JAMES B. STALLINGS, JR.
Director since 2015 Age
Member, Audit Committee Member, Safety, Environmental and Regulatory Compliance Committee |
Principal Occupation and Business Experience:Mr. Stallings is Managing Partnerthe Chief Executive Officer of PS27 Ventures, LLC, a private investment fund focused on technology companies (since January 2013). In 2013, Mr. Stallings retired from International Business Machines Corporation (IBM) (a global provider of information technology and services) as General Manager of Global Markets, Systems and Technology, a position he had held since 2009. From 2002 to 2009, Mr. Stallings held a number of senior executive leadership positions at IBM in the technology, mainframe, software and intellectual property areas. He was founder, Chairman and CEO of E House (a consumer technology company) from 2000 to 2002. Previously,
he was Executive Vice President, Physician Sales & Services, Inc. (a medical products supplier) from 1996(1996 to 2000.2000). Mr. Stallings currently serves as a director of Fidelity National Information Services Corporation (FIS) (a global provider of banking and payment technology, consulting and outsourcing solutions), Cannae Holdings, Inc. (a principal investment firm), the Seaside National Bank and Trust Company (a nationally chartered commercial bank handling private and commercial banking, wealth management and insurance), and as a director of UGI Utilities, Inc., a subsidiary of the Company.
Key Skills and Qualifications:Mr. Stallings’ qualifications to serve as a director include his expertise and extensive experience managing enterprise-wide global technology and information systems, including responsibility for profit and loss statements. With Mr. Stallings’ combination of business development and technology infrastructure expertise, as well as his education (Mr. Stallings has a Bachelor of Science degree from the U.S. Naval Academy) and his service as a director on other boards, he provides valuable business development, board-level risk management oversight (including fromwith respect to a regulated industry), finance experience and finance experience.corporate governance. The Board also considered his strong leadership, operations experience and strategic planning experience, as well as his investment committee experience at a venture capital company. By virtue of his other board service, Mr. Stallings possesses experience with board-level risk oversight, corporate governance and banking issues.
| K. R
Director since Age
61 |
Principal Occupation and Business Experience:Mr. VincentTurner is currently Managing Director of Altos Partners (formerly Altos Energy Partners), a private equity firm (since 2012), after having retired in 2011as Senior Managing Director from his positionthe Stephens Group, LLC, a private, family-owned investment firm (1983 to 2011). Mr. Turner previously served as President of Springwell Corporation, a corporate finance advisory firm he founded in 1989. Prior to 1989, Mr. Vincent held various positions at Bankers Trust Company, including managing director. Mr. Vincent serves as Trustee and Former Chairmanmember of the Boardboards of the VOYA Fundsgeneral partner of Energy Transfer Equity, L.P. (2002 to 2018), Sunoco LP (2014 to 2018), Energy Transfer Partners, L.P. (2004 to 2011), Laney Directional Drilling, LLC (2014 to 2017), and North American Energy Partners, Inc. (2003 to 2016). Additionally, Mr. Turner was a director of AmeriGas Propane, Inc., a subsidiary of the Company, from 2012 until its merger with UGI Corporation in August 2019. Mr. Turner also serves as a Director of UGI Utilities, Inc., a subsidiary of the Company. He previously
Key Skills and Qualifications:The Board considered Mr. Turner’s significant industry experience by virtue of having served on the boards and audit committees of other energy companies and master limited partnerships. Additionally, Mr. Turner possesses audit committee financial expertise having served as a Directormember of the AmeriGas Propane, Inc., Audit Committee for six years, is a subsidiary of the Company, from 1998 to 2006.
non-practicing certified public accountant and has public accounting experience. Mr. Vincent’s qualifications to serve as a director include hisTurner also has extensive experience as foundera private equity executive, including serving in accounting and senior executive of a corporate finance advisory firm, as well as his prior experience as a managing partner at a major banking institution. In addition, the Board considered Mr. Vincent’s many years serving as a director and trustee at various funds of a registered investment company, his service as a member or chair of the audit committees for public companies and funds, and his service as a director of the National Association of Corporate Directors.roles.
| JOHN L. WALSH President and Chief Executive Officer
Director since 2005 Age
Member, Executive Committee |
Principal Occupation and Business Experience:Mr. Walsh is a Director and President (since 2005) and Chief Executive Officer (since 2013) of UGI Corporation. In addition, Mr. Walsh serves as a Director and Chairman of the Board of AmeriGas Propane, Inc. (since 2016) where he had served as a director and vice chairman since 2005. He also serves as Vice Chairman of UGI Utilities, Inc., a subsidiary of the Company (since 2005). Both AmeriGas Propane, Inc. andHe previously served as UGI Utilities, Inc. are subsidiaries of UGI Corporation. Mr. Walsh served asCorporation’s Chief Operating Officer of UGI Corporation (2005-2013)(2005 to 2013) and as the President and Chief Executive Officer of UGI Utilities, Inc. (2009 to 2011). Previously, Mr. Walsh was the Chief Executive of the Industrial and Special Products Divisiondivision of the BOC Group plc (an industrial gases company), a position he assumed in 2001. He was an Executive Director of BOC (2001 to 2005), having joined BOC in 1986 as Vice President – Special Gases and having held various senior management positions in BOC, including President of Process Gas Solutions, North America (2000 to 2001) and President of BOC Process Plants (1996 to 2000). Mr. Walsh also serves as a Director at Main Line Health, Inc., the United Way of Southeastern PennsylvaniaGreater Philadelphia and Southern New Jersey, the World Affairs Council of Philadelphia, the Greater Philadelphia Chamber of Commerce, the Mastery Charter School, the Satell Institute, and the World LPG Association.Philadelphia Zoo, and as Trustee at the Saint Columbkille Partnership School. Mr. Walsh also served as a Director (since 2005) and Chairman of the Board (since 2016) of AmeriGas Propane, Inc. until its merger into UGI Corporation in August 2019.
Key Skills and Qualifications:Mr. Walsh’s qualifications to serve as a director include his extensive strategic planning, logistics and distribution and operational experience and his executive leadership experience as the Company’s CEOPresident and President,Chief Executive Officer, as well as his previous service as the Company’s Chief Operating Officer, and his other prior senior management experience with a global public company. Mr. Walsh hasin-depth knowledge of the Company’s businesses, competition, risks, and health, environmental and safety issues.risks. Mr. Walsh, by virtue of his current position and his previous position at a multinational industrial gas company, possesses international experience, as well as management development and compensation experience.
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Corporate Governance Principles
The business of UGI Corporation is managed under the direction of the Board of Directors. As part of its duties, the Board oversees the corporate governance of the Company for the purpose of creating and sustaining long-term value for its shareholders and safeguarding its commitment to its other stakeholders: our employees, our customers, our suppliers, andvendors, creditors, and the communities in which we do business. To accomplish this purpose, the Board considers the interests of the Company’s shareholdersstakeholders when, together with management, it sets the strategies and objectives of the Company.
The Board, recognizing the importance of good corporate governance in carrying out its responsibilities to our shareholders, has adopted the UGI Corporation Principles of Corporate Governance. The Principles of Corporate Governance provide a framework for the effective governance of the Board and the Company by outlining the responsibilities of the Board and Board Committees. The Board, upon recommendation of the Corporate Governance Committee, regularly reviews the Principles and, as appropriate, updates them in response to changing regulatory requirements, feedback from shareholdersstakeholders on governance matters and evolving best practices in corporate governance.
The full text of the Company’s Principles of Corporate Governance can be foundare posted on the Company’sour website at www.ugicorp.com , under Investor Relations, Corporate Governance or in print, free of charge, upon written request.
The Board, upon the recommendation of the Corporate Governance Committee, has determined that, other than Mr. Walsh, no Director has a material relationship with the Company, and each Director satisfies the criteria for an “independent director” under the rules of the New York Stock Exchange.
The Board has established the following additional guideline to assist it in determining director independence:
In making its determination of independence, the Board, with the assistance of the Company’s legal counsel, considered charitable contributions and ordinary business transactions between the Company, or affiliates of the Company, and companies where our Directors are employed or serve as directors, all of which were in compliance with either the independence rules of the New York Stock Exchange or the categorical standard set by the Board of Directors for determining director independence.
Board Leadership Structure and Role in Risk Management
The Board of Directors regularly assesses and determines the most appropriate Board structure to ensure effective and independent leadership while also ensuring appropriate insight into the operations and strategic direction of the Company. In connection with the retirement of Lon R. Greenberg as Chairman of theThe Board the Boardhas determined that the appointment of an independent Chairman would beChair is the most appropriate leadership structure.structure for the Company, taking into account the current business conditions and the environment in which the Company operates. Our Chairman, Mr. Schlanger, was first elected as Chairmanindependent Chair of the Board effectivein January 28, 2016. As announced in September 2019, as part of the Company’s ongoing Board succession planning, Mr. Schlanger informed the Board of his intention to retire from the UGI Corporation Board of Directors at the Annual Meeting of Shareholders to be held in January 2021. The Board, at that time, nominated Frank S. Hermance to succeed Mr. Schlanger as Chair of the Board following the 2020 Annual Meeting of Shareholders, with Mr. Schlanger being nominated to serve as Vice Chair to facilitate the transition. The Board believes that the Company iswill best be served by having Mr. SchlangerHermance as independent Chair due toby virtue of his unique, extensive senior executive leadership experience and global strategic perspective, as well as hisin-depth knowledge of the Company’s corporate strategy and operating history and his experience asprior service on the Board of Directors of AmeriGas Propane, Inc.
We believe that the Board effectively oversees the Company’s Presiding Director since 2011.
Senior management of the Company is responsible for assessing and managing risk. Senior management has developedrisk management. In particular, our Board takes an enterpriseactive role in risk management process intendedand environmental, social and governance (“ESG”) efforts, fulfilling its oversight responsibilities directly as well as through delegation to identify, prioritize and monitor key risks that may affect the Company. Our Board plays an important role in overseeing management’s performance of these functions. In addition to general risk oversight by the Board, the charter of the Audit Committee, sets out the primary responsibilities ofCorporate Governance Committee, the Audit Committee. Those responsibilities require the Audit Committee to discuss with management, the general auditor and the independent auditors, the Company’s enterprise risk management policies and processes, including major risk exposures, risk mitigation, and the design and effectiveness of the Company’s processes and controls to prevent and detect fraudulent activity. The Compensation and Management Development Committee is responsible for oversight ofand the Company’s compensation programs to ensure that the programs do not encourage employees to take unnecessary or excessive risks. The Safety, Environmental and Regulatory Compliance Committee, has primarywith the Chair of each Committee reporting to the Board on his or her respective committee’s oversight activities and decisions.
Committee | Risk Oversight | |
Audit | Provides oversight of the Company’s enterprise risk management policies and processes, including major risk exposures, risk mitigation and the design and effectiveness of the Company’s processes and controls to prevent and detect fraudulent activity. | |
Compensation & Management Development | Provides oversight of the Company’s compensation programs for our executives, including our named executive officers, to ensure that the programs do not encourage executives to take unnecessary or excessive risks. | |
Corporate Governance | Provides oversight of corporate governance matters, such as director independence and director succession planning, to ensure overall Board effectiveness. | |
Safety, Environmental and Regulatory Compliance | Provides oversight responsibility for the review of programs, procedures, initiatives and training related to safety, environmental and regulatory compliance for the Company’s domestic and international business units, as well as the review of policies and programs to promote cyber security and to mitigate cyber security risks. |
Our businesses are subject to a number of risks and uncertainties, which are described in detail in our Annual Report on Form10-K for the fiscal year ended September 30, 2016.2019. Throughout the year, in conjunction with its regular business presentationsmanagement presents to the Board and its committees management highlightson significant risks and risk mitigation plans. Management also reports to each of the Committees and the Board on steps being taken to enhance management processes and controls in light of evolving market, business, regulatory and other conditions. The Chair of each Committee reports toBoard reviews the entire Board on his or her respective committee’s activities and decisions. In addition, onrisks facing the Company with both an annual basis, an extended meeting of the Board is dedicated to reviewing the Company’s short- and long-term strategies and objectives, including consideration of significant risks to the execution of those strategies and the achievement of the Company’s objectives.longer-term strategic focus.
The Board of Directors held 619 meetings in Fiscal 2016.2019. All Directors attended at least 75 percent of the meetings of the Board of Directors and Committees of the Board of which they were members. Generally, all Directors are expected to attend the Company’s Annual Meeting of Shareholders, and eachabsent unforeseen circumstances that prevent their attendance. Each of the Company’s Directorsthen current Board members attended the 20162019 Annual Meeting of Shareholders.
Independent Directors of the Board also meet in regularly scheduled sessions without management.any members of management present. These sessions are led by our Chairman.Chair. The purpose of these executive sessions is to promote open and candid discussion among the independent directors.
Annually, the Corporate Governance Committee monitors and assesses the structure, composition, operation and performance of the Board and, if appropriate, makes recommendations for changes. Our Board Committees include Audit, Compensation and Management Development, Corporate Governance, Executive, and Safety, Environmental and Regulatory Compliance.Compliance, and Executive. The members of each of the Board Committees,
with the exception of the Executive Committee, are independent as defined by the New York Stock Exchange listing standards. The chartersCharters of the Audit, Corporate Governance, Compensation and Management Development, and Safety, Environmental and Regulatory Compliance Committees can be foundare posted on the Company’sour website, www.ugicorp.com under Investor Relations, Corporate(see Company — Leadership and Governance — Committees and Charters), or in print, free of charge, upon written request.
Audit Committee Compensation and Development Corporate Committee Executive Committee Safety, Environmental and Regulatory Compliance M. S. Bort R. W. Gochnauer F. S. Hermance E. E. Jones A. Pol M. O. Schlanger J. B. Stallings, Jr. R. B. Vincent J. L. Walsh NUMBER OF COMMITTEE MEETINGS HELD LAST YEARCurrent Board Composition Name
Management
Committee
Governance
Committee 1, 2 Chair 1, 2 X X 1 X Chair 1 X 1 Chair X 1, 3 Chair Chair 1 X X 1 X X X X 9 5 7 2 4
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Current Board Composition | ||||||||||
Name | Audit Committee | Compensation and Development | Corporate Committee | Executive Committee | Safety, Environmental and Regulatory Compliance | |||||
M. S. Bort (1, 2) | Chair |
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T. A. Dosch (1, 2) | X |
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R. W. Gochnauer (1) |
| X | X |
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A. N. Harris (1) |
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| X | |||||
F. S. Hermance (1) |
| X | X |
| Chair | |||||
W. J. Marrazzo (1) |
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A. Pol (1) |
| Chair |
| X | X | |||||
K. A. Romano (1) | X |
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| X | |||||
M. O. Schlanger (1, 3) |
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| Chair | Chair |
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J. B. Stallings, Jr. (1) | X |
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| X | |||||
K. R. Turner (1) |
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J. L. Walsh |
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| X |
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NUMBER OF COMMITTEE MEETINGS HELD LAST YEAR | 10 | 8 | 5 | 2 | 4 |
(1) Independent Director (2) Audit Committee Financial Expert (3) Chair of the Board
Audit Committee
: The Audit Committee (i) oversees the Company’s accounting and financial reporting processes and independent audits of the financial statements; (ii) oversees the adequacy of internal controls relative to financial and business risk; (iii) monitors compliance with enterprise risk management policies; (iv) appoints, and approves the compensation of, the independent accountants; (v) monitors the independence of the independent registered public accounting firm and the performance of the independent accountants and the internal audit function; (vi) discusses with management, the general auditor and the independent auditor, policies with respect to risk assessment and risk management; (vii) provides a means for open communication among the Company’s independent accountants, management, internal audit staff and the Board; (viii) monitors compliance with the Company’s code of business conduct and (viii)ethics with respect to the chief executive officer and senior financial officers; and (ix) oversees compliance with applicable legal and regulatory requirements.
Our Board has determined that each member of the Audit Committee is considered to be financially literate under applicable New York Stock Exchange listing standards. Additionally, the Board has determined that Ms. Bort and Mr. GochnauerDosch qualify as “audit committee financial experts” in accordance with the applicable rules and regulations of the SEC.
Compensation and Management Development Committee
: The Compensation and Management Development Committee (i) establishes and reviews overall executive compensation philosophy and objectives; (ii) reviews and approves corporate goals and objectives relevant to the CEO’s compensation, evaluates the CEO’s performance in light of those goals and objectives and, together with the other independent Directors, on the Board, determines and approves the CEO’s compensation based upon such evaluation; (iii) assists the Board in establishing a succession plan for the position of CEO; (iv) reviews the Company’s plans for management development and senior management succession; (v) establishes executive compensation policies and programs, ensuring that such plans do not encourage unnecessary risk-taking; (vi) approves salaries, target bonus levels, and awards and payments to be made to senior executivesmanagement (other than the CEO); (vii) approves a maximum value pool of options and other equity-based awards to be granted tonon-senior management employees; (viii) reviews with management the CD&A; (viii)(ix) oversees compliance with the
Company’s recoupment policy; (ix)(x) oversees compliance with the Company’s stock ownership and retention policy; and (x)(xi) selects and oversees the performance of the compensation consultant, ensuring such consultant’s independence.
Corporate Governance Committee
:The Corporate Governance Committee (i) identifies nominees and reviews the qualifications of persons eligible to stand for election as Directors and makes recommendations to the Board; (ii) reviews and recommends candidates for committeeCommittee membership and chairs; (iii) advises the Board with respect to significant developments in corporate governance matters; (iv) reviews and assesses the performance of the Board and each Committee; (v) reviews and recommends Director compensation; (vi) monitors compliance with the Company’s code of business conduct and (vi)ethics; and (vii) reviews director and officer indemnification and insurance coverage.
Safety, Environmental and Regulatory Compliance Committee
: The Safety, Environmental and Regulatory Compliance Committee (i) reviews the adequacy of, and provides oversight with respect to, the Company’s safety, environmental and regulatory compliance policies, programs, procedures, initiatives and training; (ii) reviews operational risks associated with the Company’s businesses; (iii) reviews the Company’s policies and programs to promote cyber security; (iv) reviews reports regarding the Company’s code of ethicalbusiness conduct and ethics for employees to the extent relating to safety, environmental and regulatory compliance matters; and (v) keeps abreast of the regulatory environment within which the Company operates.
Executive Committee
: The Committee has limited powers to act on behalf of the Board of Directors between regularly scheduled meetings on matters that cannot be delayed.
Compensation Committee Interlocks and Insider Participation
The current members of the Compensation and Management Development Committee are Messrs. Hermance, Jones and Vincent and Mrs. Pol. Mr. Schlanger was a member of the Compensation and Management Development Committee during a portion of Fiscal 2016. None of the members is a former or current officer or employee of the Company or any of its subsidiaries, or is an executive officer of another company where an executive officer of UGI Corporation is a director.
The Corporate Governance Committee conducts an annual assessment of the composition of the Board and Committees and reviewsestablishes, with the Board, the appropriate qualifications, skills, experience and characteristics required of Board members. The Committee seeks director candidates based upon a number of qualifications, including independence, knowledge, judgment, character, leadership skills, education, experience, financial literacy, standing in the community and the ability to foster a diversity of backgrounds and views and to complement the Board’s existing strengths.strengths, recognizing that diversity is a critical element to enhancing board effectiveness. The Committee continuously evaluates these desired attributes in light of the Company’s long-term strategy and needs as part of its Director succession planning process. The Committee seeks individuals who have a broad range of demonstrated abilities and accomplishments in areas of strategic importance to the Company, such as senior executive leadership, general operational management, finance, energy distribution, international business, law and public sector activities. Directors should also possess a willingness to challenge and stimulate management and the ability to work as part of a team in a collegial atmosphere. The Committee also seeks individuals who are capable of devoting the required amount of time to serve effectively on the Board and its Committees. With respect to incumbent Directors, the Committee also considers the past performance of each Director. As part of the annual process of nominating independent Board candidates, the Committee obtains an opinion of the Company’s General Counsellegal counsel that there is no reason to believe that the Board candidate is not “independent” as defined by the New York Stock Exchange listing standards.
The Corporate Governance Committee considers recommendations from a wide variety of its business contacts, including current non-management Directors, executive officers, community leaders, and shareholders as a source for potential Board candidates. The Committee may also utilizeuses the services of a third-party search firmfirms to assist it in identifying and evaluating possible nominees for director.Director. The Board reviews and has final approval of all potential directorDirector nominees for election to the Board. During Fiscal 2019, the Board of Directors, upon recommendation by the Corporate Governance Committee, elected William J. Marrazzo and K. Richard Turner as members of the Board. Messrs. Marrazzo’s and Turner’s biographies and qualifications are set forth in ITEM 1 — Election of Directors, beginning on page 7. In selecting Messrs. Marrazzo and Turner, the Corporate Governance Committee and the Board considered specifically their experience as members of the AmeriGas Propane, Inc. Board of Directors, prior to the AmeriGas Merger, as well as their business acumen, expertise and thorough knowledge of the Company’s domestic propane business.
WrittenShareholders may submit written recommendations by shareholders for director nominees should be submitteddirector-nominees to the Corporate Secretary, UGI Corporation, 460 North Gulph Road, King of Prussia, PA 19406. The Company’s Bylaws do not permit
shareholders to nominate candidates from the floor at an annual meeting without notifying the Corporate Secretary 45 days prior to the anniversary of the mailing date of the Company’s proxy statement for the previous year’s annual meeting. Notification must include certain information detailed in the Company’s Bylaws. If you intend to nominate a candidate from the floor at the Annual Meeting, please contact the Corporate Secretary.
Code of EthicsBoard and Committee Evaluation Process
The Company hasBoard is committed to a robust and constructive annual performance self-assessment process, which seeks to determine whether it and its Committees function effectively. This self-assessment process is also adopted (i)linked with the Board’s long-term succession planning practices and Board refreshment, generally. The Corporate Governance Committee is responsible for overseeing this formal process, with the assistance of the Corporate Secretary. Each year, the Committee reviews the overall evaluation process, as well as the substantive matters to be addressed by the evaluation process, with the goal to identify opportunities for improvement, as appropriate. The results of the assessments are discussed with the Committees and with the full Board. Any items requiring additional consideration are monitored by the Corporate Secretary throughout the subsequent year forfollow-up action, as appropriate.
The Board evaluation process is conducted, in alternating years, by either a Codewritten questionnaire or by a series of Ethicsinterviews conducted by the independent Chair. During Fiscal 2019, each Director discussed his or her assessment of the effectiveness of the Board and each committee on which he or she serves, as well as individual Director performance and Board dynamics with the Chair. The Chair prepared a summary of key findings, which is used by each of the Committees and the Board to identify opportunities for improving the Chief Executive Officer and Senior Financial Officers that applieseffectiveness of the Board, including potential changes to the Company’s Chief Executive Officer, Chief Financial OfficerBoard’s policies and Chief Accounting Officer,procedures, in order to best enable the Board and (ii) a Codeeach of Business Conduct and Ethics for Directors, Officers and Employees. Both Codes are posted on the Company’s website, www.ugicorp.com, under Investor Relations – Corporate Governance. All of these documents are also available free of charge by writingits Committees to the Treasurer of UGI Corporation at P.O. Box 858, Valley Forge, PA 19482.discharge its oversight responsibilities.
UGI seeks regular engagement with investors in order to communicate our strategy and to solicit feedback from the investorinvestment community. Management periodically engages a third partythird-party consultant to obtain independent feedback from our investors. In Fiscal 2016,2019, we participated in a number of investor conferences, roadshows, meetings at our corporate office, and telephonic discussions with investors. These meetings occurred both in the United States (U.S.) and in Europe and were attended by various members of the Company’s senior management, including our Chief Executive Officer, Chief Financial Officer, Treasurer, and/or senior members of our business segmentunit management teams. Management periodically discusses feedback, including key themes and other insights gained from the investor outreach meetings, at the Company’s Board and Committee meetings, as appropriate. The Board of Directors, as well as the management team, values the perspectives of our investors as it helps us to understand and evaluate the effectiveness of our investor communications. Additionally, the Compensation and Management Development Committee takes into consideration the results of the annual advisory vote on the Company’s executive compensation program. At the 20162019 Annual Meeting, over 96%92% of the Company’s shareholders showed their strong support by voting to approve the compensation of the Company’s named executive officers.
Code of Business Conduct and Ethics
The Company has adopted a Code of Business Conduct and Ethics, which is posted on the Company’s website, www.ugicorp.com, under “Company — Leadership and Governance — Governance Documents.” The Code of Business Conduct and Ethics is also available free of charge by writing to the Corporate Secretary of UGI Corporation at P.O. Box 858, Valley Forge, PA 19482.
Compensation Committee Interlocks and Insider Participation
The current members of the Compensation and Management Development Committee are Mrs. Pol and Messrs. Gochnauer and Hermance. None of the members is a former or current officer or employee of the Company or any of its subsidiaries, or is an executive officer of another company where an executive officer of UGI Corporation is a director.
You may contact the Board of Directors, an individual non-management director,independent Director, or the non-managementindependent Directors as a group, by writing to them c/o UGI Corporation, P.O. Box 858, Valley Forge, PA 19482. These contact instructions have beenare posted on the Company’sour website at www.ugicorp.com under Investor Relations – Corporate Governance.www.ugicorp.com.
Any communications directed to the Board of Directors, an individual non-management director,independent Director, or the non-managementindependent Directors as a group from employees or others that concern complaints regarding accounting, financial statements, internal controls, ethical or auditing matters will be handled in accordance with procedures adopted by the Audit Committee.
All other communications directed to the Board of Directors, an individual non-management director,independent Director, or the non-managementindependent Directors as a group are initially reviewed by the Corporate Secretary. In the event the Corporate Secretary has any question as to whether the directorsDirectors should be made aware of any issue raised, the Corporate Secretary shall be entitled to consult with the Chair of the Board in making such determination. The Corporate Secretary will distribute communications to the Board, an individual director, or to selected directors, depending on the content of the communication. The Corporate Secretary maintains a log of all such communications that is available for review for one year upon request of any member of the Board.
Typically, we do not forward to our Board communications from our shareholders or other parties that are of a personal nature or are not related to the duties and responsibilities of the Board, including, but not limited to, junk mail and mass mailings, resumes and other forms of job inquiries, opinion surveys and polls and business solicitations or advertisements.
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The table below shows the components of director compensation for Fiscal 2016.2019. A Director who is an officer or employee of the Company or its subsidiaries is not compensated for service on the Board of Directors or on any Committee of the Board.
Director Compensation Table – Fiscal 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Director Compensation Table – Fiscal 2019 | Director Compensation Table – Fiscal 2019 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name |
| Fees Earned or Paid in Cash ($)(1) |
|
| Stock Awards ($)(2) |
|
| Option Awards ($)(3) |
|
| Non-Equity Incentive Plan Compensation ($) |
|
| Change in Pension Value And Nonqualified Deferred Compensation Earnings ($)(4) |
|
| All Other Compensation ($) |
|
| Total ($) |
| | Fees Earned or Paid in Cash ($)(1) |
| | Stock Awards ($)(2) |
| | Option Awards ($)(3) |
| | Non-Equity Incentive Plan Compensation ($) |
| | Change in Pension Value And Nonqualified Deferred Compensation Earnings ($)(4) |
| | All Other Compensation ($) |
| | Total ($) |
| ||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) | ||||||||||||||||||||||||||||||||||||||||||
M. S. Bort | 96,667 | 126,235 | 40,779 | 0 | 0 | 0 | 263,681 |
|
115,000 |
|
|
103,500 |
|
|
50,328 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
268,828 |
| ||||||||||||||||||||||||||||
T. A. Dosch |
|
113,750 |
|
|
103,500 |
|
|
50,328 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
267,578 |
| |||||||||||||||||||||||||||||||||||
R. W. Gochnauer | 90,000 | 118,151 | 40,779 | 0 | 0 | 0 | 248,930 |
|
93,750 |
|
|
103,500 |
|
|
50,328 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
247,578 |
| ||||||||||||||||||||||||||||
L. R. Greenberg | 108,965 | 0 | 0 | 0 | 0 | 0 | 108,965 | |||||||||||||||||||||||||||||||||||||||||||||||||
A. N. Harris |
|
90,000 |
|
|
103,500 |
|
|
50,328 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
243,828 |
| |||||||||||||||||||||||||||||||||||
F. S. Hermance | 90,000 | 116,172 | 40,779 | 0 | 0 | 0 | 246,951 |
|
105,000 |
|
|
103,500 |
|
|
50,328 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
258,828 |
| ||||||||||||||||||||||||||||
E. E. Jones | 83,333 | 158,724 | 40,779 | 0 | 1,661 | 0 | 284,497 | |||||||||||||||||||||||||||||||||||||||||||||||||
W. J. Marrazzo |
|
6,300 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
6,300 |
| |||||||||||||||||||||||||||||||||||
A. Pol | 93,333 | 212,482 | 40,779 | 0 | 1,079 | 0 | 347,673 |
|
110,000 |
|
|
103,500 |
|
|
50,328 |
|
|
0 |
|
|
488 |
|
|
0 |
|
|
264,316 |
| ||||||||||||||||||||||||||||
K. A. Romano |
|
76,875 |
|
|
103,500 |
|
|
50,328 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
230,703 |
| |||||||||||||||||||||||||||||||||||
M. O. Schlanger | 198,333 | 194,903 | 40,779 | 0 | 0 | 0 | 434,015 |
|
225,000 |
|
|
223,313 |
|
|
108,858 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
557,171 |
| ||||||||||||||||||||||||||||
J. B. Stallings, Jr. | 88,133 | 130,824 | 53,466 | 0 | 0 | 0 | 272,423 |
|
102,500 |
|
|
103,500 |
|
|
50,328 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
256,328 |
| ||||||||||||||||||||||||||||
R. B. Vincent | 93,333 | 139,278 | 40,779 | 0 | 0 | 0 | 273,390 | |||||||||||||||||||||||||||||||||||||||||||||||||
K. R. Turner |
|
6,300 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
6,300 |
|
(1) | Annual Retainers. In Fiscal |
(2) | Stock Awards. All |
(3) | Stock Options. Allnon-management Directors, excluding |
(4) | The amounts shown in column (f) represent above-market earnings on deferred compensation. Earnings on deferred compensation are considered above-market to the extent that the rate of interest exceeds 120 percent of the applicable federal long-term rate. For purposes of the Director Compensation Table, the market rate on deferred compensation most analogous to the rate at the time the interest rate is set under the deferred compensation plan for Fiscal |
Director Equity Plan Limits: The Company has a $500,000 annual limit with respect to individual Director equity awards. In establishing this limit, the Board of Directors considered competitive pay levels as well as the need to retain its current Directors and attract new directors with the relevant skills and attributes desired in director candidates.
Stock Ownership Guidelines and Equity Plan Limits for Independent Directors: All independent directors are required to own Company common stock, together with stock units, in an aggregate amount equal to five times the Directors’ annual cash retainer and to achieve the target level of common stock ownership within five years after joining the Board.
The Company has a $500,000 annual limit with respect to individual Director equity awards. In establishing this limit, the Board of Directors considered competitive pay levels as well as the need to retain its current Directors and attract new Directors with the relevant skills and attributes desired in director candidates.
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The Company’s Board of Directors has adopted a written policy for the review and approval of Related Person Transactions.that applies to transactions with related parties. The policy applies to any transaction in which (i) the Company or any of its subsidiaries is a participant, (ii) any related person has a direct or indirect material interest, and (iii) the amount involved exceeds $120,000, except for any such transaction that does not require disclosure under SEC regulations. The Audit Committee of the Board of Directors, with assistance from the Company’s General Counsel, is responsible for reviewing, approving and ratifying related person transactions. The Audit Committee intends to approve or ratify only those related person transactions that are in, or not inconsistent with, the best interests of the Company and its shareholders.
|
The Audit Committee is composed of independent Directors as defined by the rules of the New York Stock Exchange and acts under aSecurities and Exchange Commission audit committee membership requirements. The Audit Committee has certain duties and powers as described in its written charter adopted by the Board of Directors. A copy of the charter can be found on the Company’s website at www.ugicorp.com (Company — Leadership and Governance — Committees and Charters — Audit Committee). As described more fully in its charter, the role of the Committee is to assist the Board of Directors in its oversight of the quality and integrity of the Company’s financial reporting process. The Committee also has the sole authority to appoint, retain, fix the compensation of, and oversee the work of, the Company’s independent auditors.auditors, as well as review the services performed by the Company’s internal audit department.
In this context, the Committee has met and held discussions with management and the independent auditors to review and discuss the Company’s internal control over financial reporting, the interim unaudited financial statements, and the audited financial statements for Fiscal 2016.2019. The Committee also reviewed management’s report on internal control over financial reporting, required under Section 404 of the Sarbanes-Oxley Act of 2002. As part of this review, the Committee reviewed the bases for management’s conclusions in that report and the report of the independent registered public accountants on the effectiveness of the Company’s internal control over financial reporting. The Committee has also discussed with the independent auditors the matters required to be discussed by Auditing Standard No. 16,1301, Communications with Audit Committees, issued by the Public Company Accounting Oversight Board (“PCAOB”). In addition, the Committee has received the written disclosures and the letter from the independent auditors required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and discussed with the independent auditors their independence.
Management has primary responsibility for the financial reporting process, including the system of internal controls, and for preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The Company’s independent auditors are responsible for auditing those financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States of America. The Committee appointed Ernst & Young LLP (“EY”) to audit the Company’s financial statements as of and for Fiscal 2019. In August 2014, the fiscal year ended September 30, 2016.Committee first approved the engagement of EY was first engaged as the Company’s independent registered public accounting firm for the fiscal year ended September 30, 2015. The Committee considered a variety of factors in selecting EY as the Company’s independent registered public accounting firm, including the firm’s independence and internal quality controls, the overall depth of talent, and EY’s experience with the Company’s industry and companies of similar scale and size. In determining whether to reappoint EY as the Company’s independent registered public accounting firm for Fiscal 2019, and in evaluating the year ending September 30, 2016,audit partner rotation for Fiscal 2020 in accordance with applicable rules and regulations, the Committee again took those factors into consideration along with its evaluationreview of the past performance of EY and EY’s familiarity with the Company’s business and internal control over financial reporting.reporting as well as the expertise and experience of the audit partner candidates. EY’s audit report appears in our Annual Report on Form10-K for the fiscal year ended September 30, 2016.Fiscal 2019. The Committee is responsible for the audit fee negotiations associated with the retention of EY.EY and the final approval of EY’s lead audit partner.
The members of the Committee are not professionally engaged in the practice of auditing or accounting. The members of the Committee rely, without independent verification, on the information provided to them and on the representations made by management and the independent auditors. Accordingly, the Committee’s considerations and discussions referred to above do not assure that the audit of the Company’s financial statements has been carried out in accordance with auditing standards generally accepted in the United States of America, that the financial statements are presented in accordance with accounting principles generally accepted in the United States of America or that our auditors are, in fact, “independent.”
Based upon the reviews and discussions described in this report, the Committee recommended to the Board of Directors, and the Board of Directors approved, that the audited financial statements be included in the Company’s Annual Report on Form10-K for the fiscal year ended September 30, 2016Fiscal 2019 for filing with the SEC.
Audit Committee
M. Shawn Bort, Chair
Richard W. GochnauerTheodore A. Dosch
Kelly A. Romano
James B. Stallings, Jr.
|
In the course of its meetings, the Audit Committee considered whether the provision by Ernst & Young LLP of the professional services described below was compatible with Ernst & Young LLP’s independence. The Committee concluded that our independent registered public accounting firm is independent from the Company and its management.
Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting the compensation of and overseeing the work of the Company’s independent accountants. In recognition of this responsibility, the Audit Committee has a policy ofpre-approving audit and permissiblenon-audit services provided by the independent accountants. The Audit Committee has also delegated limited approval authority to its chair, such authority to be exercised in the intervals between meetings, in accordance with the Audit Committee’spre-approval policy.
Prior to engagement of the Company’s independent registered public accounting firm for the next year’s audit, management submits to the Audit Committee for approval a list of services expected to be rendered during that year, and fees related thereto. The aggregate fees billed by Ernst & Young LLP, the Company’s independent registered public accountants in Fiscal 20162019 and 2015,2018, were as follows:
2016 | 2015 | 2019 | 2018 | |||||||||||||
Audit Fees(1) | $ | 8,713,638 | $ | 7,221,244 | $ | 9,354,295 | $ | 9,222,787 | ||||||||
Audit-Related Fees(2) | $ | 116,940 | $ | 103,800 | $ | 882,215 | $ | 361,487 | ||||||||
Tax Fees(3) | $ | 62,894 | $ | 409,135 | $ | 12,000 | $ | 29,825 | ||||||||
All Other Fees(4) | $ | 10,000 | $ | 4,535 | $ | 112,232 | $ | 223,182 | ||||||||
|
|
|
| |||||||||||||
Total Fees for Services Provided | $ | 8,903,472 | $ | 7,738,714 | $ | 10,360,742 | $ | 9,837,281 |
(1) | Audit Fees for Fiscal |
(2) | Audit-Related Fees for Fiscal |
(3) | Tax Fees for Fiscal |
(4) | All Other Fees for Fiscal |
|
The Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement. Based on this review and discussion, the Committee recommended to the Company’s Board of Directors, and the Board of Directors approved, the inclusion of the Compensation Discussion and Analysis in the Company’s Annual Report on Form10-K for the fiscal year ended September 30, 20162019 and the Company’s proxy statement for the 20172020 Annual Meeting of Shareholders.
Compensation and Management
Development Committee
Anne Pol, Chair
Richard W. Gochnauer
Frank S. Hermance
Ernest E. Jones
Roger B. Vincent
Notwithstanding anything to the contrary, the reports of the Compensation and Management Development Committee and the Audit Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.
|
INTRODUCTION
In this Compensation Discussion and Analysis, we address the compensation paid or awarded to the following executive officers: John L. Walsh, our President and Chief Executive Officer; Kirk R. Oliver,Ted J. Jastrzebski, our Chief Financial Officer; Jerry E. Sheridan, President and Chief Executive Officer of AmeriGas Propane, Inc. (“AmeriGas Propane”); Roger Perreault, our Executive Vice President, Global LPG, and the President of our subsidiary, UGI International, LLC (“UGI International”); and Monica M. Gaudiosi, our Vice President, General Counsel and Secretary.Secretary; and Hugh J. Gallagher, the President and Chief Executive Officer of our subsidiary, AmeriGas Propane, Inc. (“AmeriGas Propane”). We refer to these executive officers as our “named executive officers” for Fiscal 2016.2019.
Compensation decisions for Mr. Walsh were made by the independent members of our Board of Directors after receiving the recommendations of its Compensation and Management Development Committee, while compensation decisions for Messrs. OliverJastrzebski and Perreault and Ms. Gaudiosi were made by the Compensation and Management Development Committee. CompensationUntil August 21, 2019, prior to the closing of the AmeriGas Merger, compensation decisions for Mr. SheridanGallagher were made by the independent members of the Board of Directors of AmeriGas Propane, the General Partner of AmeriGas Partners, L.P. (“AmeriGas Partners”), after receiving the recommendation of its Compensation/Pension Committee. Following the AmeriGas Merger, compensation decisions for Mr. Gallagher were made by the Compensation and Management Development Committee. For ease of understanding, we will use the term “we” to refer to UGI Corporation, UGI International, and AmeriGas Propane, and the term “Committee” or “Committees” to refer to the UGI Corporation Compensation and Management Development Committee and/or the AmeriGas Propane Compensation/Pension Committee, as appropriate, in the relevant compensation discussions, unless the context indicates otherwise.
Our compensation program for named executive officers is designed to provide a competitive level of total compensation; motivate and encourage our executives to contribute to our financial success; retain talented and experienced executives; and reward our executives for leadership excellence and performance that promotes sustainable growth in shareholder value. As set forth in this Compensation Discussion and Analysis, the level of compensation received by the Company’s named executive officers in Fiscal 20162019 reflects outstandingsolid performance by the Company during Fiscal 2016 as well as the Company’s outstanding returns to its shareholders.2019.
• | Overview of Performance |
The following are some of the Company’s Fiscal 2016 highlights:
• | ||
|
|
The Board of Directors increased the Company’s annual dividend rate by approximately 25% (the 32nd consecutive year of annual dividend increases).
Significant progress was made on strategic initiatives, including (i) the AmeriGas Merger, (ii) the enhancement of the Company’s midstream capabilities through the CMG Acquisition, (iii) record capital investment at UGI Utilities, Inc. and (iv) the refinancing of UGI International’s debt portfolio.
Both LPG businesses launched transformation initiatives to promote greater efficiencies, optimize our business model, and leverage technology to increase profitability and deliver an improved customer experience.
1UGI Corporation’s Fiscal 20162019 earnings per share isare adjusted to exclude (i) the impact of netchanges in unrealized gains and losses on commodity and certain foreign currency derivative instruments not associated with current period transactions (principally comprising changes in unrealized gains and losses on such derivative instruments) ($0.17.69 per diluted share), (ii) losses associated with extinguishments of debt ($.02 per diluted share), (iii) merger expenses associated with the AmeriGas Merger ($.01 per diluted share), (iv) acquisition and integration expenses associated with the Finagaz acquisition in FranceCMG Acquisition ($0.10.06 per diluted share), and (iii) loss on extinguishments of debt(v) LPG business transformation costs ($0.04.09 per diluted share).
• | Fiscal |
The following chart summarizes the principal elements of our Fiscal 20162019 executive compensation program. We describe these elements, as well as retirement, severance and other benefits, in more detail later in this Compensation Discussion and Analysis.
Principal Components of Compensation Paid to Named Executive Officers in Fiscal 20162019
Component | Principal Objectives | Fiscal | ||
Base Components | ||||
Salary | Compensate executive as appropriate for his or her position, experience and responsibilities based on market data. | Merit salary increases ranged from | ||
Annual Bonus Awards | Motivate executive to focus on achievement of our annual business objectives. | Target incentives ranged from | ||
Long-Term Incentive Awards | ||||
Stock Options | Align executive interests with shareholder interests; create a strong financial incentive for achieving or exceeding long-term performance goals, as the value of stock options is a function of the price of our stock. | The number of shares underlying option awards ranged from | ||
Performance Units (UGI Corporation) | Align executive interests with shareholder interests; create a strong financial incentive for achieving long-term performance goals by encouraging total Company shareholder return that compares favorably to other utility-based companies. | The number of UGI performance units awarded in Fiscal | ||
| ||||
Performance Units (AmeriGas Partners) | Prior to the AmeriGas Merger, for Fiscal 2019 grants, the principal objective of this component was to align executive interests with unitholder | |||
|
• | Link Between Our Financial Performance and Executive Compensation |
The Committee sets rigorous goals for our executive officers that are directly tied to the Company’s financial performance and our total return to our shareholders, and in the case of AmeriGas Partners, our total return to our unitholders.shareholders. We believe that the performance-based components of our compensation program, namely our stock options and performance units, have effectively linked our executives’ compensation to our financial performance. The following charts set forth the Company’s Adjusted EPS performance from Fiscal 20142017 through Fiscal 20162019 as well as the Company’s three-year stock performance compared to the S&P Utilities Index and the Russell MidCap Utilities Index (exclusive of telecommunications companies) (“Adjusted Russell MidCap Utilities Index”), the peer group referenced by the Committee for purposes of the Company’s long-term compensation plan.
To better illustrate the total direct performance-based compensation paid or awarded to Mr. Walsh in Fiscal 2016, 2015 and 2014, the following table is provided as supplemental information. A comparable illustration would apply to our other named executive officers. The information in the supplemental table below differs from the information in the Summary Compensation Table in several ways. Specifically,reflects the table below omitsgrant-date fair value for equity awards, as required. However, we believe that a better assessment of amounts earned through equity awards can be made by considering our executives’ realizable pay, which was significantly lower than the columns captioned “Change in Pension Value and Nonqualified Deferred Compensation Earnings” and “All Other Compensation” because these amounts are not considered in establishing annual total cash compensation and total direct compensation and some of the amounts in those columns of the Summary Compensation Table can vary significantly from year to year. The table below shows Mr. Walsh’s direct compensation for the last three fiscal years. Mr. Walsh’s actual (or estimated in the case of performance related to Fiscal 2016) three-year long-termgrant-date fair value. While UGI performance unit payouts during the period clearly demonstrate shareholder returns for the Company that areawards have resulted in excess of the returns of most companies included in the Company’s peer group. Similarly, the amount Mr. Walsh received as non-equity incentive compensation under the Company’s annual bonus plan is directly linked to the Company’s annual financial performancepayouts in each of the last five performance cycles, the current cycle scheduled to end December 31, 2019 is tracking towards no payout as are thein-progress cycles scheduled to conclude on December 31, 2020 and December 31, 2021. Further, the Fiscal 2016, 20152019 stock option award is currently underwater and 2014,thein-the-money value of the Fiscal 2018 and Fiscal 2017 option awards are meaningfully below the grant-date fair values.
The graph below illustrates the effect of our performance-based compensation programs on the total compensation of our Chief Executive Officer and compares his targeted compensation to realizable pay as more clearly illustrated in Short-Term Incentives – Annual Bonuses below.of September 30, 2019.
Fiscal Year 2016 2015 2014 Salary Non-Equity
Incentive
Compensation Performance
Unit Payout(1) Intrinsic Value
of Stock
Options in
Fiscal 2016
(Valued at
9/30/16) Total Direct
Compensation $ 1,133,704 $ 1,159,212 $ 5,832,540 (2) $ 3,788,400 $ 11,913,856 $ 1,079,728 $ 1,604,745 $ 4,840,440 (3) $ 2,221,560 $ 9,746,473 $ 1,028,300 $ 1,974,336 $ 3,036,515 (4) $ 7,128,000 $ 13,167,151
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|
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|
Short-Term Incentives — Annual Bonuses
Our annual bonuses are directly tied to key financial metrics for each executive. For Messrs. Walsh and OliverJastrzebski and Ms. Gaudiosi, the financial metric is Adjusted EPS (as previously defined) and for Mr. Perreault, the metric is adjusted earnings before interest and taxes of UGI International, adjusted to exclude the impact of net gains on commodity derivative instruments not associated with current period transactions at UGI International and integration expenses associated with the Finagaz acquisition in France (“Adjusted EBIT”). Mr. Sheridan’s annual bonus is tied to AmeriGas Propane’s earnings before interest, taxes, depreciation and amortization, adjusted to exclude the impact of net gains on commodity derivative instruments not associated with current period transactions at AmeriGas Propane (“Adjusted EBITDA”) for 90 percent of the total bonus opportunity and a customer service-related goal for 10 percent of the bonus opportunity. The Adjusted EBITDA result for Mr. Sheridan, which is then modified based on the achievement of a safety performance goal.goal based on weighted average safety modifier results from AmeriGas Propane, UGI International, UGI Utilities, Inc. and UGI Energy Services, LLC (“Energy Services”). Mr. Perreault’s annual bonus is comprised of three components: (i) fifty percent is tied to UGI International performance, (ii) thirty percent is tied to AmeriGas Partners performance, and (iii) twenty percent is tied to UGI Corporation performance. Additional details on each of the three components of Mr. Perreault’s annual bonus as set forth in more detail in this Compensation Discussion and Analysis. Ninety percent of Mr. Gallagher’s annual bonus is tied to AmeriGas Partners’ operating cash flow, as modified by achievement of a safety performance goal, and ten percent is tied to customer service goals.
As illustrated in the chart below, when the Company’s Adjusted EPS exceeds the targeted goal, the annual bonus percentage paid to a named executive officer exceeds the targeted payout amount. Similarly, when Adjusted EPS is below the targeted goal, the annual bonus percentage paid to a named executive officer is less than the targeted payout amount. The foregoing correlation between the Adjusted EPS and bonus payout amounts would also be true with respect to the correlation between (i) Adjusted EBIT and Mr. Perreault’smetrics applied to the annual bonus payout for Messrs. Perreault and (ii) Adjusted EBITDA and Mr. Sheridan’s bonus payout. EachGallagher. The Committee has discretion under our executive annual bonus plans to (i) adjust Adjusted EPS, Adjusted EBIT, and Adjusted EBITDAOperating Cash Flow for extraordinary items or other events as the Committee deems appropriate, and (ii) increase or decrease the amount of an award determined to be payable under the bonus plan by up to 50 percent. See COMPENSATION DISCUSSION AND ANALYSIS — Elements of Compensation — Annual Bonus Awards, beginning on page 30.32. The following table demonstrates the strong link between Company financial performance and bonus payout percentages by illustrating that the Company’s improvedAdjusted EPS (as compared to the targeted Adjusted EPS range) during each of the last three fiscal years directly correlates to the bonus payouts for our executives.
Fiscal Year | UGI Corporation Targeted Adjusted EPS Range | UGI Corporation Adjusted EPS for Bonus | % of Target Bonus Paid | |||||||||
2016 | $ | 2.15-$2.30 | $ | 2.05 | 81.8 | % | ||||||
2015 | $ | 1.88-$1.98 | $ | 2.02 | 118.9 | % | ||||||
2014 | $ | 1.73-$1.80 | $ | 1.98 | 160.0 | % |
Fiscal Year | UGI Corporation Targeted Adjusted EPS Range | UGI Corporation Adjusted EPS for Bonus | Safety Modifier | % of Target Bonus Paid | ||||||||||
2019 |
| $2.75-$2.95 |
| $2.36 (1) |
| 91.8 | % |
| 59.5 | % | ||||
2018 |
| $2.45-$2.65 |
| $ 2.55 |
| N/A |
|
| 118.2 | % | ||||
2017 |
| $2.30-$2.45 |
| $ 2.25 |
| N/A |
|
| 89.2 | % |
(1) | Adjusted EPS achieved for Fiscal 2019 was $2.28 and Adjusted EPS for bonus purposes was further adjusted to exclude the share dilution impact and net income impact resulting from the CMG Acquisition and the AmeriGas Merger. |
Long-Term Incentive Compensation
Our long-term incentive compensation program, principally comprised of stock options and performance units, is intended to create a strong financial incentive for achievement of the Company’s long-term performance goals. In addition, linking equity to compensation aligns our executives’ interests with shareholder interests.
Long-Term Incentives — Stock Options
Stock option values reported in the Summary Compensation Table reflect the valuation methodology mandated by SEC regulations established by the Securities and Exchange Commission (“SEC”), which is based on grant date fair value as determined under U.S. generally accepted accounting principles in the United States (“GAAP”). Therefore, the amounts shown under “Option Awards” in the Summary Compensation Table do not reflect performance of the underlying shares subsequent to the grant date. From our executives’ perspectives, the value of a stock option is based on the excess of the market price of the underlying shares over the exercise price (sometimes referred to as the “intrinsic value”) and, therefore, is directly affected by market performance of the Company’s common stock. As a result of the Company’s recent performance, the fiscalyear-end intrinsic value of the options granted to our executives duringin Fiscal 2016 2019, Fiscal 2018 and Fiscal 2017
is moreless than the amounts set forth in column (f) of the Summary Compensation Table. Given the outstanding returns to our shareholders, the intrinsic value of management’s stock options is higher than the value in the Summary Compensation Table, thereby evidencing a strong alignment of management’s compensation with shareholder returns. The table below illustrates the intrinsic value of the stock options granted to Mr. Walsh in Fiscal 2016, 20152019, Fiscal 2018 and 2014,Fiscal 2017, respectively.
Fiscal Year | Number of Shares Underlying Options Granted to Mr. Walsh | Summary Compensation Table Option Awards Value | Exercise Price Per Share | Price Per Share at 9/30/16 | Total Intrinsic Value of Options at 9/30/16 | |||||||||||||||
2016 | 330,000 | $ | 1,581,030 | $ | 33.76 | $ | 45.24 | $ | 3,788,400 | |||||||||||
2015 | 306,000 | $ | 1,705,338 | $ | 37.98 | $ | 45.24 | $ | 2,221,560 | |||||||||||
2014 | 405,000 | $ | 1,992,060 | $ | 27.64 | $ | 45.24 | $ | 7,128,000 |
Fiscal Year | Number of Shares Underlying Options Granted to Mr. Walsh | Summary Compensation Table Option Awards Value | Exercise Price Per Share | Price Per Share at 9/30/19 | Total Intrinsic Value of Options at 9/30/19 | |||||||||||||||
2019 |
| 228,850 |
| $ | 2,029,900 |
| $ | 53.35 |
|
| $ 50.27 |
|
| $ 0 |
| |||||
2018 |
| 260,000 |
| $ | 1,887,600 |
| $ | 46.95 |
|
| $ 50.27 |
|
| $ 863,200 |
| |||||
2017 |
| 270,000 |
| $ | 2,041,200 |
| $ | 46.08 |
|
| $ 50.27 |
|
| $ 1,131,300 |
|
Long-Term Incentives — Performance Units
Performance units are valued upon grant date in accordance with SEC regulations, based on grant date fair value as determined under GAAP. Nevertheless, the actual number of shares or partnership units ultimately awarded is entirely dependent on the TSR on UGI Corporation common stock relative to a competitive peer group, (or, in the case of Mr. Sheridan, TUR on AmeriGas Partners’ common units relative to a competitive peer group and achievement of a customer gain/loss goal), which will not be finally determined with respect to performance units granted in Fiscal 20162019 until the end of calendar year 2018.2021.
The following table shows the correlation between (i) levels of UGI Corporation TSR and long-term incentive compensation paid in each of the previous four fiscal years, and (ii) the estimated payout in Fiscal 20172020 using October 31, 2016,2019, instead of December 31, 2016,2019, as the end of the three-year performance period. The table also compares UGI Corporation’s TSR to the average shareholder return of the Company’s peer group. As of October 31, 2016, AmeriGas Partners’ TUR ranked 3rd in its peer group, resulting in an estimated payout in Fiscal 2017 of 200 percent. AmeriGas Partners’ TUR ranked 10th in its peer group for the three-year period ended December 31, 2015, resulting in a 162.5 percent payout during Fiscal 2016. AmeriGas Partners’ TUR in the prior three fiscal years was below the threshold for payment.
Performance Period (Calendar Year) UGI Corporation Total Shareholder Return Ranking Relative to Peer Group 2014 — 2016(2) 4th out of 34 (91st percentile) 2013 — 2015 5th out of 36 (88th percentile) 2012 — 2014 2nd out of 39 (97th percentile) 2011 — 2013 20thout of 40 (50th percentile) 2010 — 2012 19thout of 32 (42nd percentile) UGI
Corporation Total
Shareholder
Return(1) Total Average
Shareholder
Return of Peer
Group
(Excluding
UGI Corporation) UGI
Corporation
Performance
Unit Payout as a
Percentage of
Target 77.0 % 33.3 % 200.0 % 74.9 % 38.5 % 196.4 % 113.5 % 55.9 % 193.4 % 46.8 % 50.1 % 100.0 % 46.9 % 45.4 % 59.7 %
Performance Period (Calendar Year) | UGI Corporation Total Shareholder Return Ranking Relative to Peer Group | UGI Corporation Total Shareholder Return (1) | Total Average Shareholder Return of Peer Group (Excluding UGI Corporation) | UGI Corporation Performance Unit Payout as a Percentage of Target | |||||||||||||
2017 — 2019 (2) | 24th out of 28 (15th percentile) | 14.3% |
| 59.1 | % | 0.0% | |||||||||||
2016 — 2018 | 4th out of 30 (90thpercentile) | 70.5% |
| 54.4 | % | 199.1% | |||||||||||
2015 — 2017 | 20th out of 33 (41st percentile) | 38.9% |
| 34.7 | % | 71.9% | |||||||||||
2014 — 2016 | 4th out of 34 (91st percentile) | 78.7% |
| 35.1 | % | 200.0% | |||||||||||
2013 — 2015 | 5th out of 36 (88th percentile) | 74.9% |
| 38.5 | % | 196.4% |
(1) | Calculated in accordance with the |
(2) | Estimated ranking and payout reflects the TSR of UGI Corporation for the |
As noted below, beginning with performance units granted in Fiscal 2011, TSR for UGI Corporation is compared to companies in the Adjusted Russell MidCap Utilities Index, rather than to companies in the S&P Utilities Index. In addition, beginning with performance units granted in Fiscal 2010,2019, TUR for AmeriGas Partners isfor Fiscal 2019 was compared to the energy master limited partnerships and limited liability companies in the Tortoise MLP Index. In Fiscal 2018 and 2017, however, TUR for AmeriGas Partners was compared to the energy master limited partnerships and limited liability companies in the Alerian MLP Index. AmeriGas Partners was removed from the Alerian Index in December 2018. For Mr. Sheridan’sGallagher’s Fiscal 20142018 and 2017 performance unit award, the Committee adoptedapplied a second relative total return metric comparing AmeriGas Partners’ TUR to the TUR of the other two retail propane distribution companies included in the Alerian MLP Index. The Committee replaced this second relative return metric for Mr. Sheridan’s Fiscal 2016 and Fiscal 2015 performance unit awards with a metric tied to AmeriGas Partners’ customer gain/loss performance. The Committee thenalso added a modifier to the portion of Mr. Sheridan’sGallagher’s Fiscal 20162018 and Fiscal 20152017 performance unit awards tied to AmeriGas Partners’ TUR performance compared to the Alerian MLP Index based on AmeriGas Partners’ performance compared to the other two retail propane distribution companies that were included at that time in the Alerian MLP Index.
The link between the Company’s financial performance and our executive compensation program is evident in the supplemental tables provided above. The Committees believeCommittee believes there is an appropriate link between executive compensation and the Company’s performance.
• | Compensation and Corporate Governance Practices |
The Committees seekCommittee seeks to implement and maintain sound compensation and corporate governance practices, which include the following:
The Committee is composed entirely of directors who are independent, as defined in the corporate governance listing standards of the New York Stock Exchange.
The Committee utilizes the services of Pay Governance LLC (“Pay Governance”), an independent outside compensation consultant. The Committee believes that, during Fiscal 2016,2019, there was no conflict of interest between Pay Governance and the Committee. In reaching the foregoing conclusions, the Committee considered the factors set forth by the New York Stock Exchange regarding compensation committee advisor independence.
The Company allocates a substantial portion of compensation to performance-based compensation. In Fiscal 2016, 812019, 82 percent of the principal compensation components, in the case of Mr. Walsh, and 7069 percent to 7574 percent of the principal compensation components, in the case of all other named executive officers, were variable and tied to financial performance or TSR.objectives.
The Company awards a substantial portion of compensation in the form of long-term awards, namely stock options and performance units, so that executive officers’ interests are aligned with the interests of shareholders (unitholders in the case of Mr. Sheridan) and long-term Company performance.
Annual bonus opportunities for the named executive officers are based primarily on key financial metrics.metrics and safety performance goals. Similarly, long-term incentives are based on UGI Corporation common stock values and relative stock price performance. Long-termIn Fiscal 2019, long-term incentives for Mr. Sheridan arePerreault were based partially on (i)UGI Corporation common stock values and relative stock performance and partially on AmeriGas Partners common unit values and relative common unit performanceperformance. Long-term incentives for Mr. Gallagher were based on AmeriGas Partners common unit values and (ii) customer gain/lossrelative common unit performance.
At our 2019 Annual Meeting, over 92% of our shareholders voted to approve the compensation of our named executive officers.
We require termination of employment for payment under our change in control agreements (referred to as a “double trigger”). In addition, beginning in January of 2015, weWe require a double trigger for the accelerated vesting of equity awards in the event of a change in control. We alsoIn addition, none of our NEOs have not entered into change in control agreements providing for taxgross-up payments under Section 280G of the Internal Revenue Code since 2010.Code. See COMPENSATION OF EXECUTIVE OFFICERS — Potential Payments Upon Termination or Change in Control, beginning on page 52.58.
We have meaningful stock ownership guidelines. See COMPENSATION DISCUSSION AND ANALYSIS — Stock Ownership Guidelines,and Retention Policy, beginning on page 41.
We have a recoupment policy for incentive-based compensation paid or awarded to current and former executive officers in the event of a restatement due to materialnon-compliance with financial reporting requirements.
We have a policy prohibiting the Company’s Directors and executive officers from (i) hedging the securities of UGI Corporation, and AmeriGas Partners, (ii) holding UGI Corporation and AmeriGas Partners securities in margin accounts as collateral for a margin loan, andand/or (iii) pledging the securities of UGI Corporation and AmeriGas Partners.Corporation. The Policy specifically prohibits hedging or monetization transactions through the use of prepaid variable forwards, equity swaps, collars and/or exchange funds.
COMPENSATION PHILOSOPHY AND OBJECTIVES
Our compensation program for our named executive officers is designed to provide a competitive level of total compensation necessary to attract and retain talented and experienced executives. Additionally, our compensation program is intended to motivate and encourage our executives to contribute to our success and reward our executives for leadership excellence and performance that promotes sustainable growth in shareholder and common unitholder value.
In Fiscal 2016,2019, the components of our compensation program included salary, annual bonus awards, long-term incentive compensation (performance unit awards and UGI Corporation stock option grants and one restricted unit award)grants), perquisites, retirement benefits and other benefits, all as described in greater detail in this Compensation Discussion and Analysis. We believe that the elements of our compensation program are essential components of a balanced and competitive compensation program to support our annual and long-term goals.
DETERMINATION OF COMPETITIVE COMPENSATION
In determining Fiscal 20162019 compensation, the CommitteesCommittee engaged Pay Governance as theirits compensation consultant. The primary duties of Pay Governance were to:
provide the Committees with independent and objective market data;
conduct compensation analyses;
review and advise on pay programs and salary, target bonus and long-term incentive levels applicable to our executives;
review components of our compensation program as requested from time to time by the CommitteesCommittee and recommend plan design changes, as appropriate; and
provide general consulting services related to the fulfillment of the Committees’Committee’s charters.
Pay Governance has not provided actuarial or other services relating to pension and post-retirement plans or services related to other benefits to us or our affiliates, and generally all of its services are those that it provides to the Committees.Committee. Pay Governance has provided market data for positions below the senior executive level as requested by management as well as market data for directorDirector compensation, but its fees for this work historically are modest relative to its overall fees.
In assessing competitive compensation, we referenced market data provided to us in Fiscal 20152018 by Pay Governance. Pay Governance provided us with two reports: the “2015“2018 Executive Cash Compensation Review” and the “2015“2018 Executive Long-Term Incentive Review.” We do not benchmark against specific companies in the databases utilized by Pay Governance in preparing its reports. Our Committees doCommittee does benchmark, however, by using Pay Governance’s analysis of compensation databases that include numerous companies as a reference point to provide a framework for compensation decisions. Our Committees exerciseCommittee exercises discretion and also reviewreviews other factors, such as internal equity (both within and among our business units) and sustained individual and company performance, when setting our executives’ compensation.
In order to provide the Committee with data reflecting the relative sizes of UGI’s nonutilitynon-utility and utility businesses, Pay Governance first referenced compensation data for comparable executive positions in each of the Willis Towers Watson 20152018 General Industry Executive Compensation Database (“General Industry Database”) and the Willis Towers Watson 20152018 Energy Services Executive Compensation Database (“Energy Services Database”). Willis Towers Watson’s General Industry Database is comprised of approximately 450625 companies from a broad range of industries, including oil and gas, aerospace, automotive and transportation, chemicals, computer, consumer products, electronics, food and beverages, metals and
mining, pharmaceutical and telecommunications. The Willis Towers Watson Energy Services Database is comprised of approximately 115 companies, primarily utilities. For Messrs. Walsh and OliverJastrzebski and Ms. Gaudiosi, Pay Governance weighted the General Industry Database survey data 75 percent and the Energy Services Database survey data 25 percent and added the two. For example, if the relevant market rate for a particular executive position derived from information in the General Industry Database was $100,000 and the relevant market rate derived from information in the Energy Services Database was $90,000, Pay Governance would provide us with a market rate of $97,500 for that position (($100,000 x 75 percent = $75,000) plus ($90,000 x 25 percent = $22,500)). The impact of weighting information derived from the two databases is to obtain a market rate designed to approximate the relative sizes of our nonutilitynon-utility and utility businesses. For Messrs. SheridanPerreault and Perreault,Gallagher, we referenced Towers Watson’s 2015the General Industry Database. The identities of the companies that comprise the databases utilized by Pay Governance have not been disclosed to us by Pay Governance.
We generally seek to position a named executive officer’s salary grade so that the midpoint of the salary range for his or her salary grade approximates the 50th50th percentile of the “going rate” for comparable executives included in the executive compensation database material referenced by Pay Governance. By comparable executive, we mean an executive having a similar range of responsibilities and the experience to fully perform these responsibilities. Pay Governancesize-adjusted the survey data to account for the relative revenues of the survey companies in relation to ours. In other words, the adjustment reflects the expectation that a larger company would be more likely to pay a higher amount of compensation for the same position than a smaller company. Using this adjustment, Pay Governance developed going rates for positions comparable to those of our executives, as if the companies included in the respective databases had revenues similar to ours. We believe that Pay Governance’s application of size adjustments to applicable positions in these databases is an appropriate method for establishing market rates. After consultation with Pay Governance, we considered salary grade midpoints that were within 15 percent of the median going rate developed by Pay Governance to be competitive.
• | Salary |
Salary is designed to compensate executives for their level of responsibility and sustained individual performance. We pay our executive officers a salary that is competitive with that of other executive officers providing comparable services, taking into account the size and nature of the business of the Company, AmeriGas PartnersPropane, or UGI International, as the case may be.
As noted above, we seek to establish the midpoint of the salary grade for the positions held by our named executive officers at approximately the 50th percentile of the going rate for executives in comparable positions. Based on the data provided by Pay Governance in July 2015,2018, we increased the range of salary in each salary grade for Fiscal 20162019 for each named executive officer, other than Mr. Walsh, by 2 percent. The Committee established Mr. Walsh’s Fiscal 20162018 salary grade midpoint at the market median of comparable executives as identified by Pay Governance based on its analysis of the executive compensation databases. For Mr. Walsh, this resulted in a decreasean increase of the range of salary in his salary grade from the prior year of 1.45.6 percent.
For Fiscal 2016,2019, the merit increases were targeted at 3 percent, but individual increases varied based on performance evaluations and the individual’s position within the salary range. Performance evaluations were based on qualitative and subjective assessments of each individual’s contribution to the achievement of our business strategies, including the development of growth opportunities and leadership in carrying out our talent development program. Messrs.Mr. Walsh, and Sheridan, in their capacitieshis capacity as chief executive officersofficer of the Company, and AmeriGas Propane, respectively, had additional goals and objectives for Fiscal 2016,2019, as established during the first quarter of Fiscal 2016.2019. Mr. Walsh’s annual goals and objectives included the advancement of an organizational succession plan, including the continued development of a global management team and the continuing execution of enterprise-wide alignment of the Company’s senior management team,critical processes, the recruitment of experienced individuals to fill key roles within the organization, the enhancementadvancement of organizational processes,leadership development activities, achievement of
annual financial and strategic goals and leadership in identifying investment opportunities for the Company and its subsidiaries. Mr. Sheridan’s annual goals and objectives for Fiscal 2016 included achievement of annual financial goals, leadership development objectives, and implementation of AmeriGas Propane’s growth strategies, including with respect to customer growth and retention and customer service initiatives. All named executive officers received a salary in Fiscal 20162019 that was within 9091 percent to 111120 percent of the midpoint for his or her salary range.
The following table sets forth each named executive officer’s Fiscal 20162019 salary.
Name | Salary | Percentage Increase over Fiscal 2015 Salary | Salary | Percentage Increase over Fiscal 2018 Salary | ||||||||||||
John L. Walsh | $ | 1,133,704 | 5.0 | % | $ | 1,244,719 |
|
| 4.0% |
| ||||||
Kirk R. Oliver | $ | 541,190 | 1.5 | % | ||||||||||||
Jerry E. Sheridan | $ | 541,528 | 2.8 | % | ||||||||||||
Ted J. Jastrzebski | $ | 658,125 |
|
| 1.3% |
| ||||||||||
Roger Perreault | $ | 550,000 | (1) | N/A | $ | 630,000 |
|
| (1) |
| ||||||
Monica M. Gaudiosi | $ | 448,058 | 3.0 | % | $ | 489,605 |
|
| 3.0% |
| ||||||
Hugh J. Gallagher | $ | 460,000 |
|
| (2) |
|
(1) | Mr. Perreault’s salary |
(2) | Mr. Gallagher’s salary increase of nearly 30% reflects his promotion to President and Chief Executive Officer of AmeriGas Propane, effective September 18, 2018. |
• | Annual Bonus Awards |
Our annual bonus plans provide our named executive officers with the opportunity to earn an annual cash incentive, provided that certain performance goals are satisfied. Our annual cash incentive is intended to motivate our executives to focus on the achievement of our annual business objectives by providing competitive incentive opportunities to those executives who have the ability to significantly impact our financial performance. We believe that basing a meaningful portion of an executive’s compensation on financial performance emphasizes our pay-for-performance philosophy and will result in the enhancement of shareholder or unitholder value.
In determining each executive position’s target award level under our annual bonus plans, we considered database information derived by Pay Governance regarding the percentage of salary payable upon achievement of target goals for executives in similar positions at other companies as described above. In establishing the target award level, we positioned the amount at approximately the 50th percentile for comparable positions.
Messrs. Walsh Oliver and PerreaultJastrzebski and Ms. Gaudiosi participate in the UGI Corporation Executive Annual Bonus Plan (the “UGI Bonus Plan”), whileand Mr. SheridanGallagher participates in the AmeriGas Propane Executive Annual Bonus Plan (the “AmeriGas Bonus Plan”). ForMr. Perreault participates in both the UGI Bonus Plan and the AmeriGas Bonus Plan, with his target award opportunity tied (i) fifty percent to UGI International performance, (ii) thirty percent to AmeriGas Partners performance, and (iii) twenty percent to UGI Corporation performance. The entire target award opportunity for Messrs. Walsh and OliverJastrzebski and Ms. Gaudiosi, and the entiretwenty percent of Mr. Perreault’s target award opportunity tied to UGI Corporation performance, was based on the Company’s Adjusted EPS.EPS, as further adjusted by the Committee. For Messrs. Walsh and Jastrzebski and Ms. Gaudiosi (but not Mr. Perreault), the Adjusted EPS was then modified based on the achievement of a safety performance goal based on weighted average safety modifier results from AmeriGas Propane, UGI Utilities, Inc., Energy Services, and UGI International. With respect to the fifty percent of Mr. Perreault’s target award opportunityannual bonus tied to UGI International performance, (i) ninety percent was based on UGI International’s earnings before interest and taxes, adjusted to (1) exclude theafter-tax impact of changes in unrealized gains and losses on commodity and certain foreign currency derivative instruments not associated with current period transactions at UGI International, (2) losses associated with extinguishments of debt and (3) UGI International business transformation costs (“Adjusted EBIT”), which was then modified based on achievement of a safety performance goal at UGI International, and (ii) ten percent was based on achievement of strategic goals at UGI International, but contingent on a payout under the Adjusted EBIT of UGI International. We believe that annual bonus payments to our most senior executives should reflect our overall financial results for the fiscal year, and Adjusted EPS and Adjust EBIT provide straightforward, “bottom line” measurescomponent of the performance of an executive in a large, well-established corporation.
For similar reasons, 90award. With respect to the thirty percent of Mr. Sheridan’sPerreault’s annual bonus tied to AmeriGas Partners performance and for Mr. Gallagher’s entire target awardbonus opportunity, (i) ninety percent was based on AmeriGas Partners’ Adjusted EBITDA less growth and maintenance capital expenditures (“Operating Cash Flow”), subject to modification based on achievement of a safety performance goal as described below. The other 10and (ii) ten percent of Mr. Sheridan’s target award opportunity was based on achievement of customer service goals, but contingent on a payout under the financial component of the award. We believe that customer service for AmeriGas Partners is an important component
The financial portion of the bonus calculation because we foresee no or minimal growth in total demand for propane in the next several years, and, therefore, customer service is an important factor in our ability to improve the long-term financial performance of AmeriGas Partners. We also believe that achievement of superior safety performance is an important short-term and long-term strategic initiative and is therefore included as a component of the AmeriGas Propane bonus calculation.
Each Committee has discretion under our executive annual bonus plans to (i) adjust Adjusted EPS, Adjusted EBIT and Adjusted EBITDA for extraordinary items or other events as the Committee deems appropriate, (ii) increase or decrease the amount of an award determined to be payable under the bonus plan by up to 50 percent, and (iii) review quantitative factors (such as Company performance) and qualitative factors (such as individual performance and overall contributions to the Company) when determining the annual bonus to be paid to an executive who terminates employment during the fiscal year on account of retirement, death or disability. The UGI Bonus Plan and the AmeriGas Bonus Plan each provides that, unless the Committee determines otherwise, all executive officers who have not fulfilled their respective equity ownership requirements receive as part of their ongoing compliance up to 10 percent of their gross annual bonus in fully vested UGI Corporation common stock or AmeriGas Partners common units, as applicable.
The bonus award opportunity for each of Messrs. Walsh and Oliver and Ms. Gaudiosinamed executive officer was structured so that (i) no amount would be paidpayable unless the Company’s Adjusted EPSrelevant financial metric achievement was at least 80 percent of the
target amount, with(ii) the target bonus award being paid outwould be payable (subject to modification based on safety performance) if the Company’s Adjusted EPSrelevant financial metric was 100 percent of the targeted Adjusted EPS. The maximum award, equalfully achieved and (iii) up to 200 percent of the target award would be payable (subject to modification based on safety performance) if Adjusted EPSthe relevant financial metric achieved equaled or exceeded 120 percent of the Adjusted EPSrelevant financial target. The targeted Adjusted EPS for bonus purposes for Fiscal 2016 was established to be in the range of $2.15 to 2.30 per share, and Adjusted EPS for bonus purposes achieved for Fiscal 2016 was $2.05. As a result, Messrs. Walsh and Oliver and Ms. Gaudiosi each received a bonus payout equal to 81.8 percent of his or her target award for Fiscal 2016, with Mr. Oliver receiving 10 percent of his payout in Company stock to satisfy ongoing stock ownership compliance requirements.
For Mr. Sheridan, the 90 percent component of the bonus award opportunity based on Adjusted EBITDA of AmeriGas Partners, subject to modification based on safety performance, was structured so that no amount would be paid unless AmeriGas Partners’ Adjusted EBITDA was at least 90 percent of the target amount, while 200 percent of the target bonus could be payable if Adjusted EBITDA equaled or exceeded 110 percent of the target amount. The percentage of target bonus payable based on the level of achievement of Adjusted EBITDA is referred to as the “Adjusted EBITDAfinancial metric (the “Financial Metric Leverage Factor.” The Adjusted EBITDA Leverage FactorFactor”) is then modified to reflect the degree of achievement of a predetermined safety performance
objective tied to AmeriGas Propane’s Fiscal 20162019 Occupational Safety and Health Administration (“OSHA”) recordables (“Safety Leverage Factor”). For Fiscal 2016,2019, the percentage representing the Safety Leverage Factor ranged from 8090 percent if the performance target was not achieved, to a maximum of 120110 percent if performance exceeded the target. We believe the Safety Leverage Factor for Fiscal 20162019 represented an achievable but challenging performance target. Once the Adjusted EBITDAFinancial Metric Leverage Factor and Safety Leverage Factor are determined, the Adjusted EBITDAFinancial Metric Leverage Factor is multiplied by the Safety Leverage Factor to obtain a total adjusted leverage factor (the “Total Adjusted Leverage Factor”). The relevant Total Adjusted Leverage Factor is then multiplied by the relevant target bonus opportunity to arrive at the 90for each individual. For Fiscal 2019, this amount represents (i) 100 percent portion of the bonus payout for Messrs. Walsh, Jastrzebski and Ms. Gaudiosi and (ii) 90 percent of the bonus payout for Mr. Gallagher, with the remaining ten percent of Mr. Gallagher’s bonus payout attributable to achievement of customer service goals described below. For Mr. Perreault, each of the (i) Adjusted EBIT leverage factor related to UGI International financial performance and (ii) Operating Cash Flow leverage factor related to AmeriGas Partners performance was modified by the relevant Safety Leverage Factor, while the portion of Mr. Perreault’s target bonus award payable fortied to Adjusted EPS of UGI Corporation was not subject to a Safety Leverage Factor.
For the fiscal year. The actual Adjusted EBITDA achieved for Fiscal 2016 was $543 million. The applicable range for targeted Adjusted EBITDA for bonus purposes for Fiscal 2016 was $660 million to $690 million. Mr. Sheridan’s remaining 10 percent component of hisMessrs. Perreault’s and Gallagher’s bonus award opportunity was based ontied to customer service goals but this portion of Mr. Sheridan’s award isat AmeriGas Propane and only payable if there is at least a threshold payout under the Adjusted EBITDAOperating Cash Flow financial component of his award. For Fiscal 2016,the award, AmeriGas Propane engaged a third party company to conduct customer surveys in order to better understand customer satisfaction with services provided by AmeriGas Propane. Each individual survey is given an overall satisfaction score and the scores are then aggregated by the third party company to calculate a total score known as a net promoter score. Mr. Sheridan’s award opportunity for theThe customer service componentportion of his bonusthe target award was structured sosuch that (i) no amount would be paidpayable unless the actual net promoter score was at least 85 percent of the net promoter score target, with(ii) the target bonus award being paid outwould be payable if the net promoter score was 100 percent of the targeted goal. Thegoal and (iii) the maximum award, equalup to 150 percent of the targeted award, would be payable if the net promoter score exceeded the net promoter score target. Because the threshold Adjusted EBITDA target was not attained, Mr. Sheridan did not receive a bonus payout for Fiscal 2016.
For Mr. Perreault, thePerreault’s bonus award opportunity based ontied to strategic goals at UGI International’sInternational and only payable if there is at least a threshold payout under the Adjusted EBIT financial component of the award, the strategic goals were based 70 percent on operating efficiencies achieved at UGI International and 30 percent on improvements to the UGI International internal control environment during Fiscal 2019. The strategic goal portion of Mr. Perreault’s target award was structured sosuch that (i) no amountsamount would be paidpayable unless UGI International’s Adjusted EBIT was at least 7560 percent of the target amount, withgoal was achieved, (ii) the target bonus award being paid outwould be payable if UGI International’s Adjusted EBIT was 100 percent of the targeted Adjusted EBIT. Thegoal was achieved and (iii) the maximum award, equalup to 200150 percent of the targettargeted award, would be payable if Adjusted EBIT equaled orthe result exceeded 130 percentthe targeted goal.
We believe that annual bonus payments to our most senior executives should reflect our overall financial results for the fiscal year, and the metrics described above provide “bottom line” measures of the performance of an executive in a large, well-established corporation. In addition, we believe that achievement of superior safety performance is an important short-term and long-term strategic initiative and is therefore included as a component of the annual bonus calculation. Moreover, efficiency goals and customer service initiatives at UGI International and AmeriGas Propane are important because we foresee no or minimal growth in total market demand for LPG in the next several years, and, therefore, efficient operations and customer service are important factors in our ability to improve the long-term financial performance of the business.
The targeted Adjusted EBIT.EPS for bonus purposes for Fiscal 2019 was established in the range of $2.75 to $2.95 per share. Adjusted EPS achieved for Fiscal 2019 was $2.28 and Adjusted EPS for bonus purposes, as adjusted to exclude the share dilution impact and net income impact resulting from the CMG Acquisition and
the AmeriGas Merger, was $2.36. The Fiscal 2019 safety modifier applied to the bonus payout for Messrs. Walsh and Jastrzebski was 91.8 percent. UGI International’s Fiscal 2019 targeted Adjusted EBIT for bonus purposes for Fiscal 2016 was established to be in the range of $195$270 million to $225$300 million, and Adjusted EBIT achieved byfor Fiscal 2019 was approximately $235 million. For UGI International, the Fiscal 2019 safety modifier was 90 percent and the strategic goal targets were achieved. AmeriGas Partners’ Fiscal 2019 targeted Operating Cash Flow for bonus purposes was established in the range of $475 million to $575 million, and Operating Cash Flow achieved for Fiscal 20162019 was approximately $234$473 million. For AmeriGas Partners, the Fiscal 2019 safety modifier was 90 percent and the customer service goals were achieved at 95 percent of target.
As a result of the foregoing, Mr. Perreault received a pro-rated bonus payout equal to 129.6 percent of his target award for Fiscal 2016, with 10 percent of such payout received in Company stock to satisfy ongoing stock ownership compliance requirements.
Thethe following annual bonus payments were made for Fiscal 2016:2019:
Name | Percent of Target Bonus Paid | Payout | Percent of Target Bonus Paid | Payout | ||||||||||||
John L. Walsh | 81.8 | % | $ | 1,159,212 |
| 59.5 | % | $ | 925,760 |
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Kirk R. Oliver(1) | 81.8 | % | $ | 332,020 | ||||||||||||
Jerry E. Sheridan | 0 | % | $ | 0 | ||||||||||||
Roger Perreault(1)(2) | 129.6 | % | $ | 386,100 | ||||||||||||
Ted J. Jastrzebski (1) |
| 59.5 | % | $ | 313,268 |
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Roger Perreault (1) |
| 70.8 | % | $ | 334,530 |
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Monica M. Gaudiosi | 81.8 | % | $ | 238,232 |
| 59.5 | % | $ | 203,921 |
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Hugh J. Gallagher (1) |
| 77.9 | % | $ | 268,755 |
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• | Long-Term Compensation — Fiscal |
Background and Determination of Grants — Stock Options, Performance Units and Restricted Units
Our long-term incentive compensation is intended to create a strong financial incentive for achieving or exceeding long-term performance goals and to encourage executives to hold a significant equity stake in our Company in order to align the executives’ interests with shareholder interests. Additionally, we believe our long-term incentives provideincentive compensation program provides us the ability to attract and retain talented executives in a competitive market.
Our long-term compensation for Fiscal 20162019 included UGI Corporation stock option grants and either UGI Corporation or, prior to the AmeriGas Merger, AmeriGas Partners performance unit awards. Each performance unit represents the right of the recipient to receive a share of common stock or, prior to the AmeriGas Merger, a common unit, if specified performance goals and other conditions are met. In addition, Mr. Perreault received a UGI Corporation restricted unit award of 12,000 UGI Corporation restricted stock units, with dividend equivalents, in connection with the commencement of his employment. Each stock unit represents the right of Mr. Perreault to receive a share of UGI Corporation common stock after three years of employment with the Company.
UGI Corporation stock options performance units and restrictedperformance units were awarded under the 2013 Plan. AmeriGas Partners performance units were awarded under the AmeriGas Propane, Inc. 2010 Long-Term Incentive Plan on behalf of AmeriGas Partners, L.P. (the “AmeriGas 2010 Plan”). UGI Corporation stock options generally have a term of ten years and become exercisable in three equal annual installments beginning on the first anniversary of the grant date. Messrs. Walsh, OliverJastrzebski, and Perreault and Ms. Gaudiosi were each awarded UGI Corporation performance units tied to the three-year TSR performance of the Company’s common stock relative to that of the companies in the Adjusted Russell MidCap Utilities Index. Mr. Sheridan wasIn Fiscal 2019, Messrs. Perreault and Gallagher were awarded AmeriGas Partners performance units tied to (i) a relative TUR metric based on the AlerianTortoise MLP Index, as modified by AmeriGas Partners’ TUR performance compared to the other two retail propane distribution companies in the Alerian Index, and (ii) a customer gain/loss metric.Index.
As is the case with cash compensation and annual bonus awards, we referenced Pay Governance’s analysis of executive compensation database information in establishing equity compensation for the named executive officers. In determining the total dollar value of the long-term compensation opportunity to be provided in Fiscal 2016,2019, we initially referenced (i) median salary information, and (ii) competitive market-based long-term incentive compensation information, both as calculated by Pay Governance. Pay Governance also provided competitive market incentive levels based on its assessment of accounting values. Accounting values are reported directly by companies to the survey databases and are determined in accordance with GAAP.
Except for Mr. Sheridan,
For Messrs. Walsh and Jastrzebski and Ms. Gaudiosi, we initially applied approximately 50 percent of the amount of the long-term incentive opportunity to UGI stock options and approximately 50 percent to UGI performance units. Because of Mr. SheridanPerreault’s role and responsibilities, we applied approximately 33 percent of the amount of the long-term incentive opportunity to UGI stock options, approximately 33 percent to UGI performance units and approximately 34 percent to AmeriGas Partners performance units. Similarly, because Mr. Gallagher is an executive officer employed by AmeriGas Propane, we initially applied approximately 30 percent of the amount of his long-term incentive opportunity to UGI stock options, and approximately 70 percent to AmeriGas performance units (30 percent is applied to AmeriGas Partners performance compared to the Alerian MLP Index, as modified by AmeriGas Partners’ TUR performance compared to the other two retail propane distribution companies, Ferrellgas Partners, L.P. and Suburban Propane Partners, L.P., included in the Alerian MLP Index (the “Propane MLP Group”), and 40 percent is tied to a customer gain/loss performance metric).units. We believe this bifurcation providesthe aforementioned bifurcations provide a good balance between two important goals.with respect to Messrs. Perreault’s and Gallagher’s respective responsibilities. Because the value of stock options is a function of the appreciation or depreciation of our stock price, stock options are designed to align the executive’s interests with shareholder interests. As explained in more detail below, the performance units are designed to encourage increased total shareholder or unitholder return over a period of time.
For Fiscal 2016 equity awards, Pay Governance provided the competitive market incentive levels based on its assessment of accounting values. Pay Governance then provided data for our long-term incentive values by utilizing accounting values. Accounting values are reported directly by companies to the survey databases and are determined in accordance with GAAP.
While management used the Pay Governance calculations as a starting point, in accordance with past practice, management recommended adjustments to the aggregate numbermedian levels of Company stock options and Company and AmeriGas Partners performance units calculated by Pay Governance. The adjustments were designed to address historic grant practices, internal pay equity (both within and among our business units) and the policy of the Company that the three-year average of the annual number of equity awards made under the Company’s 2013 Plan for the fiscal years 20142017 through 2016,2019, expressed as a percentage of common shares outstanding at fiscalyear-end, will not exceed 2 percent. For purposes of calculating the
annual number of equity awards used in this calculation: (i) each stock option granted is deemed to equal one share, and (ii) each performance unit earned and paid in shares of stock and each stock unit granted and expected to be paid in shares of stock is deemed to equal 4.67 shares. The adjustments generally resulted in (i) a decrease in the number of shares underlying stock options, and (ii) except with respect to Mr. Sheridan and Ms. Gaudiosi, a decrease in the number of performance units awarded, in each case as compared to amounts calculated by Pay Governance using accounting values.
As a result of the Committee’s acceptance of management’s recommendations, the named executive officers with the exception of Mr. Perreault, received between approximately 8280 percent and 99102 percent of the total dollar value of long-term compensation opportunity recommended by Pay Governance using accounting values. The actual grant amounts based onvalues and received the foregoing analysis are as follows:following grants:
Name | Stock Options # Granted | Performance Units # Granted | Stock Options # Granted | Performance Units # Granted | ||||||||
John L. Walsh | 330,000 | 50,000 | 228,850 | 36,450 | ||||||||
Kirk R. Oliver | 100,000 | 15,000 | ||||||||||
Jerry E. Sheridan | 65,000 | 18,700 | (2) | |||||||||
Roger Perreault(1) | 50,000 | 7,500 | (3) | |||||||||
Ted J. Jastrzebski | 73,560 | 11,720 | ||||||||||
Roger Perreault | 44,680 | 18,640(1) | ||||||||||
Monica M. Gaudiosi | 70,000 | 11,000 | 47,680 | 7,590 | ||||||||
Hugh J. Gallagher | 25,880 | 15,130(2) |
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Peer GroupsGroup and Performance Metrics
While the numbervalue of performance units awarded to the named executive officers was determined as described above, the actual number of shares or units underlying performance units that are paid out at the expiration of the three-year performance period willwere intended to be based upon the Company’s comparative TSR (or AmeriGas Partners’ comparative TUR) over the period from January 1, 20162019 to December 31, 2018.2021. Specifically, with respect to Company performance units, we will compare the TSR of the Company’s common stock relative to the TSR performance of those companies comprising the Adjusted Russell MidCap Utilities Index as of the beginning of the performance period using the comparative returns methodology used by Bloomberg L.P. or its successor at the time of calculation. In computing TSR, the Company uses the average of the daily closing prices for its common stock and the common stock of each company in the Adjusted Russell MidCap Utilities Index for the calendar quarter prior to January 1 of the beginning and end of a given three-year performance period. In addition, TSR gives effect to all dividends throughout the three-yearthree-
year performance period as if they had been reinvested. If a company is added to the Adjusted Russell MidCap Utilities Index during a three-year performance period, we do not include that company in our TSR analysis. We will only remove a company that was included in the Adjusted Russell MidCap Utilities Index at the beginning of a performance period if such company ceases to exist during the applicable performance period. The companies in the Adjusted Russell MidCap Utilities Index as of January 1, 20162019 were as follows:
Alliant Energy Corporation | Entergy Corporation | Pinnacle West Capital Corp. | ||
Ameren Corporation | Evergy Inc. | PPL Corporation | ||
American Water Works Company, Inc. | Eversource Energy | Public Service Enterprise Group | ||
Aqua America, Inc. | FirstEnergy Corp. | Sempra Energy | ||
Atmos Energy Corporation | Hawaiian Electric Industries, Inc. | The AES Corporation | ||
Avangrid, Inc. | ||||
MDU Resources Group, Inc. | Vectren Corporation | |||
CenterPoint Energy, Inc. | National Fuel Gas Company | Vistra Energy Corporation | ||
CMS Energy | NiSource Inc. | WEC Energy Group, Inc. | ||
Consolidated Edison, Inc. | NRG Energy, Inc. | Xcel Energy Inc. | ||
DTE Energy Company | OGE Energy Corp. | |||
Edison International | PG&E Corporation |
The Committee determined that the Adjusted Russell MidCap Utilities Index is an appropriate peer group because the companies included in the Russell MidCap Utilities Index generally are comparable to the Company in terms of market capitalization and the Company is included in the Russell MidCap Utilities Index. The Company, with approval of the Committee, excludedWe exclude telecommunications companies from the peer group because the nature of the telecommunications business is markedly different from that of other companies in the utilities industry.
Mr. Sheridan was awarded AmeriGas Partners performance unit awards tied to two different metrics: (i) the three-year TUR performance of AmeriGas Partners common units relative to that of the entities in the Alerian MLP Index, as modified based on the three-year TUR performance of AmeriGas Partners common units relative to that of the other companies in the Propane MLP Group, and (ii) a customer gain/loss metric. The Committee determined that a metric directly tied to customer gains and losses would strengthen the link between pay and performance and advance AmeriGas Partners’ long-term strategic goals and objectives. With respect to AmeriGas Partners performance units tied to the Alerian MLP Index, we will compare the TUR of AmeriGas Partners’ common units relative to the TUR performance of those entities comprising the Alerian MLP Index as of the beginning of the performance period using the comparative returns methodology used by Bloomberg L.P. or its successor at the time of calculation. In computing TUR, we use the average of the daily closing prices for AmeriGas Partners’ common units and those of each of the entities in the Alerian MLP Index for the calendar quarter prior to January 1 of the beginning and end of a given three-year performance period. In addition, TUR gives effect to all distributions throughout the three-year performance period as if they had been reinvested. If an entity is added to the Alerian MLP Index during a three-year performance period, we do not include that entity in our TUR analysis. We will only remove a company that was included in the Alerian MLP Index at the beginning of a performance period if such company ceases to exist during the applicable performance period. The companies in the Alerian MLP Index as of January 1, 2016 were as follows:
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For Company performance units tied to the Adjusted Russell Midcap Utilities Index, the minimum award, equivalent to 25 percent of the number of performance units, will be payable if the Company’s TSR rank is at the 25th percentile of the Adjusted Russell MidCap Utilities Index. The target award, equivalent to 100 percent of the number of performance units, will be payable if the TSR rank is at the 50th percentile. The maximum award, equivalent to 200 percent of the number of performance units, will be payable if the Company’s TSR rank is at the 90th percentile of the Adjusted Russell MidCap Utilities Index.
The number of AmeriGas Partners common units underlying performance units tied to the Alerian MLP Index will be based upon AmeriGas Partners’ TUR rank relative to the Alerian MLP Index entities and is computed using a methodology analogous to that described above with regard to the Company’s TSR ranking. The result is then modified based on AmeriGas Partners’ TUR performance compared to the Propane MLP Group. If AmeriGas Partners’ Alerian TUR performance qualifies for a payout at the conclusion of the three-year period ending December 31, 2018, then that payout would be modified as follows: (i) if AmeriGas Partners’ TUR during the three-year period ranks first compared to the other companies in the Propane MLP Group, then the performance unit payout would be leveraged at 130 percent; (ii) if AmeriGas Partners’ TUR during the three-year period ranks second compared to the other companies in the Propane MLP Group, then the performance unit payout would be leveraged at 100 percent; and (iii) if AmeriGas Partners’ TUR during the three-year period ranks third compared to the other Propane MLP Group companies, then the performance unit payout would be leveraged at 70 percent. The overall payout is capped at 200 percent of the target number of performance units awarded. If one of the other two companies in the Propane MLP Group ceases to exist as a publicly traded company or declares bankruptcy (“Adjustment Event”) during the first year of the performance period, then the performance units will become payable at the end of the three-year performance period based on AmeriGas Partners’ TUR performance compared to the Alerian MLP Index and no modification will be made. If an Adjustment Event occurs during the second year of the performance period, then one-half of the modifier would be applied to the payout calculated under the Alerian MLP Index. If an Adjustment Event occurs during the third year of the performance period, then the full Propane MLP Group modifier would be calculated using the TUR as of the day immediately preceding the first public announcement of the Adjustment Event.
The Fiscal 2016 performance units awarded to Mr. Sheridan and tied to customer gain and loss performance will be paid at the conclusion of the three-year performance period ending September 30, 2018 (assuming continued employment through December 31, 2018). The overall payout is capped at 200 percent of the target number of performance units awarded. The Committee believes that challenging goals and targets have been established with respect to the customer gain/loss metric for the described performance units. For illustrative purposes, there would have been no payout during at least the last five fiscal years had this metric been in place.
Each award payable to the named executive officersofficer provides a number of the Company’s shares or AmeriGas Partners’ common units equal to the number of performance units earned. After the Committee has determined that the conditions for payment have been satisfied, the Company or AmeriGas Propane, as the case may be, has the authority to provide for a cash payment to the named executives in lieu of a limited number of the shares or common units payable. The cash payment is based on the value of the securities at the end of the performance period and is designed to meet minimum statutory tax withholding requirements. In the event that executives earn shares in excess of the target award, the value of the shares earned in excess of the target is paid entirely in cash.
All performance units have dividend or distribution equivalent rights, as applicable.rights. A dividend equivalent is an amount determined by multiplying the number of performance units credited to the recipient’s account by theper-share cash dividend or theper-share fair market value of anynon-cash dividend paid by the Company during the performance period on Company shares on a dividend payment date. A distribution equivalent relates to AmeriGas Partners common units and is determined in a similar manner. Accrued dividend and distribution equivalents are payable in cash based on the number of common shares, or AmeriGas Partners’ common units, if any, paid out at the end of the performance period.
Impact of the AmeriGas Merger
In Fiscal 2019, Messrs. Perreault and Gallagher were awarded AmeriGas Partners performance unit awards tied to the three-year TUR performance of AmeriGas Partners common units relative to that of the entities in the Tortoise MLP Index. With respect to AmeriGas Partners performance units granted in Fiscal 2019 as well as the performance units granted to Mr. Gallagher in Fiscal 2018 and 2017 tied to AmeriGas Partners TUR performance, each performance unit outstanding immediately prior to the completion of the AmeriGas Merger was, as of the effective time of the AmeriGas Merger, automatically canceled and converted into a number of cash-settled restricted stock units relating to Company common stock determined by multiplying (i) the target number of the performance unit award, times (ii) 0.6378 (the “Share Consideration” under the
AmeriGas Merger Agreement) times (iii) the greater of 100 percent or such percentage as is determined under the original award based on AmeriGas Partners’ relative TUR performance for a shortened period that ended on the last trading day prior to the date of the AmeriGas Merger (this was 200 percent for the Fiscal 2019 grant and 100 percent for each of the Fiscal 2018 and Fiscal 2017 grants). These restricted stock units vest on the originally scheduled vesting dates with the only condition being employment with the Company through the time of vesting.
In Fiscal 2018 and Fiscal 2017, Mr. Gallagher was also granted AmeriGas Partners performance units subject to a customer gain/loss performance metric. In connection with the AmeriGas Merger, these units were automatically cancelled and converted into a number of cash-settled performance-based restricted stock units relating to Company common stock, with such number determined by multiplying the number of outstanding AmeriGas Partners performance units by .6378 (the Share Consideration under the AmeriGas Merger Agreement). These cash-settled UGI restricted stock units continue to be subject to the same performance-based vesting and payment conditions as applicable prior to the AmeriGas Merger.
For performance units granted in Fiscal 2019, we compared the TUR of AmeriGas Partners’ common units relative to the TUR performance of those entities comprising the Tortoise MLP Index as of the beginning of the performance period using the comparative returns methodology used by Bloomberg L.P. or its successor. In computing TUR, we used the average of the daily closing prices for AmeriGas Partners’ common units and those of each of the entities in the Tortoise MLP Index for the90-day period that ended on the last trading day prior to the AmeriGas Merger. In addition, TUR gives effect to all distributions throughout the three-year performance period as if they had been reinvested. The companies in the Tortoise MLP Index as of January 1, 2019 were as follows:
Alliance Resource Partners, L.P. | Enviva Partners, LP | NuStar Energy L.P. | ||
Andeavor Logistics LP | EQT Midstream Partners, LP | PBF Logistics LP | ||
Black Stone Minerals, L.P. | GasLog Partners LP | Phillips 66 Partners LP | ||
BP Midstream Partners LP | Genesis Energy, L.P. | Shell Midstream Partners, L.P. | ||
Buckeye Partners, L.P. | Global Partners LP | Sprague Resources LP | ||
Ciner Resources LP | Golar LNG Partners LP | Suburban Propane Partners, L.P. | ||
CONSOL Coal Resources LP | Green Plains Partners LP | Sunoco LP | ||
Crestwood Equity Partners LP | Hoegh LNG Partners LP | TC PipeLines, LP | ||
CrossAmerica Partners LP | Holly Energy Partners, L.P. | Transmontaigne Partners, L.P. | ||
CVR Partners, LP | KNOT Offshore Partners LP | USD Partners LP | ||
CVR Refining, LP | Martin Midstream Partners | Westlake Chemical Partners LP | ||
Delek Logistics Partners, LP | NGL Energy Partners LP | |||
Dorchester Minerals, L.P. | Noble Midstream Partners LP |
For AmeriGas Partners performance units that vested in Fiscal 2019, the number of AmeriGas Partners common units underlying performance units tied to the Alerian MLP Index were based upon AmeriGas Partners’ TUR rank relative to the Alerian MLP Index entities and was computed using a methodology analogous to that described above. The result was then modified based on AmeriGas Partners’ TUR performance compared to the other two publicly traded retail propane distribution companies, Ferrellgas Partners, L.P. and Suburban Propane Partners, L.P. (the “Propane MLP Group”).
• | Long-Term Compensation — Payout of Performance Units for |
During Fiscal 2016,2019, we paid out awards to those executives who received UGI performance units covering the period from January 1, 20132016 to December 31, 2015.2018. For that period, the Company’s TSR ranked 5th4th relative to the other companies in the Adjusted Russell Midcap Utilities Index, placing the Company at the 88th90th percentile ranking, resulting in a 196.4199.1 percent payout of the target award. BecauseFor the payout exceeded 100 percent,performance period from January 1, 2016 to December 31, 2018, Mr. Gallagher received AmeriGas Partners performance units tied to two different metrics: (i) the 2013 Plan provides that cash will be paid in lieu of units for any amount in excess of the 100 percent target.Alerian Index and (ii) customer gain/loss performance. AmeriGas Partners’ TUR ranked 10th12th relative to the other companies in the Alerian Index and 1st relative to the other companies in the Propane MLP Group, placing the Company at the 75th69th percentile ranking and resulting in a 162.5payout of 193.2 percent payout of the target award. Because the payout exceeded 100 percent, the AmeriGas 2010 Plan provides that cash will be paid in lieu of units for any amount in excess of the 100 percent target. Based on customer gain/loss performance during the performance measurement period, there was no payout with respect to the customer gain/loss performance metric. The performance unit payouts for Fiscal 20162019 were as follows:
Name | Performance Unit Payout (#)(1) | Performance Unit Payout Value(2) ($) | Cash Payout (Award in excess of 100%) ($) | Performance Unit Payout (#) (1) | Performance Unit Payout Value ($) (2) | Cash Payout ($) (3) | ||||||||||||||||
John L. Walsh | 38,254 | $ | 2,228,160 | $ | 2,456,321 | 30,060 | $ | 2,667,500 |
| $ | 3,707,292 |
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Kirk R. Oliver(3) | 15,994 | $ | 860,880 | $ | 953,336 | |||||||||||||||||
Jerry E. Sheridan(4) | 9,595 | $ | 488,348 | $ | 546,957 | |||||||||||||||||
Ted J. Jastrzebski (4) | 2,814 | $ | 213,400 |
| $ | 217,691 |
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Roger Perreault (4) | 5,394 | $ | 400,125 |
| $ | 508,852 |
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Monica M. Gaudiosi | 10,223 | $ | 506,400 | $ | 560,786 | 7,617 | $ | 586,850 |
| $ | 646,340 |
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Hugh J. Gallagher (5) | 1,167 | $ | 44,275 |
| $ | 56,014 |
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(1) | Number of units/shares paid out after withholding taxes. |
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(4) | Messrs. Walsh, Jastrzebski and |
Mr. |
• | Perquisites and Other Compensation |
We provide limited perquisite opportunities to our executive officers. We provide reimbursement for tax preparation services (discontinued in Fiscal 2011 for newly hired executives), airline membership reimbursement and limited spousal travel. Our named executive officers may also occasionally use the Company’s tickets for sporting events for personal rather than business purposes. The aggregate cost of perquisites for all named executive officers in Fiscal 20162019 was less than $10,000. In addition, (1) Mr. Perreault received reimbursement for relocation expenses of $10,640 during Fiscal 2016 in connection with the commencement of his employment in December 2015, and (2) Mr. Oliver received reimbursement for relocation expenses of $49,344 during Fiscal 2016 in connection with the commencement of his employment with the Company in October of 2012.
• | Other Benefits |
Our named executive officers participate in various retirement, pension, deferred compensation and severance plans, which are described in greater detail in the Ongoing Plans and Post-Employment
Agreements section of this Compensation Discussion and Analysis. We also provide employees, including the named executive officers, with a variety of other benefits, including medical and dental benefits, disability benefits, life insurance and paid time off for holidays and vacations. These benefits generally are available to all of our full-time employees, although AmeriGas Propane provided certain enhanced disability and life insurance benefits to its senior executives, which for Mr. SheridanGallagher had a total cost in Fiscal 20162019 of less than $5,000.
ONGOING PLANS AND POST-EMPLOYMENT AGREEMENTS
We have several plans and agreements (described below) that enable our named executive officers to accrue retirement benefits as the executives continue to work for us, provide severance benefits upon certain types of termination of employment events or provide other forms of deferred compensation.
Retirement Income Plan for Employees of UGI Utilities, Inc. (the “UGI Pension Plan”)
This plan is atax-qualified defined benefit plan available to, among others, employees of the Company and certain of its subsidiaries. The UGI Pension Plan was closed to new participants as of January 1, 2009. The UGI Pension Plan provides an annual retirement benefit based on an employee’s earnings and years of service, subject to maximum benefit limitations. Mr. Walsh participates in the UGI Pension Plan. Mr. Gallagher has a vested annual benefit amount under the UGI Pension Plan based on prior credited service of approximately $37,100. Mr. Gallagher is not currently earning benefits under that plan. See COMPENSATION OF EXECUTIVE OFFICERS — Pension Benefits Table and accompanying narrative, beginning on page 49,50 for additional information.
UGI Utilities, Inc. Savings Plan (the “UGI Savings Plan”)
This plan is atax-qualified defined contribution plan available to, among others, employees of the Company. Under the plan, an employee may contribute, subject to Internal Revenue Code (the “Code”) limitations, (which, among other things, limited annual contributions in 2016 to $18,000), up to a maximum of 50 percent of his or her eligible compensation on apre-tax basis and up to 20 percent of his or her eligible compensation on anafter-tax basis. The combined maximum ofpre-tax andafter-tax contributions is 50 percent of his or her eligible compensation. The Company provides matching contributions targeted at 50 percent of the first 3 percent of eligible compensation contributed by the employee in any pay period, and 25 percent of the next 3 percent. For participants entering the UGI Savings Plan on or after January 1, 2009 who are not eligible to participate in the UGI Pension Plan, the Company provides matching contributions targeted at 100 percent of the first 56 percent of eligible compensation contributed by the employee in any pay period. Amounts credited to the employee’s account in the plan may be invested among a number of funds, including the Company’s stock fund. Messrs. Walsh, OliverJastrzebski, and Perreault and Ms. Gaudiosi are eligible to participate in the UGI Savings Plan.
AmeriGas Propane, Inc. Savings Plan (the “AmeriGas Savings Plan”)
This plan is atax-qualified defined contribution plan for AmeriGas Propane employees. Subject to Code limits, which are the same as described above with respect to the UGI Savings Plan, an employee may contribute, on apre-tax basis, up to 50 percent of his or her eligible compensation, and AmeriGas Propane provides a matching contribution equal to 100 percent of the first 5 percent of eligible compensation
contributed in any pay period. Like the UGI Savings Plan, participants in the AmeriGas Savings Plan may invest amounts credited to their account among a number of funds, including the Company’s stock fund. Mr. SheridanGallagher is eligible to participate in the AmeriGas Savings Plan.
UGI Corporation Supplemental Executive Retirement Plan and Supplemental Savings Plan
UGI Corporation Supplemental Executive Retirement Plan
This plan is a nonqualified defined benefit plan that provides retirement benefits that would otherwise be provided under the UGI Pension Plan to employees hired prior to January 1, 2009, but are prohibited from
being paid from the UGI Pension Plan by Code limits. The plan also provides additional benefits in the event of certain terminations of employment covered by a change in control agreement. Mr. Walsh participates in the UGI Corporation Supplemental Executive Retirement Plan.Plan (“UGI SERP”). See COMPENSATION OF EXECUTIVE OFFICERS — Pension Benefits Table and accompanying narrative, beginning on page 49,50, for additional information.
UGI Corporation Supplemental Savings Plan
This plan is a nonqualified deferred compensation plan that provides benefits to certain employees that would be provided under the qualified UGI Savings Plan to employees hired prior to January 1, 2009 in the absence of Code limitations. The UGI Corporation Supplemental Savings Plan (“SSP”) is intended to pay an amount substantially equal to the difference between the Company matching contribution to the qualified UGI Savings Plan and the matching contribution that would have been made under the qualified UGI Savings Plan if the Code limitations were not in effect. At the end of each plan year, a participant’s account is credited with earnings equal to the weighted average return on two indices: 60 percent on the total return of the Standard and Poor’s 500 Index and 40 percent on the total return of the Barclays Capital U.S. Aggregate Bond Index. The plan also provides additional benefits in the event of certain terminations of employment covered by a change in control agreement. Mr. Walsh is eligible to participate in the UGI Corporation Supplemental Savings Plan.SSP. See COMPENSATION OF EXECUTIVE OFFICERS — Nonqualified Deferred Compensation Table and accompanying narrative, beginning on page 51,52, for additional information.
2009 UGI Corporation Supplemental Executive Retirement Plan for New Employees
The 2009 UGI Corporation Supplemental Executive Retirement Plan for New Employees (the “2009 UGI SERP”) is a nonqualified deferred compensation plan that is intended to provide retirement benefits to executive officers who are not eligible to participate in the UGI Pension Plan, having commenced employment with UGI on or after January 1, 2009. Under the 2009 UGI SERP, the Company credits to each participant’s account annually an amount equal to 5 percent of the participant’s compensation (salary and annual bonus) up to the Code compensation limit ($265,000280,000 in 2016)2019) and 10 percent of compensation in excess of such limit. In addition, if any portion of the Company’s matching contribution under the UGI Savings Plan is forfeited due to nondiscrimination requirements under the Code, the forfeited amount, adjusted for earnings and losses on the amount, will be credited to the participant’s account. Participants direct the investment of their account balances among a number of mutual funds, which are generally the same funds available to participants in the UGI Savings Plan, other than the UGI stock fund. Messrs. OliverJastrzebski and Perreault and Ms. Gaudiosi are eligible to participate in the 2009 UGI SERP. See COMPENSATION OF EXECUTIVE OFFICERS — Nonqualified Deferred Compensation Table and accompanying narrative, beginning on page 51,52, for additional information.
AmeriGas Propane, Inc. Supplemental Executive Retirement Plan
AmeriGas Propane maintains a supplemental executive retirement plan, which is a nonqualified deferred compensation plan for highly compensated employees of AmeriGas Propane. Under the plan, AmeriGas Propane credits to each participant’s account annually an amount equal to 5 percent of the participant’s compensation up to the Code compensation limits and 10 percent of compensation in excess of such limit. In addition, if any portion of AmeriGas Propane’s matching contribution under the AmeriGas Savings Plan is forfeited due to nondiscrimination requirements under the Code, the forfeited amount, adjusted for earnings and losses on the amount, will be credited to the participant’s account. Participants direct the investment of the amounts in their accounts among a number of mutual funds. Mr. SheridanGallagher participates in the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan.Plan (“AmeriGas SERP”). See COMPENSATION OF EXECUTIVE OFFICERS — Nonqualified Deferred Compensation Table and accompanying narrative, beginning on page 51,52, for additional information.
AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan
AmeriGas Propane maintains a nonqualified deferred compensation plan under which participants may defer up to $10,000 of their annual compensation. Deferral elections are made annually by eligible participants in
respect of compensation to be earned for the following year. Participants may direct the investment of deferred amounts into a number of mutual funds. Payment of amounts accrued for the account of a participant generally is made following the participant’s termination of employment. Mr. SheridanGallagher is eligible to participate in the AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan. See COMPENSATION OF EXECUTIVE OFFICERS — Nonqualified Deferred Compensation Table and accompanying narrative, beginning on page 51,52, for additional information.
UGI Corporation 2009 Deferral Plan, As Amended and Restated Effective June 1, 2010
This plan provides deferral options that comply with the requirements of Section 409A of the Code related to (i) all stock units and phantom units granted to the Company’snon-employee Directors and AmeriGas Propane’snon-employee Directors prior to the AmeriGas Merger, (ii) benefits payable under the UGI Corporation Supplemental Executive Retirement Plan,SERP, (iii) benefits payable under the 2009 UGI SERP, and (iv) benefits payable under the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan.SERP. If an eligible participant elects to defer payment under the plan, the participant may receive future benefits after separation from service as (x) a lump sum payment, (y) annual installment payments over a period between two and ten years, or (z) one to five retirement distribution amounts to be paid in a lump sum in the year specified by the individual. Deferred benefits, other than stock units and phantom units, will be deemed to be invested in investment funds selected by the participant from among a list of available funds. The plan also provides newly eligiblewas closed to new participants with a deferral election that must be acted upon promptly.in Fiscal 2017.
Severance Pay Plans for Senior Executive Employees
The Company and AmeriGas Propane each maintain a severance pay plan that provides severance compensation to certain senior level employees. The plans are designed to alleviate the financial hardships that may be experienced by executive employee participants whose employment is terminated without just“just cause,” other than in the event of death or disability. The Company’s plan covers Messrs. Walsh, OliverJastrzebski and Perreault and Ms. Gaudiosi and the AmeriGas Propane plan covers Mr. Sheridan.Gallagher. See COMPENSATION OF EXECUTIVE OFFICERS — Potential Payments Upon Termination or Change in Control, beginning on page 52,58, for further information regarding the severance plans.
Change in Control Agreements
The Company has change in control agreements with Messrs. Walsh, OliverJastrzebski and Perreault and Ms. Gaudiosi and AmeriGas Propane has a change in control agreement with Mr. Sheridan.Gallagher. The change in control agreements are designed to reinforce and encourage the continued attention and dedication of the executives without disruption in the face of potentially distracting circumstances arising from the possibility of the change in control and to serve as an incentive to their continued employment. The agreements provide for payments and other benefits if we terminate an executive’s employment without cause or if the executive terminates employment for good reason within two years following a change in control of the Company (and, in the case of Mr. Sheridan, AmeriGas Propane or AmeriGas Partners).Company. See COMPENSATION OF EXECUTIVE OFFICERS — Potential Payments Upon Termination or Change in Control, beginning on page 52,58, for further information regarding the change in control agreements.
STOCK OWNERSHIP GUIDELINESAND RETENTION POLICY
We seek to align executives’ interests with shareholder and unitholder interests through our equity ownership guidelines.Stock Ownership and Retention Policy (the “Policy”). We believe that by encouraging our executives to maintain a meaningful equity interest in the Company, or, if applicable, AmeriGas Partners, we will enhance the link between our executives and shareholders or unitholders.shareholders. Under our guidelines,the Policy, an executive must meet 1025 percent of the ownership requirement within one yearthree years from the date of his or her employment or promotion. For an executive hired or promoted on or after January 24, 2017 and not previously subject to the Policy, the executive must satisfy his or her respective equity ownership requirement in full within six years and will also be subject to ongoing compliance requirements. The three-year period to achieve 25 percent of the ownership requirement and the six-year period to achieve the full ownership requirement was reset to commence on September 1, 2019 for those executives who, prior to the AmeriGas Merger, utilized AmeriGas Partners common units to satisfy his or her ownership requirement. Executives subject to the Company’s prior stock ownership policy are not required to fully satisfy their
equity ownership requirement by the end of asix-year achievement period but will continue to be subject to the Policy’s ongoing compliance requirements.
The UGI Bonus Plan and the AmeriGas Bonus Plan each provides that, unless the Committee determines otherwise, all executive officers who have not fulfilled their equity ownership requirement receive up to 10 percent of their gross annual bonus in fully vested UGI Corporation common stock or AmeriGas Partners common units.stock. In addition, the guidelines requirePolicy requires that 50 percent of the net proceeds from a “cashless exercise” of stock options be used to purchase stock until the ownership requirement is met.met except for executive officers who are also Section 16 officers of the Company. The guidelinesPolicy also requirerequires that, until the share ownership requirement is met, the executive retain all shares or common units received in connection with the payout of performance units. UpExecutives may not use unexercised stock options or unvested (unearned) performance units that are not time-based to 20 percent of thesatisfy their equity ownership requirement may be satisfied through holdings of UGI common stock in the executive’s account in the relevant savings plan.requirements.
As of September 30, 2016,2019, the equitystock ownership requirements for the named executive officers were as follows: (1) Mr. Walsh – 225,000 shares; (2) Mr. Oliver – 50,000 shares; (3) Mr. Perreault – 30,000 shares; and (4) Ms. Gaudiosi – 30,000 shares. Mr. Sheridan is permitted to satisfy his requirements through ownership of UGI common stock, AmeriGas Partners common units, or a combination of UGI common stock and AmeriGas Partners common units, with each AmeriGas Partners common unit equivalent to 1.5 shares of UGI common stock. Mr. Sheridan’s ownership requirement is 60,000 shares of UGI Corporation common stock or 40,000 AmeriGas Partners common units.
Name | Stock Ownership Requirement (UGI common stock) | ||||
John L. Walsh | 225,000 | ||||
Ted J. Jastrzebski | 50,000 | ||||
Roger Perreault | 50,000 | ||||
Monica M. Gaudiosi | 30,000 | ||||
Hugh J. Gallagher | 30,000 |
At September 30, 2016,2019, Mr. Walsh’s ownership requirement is equivalent to nearly 9 times his base salary, while the stock ownership multiple for the other named executive officers ranged from 2.42.5 times to 4.23.5 times base salary. Based on information from Pay Governance, the Committee believes its stock ownership requirements generally align with market practices. Although not all named executive officers have met their respective ownership requirements due to the amount of time they have served in their current positions, all named executive officers were in compliance at September 30, 20162019 with the Company’s guidelinesPolicy requiring the accumulation of shares, or units in the case of Mr. Sheridan,equity over time.
STOCK OPTION GRANT PRACTICES
The Committees approve annual stock option grants to executive officers in the last calendar quarter of each year, to be effective the following January 1.January. The exercise price per share of the options is equal to or greater than the closing share price of the Company’s common stock on the last trading day of December. A grant to a new employee is generally effective on the later of the date the employee commences employment with us or the date the Committee authorizes the grant. In either case, the exercise price is equal to or greater than the closing price per share of the Company’s common stock on the effective date of grant. From time to time, management recommends stock option grants fornon-executive employees, and the grants, if approved by the Committee, are effective on or after the date of Committee action and have an exercise price equal to or greater than the closing price per share of the Company’s common stock on the effective date of grant. We believe that our stock option grant practices are appropriate and effectively eliminate any question regarding “timing” of grants in anticipation of material events.
ROLE OF EXECUTIVE OFFICERS IN DETERMINING EXECUTIVE COMPENSATION
In connection with Fiscal 20162019 compensation, Mr. Walsh, aided by our corporate human resources department, provided statistical data and recommendations to the appropriate Committee to assist it in determining compensation levels. Mr. Walsh did not make recommendations as to his own compensation and was excused from the Committee meeting when his compensation was discussed by the Committee. While the CommitteesCommittee utilized information provided by Mr. Walsh, and valued Mr. Walsh’s observations with regard to other executive officers, the ultimate decisions regarding executive compensation were made by the
Committee for all named executive officers, except Messrs. Walsh and Sheridan,Gallagher, for whom executive compensation decisions were made by the independent members of the appropriate Board of Directors following Committee recommendations.
TAX CONSIDERATIONS
In Fiscal 2016,2019, we paid salary and annual bonus compensation to named executive officers that weremay not be fully deductible under U.S. federal tax law because it did not meet the statutory performance criteria.tax. Section 162(m) of the Code precludes us from deductingsets a $1,000,000 cap on the deduction for compensation paid by a publicly held corporation to a “covered employee,” which includes certain forms of compensation in excess of $1,000,000 paid to theour named executive officers in any one year. Our policy generally is to preserveofficers. Other than certain grandfathered awards, the federal income tax deductibility of equityTCJA eliminated the performance-based compensation paid to our executives by making it performance-based.exception under Section 162(m) for taxable years beginning after December 31, 2017. We will continue to consider and evaluate all of our compensation programs in light of federal tax law and regulations. Nevertheless, we believe that, in some circumstances, factors other than tax deductibility take precedence in determining the forms and amount of compensation, and we retain the flexibility to authorize compensation that may not be deductible if we believe it is in the best interests of our Company.
|
The following tables, narrative and footnotes provide information regarding the compensation of our Chief Executive Officer, Chief Financial Officer and our three other most highly compensated executive officers in Fiscal 2016.2019.
Summary Compensation Table – Fiscal 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Compensation Table – Fiscal 2019 | Summary Compensation Table – Fiscal 2019 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name and Principal Position | Fiscal Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($) | Fiscal Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. L. Walsh President and Chief Executive Officer | | 2016 2015 2014 | |
| 1,132,043 1,078,342 1,027,169 |
|
| 0 0 0 |
|
| 1,648,500 1,741,050 2,053,380 |
|
| 1,581,030 1,705,338 1,992,060 |
|
| 1,159,212 1,604,745 1,974,336 |
|
| 2,439,939 1,920,003 1,009,878 |
|
| 61,549 67,810 41,037 |
|
| 8,022,273 8,117,288 8,097,860 |
|
|
2019 2018 2017 |
|
|
1,242,876 1,195,943 1,171,854 |
|
|
0 0 0 |
|
|
2,026,620 1,994,300 1,953,960 |
|
|
2,029,900 1,887,600 2,041,200 |
|
|
925,760 1,768,338 1,308,319 |
|
|
2,300,451 544,481 1,334,584 |
|
|
67,153 55,997 51,795 |
|
|
8,592,760 7,446,659 7,861,712 |
| |||||||||||||||||||||||||||
K. R. Oliver Chief Financial Officer | | 2016 2015 2014 | |
| 540,944 532,902 522,552 |
|
| 0 0 0 |
|
| 494,550 539,726 635,570 |
|
| 479,100 501,570 571,795 |
|
| 332,020 475,465 627,276 |
|
| 0 0 0 |
|
| 136,640 101,087 115,233 |
|
| 1,983,254 2,150,750 2,472,426 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. E. Sheridan President and Chief Executive Officer of AmeriGas Propane, Inc. | | 2016 2015 2014 | |
| 541,082 526,474 506,018 |
|
| 0 0 0 |
|
| 699,474 1,300,299 877,682 |
(6) |
| 311,415 319,920 420,546 |
|
| 0 352,471 302,834 |
|
| 0 0 0 |
|
| 54,108 88,145 110,391 |
|
| 1,606,079 2,587,309 2,217,471 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Perreault Vice President, UGI International | 2016 | 433,654 | 0 | 960,499 | (7) | 239,550 | 386,100 | 0 | 92,115 | 2,111,918 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
T. J. Jastrzebski Chief Financial Officer |
|
2019 |
|
|
683,127 |
|
|
0 |
|
|
651,632 |
|
|
652,477 |
|
|
313,268 |
|
|
0 0 |
|
|
102,689 |
|
|
2,403,193 3,715,020 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Perreault Executive Vice President, Global LPG; President, UGI International |
|
2019 2017 |
|
|
652,222 563,229 |
|
|
0 0 0 |
|
|
793,022 458,150 437,070 |
(8) |
|
418,095 378,000 |
|
|
334,530 406,019 |
|
|
0 0 0 |
|
|
101,502 141,154 |
|
|
2,299,371 1,896,684 1,925,472 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
M. M. Gaudiosi Vice President, General Counsel and Secretary | | 2016 2015 2014 | |
| 447,655 434,611 420,007 |
| | 0 0 | |
| 362,670 365,621 415,565 |
|
| 335,370 351,099 368,900 |
|
| 238,232 336,194 437,102 |
|
| 0 0 0 |
|
| 63,956 72,447 85,545 |
|
| 1,447,883 1,559,972 1,772,119 |
|
|
2019 2017 |
|
|
507,889 458,833 |
|
|
0 0 0 |
|
|
422,004 462,780 |
|
|
422,922 453,600 |
|
|
203,920 266,281 |
|
|
0 0 0 |
|
|
73,080 67,472 |
|
|
1,629,815 1,708,966 |
| |||||||||||||||||||||||||||
H. J. Gallagher President and Chief Executive Officer, AmeriGas Propane |
|
2019 |
|
|
459,737 |
|
|
0 |
|
|
458,136 |
(8) |
|
241,202 |
|
|
268,755 |
|
|
90,611 |
|
|
73,911 |
|
|
1,592,352 |
|
(1) | The amounts shown in column (c) represent salary payments actually received during the fiscal year shown based on the number of pay periods within such fiscal year. Mr. |
(2) | The amounts shown in columns (e) and (f) represent the aggregate fair value of awards of performance units and stock options on the date of grant. The assumptions used in the calculation of the amounts shown are included in Note 2 and Note |
(3) | The amounts shown in this column represent payments made under the applicable performance-based annual bonus plan. For Fiscal |
(4) | The amount shown in column (h) of the Summary Compensation Table reflects the change from September 30, |
(5) | The table below shows the components of the amounts included for each named executive officer under column (i), All Other Compensation, in the Summary Compensation Table. None of the named executive officers received perquisites with an aggregate value of $10,000 or more during Fiscal |
Name | Employer Contribution to 401(k) Savings Plan ($) | Employer Contribution to UGI Supplemental Savings Plan and 2009 Supplemental Executive Retirement Plan for New Employees; AmeriGas Propane, Inc. Supplemental Executive Retirement Plan ($) | Relocation Expense Reimbursement ($) | Total ($) | ||||||
John L. Walsh | 5,887 | 55,662 | 0 | 61,549 | ||||||
Kirk R. Oliver(a) | 13,250 | 74,046 | 49,344 | 136,640 | ||||||
Jerry E. Sheridan | 13,250 | 40,858 | 0 | 54,108 | ||||||
Roger Perreault(b) | 12,750 | 68,725 | 10,640 | 92,115 | ||||||
Monica M. Gaudiosi | 8,617 | 55,339 | 0 | 63,956 |
|
|
Name | Employer Contribution to 401(k) Savings Plan ($) | Employer Contribution to SSP, 2009 SERP, and AmeriGas SERP, as applicable ($) | Total ($) | |||||
John L. Walsh |
| 6,375 |
| 60,778 | 67,153 | |||
Ted J. Jastrzebski |
| 16,800 |
| 85,889 | 102,689 | |||
Roger Perreault |
| 16,577 |
| 84,925 | 101,502 | |||
Monica M. Gaudiosi |
| 15,649 |
| 57,431 | 73,080 | |||
Hugh J. Gallagher |
| 14,812 |
| 59,099 | 73,911 |
(6) |
|
Includes transition awards granted in connection with Mr. |
(7) | Includes 155,000 option awards granted in connection with Mr. Jastrzebski’s commencement of employment which began vesting on May 22, 2019 and vest in three equal annual installments. |
(8) |
|
Grants of Plan-Based Awards in Fiscal 20162019
The following table and footnotes provide information regarding equity andnon-equity plan grants to the named executive officers in Fiscal 2016.2019.
Grants of Plan-Based Awards Table – Fiscal 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grants of Plan-Based Awards Table – Fiscal 2019 | Grants of Plan-Based Awards Table – Fiscal 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)
| Estimated Future Payouts Under Equity Incentive Plan Awards (2)
| All Other Stock Awards: Number of Shares | All Other Option Awards: Number of Securities | Exercise or Base Price of | Grant Date Value of Stock and | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)
| Estimated Future Payouts Under Equity Incentive Plan Awards (2)
| All Other Option Awards: Number of Securities
| Exercise or Base Price of
| Grant Date Fair Value of Stock and
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Board Action Date | Thres- hold ($) | Target ($) | Maximum ($) | Thres- hold (#) | Target (#) | Maximum (#) | of Stock or Units (#)(3) | Underlying Options (#) (4) | Option Awards ($/Sh) | Option Awards ($) | Grant Date | Board Action Date | Thres- hold ($) | Target ($) | Maximum ($) | Thres- hold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | (m) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (k) | (l) | (m) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. L. Walsh | 10/01/15 | 11/20/15 | 850,278 | 1,417,130 | 2,834,260 |
| 10/1/2018 |
|
| 11/15/2018 |
|
| 840,185 |
|
| 1,555,899 |
|
| 3,111,798 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/20/15 | 330,000 | 33.76 | 1,581,030 |
| 1/1/2019 |
|
| 11/15/2018 |
|
| 228,850 |
| 53.35 |
| 2,029,900 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/20/15 | 12,500 | 50,000 | 100,000 | 1,648,500 |
| 1/1/2019 |
|
| 11/15/2018 |
|
| 9,113 |
|
| 36,450 |
|
| 72,900 |
|
| 2,026,620 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
K. R. Oliver | 10/01/15 | 11/19/15 | 243,536 | 405,893 | 811,785 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 100,000 | 33.76 | 479,100 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 3,750 | 15,000 | 30,000 | 494,550 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. E. Sheridan | 10/01/15 | 11/19/15 | 223,976 | 433,222 | 866,444 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
T. J. Jastrzebski |
| 10/1/2018 |
|
| 11/15/2018 |
|
| 284,310 |
|
| 526,500 |
|
| 1,053,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 65,000 | 33.76 | 311,415 |
| 1/1/2019 |
|
| 11/15/2018 |
|
| 73,560 |
| 53.35 |
| 652,477 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 3,000 | 6,700 | 13,400 | 288,234 |
| 1/1/2019 |
|
| 11/15/2018 |
|
| 2,930 |
|
| 11,720 |
|
| 23,440 |
|
| 651,632 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 3,000 | 12,000 | 24,000 | 411,240 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Perreault | 10/01/15 | 07/28/15 | 208,542 | 297,917 | 595,833 |
| 10/1/2018 |
|
| 11/15/2018 |
|
| 266,632 |
|
| 472,500 |
|
| 945,000 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/07/15 | 07/28/15 | 1,500 | 6,000 | 12,000 | 151,200 |
| 1/30/2019 |
|
| 1/30/2019 |
|
| 44,860 |
| 56.25 |
| 418,095 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/07/15 | 07/28/15 | 750 | 3,000 | 6,000 | 128,250 |
| 1/30/2019 |
|
| 1/29/2019 |
|
| 2,895 |
|
| 11,580 |
|
| 23,160 |
|
| 350,642 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12/07/15 | 07/28/15 | 12,000 | 433,774 |
| 1/30/2019 |
|
| 1/30/2019 |
|
| 1,765 |
|
| 7,060 |
|
| 14,120 |
|
| 442,380 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 07/28/15 | 50,000 | 33.76 | 239,550 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 07/28/15 | 1,875 | 7,500 | 15,000 | 247,275 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
M. M. Gaudiosi | 10/01/15 | 11/19/15 | 174,743 | 291,238 | 582,475 |
| 10/1/2018 |
|
| 11/15/2018 |
|
| 185,071 |
|
| 342,724 |
|
| 685,447 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 70,000 | 33.76 | 335,370 |
| 1/1/2019 |
|
| 11/15/2018 |
|
| 47,680 |
| 53.35 |
| 422,922 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01/01/16 | 11/19/15 | 2,750 | 11,000 | 22,000 | 362,670 |
| 1/1/2019 |
|
| 11/15/2018 |
|
| 1,898 |
|
| 7,590 |
|
| 15,180 |
|
| 422,004 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
H. J. Gallagher |
| 10/1/2018 |
|
| 11/15/2018 |
|
| 196,995 |
|
| 345,000 |
|
| 690,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/30/2019 |
|
| 1/30/2019 |
|
| 25,880 |
| 56.25 |
| 241,202 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/30/2019 |
|
| 1/29/2019 |
|
| 3,783 |
|
| 15,130 |
|
| 30,260 |
|
| 458,136 |
|
(1) | The amounts shown under this heading relate to bonus opportunities under the relevant company’s annual bonus plan for Fiscal |
(2) | The awards shown for Messrs. Walsh, |
The awards shown for Mr. Sheridan are performance units under the AmeriGas 2010 Plan, as described in the Compensation Discussion and Analysis. Terms of these awards with respect to forfeitures and change in control, as defined in the AmeriGas 2010 Plan, are fashioned in a similar manner to the terms of the performance units granted under the Company’s 2013 Plan.
|
Options are granted under the Company’s 2013 Plan. Under the Company’s 2013 Plan, the option exercise price is not less than 100 percent of the fair market value of the Company’s common stock on the effective date of the grant, which is either the date of the grant or a specified future date. The term of each option is generally ten years, which is the maximum allowable term. The options become exercisable in three equal annual installments beginning on the first anniversary of the grant date. All options are nontransferable and generally exercisable only while the optionee is employed by the Company or an affiliate, with exceptions for exercise following termination without cause, retirement, disability or death. In the case of termination without cause, the option will be exercisable only to the extent that it has vested as of the date of termination of employment and the option will terminate upon the earlier of the expiration date of the option and the expiration of the13-month period commencing on the date of termination of employment. If termination of employment occurs due to retirement, the option will thereafter become exercisable as if the optionee had continued to be employed by, or continued to provide service to, the Company, and the option will terminate upon the original expiration date of the option. If termination of employment occurs due to disability, the option term is shortened to the earlier of the third anniversary of the date of such termination of employment and the original expiration date, and vesting continues in accordance with the original vesting schedule. In the event of death of the optionee while an employee, the option will become fully vested and the option term will be shortened to the earlier of the expiration of the12-month period following the optionee’s death and the original expiration date. Options are subject to adjustment in the event of recapitalizations, stock splits, mergers, and other similar corporate transactions affecting the Company’s common stock. In the event of a change in control, unvested options become exercisable only for a qualifying termination of employment. |
Outstanding Equity Awards atYear-End
The following table shows the outstanding stock option and performance unit awards held by the named executive officers at September 30, 2016.2019.
Outstanding Equity Awards at Year-End Table – Fiscal 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Equity Awards atYear-End Table – Fiscal 2019 | Outstanding Equity Awards atYear-End Table – Fiscal 2019 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. L. Walsh | 187,500 | (1) | 16.13 | 12/31/2019 | 0 | 0 | 63,000 | (11) | 5,643,540 |
| 50,000 | (1) |
| 21.06 |
| 12/31/2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
187,500 | (2) | 21.06 | 12/31/2020 | 45,000 | (12) | 2,035,800 |
| 187,500 | (2) |
| 19.60 |
| 12/31/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
187,500 | (3) | 19.60 | 12/31/2021 | 50,000 | (13) | 2,262,000 |
| 178,500 | (3) |
| 21.81 |
| 12/31/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
178,500 | (4) | 21.81 | 12/31/2022 |
| 129,000 | (4) |
| 25.50 |
| 3/31/2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
129,000 | (5) | 25.50 | 03/31/2023 |
| 405,000 | (5) |
| 27.64 |
| 12/31/2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
270,000 | (6) | 135,000 | (6) | 27.64 | 12/31/2023 |
| 306,000 | (6) |
| 37.98 |
| 12/31/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
102,000 | (7) | 204,000 | (7) | 37.98 | 12/31/2024 |
| 330,000 | (7) |
| 33.76 |
| 12/31/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
330,000 | (8) | 33.76 | 12/31/2025 |
| 180,000 | (8) |
| 90,000 | (8) |
| 46.08 |
| 12/31/2026 |
| 38,000 | (15) |
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
K. R. Oliver | 112,500 | (4) | 21.81 | 12/31/2022 | 0 | 0 | 19,500 | (11) | 1,746,810 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
77,500 | (6) | 38,750 | (6) | 27.64 | 12/31/2023 | 13,950 | (12) | 631,098 |
| 86,666 | (9) |
| 173,334 | (9) |
| 46.95 |
| 12/31/2027 |
| 37,000 | (16) |
| 1,859,990 | |||||||||||||||||||||||||||||||||||||||||||||||||
30,000 | (7) | 60,000 | (7) | 37.98 | 12/31/2024 | 15,000 | (13) | 678,600 |
| 228,850 | (10) |
| 53.35 |
| 12/31/2028 |
| 36,450 | (17) |
| 1,832,342 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
100,000 | (8) | 33.76 | 12/31/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. E. Sheridan | 28,500 | (6) | 27.64 | 12/31/2023 | 0 | 0 | 9,500 | (14) | 867,540 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
T. J. Jastrzebski |
| 51,666 | (11) |
| 103,334 | (11) |
| 49.19 |
| 5/21/2028 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 73,560 | (10) |
| 53.35 |
| 12/31/2028 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
20,000 | (9) | 40,000 | (9) | 38.05 | 1/20/2025 | 8,000 | (15) | 547,920 |
| 7,000 | (15) |
| 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
65,000 | (8) | 33.76 | 12/31/2025 | 6,950 | (16) | 317,337 |
| 10,000 | (16) |
| 502,700 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
13,300 | (17) | 607,278 |
| 12,000 | (23) |
| 603,240 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6,700 | (18) | 305,922 |
| 11,720 | (17) |
| 589,164 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12,000 | (19) | 547,920 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Perreault | 50,000 | (8) | 33.76 | 12/31/2025 | 3,000 | (11) | 268,740 |
| 50,000 | (7) |
| 33.76 |
| 12/31/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6,000 | (12) | 271,440 |
| 33,334 | (8) |
| 16,666 | (8) |
| 46.08 |
| 12/31/2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12,000 | (20) | 542,880 |
| 16,666 | (9) |
| 33,334 | (9) |
| 46.95 |
| 12/31/2027 |
| 8,500 | (15) |
| 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
7,500 | (13) | 339,300 |
| 44,860 | (12) |
| 56.25 |
| 1/29/2029 |
| 8,500 | (16) |
| 427,295 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7,060 | (17) |
| 354,906 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 14,771 | (18) |
| 742,561 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
M. M. Gaudiosi | 75,000 | (10) | 17.75 | 04/22/2022 | 0 | 0 | 12,750 | (11) | 1,142,145 |
| 75,000 | (13) |
| 17.75 |
| 4/22/2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
75,000 | (4) | 21.81 | 12/31/2022 | 9,450 | (12) | 427,518 |
| 75,000 | (3) |
| 21.81 |
| 12/31/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
50,000 | (6) | 25,000 | (6) | 27.64 | 12/31/2023 | 11,000 | (13) | 497,640 |
| 75,000 | (5) |
| 27.64 |
| 12/31/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
21,000 | (7) | 42,000 | (7) | 37.98 | 12/31/2024 |
| 63,000 | (6) |
| 37.98 |
| 12/31/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
70,000 | (8) | 33.76 | 12/31/2025 |
| 70,000 | (7) |
| 33.76 |
| 12/31/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 40,000 | (8) |
| 20,000 | (8) |
| 46.08 |
| 12/31/2026 |
| 9,000 | (15) |
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 20,000 | (9) |
| 40,000 | (9) |
| 46.95 |
| 12/31/2027 |
| 8,500 | (16) |
| 427,295 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 47,680 | (10) |
| 53.35 |
| 12/31/2028 |
| 7,590 | (17) |
| 381,549 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
H. J. Gallagher |
| 8,250 | (5) |
| 27.64 |
| 12/31/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 15,000 | (14) |
| 38.05 |
| 1/20/2025 |
| 892 | (19) |
| 44,887 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 17,500 | (7) |
| 33.76 |
| 12/31/2025 |
| 1,466 | (20) |
| 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9,332 | (8) |
| 4,668 | (8) |
| 46.08 |
| 12/31/2026 |
| 956 | (21) |
| 48,093 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4,333 | (9) |
| 8,667 | (9) |
| 46.95 |
| 12/31/2027 |
| 1,530 | (22) |
| 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 25,880 | (12) |
| 56.25 |
| 1/29/2029 |
| 19,299 | (18) |
| 970,202 |
Note: Column (d) was intentionally omitted.
(1) |
|
These options were granted effective January 1, 2011 and were fully vested on January 1, 2014. |
These options were granted effective January 1, 2012 and were fully vested on January 1, 2015. |
These options were granted effective January 1, 2013 and were fully vested on January 1, 2016. |
These options were granted effective April 1, 2013 in connection with Mr. Walsh’s promotion to Chief Executive Officer in 2013 and were fully vested on April 1, 2016. |
(5) | These options were granted effective January 1, 2014 and were fully vested on January 1, 2017. |
(6) | These options were granted effective January 1, |
(7) | These options were granted effective January 1, 2016 and were fully vested on January 1, 2019. |
(8) | These options were granted effective January 1, 2017. These options vest 33 1/3 percent on each anniversary of the grant date and will be fully vested on January 1, |
These options were granted effective January 1, |
These options were granted effective January 1, |
(11) | These options were granted in connection with the commencement of Mr. Jastrzebski’s employment effective May 22, 2018. These options vest 33 1/3 percent on each anniversary of the grant date and will be fully vested on May 22, 2021. |
(12) | These options were granted effective January |
These options were granted effective April 23, |
(14) | These options were granted effective January 21, 2015 and were fully vested on January 21, 2018. |
(15) | The amount shown relates to a target award of performance units granted effective January 1, |
These performance units were awarded January 1, |
These performance units were awarded January 1, |
The amount shown |
The amount shown |
|
unit payout will be leveraged at |
performance units awarded. The performance units |
The amount shown |
|
The amount shown |
These restricted units were granted effective |
Option Exercises and Stock Vested in Fiscal 20162019
The following table sets forth (i) the number of shares of UGI Corporation common stock acquired by the named executive officers in Fiscal 20162019 from the exercise of stock options, (ii) the value realized by those
officers upon the exercise of stock options based on the difference between the market price for our common stock on the date of exercise and the exercise price for the options, (iii) the number of performance units and officers upon the exercise of stock options based on the difference between the market price for our common stock on the date of exercise and the exercise price for the options, (iii) the number of performance units and stock units previously granted to the named executive officers that vested in Fiscal 2016,2019, and (iv) the value realized by those officers upon the vesting of such units based on the closing market price for shares of our common stock, or for Mr. Sheridan,Gallagher, common units of AmeriGas Partners, on the vesting date.
Option Exercises and Stock Vested Table – Fiscal 2016 | ||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||||||
J. L. Walsh | 100,000 | 2,372,500 | 129,624 | 4,376,106 | ||||||||||||
K. R. Oliver | 28,125 | 650,619 | 50,082 | 1,690,768 | ||||||||||||
J. E. Sheridan | 64,125 | 1,069,983 | 23,156 | 793,556 | ||||||||||||
R. Perreault | 0 | 0 | 0 | 0 | ||||||||||||
M. M. Gaudiosi | 0 | 0 | 29,460 | 994,570 |
Number of Shares Acquired on Exercise (#) Value Realized on Exercise ($) Number of Shares Acquired on Vesting (#) Value Realized on Vesting ($) (a) (b) (c) (d) (e) J. L. Walsh 137,500 4,793,594 99,550 5,605,412 T. J. Jastrzebski 0 0 7,964 431,091 R. Perreault 0 0 26,932 1,583,404 H. J. Gallagher 0 0 3,381 123,846 M. M. Gaudiosi 0 0 21,901 1,233,191 Option Exercises and Stock Vested Table – Fiscal 2019 Option Awards Stock Awards Name
Pension Benefits
The following table shows (i) the number of years of credited service for the named executive officers under the Company’s defined benefit retirement plan (which we refer to below asUGI Pension Plan and the “UGI Utilities, Inc. Retirement Plan”) and its supplemental executive retirement plan (which we refer to below as the “UGI SERP”),UGI SERP, (ii) the actuarial present value of accumulated benefits under those plans as of September 30, 2016,2019, and (iii) any payments made to the named executive officers in Fiscal 20162019 under those plans.
Pension Benefits Table – Fiscal 2016 | ||||||||||||||||||||||||
Pension Benefits Table – Fiscal 2019 | Pension Benefits Table – Fiscal 2019 | |||||||||||||||||||||||
Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (b) | (c) | (d) | (e) | ||||||||||||||||
UGI SERP | 11 | 7,270,402 | 0 | |||||||||||||||||||||
J. L. Walsh | UGI Utilities, Inc. Retirement Income Plan | 11 | 722,078 | 0 | UGI SERP | 14 |
| 11,083,834 |
| 0 | ||||||||||||||
K. R. Oliver | None | 0 | 0 | 0 | ||||||||||||||||||||
J. E. Sheridan | None | 0 | 0 | 0 | ||||||||||||||||||||
J. L. Walsh | UGI Pension Plan | 14 |
| 1,016,449 |
| 0 | ||||||||||||||||||
None | 0 |
| 0 |
| 0 | |||||||||||||||||||
R. Perreault | None | 0 | 0 | 0 | None | 0 |
| 0 |
| 0 | ||||||||||||||
M. M. Gaudiosi | None | 0 | 0 | 0 | None | 0 |
| 0 |
| 0 | ||||||||||||||
UGI SERP | 11 |
| 20,942 |
| 0 | |||||||||||||||||||
H. J. Gallagher | UGI Pension Plan | 11 |
| 471,794 |
| 0 |
(1) | Messrs. Jastrzebski and Perreault and Ms. Gaudiosi do not participate in any defined benefit pension plan. Mr. Gallagher has a vested annual benefit amount under the UGI Pension Plan based on prior credited service of approximately $37,100. Mr. Gallagher is not currently earning benefits under that plan. |
The Company participates in the UGI Pension Plan to provide retirement income to its employees hired prior to January 1, 2009. The UGI Pension Plan pays benefits based upon final average earnings, consisting of base salary or wages and annual bonuses and years of credited service. Benefits vest after the participant completes five years of vesting service.
The UGI Pension Plan provides normal annual retirement benefits at age 65, unreduced early retirement benefits at age 62 with ten years of service and reduced, but subsidized, early retirement benefits at age 55 with ten years of service. Employees terminating prior to early retirement eligibility are eligible to receive a benefit under the plan formula commencing at age 65 or an unsubsidized benefit as early as age 55, provided they had 10 years of service at termination. Employees who have attained age 50 with 15 years of service and are involuntarily terminated by the Company prior to age 55 are also eligible for subsidized early retirement benefits, beginning at age 55.
The UGI Pension Plan’s normal retirement benefit formula is (A) – (B) and is shown below:
A = The lowerminimum of (1) and (2), where
(1) = 1.9% of five-year final average earnings (as defined in the UGI Pension Plan) multiplied by years of service;
(2) = 60% of the highest year of earnings; and
B = 1% of the estimated primary Social Security benefit multiplied by years of service.service (maximum of 35 years).
The amount of the benefit produced by the formula will be reduced by an early retirement factor based on the employee’s actual age in years and months as of his early retirement date. The reduction factors range from 65 percent at age 55 to 100 percent (no reduction) at age 62.
The normal form of benefit under the UGI Pension Plan for a married employee is a 50 percent joint and survivor lifetime annuity. Regardless of marital status, a participant may choose from a number of lifetime annuity payments.
The UGI Pension Plan is subject to qualified-plan Code limits on the amount of annual benefit that may be paid and on the amount of compensation that may be taken into account in calculating retirement benefits under the plan. For plan year 2016,2019, the limit on the compensation that may be used is $265,000$280,000 and the limit on annual benefits payable for an employee retiring at age 65 in 20162019 is $210,000.$225,000. Benefits in excess of those permitted under the statutory limits are paid from the Company’s Supplemental Executive Retirement Plan,UGI SERP, described below.
Mr. Walsh is currently eligible for unreduced early retirement benefits under the UGI Pension Plan.
UGI Corporation Supplemental Executive Retirement Plan
The UGI SERP is anon-qualified defined benefit plan that provides retirement benefits that would otherwise be provided under the UGI Pension Plan to employees hired prior to January 1, 2009, but are prohibited from being paid from the UGI Pension Plan by Code limits. The benefit paid by the UGI SERP is approximately equal to the difference between the benefits provided under the UGI Pension Plan to eligible participants and benefits that would have been provided by the UGI Pension Plan if not for the limitations of the Employee Retirement Income Security Act of 1974, as amended, and the Code. Benefits vest after the participant completes 5 years of vesting service. The benefits earned under the UGI SERP are payable in the form of a lump sum payment or rolled over to the Company’s nonqualified deferred compensation plan. For participants who attained age 50 prior to January 1, 2004, theThe lump sum payment is calculated using two interest rates. One rate is for service prior to January 1, 2004 and the other is for service after January 1, 2004. The rate for pre-January 1, 2004 service is the daily average of Moody’s Aaa bond yields for the month in which the participant’s termination date occurs, plus 50 basis points, and tax-adjusted using the highest marginal federal tax rate. The interest rate for post-January 1, 2004 service is the daily average of ten-year Treasury Bond yields in effect for the month in which the participant’s termination date occurs. The latter rate is used for calculating the lump sum payment for participants attaining age 50 on or after January 1, 2004. Payment is due within 60 days after the termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of asix-month postponement period following “separation from service” as defined in the Code.
Actuarial assumptions used to determine values in the Pension Benefits Table — Fiscal 20162019
The amounts shown in the Pension Benefit Table above are actuarial present values of the benefits accumulated through September 30, 2016.2019. An actuarial present value is calculated by estimating expected future payments starting at an assumed retirement age, weighting the estimated payments by the estimated probability of surviving to each post-retirement age, and discounting the weighted payments at an assumed discount rate to reflect the time value of money. The actuarial present value represents an estimate of the amount which, if invested today at the discount rate, would be sufficient on an average basis to provide estimated future payments based on the current accumulated benefit. The assumed retirement age for each named executive is age 62, which is the earliest age at which the executive could retire without any benefit reduction due to age. Actual benefit present values will vary from these estimates depending on many factors, including an executive’s actual retirement age. The key assumptions included in the calculations are as follows:
September 30, 2016 | September 30, 2015 | |||
Discount rate for UGI Pension Plan for all purposes and for SERP, for pre-commencement calculations | 3.80% (UGI Pension Plan) 3.00% (SERP) | 4.60% | ||
SERP lump sum rate | 2.40% for applicable pre-2004 service; 1.60% for other service | 2.70% for applicable pre-2004 service; 2.10% for other service | ||
Retirement age | 62 | 62 | ||
Postretirement mortality for Pension Plan | RP-2014 blue collar table, adjusted to 2006 using MP-2014 with rates then decreased by 4.3%; projected forward on a generational basis using Scale BB-2D | RP-2014 blue collar table, adjusted to 2006 using MP-2014 with rates then decreased by 4.3%; projected forward on a generational basis using Scale BB-2D | ||
Postretirement Mortality for SERP | 1994 GAR Unisex | 1994 GAR Unisex | ||
Preretirement Mortality | none | none | ||
Termination and disability rates | none | none | ||
Form of payment – qualified plan | Single life annuity | Single life annuity | ||
Form of payment – nonqualified plan | Lump sum | Lump sum |
Discount rate for UGI Pension Plan for all purposes and for SERP, for pre-retirement calculations 3.30% (UGI Pension Plan) 2.90% (SERP) 4.40% (UGI Pension Plan) 4.20% (SERP) SERP lump sum rate 1.70% 2.80% for applicablepre-2004 service; 3.10% for other service Retirement age 62 62 Postretirement mortality for Pension Plan RP-2014 blue collar table, adjusted to 2006 using MP-2014 with rates then decreased by 5.5%; projected forward on a generational basis using ScaleMP-2018 RP-2014 blue collar table, adjusted to 2006 using MP-2014 with rates then decreased by 4.3%; projected forward on a generational basis using ScaleBB-2D Postretirement Mortality for SERP 1994 GAR Unisex 1994 GAR Unisex Preretirement Mortality none none Termination and disability rates none none Form of payment – qualified plan Single life annuity Single life annuity Form of payment – nonqualified plan Lump sum Lump sum September 30, 2019 September 30, 2018
Nonqualified Deferred Compensation
The following table shows the contributions, earnings, withdrawals and account balances for each of the named executive officers who participate in the Company’s Supplemental Savings Plan (“SSP”),SSP, the 2009 UGI Corporation Supplemental Executive Retirement Plan for New Employees (“2009 UGI SERP”),SERP, and the AmeriGas Propane, Inc. Supplemental Executive Retirement Plan (“AmeriGas SERP”).SERP.
Nonqualified Deferred Compensation Table – Fiscal 2016 | ||||||||||||||||||||||||||||||||||||||||||||
Nonqualified Deferred Compensation Table – Fiscal 2019 | Nonqualified Deferred Compensation Table – Fiscal 2019 |
| ||||||||||||||||||||||||||||||||||||||||||
Name | Plan Name | Executive Contributions in Last Fiscal Year ($) | Employer Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($)(4) | Plan Name | Executive Contributions in Last Fiscal Year ($) | Employer Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($)(5) | ||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||||||||||||||||||||
J. L. Walsh | SSP | 0 | 55,662 | (1) | 3,866 | 0 | 427,703 | SSP | 0 | 60,778(1) | 0 | (4) | 0 | 676,724 | ||||||||||||||||||||||||||||||
K. R. Oliver | 2009 UGI SERP | 0 | 74,046 | (2) | 6,040 | 0 | 292,658 | |||||||||||||||||||||||||||||||||||||
J. E. Sheridan | AmeriGas SERP | 0 | 40,858 | (3) | 22,014 | 0 | 634,122 | |||||||||||||||||||||||||||||||||||||
T. J. Jastrzebski | 2009 UGI SERP |
| 0 |
|
| 85,889(2) |
|
| 1,627 |
|
| 0 |
|
| 36,437 |
| ||||||||||||||||||||||||||||
R. Perreault | 2009 UGI SERP | 0 | 68,725 | (2) | 0 | 0 | 0 | 2009 UGI SERP |
| 0 |
|
| 84,925(2) |
|
| 6,281 |
|
| 0 |
|
| 271,780 |
| |||||||||||||||||||||
M. M. Gaudiosi | 2009 UGI SERP | 0 | 55,339 | (2) | 10,396 | 0 | 235,134 | 2009 UGI SERP |
| 0 |
|
| 57,431(2) |
|
| 13,659 |
|
| 0 |
|
| 509,745 |
| |||||||||||||||||||||
H. J. Gallagher | AmeriGas SERP |
| 0 |
|
| 59,099(3) |
|
| 5,069 |
|
| 0 |
|
| 189,165 |
|
(1) | This amount represents the employer contribution to the Company’s SSP, which is also reported in the Summary Compensation Table in the “All Other Compensation” column. |
(2) | This amount represents the employer contribution to the 2009 UGI SERP, which is also reported in the Summary Compensation Table in the “All Other Compensation” column. |
(3) | This amount represents the employer contribution to the AmeriGas SERP, which is also reported in the Summary Compensation Table in the “All Other Compensation” column. |
(4) | Mr. Walsh’s account reflects a loss of $16,442 for the calendar year ended December 31, 2018. |
(5) | The aggregate balances do not include the Company contributions for Fiscal |
The SSP is a nonqualified deferred compensation plan that provides benefits to certain employees that would be provided under the Company’s 401(k)UGI Savings Plan in the absence of Code limitations. Benefits vest after the participant completes five years of service. The SSP is intended to pay an amount substantially equal to the difference between the Company matching contribution that would have been made under the 401(k)UGI Savings Plan if the Code limitations were not in effect and the Company match actually made under the 401(k)UGI Savings Plan. The Code compensation limit for plan year 20162019 was $265,000.$280,000. Under the SSP, the participant is credited with a Company match on compensation in excess of Code limits using the same formula applicable to contributions to the Company’s 401(k)UGI Savings Plan, which is a match of 50 percent on the first 3 percent of eligible compensation, and a match of 25 percent on the next 3 percent, assuming that the employee contributed to the 401(k)UGI Savings Plan the lesser of 6 percent of eligible compensation and the maximum amount permissible under the Code. Amounts credited to the participant’s account are credited with interest. The rate of interest currently in effect is the rate produced by blending the annual return on the Standard and Poor’s 500 Index (60 percent weighting) and the annual return on the Barclays Capital U.S. Aggregate Bond Index (40 percent weighting). Account balances are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of asix-month postponement period following “separation from service” as defined in the Code.
The AmeriGas SERP is a nonqualified deferred compensation plan that is intended to provide retirement benefits to certain AmeriGas Propane employees. Under the plan, AmeriGas Propane credits to each participant’s account annually an amount equal to 5 percent of the participant’s compensation (salary and annual bonus) up to the Code compensation limit ($265,000280,000 in plan year 2016)2019) and 10 percent of compensation in excess of such limit. In addition, if any portion of AmeriGas Propane’s matching contribution under the AmeriGas Propane, Inc. 401(k) Savings Plan (“AmeriGas 401(k) Savings Plan”) is forfeited due to nondiscrimination requirements under the Code, the forfeited amount, adjusted for earnings
and losses on the amount, will be credited to the participant’s account. Benefits vest on the fifth anniversary of a participant’s employment commencement date. Participants direct the investment of their account balances among a number of funds, which are generally the same funds available to participants in the AmeriGas 401(k) Savings Plan, other than the UGI Corporation stock fund. Account balances are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of asix-month postponement period following “separation from service” as defined in the Code. Amounts payable under the AmeriGas SERP may be deferred in accordance with the Company’s 2009 Deferral Plan. See COMPENSATION DISCUSSION AND ANALYSIS – UGI Corporation 2009 Deferral Plan, page 40.41.
The AmeriGas Propane, Inc. Nonqualified Deferred Compensation Plan is a nonqualified deferred compensation plan that provides benefits to certain employees that would otherwise be provided under the AmeriGas 401(k) Savings Plan. The plan is intended to permit participants to defer up to $10,000 of annual compensation that would generally not be eligible for contribution to the AmeriGas 401(k) Savings Plan due to Code limitations and nondiscrimination requirements. Participants may direct the investment of deferred amounts into a number of funds. The funds available are the same funds available under the AmeriGas 401(k) Savings Plan, other than the UGI Corporation stock fund. Account balances are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of asix-month postponement period following “separation from service” as defined in the Code.
The 2009 UGI SERP is a nonqualified deferred compensation plan that is intended to provide retirement benefits to executive officers who are not eligible to participate in the UGI Pension Plan, having been hired on or after January 1, 2009. Under the 2009 UGI SERP, the Company credits to each participant’s account annually an amount equal to 5 percent of the participant’s compensation (salary and annual bonus) up to the Code compensation limit ($265,000280,000 in plan year 2016)2019) and 10 percent of compensation in excess of such limit. In addition, if any portion of the Company’s matching contribution under the Company’s 401(k)UGI Savings Plan is forfeited due to nondiscrimination requirements under the Code, the forfeited amount, adjusted for earnings and losses on the amount, will be credited to the participant’s account. Benefits vest on the fifth anniversary of a participant’s employment commencement date. Participants direct the investment of their account
balances among a number of mutual funds, which are generally the same funds available to participants in the Company’s 401(k)UGI Savings Plan, other than the UGI Corporation stock fund. Account balances are payable in a lump sum within 60 days after termination of employment, except as required by Section 409A of the Code. If payment is required to be delayed by Section 409A of the Code, payment is made within 15 days after expiration of asix-month postponement period following “separation from service” as defined in the Code. Amounts payable under the 2009 UGI SERP may be deferred in accordance with the Company’sUGI Corporation 2009 Deferral Plan. See COMPENSATION DISCUSSION AND ANALYSIS – UGI Corporation 2009 Deferral Plan, page 40.41.
Potential Payments Upon Termination or Change in Control
Severance Pay Plan for Senior Executive Employees
Named Executive Officers Employed by UGI Corporation. The UGI Corporation Senior Executive Employee Severance Plan (the “UGI Severance Plan”) provides for payment to certain senior level employees of UGI, including Messrs. Walsh, OliverJastrzebski and Perreault and Ms. Gaudiosi, in the event their employment is terminated without fault on their part. Benefits are payable to a senior executive covered by the UGI Severance Plan if the senior executive’s employment is involuntarily terminated for any reason other than for just cause“just cause” or as a result of the senior executive’s death or disability. Under the UGI Severance Plan, “just cause” generally means dismissal of an executive due to (i) misappropriation of funds, (ii) conviction of a felony or crime involving moral turpitude, (iii) material breach of the Company’s codeCode of conductBusiness Conduct and Ethics or other written employment policies, (iv) breach of a written restrictive covenant agreement, (v) gross misconduct in the performance of his or her duties, or (vi) the intentional refusal or failure to perform his or her material duties.
Except as provided herein, the UGI Severance Plan provides for cash payments equal to a participant’s compensation for a period of time ranging from six months to 18 months, depending on length of service (the “Continuation Period”). In the case of Mr. Walsh, the Continuation Period is 30 months. In addition, a participant may receive an annual bonus for his or her year of termination, subject to the Committee’s discretion and not to exceed the amount of his or her bonus under the Annual Bonus Plan,pro-rated for the number of months served in the fiscal year prior to termination. The levels of severance payments were established by the Committee based on competitive practice and are reviewed by management and the Committee from time to time.
Under the UGI Severance Plan, a participant also receives a payment equal to the cost the participant would have incurred to continue medical and dental coverage under the Company’s plans for the Continuation Period (less the amount the participant would be required to contribute for such coverage if the participant were an active employee), provided continued medical and dental coverage would not result in adverse tax consequences to the participant or the Company and is permitted under the applicable medical and dental plans. The maximum period for calculating the payment of such benefits is 18 months (30 months in the case of Mr. Walsh). The UGI Severance Plan also provides for outplacement services for a period of 12 months following a participant’s termination of employment and reimbursement for tax preparation services, if eligible, for the final year of employment.
In order to receive benefits under the UGI Severance Plan, a participant is required to execute a release that discharges UGI and its subsidiaries from liability for any claims the senior executive may have against any of them, other than claims for amounts or benefits due to the executive under any plan, program or contract provided by or entered into with UGI or its subsidiaries. The UGI Severance Plan also requires a senior executive to ratify any existing post-employment activities agreement (which restricts the senior executive from competing with the Company following termination of employment) and to cooperate in attending to matters pending at the time of termination of employment.
Named Executive Officers Employed by AmeriGas Propane. The AmeriGas Propane, Inc. Senior Executive Employee Severance Plan (the “AmeriGas Severance Plan”) provides for payment to certain senior level employees of AmeriGas Propane, including Mr. Sheridan,Gallagher, in the event their employment is terminated
without fault on their part. Specified benefits are payable to a senior executive covered by the AmeriGas Severance Plan if the senior executive’s employment is involuntarily terminated for any reason other than for just“just” cause or as a result of the senior executive’s death or disability. Under the AmeriGas Severance Plan, “just cause” generally means dismissal of an executive due to (i) misappropriation of funds, (ii) conviction of a felony or crime involving moral turpitude, (iii) material breach of AmeriGas Propane’s codethe Company’s Code of conductBusiness Conduct and Ethics or other written employment policies, (iv) breach of a written restrictive covenant agreement, (v) gross misconduct in the performance of his or her duties, or (vi) the intentional refusal or failure to perform his or her material duties.
Except as provided herein, the AmeriGas Severance Plan provides for cash payments equal to a participant’s compensation for a period of time ranging from six months to 18 months, depending on length of service (the “AmeriGas Continuation Period”). In the case of Mr. Sheridan, the AmeriGasGallagher’s Continuation Period ranges from 12 months tois 24 months, depending on length of service.months. In addition, a participant may receive an annual bonus for his or her year of termination, subject to the Committee’s discretion and not to exceed the amount of his or her bonus under the Annual Bonus Plan,pro-rated for the number of months served in the fiscal year prior to termination. The levels of severance payments were established by the Committee based on competitive practice and are reviewed by management and the Committee from time to time.
Under the AmeriGas Severance Plan, a participant also receives a payment equal to the cost the participant would have incurred to continue medical and dental coverage under AmeriGas Propane’s plans for the AmeriGas Continuation Period (less the amount the participant would be required to contribute for such coverage if the participant were an active employee), provided continued medical and dental coverage would not result in adverse tax consequences to the participant or AmeriGas Propane and is permitted under the
applicable medical and dental plans. The AmeriGas Severance Plan also provides for outplacement services for a period of 12 months following a participant’s termination of employment and reimbursement for tax preparation services, if eligible, for the final year of employment.
In order to receive benefits under the AmeriGas Severance Plan, a participant is required to execute a release that discharges AmeriGas Propane and its affiliates from liability for any claims the senior executive may have against any of them, other than claims for amounts or benefits due to the executive under any plan, program or contract provided by or entered into with AmeriGas Propane or its affiliates. Each senior executive is also required to ratify any existing post-employment activities agreement (which restricts the senior executive from competing with AmeriGas Propane and its affiliates following termination of employment) and to cooperate in attending to matters pending at the time of termination of employment.
Change in Control Arrangements
Named Executive Officers Employed by UGI Corporation. Messrs. Walsh, OliverJastrzebski and Perreault and Ms. Gaudiosi each have an agreement with the Company that provides benefits in the event of a change in control. Mr. Walsh’s agreement has a term of one year with automatic one-year extensions each year, unless in each case, prior to a change in control, the Company terminates such agreement with required advance notice. Each of Messrs. Oliver’sWalsh’s, Jastrzebski’s and Perreault’s and Ms. Gaudiosi’s agreement has a term of three years with automaticone-year extensions each year, unless, prior to a change in control, the Company terminates such agreement with required advance notice. In the absence of a change in control or termination by the Company, each agreement will terminate when, for any reason, the executive terminates his or her employment with the Company. A change in control is generally deemed to occur in the following instances:
Any person (other than certain persons or entities affiliated with the Company), together with all affiliates and associates of such person, acquires securities representing 20 percent or more of either (i) the then outstanding shares of common stock, or (ii) the combined voting power of the Company’s then outstanding voting securities;
Individuals who at the beginning of any24-month period constitute the Board of Directors (the “Incumbent Board”), and any new Director whose election by the Board of Directors, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Incumbent Board, cease for any reason to constitute a majority;
The Company is reorganized, merged or consolidated with or into, or sells all or substantially all of its assets to, another corporation in a transaction in which former shareholders of the Company do not own more than 50 percent of the outstanding common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring corporation; or
The Company is liquidated or dissolved.
The Company will provide each of Messrs. Walsh, OliverJastrzebski and Perreault and Ms. Gaudiosi with cash benefits if we terminate his or her employment without “cause” or if he or she terminates employment for “good reason” at any time within two years following a change in control of the Company. “Cause” generally includes (i) misappropriation of funds, (ii) habitual insobriety or substance abuse, (iii) conviction of a crime involving moral turpitude, or (iv) gross negligence in the performance of duties, which gross negligence has had a material adverse effect on the business, operations, assets, properties or financial condition of the Company. “Good reason” generally includes a material diminution in authority, duties, responsibilities or base compensation; a material breach by the Company of the terms of the agreement; and substantial relocation requirements. If the events trigger a payment following a change in control, the benefits payable to each of Messrs. Walsh, OliverJastrzebski and Perreault and Ms. Gaudiosi will be as specified under his or her change in control agreement unless payments under the UGI Severance Plan described above would be greater, in which case benefits would be provided under the UGI Severance Plan.
Benefits under this arrangement would be equal to three times the executive officer’s base salary and annual bonus.bonus, in the case of Messrs. Walsh and Jastrzebski and Ms. Gaudiosi, and equal to 2.5 times the executive officer’s base salary and annual bonus, in the case of Mr. Perreault. Each executive would also receive the cash equivalent of his or her target bonus, prorated for the number of months served in the fiscal year. In addition, Messrs. Walsh, OliverJastrzebski and Perreault and Ms. Gaudiosi are each entitled to receive a payment equal to the cost he or she would incur if he or she enrolled in the Company’s medical and dental plans for three years, (less2.5 years in the case of Mr. Perreault, less the amount he or she would be required to contribute for such coverage if he or she were an active employee).employee. Mr. Walsh would also have benefits under the UGI SERP and SSP. Messrs. OliverJastrzebski and Perreault and Ms. Gaudiosi would also have benefits under the Company’s 2009 UGI SERP, calculated as if each of them had continued in employment for three years.years, 2.5 years in the case of Mr. Perreault. In addition, outstanding performance units, stock units and dividend equivalents will only be paid for a qualifying termination of employment and will be paid in cash based on the fair market value of the Company’s common stock in an amount equal to the greater of (i) the target award, and (ii) the award amount that would have been paid if the performance unit measurement period ended on the date of the change in control, as determined by the Compensation and Management Development Committee. For treatment of stock options, see the Grants of Plan-Based Awards Table.
TheNone of the change in control benefits for Mr. Walshour named executive officers are subject to a “conditional gross-up” for excise and related taxes in the event they would constitute “excess parachute payments,” as defined in Section 280G of the Code. The Company will provide the tax gross-up if the aggregate parachute value of benefits is greater than 110 percent of the maximum amount that may be paid under Section 280G of the Code without imposition of an excise tax. If the parachute value does not exceed the 110 percent threshold, the benefits for Mr. Walsh will be reduced to the extent necessary to avoid imposition of the excise tax on “excess parachute payments.” The Company discontinued the use of a tax gross-up in July of 2010 for executives who enter into change in control agreements subsequent thereto. As a result, Messrs. Oliver’s and Perreault’s and Ms. Gaudiosi’s benefits are notwere previously subject to a “conditional gross-up” for excise and related taxesgross-up,” but such tax gross-up feature was eliminated from Mr. Walsh’s change in the event they would constitute “excess parachute payments,” as defined in Section 280G of the Code.control agreement effective December 2019.
In order to receive benefits under his or her change in control agreement, each of Messrs. Walsh, OliverJastrzebski and Perreault and Ms. Gaudiosi is required to execute a release that discharges the Company and its subsidiaries from liability for any claims he or she may have against any of them, other than claims for amounts or benefits due under any plan, program or contract provided by or entered into with the Company or its subsidiaries.
Named Executive OfficersOfficer Employed by AmeriGas PropanePropane. Mr. SheridanGallagher has an agreement with AmeriGas Propane that provides benefits in the event of a change in control. His agreement has a term of one yearthree years and is automatically extended forone-year terms each year unless, prior to a change in control, AmeriGas Propane terminates his agreement with required advance notice. In the absence of a change in control or termination by AmeriGas Propane, his agreement will terminate when, for any reason, he terminates his employment with AmeriGas Propane. A change in control is generally deemed to occur in the following instances:
Any person (other than certain persons or entities affiliated with the Company), together with all affiliates and associates of such person, acquires securities representing 20 percent or more of either (i) the then outstanding shares of common stock, or (ii) the combined voting power of the Company’s then outstanding voting securities;
outstanding shares of common stock, or (ii) the combined voting power of the Company’s then outstanding voting securities; |
Individuals who at the beginning of any24-month period constitute the Company’s Board of Directors (the “Incumbent Board”), and any new Director whose election by the Board of Directors, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Incumbent Board, cease for any reason to constitute a majority;
The Company is reorganized, merged or consolidated with or into, or sells all or substantially all of its assets to, another corporation in a transaction in which former shareholders of the Company do not own more than 50 percent of the outstanding common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring corporation;
AmeriGas Propane, AmeriGas Partners or AmeriGas Propane, L.P. is reorganized, merged or consolidated with or into, or sells all or substantially all of its assets to, another entity in a transaction with respect to which all of the individuals and entities who were owners of AmeriGas Propane’s voting securities or the outstanding units of the Partnership immediately prior to such transaction do not, following such transaction, own more than 50 percent of the outstanding common stock and the combined voting power of the then outstanding voting securities of the surviving or acquiring corporation, or if the resulting entity is a partnership, the former unitholders do not own more than 50 percent of the outstanding common units in substantially the same proportion as their ownership immediately prior to the transaction;
The Company, AmeriGas Propane, AmeriGas Partners or AmeriGas Propane, L.P. (the “Operating Partnership”) is liquidated or dissolved;
The Company fails to own more than 50 percent of the general partnership interests of AmeriGas Partners or the Operating Partnership; or
The Company fails to own more than 50 percent of the outstanding shares of common stock of AmeriGas Propane; or
AmeriGas Propane is removed as the General Partner of AmeriGas Partners or the Operating Partnership.Propane.
AmeriGas Propane will provide Mr. SheridanGallagher with cash benefits if there is a termination of his employment without “cause” or if he terminates employment for “good reason” at any time within two years following a change in control. “Cause” generally includes (i) misappropriation of funds, (ii) habitual insobriety or substance abuse, (iii) conviction of a crime involving moral turpitude, or (iv) gross negligence in the performance of duties, which gross negligence has had a material adverse effect on the business, operations, assets, properties or financial condition of AmeriGas Propane. “Good reason” generally includes a material diminution in authority, duties, responsibilities or base compensation; a material breach by AmeriGas Propane of the terms of the agreement; and substantial relocation requirements. If the events trigger a payment following a change in control, the benefits payable to Mr. SheridanGallagher will be as specified under his change in control agreement unless payments under the AmeriGas Severance Plan described above would be greater, in which case benefits would be provided under the AmeriGas Severance Plan.
Benefits under this arrangement would be equal to three2.5 times Mr. Sheridan’sGallagher’s base salary and annual bonus. Mr. SheridanGallagher would also receive the cash equivalent of his target bonus, prorated for the number of months served in the fiscal year. In addition, he is entitled to receive a payment equal to the cost he would incur if he enrolled in AmeriGas Propane’s medical and dental plans for three2.5 years (less the amount he would be required to contribute for such coverage if he were an active employee). Mr. SheridanGallagher would also receive his benefits under the AmeriGas SERP calculated as if he had continued in employment for three2.5 years. In addition, outstanding performance units and distribution equivalents will only be paid for a qualifying termination of employment and will be paid in cash based on the fair market value of AmeriGas Partners common units in an amount equal to the greater of (i) the target award, and (ii) the award amount that would have been paid if the measurement period ended on the date of the change in control, as determined by the AmeriGas Propane Compensation/Pension Committee. For treatment of stock options, see the Grants of Plan-Based Awards Table.
AmeriGas Propane discontinued the use of a tax gross-up in November of 2010 and, as a result, Mr. Sheridan’sGallagher’s benefits are not subject to a “conditionalgross-up” for excise and related taxes in the event they would constitute “excess parachute payments,” as defined in Section 280G of the Code.
In order to receive benefits under his change in control agreement, Mr. SheridanGallagher is required to execute a release that discharges AmeriGas Propane and its affiliates from liability for any claims he may have against any of them, other than claims for amounts or benefits due under any plan, program or contract provided by or entered into with AmeriGas Propane or its affiliates.
Potential Payments Upon Termination or Change in Control
The amounts shown in the table below are merely estimates of the incremental amounts that would be paid out to the named executive officers if their termination had occurred on the last day of Fiscal 2016.2019. The actual amounts to be paid out can only be determined at the time of such named executive officer’s termination of employment. The amounts set forth in the table below do not include compensation to which each named executive officer would be entitled without regard to his or her termination of employment, including (i) base salary and short-term incentives that have been earned but not yet paid, and (ii) amounts that have been earned, but not yet paid, under the terms of the plans reflected in the Pension Benefits Table and the Nonqualified Deferred Compensation Table. There are no incremental payments in the event of voluntary resignation, termination for cause, disability or upon retirement.
Potential Payments Upon Termination or Change in Control Table – Fiscal 2016 | ||||||||||||||||||||||||||||||||||||||||
Potential Payments Upon Termination or Change in Control Table – Fiscal 2019 | Potential Payments Upon Termination or Change in Control Table – Fiscal 2019 |
| ||||||||||||||||||||||||||||||||||||||
Name & Triggering Event | Severance Pay($)(1)(2) | Equity Awards with Accelerated Vesting($)(3) | Nonqualified Retirement Benefits($)(4) | Welfare & Other Benefits($)(5) | Total($) | Severance Pay($)(1)(2) | Equity Awards with Accelerated Vesting($)(3) | Nonqualified Retirement Benefits($)(4) | Welfare & Other Benefits($)(5) | Total($) | ||||||||||||||||||||||||||||||
J. L. Walsh | ||||||||||||||||||||||||||||||||||||||||
Death | 0 | 12,606,760 | 6,278,353 | 0 | 18,885,113 |
| 0 |
|
| 4,713,601 |
|
| 9,212,220 |
|
| 0 |
|
| 13,925,821 |
| ||||||||||||||||||||
Involuntary Termination Without Cause | 6,597,285 | 0 | 7,386,298 | 60,967 | 14,044,550 |
| 7,631,086 |
|
| 0 |
|
| 11,099,060 |
|
| 88,058 |
|
| 18,818,204 |
| ||||||||||||||||||||
Termination Following Change in Control | 9,299,777 | 20,509,117 | 12,368,561 | 12,906,994 | 55,084,449 |
| 9,957,752 |
|
| 6,555,159 |
|
| 13,763,613 |
|
| 90,080 |
|
| 30,366,604 |
| ||||||||||||||||||||
K. R. Oliver | ||||||||||||||||||||||||||||||||||||||||
Death | 0 | 3,794,712 | 0 | 0 | 3,794,712 | |||||||||||||||||||||||||||||||||||
Involuntary Termination Without Cause | 1,054,281 | 0 | 0 | 38,807 | 1,093,088 | |||||||||||||||||||||||||||||||||||
Termination Following Change in Control | 3,502,618 | 6,206,637 | 288,018 | 82,364 | 10,079,637 | |||||||||||||||||||||||||||||||||||
J. E. Sheridan | ||||||||||||||||||||||||||||||||||||||||
T. J. Jastrzebski | ||||||||||||||||||||||||||||||||||||||||
Death | 0 | 3,235,474 | 0 | 0 | 3,235,474 |
| 0 |
|
| 1,480,955 |
|
| 0 |
|
| 0 |
|
| 1,480,955 |
| ||||||||||||||||||||
Involuntary Termination Without Cause | 1,910,343 | 0 | 0 | 71,522 | 1,981,865 |
| 1,196,269 |
|
| 0 |
|
| 0 |
|
| 39,216 |
|
| 1,235,485 |
| ||||||||||||||||||||
Termination Following Change in Control | 3,357,472 | 5,349,973 | 252,675 | 95,977 | 9,056,097 |
| 4,344,795 |
|
| 2,158,594 |
|
| 313,388 |
|
| 101,731 |
|
| 6,918,508 |
| ||||||||||||||||||||
R. Perreault | ||||||||||||||||||||||||||||||||||||||||
Death | 0 | 958,544 | 0 | 0 | 958,544 |
| 0 |
|
| 1,819,527 |
|
| 0 |
|
| 0 |
|
| 1,819,527 |
| ||||||||||||||||||||
Involuntary Termination Without Cause | 786,571 | 0 | 0 | 34,780 | 821,351 |
| 1,218,808 |
|
| 0 |
|
| 0 |
|
| 38,044 |
|
| 1,256,852 |
| ||||||||||||||||||||
Termination Following Change in Control | 2,112,917 | 1,884,739 | 155,000 | 54,910 | 4,207,566 |
| 3,228,750 |
|
| 2,198,563 |
|
| 240,625 |
|
| 53,464 |
|
| 5,721,402 |
| ||||||||||||||||||||
M. M. Gaudiosi | ||||||||||||||||||||||||||||||||||||||||
Death | 0 | 2,576,222 | 0 | 0 | 2,576,222 |
| 0 |
|
| 1,081,076 |
|
| 0 |
|
| 0 |
|
| 1,081,076 |
| ||||||||||||||||||||
Involuntary Termination Without Cause | 814,432 | 0 | 0 | 27,156 | 841,588 |
| 1,047,003 |
|
| 0 |
|
| 0 |
|
| 31,605 |
|
| 1,078,608 |
| ||||||||||||||||||||
Termination Following Change in Control | 2,643,497 | 4,251,474 | 210,662 | 30,307 | 7,135,940 |
| 2,839,711 |
|
| 1,477,874 |
|
| 207,699 |
|
| 40,959 |
|
| 4,566,243 |
| ||||||||||||||||||||
H. J. Gallagher | ||||||||||||||||||||||||||||||||||||||||
Death |
| 0 |
|
| 1,382,041 |
|
| 18,017 |
|
| 0 |
|
| 1,400,058 |
| |||||||||||||||||||||||||
Involuntary Termination Without Cause |
| 1,955,000 |
|
| 0 |
|
| 20,638 |
|
| 89,139 |
|
| 2,064,777 |
| |||||||||||||||||||||||||
Termination Following Change in Control |
| 2,008,387 |
|
| 1,413,020 |
|
| 186,888 |
|
| 86,424 |
|
| 3,694,719 |
|
(1) | Amounts shown under “Severance Pay” in the case of involuntary termination without cause are calculated under the terms of the UGI Severance Plan for Messrs. Walsh, |
(2) | Amounts shown under “Severance Pay” in the case of termination following a change in control are calculated under the officer’s change in control agreement. |
(3) | In calculating the amounts shown under “Equity Awards with Accelerated Vesting”, we assumed (i) the continuation of the Company’s dividend |
(4) | Amounts shown under “Nonqualified Retirement Benefits” are in addition to amounts shown in the Pension Benefits Table – Fiscal |
(5) | Amounts shown under “Welfare and Other Benefits” include estimated payments for (i) medical and dental insurance premiums, (ii) outplacement services and (iii) tax preparation |
Market Price of Shares
The closing price of our Common Stock, as reported on the New York Stock Exchange Composite Tape on November 14, 2016,29, 2019, was $43.19.$43.55.
The Dodd-Frank Wall Street Reform and Consumer Protection Act and related rules adopted by the SEC require disclosure of the ratio of the annual total compensation of its chief executive officer to the annual total compensation of its median employee. As permitted by SEC rules, we used the same median employee for Fiscal 2019 that we identified for Fiscal 2018 because there were no significant changes to the global employee population nor significant changes to employee compensation arrangements. The following table shows the ratio of the annual total compensation of our Chief Executive Officer compared to that of our median employee for Fiscal 2019. In calculating the pay ratio, we did not utilize the “de minimis” exception, statistical sampling or other similar methods, or anycost-of-living adjustment, as permitted by applicable SEC regulations.
Annual total compensation of our CEO for Fiscal 2019 | $ | 8,592,760 | ||
Annual total compensation of our median employee for Fiscal 2019 | $ | 64,610 | ||
Ratio of annual total compensation of our CEO to the annual total compensation of our median employee for Fiscal 2019 | 133 to 1 |
Methodology:
1. | Because there were no significant changes to our workforce or employee compensation arrangements in Fiscal 2019, the median employee that we used for purposes of calculating CEO pay ratio for Fiscal 2018 is the same median employee that we identified for disclosure in Fiscal 2019. |
2. | With respect to the annual total compensation of the “median employee,” we identified and calculated the elements of such employee’s compensation for Fiscal 2019 in accordance with the requirements of Item 402(c)(2)(x) of RegulationS-K using Target Total Cash Compensation (base salary equivalent and overtime, plus incentive compensation and commissions) as our consistently applied compensation measure. For purposes of ournon-U.S.-based employees, we converted the gross salary amounts from the local currency into U.S. dollar amounts using aone-year trailing average exchange rate, using daily price moves, for the period from July 1, 2018 to July 1, 2019. |
3. | With respect to the annual total compensation of our CEO, we used the amount reported in the “Total column (column (j))” of our Fiscal 2019 Summary Compensation Table included in this Proxy Statement. |
Security Ownership of Directors and Executive Officers
The following table shows the number of shares beneficially owned by each Director, by each of the executive officers named in the Summary Compensation Table, and by all Directors and executive officers as a group. The table shows their beneficial ownership as of October 1, 2016.2019. The address for each beneficial owner in the table below is c/o UGI Corporation, P.O. Box 858, Valley Forge, PA 19482.
Mr. Walsh beneficially owns approximately 1.1 percent of the outstanding common stock. Each other person named in the table beneficially owns less than 1 percent of the outstanding common stock. Directors and executive officers as a group own approximately 2.2 percent of the outstanding common stock. For purposes of reporting total beneficial ownership, shares that may be acquired within 60 days of October 1, 20162019 through UGI Corporation stock option exercises are included.
Beneficial Ownership of Directors, Nominees and Named Executive Officers
Name | Number of Shares of UGI Common Stock(1) | Number of UGI Stock Units(2) | Exercisable Options For UGI Common Stock | Number of Shares of UGI Common Stock(1) | Number of UGI Stock Units(2) | Exercisable Options for UGI Common Stock | ||||||||||||||||||
M. Shawn Bort | 6,525 | (3) | 33,656 | 96,750 |
| 14,345 | (3) |
| 43,762 |
|
| 69,150 |
| |||||||||||
Theodore A. Dosch |
| 0 |
|
| 6,443 |
|
| 18,900 |
| |||||||||||||||
Hugh J. Gallagher |
| 10,251 | (4) |
| 0 |
|
| 54,415 |
| |||||||||||||||
Monica M. Gaudiosi | 40,223 | 0 | 221,000 |
| 61,109 |
|
| 0 |
|
| 418,000 |
| ||||||||||||
Richard W. Gochnauer | 0 | 24,435 | 71,250 |
| 0 |
|
| 33,970 |
|
| 94,650 |
| ||||||||||||
Alan N. Harris |
| 0 |
|
| 4,388 |
|
| 12,900 |
| |||||||||||||||
Frank S. Hermance | 150,000 | (4) | 22,178 | 64,875 |
| 250,000 | (5) |
| 34,376 |
|
| 88,275 |
| |||||||||||
Ernest E. Jones | 11,566 | 70,718 | 109,500 | |||||||||||||||||||||
Kirk R. Oliver | 47,756 | (5) | 0 | 220,000 | ||||||||||||||||||||
Ted J. Jastrzebski |
| 15,263 |
|
| 0 |
|
| 51,666 |
| |||||||||||||||
William J. Marrazzo |
| 637 |
|
| 0 |
|
| 0 |
| |||||||||||||||
Roger Perreault |
| 23,124 |
|
| 0 |
|
| 99,998 |
| |||||||||||||||
Anne Pol | 5,259 | 132,041 | 102,750 |
| 5,563 |
|
| 157,842 |
|
| 94,650 |
| ||||||||||||
Roger Perreault | 0 | (6) | 0 | 0 | ||||||||||||||||||||
Kelly A. Romano |
| 0 |
|
| 1,840 |
|
| 5,400 |
| |||||||||||||||
Marvin O. Schlanger | 65,586 | (7) | 111,989 | 109,500 |
| 104,473 | (6) |
| 145,032 |
|
| 113,730 |
| |||||||||||
Jerry E. Sheridan | 2,014 | (8) | 0 | 20,000 | ||||||||||||||||||||
James B. Stallings, Jr. | 0 | 3,950 | 11,800 |
| 0 |
|
| 12,214 |
|
| 35,200 |
| ||||||||||||
Roger B. Vincent | 22,516 | (9) | 48,535 | 58,500 | ||||||||||||||||||||
K. Richard Turner |
| 4,144 | (7) |
| 0 |
|
| 0 |
| |||||||||||||||
John L. Walsh | 392,562 | (10) | 0 | 1,242,000 |
| 459,879 | (8) |
| 0 |
|
| 1,852,666 |
| |||||||||||
Directors and executive officers as a group (16 persons) | 904,627 | 447,502 | 2,528,725 | |||||||||||||||||||||
Directors and executive officers as a group (19 persons) |
| 1,029,884 |
|
| 439,867 |
|
| 3,258,215 |
|
(1) | Sole voting and investment power unless otherwise specified. |
(2) | The 2004 Omnibus Equity Compensation Plan and the 2013 Plan each provides that stock units will be converted to shares and paid out to Directors upon their retirement or termination of service. |
(3) | Ms. Bort’s shares are held jointly with her spouse. |
(4) | Mr. |
(5) |
|
(6) |
|
Includes |
The Turner Family Partnership holds 637 of Mr. |
|
Mr. Walsh’s shares are held jointly with his spouse. |
Securities Ownership of Certain Beneficial Owners
The following table shows information regarding each person known by the Company to be the beneficial owner of more than five percent of the Company’s common stock. The ownership information below is based on information reported on a Form 13F as filed with the SEC in November 20162019 for the quarter ended September 30, 2016.2019.
Securities Ownership of Certain Beneficial Owners
|
|
|
| |||||||
|
| |||||||||
|
| |||||||||
|
|
Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class(1) | |||||||||
Common Stock |
The Vanguard Group, Inc. P.O. Box 2600 Valley Forge, PA 19482
|
|
22,137,269(2) |
|
|
10.59% |
| |||||
Common Stock |
Wellington Management Group LLP c/o Wellington Management Company LLP 280 Congress Street Boston, MA 02210
|
|
21,549,641(3) |
|
|
10.31% |
| |||||
Common Stock |
BlackRock Inc. 55 East 52nd Street New York, NY 10055
|
|
21,396,293(4) |
|
|
10.24% |
| |||||
Common Stock |
State Street Corp. One Lincoln Street Boston, MA 02211 |
|
10,912,281(5) |
|
|
5.22% |
|
(1) | Based on |
(2) | The reporting person, and certain related entities, have shared voting power with respect to |
(3) | The reporting person, and certain related entities, |
(4) | The reporting person, and certain related entities, |
(5) | The reporting person, and certain related entities, has sole voting power with respect to 10,083,826 shares, no voting power with respect to 581,380 shares, shared voting power with respect to 247,075 shares, and shared investment power with respect to |
Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports
Section 16(a) of the Exchange Act requires our Directors, certain officers and 10 percent beneficial owners to report their ownership of shares and changes in such ownership to the SEC. Based on our records, we believe that, during Fiscal 2016,2019, all of such reporting persons complied with all Section 16(a) reporting requirements applicable to them. However, Mr. Jerry E. Sheridan wasMessrs. Jastrzebski and Perreault and Ms. Ann Kelly, the Company’s former Vice President, Chief Accounting Officer and Corporate Controller, were each inadvertently late in filing onea Form 4 relating to a grant of common stock option exercisepursuant to the Company’s Executive Annual Bonus Plan due to an administrative error.
ITEM 2 — ADVISORY VOTEON UGI CORPORATION’S EXECUTIVE COMPENSATION |
Pursuant to Section 14A of the Exchange Act, the Company is providing shareholders with the opportunity to cast an advisory,non-binding vote to approve the compensation of our named executive officers. The compensation of our named executive officers is disclosed under the headings “Compensation Discussion and Analysis” and “Compensation of Executive Officers” beginning on pages 2124 and 42,43, respectively, of this Proxy Statement. At the 20162019 Annual Meeting, over 96%92% of our shareholders voted to approve the compensation of our named executive officers.
We believe that the interests of our named executive officers and our shareholders are closely aligned. As described in the Compensation Discussion and Analysis, the compensation program for our named executive officers is designed to provide a competitive level of total compensation, to motivate and encourage our executive officers to contribute to the Company’s success and to effectively link our executives’ compensation to our financial performance and sustainable growth in shareholder value. The Compensation Discussion and Analysis also describes in detail the components of our executive compensation program and the process by which, and the reasons why, the independent members of our Board of Directors and our Compensation and Management Development Committee make executive compensation decisions.
In making executive compensation decisions, our Compensation and Management Development Committee seeks to implement and maintain sound compensation and corporate governance practices, which include the following:
Our Compensation and Management Development Committee is composed entirely of directors who are independent, as defined in the corporate governance listing standards of the New York Stock Exchange.
Our Compensation and Management Development Committee utilizes the services of Pay Governance LLC, an independent outside compensation consultant.
The Company allocates a substantial portion of compensation to performance-based compensation. In Fiscal 2016, 81%2019, 82% of the principal compensation components, in the case of Mr. Walsh, and 70%69% to 75%74% of the principal compensation components, in the case of all other named executive officers, were variable and tied to financial performance or TSR.
The Company awards a substantial portion of compensation in the form of long-term awards, namely stock options and performance units, so that executive officers’ interests are aligned with shareholders’ interests and long-term Company performance.
Annual bonus opportunities for the named executive officers are based on key financial metrics. Similarly, long-term incentives are based on UGI Corporation common stock values and relative stock price performance (or, in the case of Mr. Sheridan, performance relative to AmeriGas Partners common units and other key strategic goals).performance.
We require termination of employment for payment under our change in control agreements (referred to as a “double trigger”). In addition, beginning in January of 2015, we require a double trigger for the accelerated vesting of equity awards in the event of a change in control. WeNone of our named executive officers have not entered into change in control agreements providing for taxgross-up payments under Section 280G of the Internal Revenue Code since 2010.Code. See COMPENSATION OF EXECUTIVE OFFICERS — Potential Payments Upon Termination or Change in Control, beginning on page 52.58.
We have meaningful stock ownership and retention guidelines. See COMPENSATION OF EXECUTIVE OFFICERS — Stock Ownership Guidelines,and Retention Policy, beginning on page 41.
We have a recoupment policy for incentive-based compensation paid or awarded to current and former executive officers in the event of a restatement due to materialnon-compliance with financial reporting requirements.
We have a policy prohibiting the Company’s Directors and executive officers from (i) hedging the securities of UGI Corporation, and AmeriGas Partners, (ii) holding UGI Corporation and AmeriGas Partners securities in margin accounts as collateral for a margin loan, andand/or (iii) pledging the securities of UGI Corporation and AmeriGas Partners.Corporation. The Policy specifically prohibits hedging or monetization transactions through the use of prepaid variable forwards, equity swaps, collars and/or exchange funds.
This vote is advisory, which means that the vote on executive compensation is not binding on the Company, our Board of Directors or the Compensation and Management Development Committee. The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of our named executive officers. The Board of Directors and the Compensation and Management Development Committee expect to take into account the outcome of this vote when considering future executive compensation decisions and will evaluate whether any actions are necessary to address shareholders’ concerns, to the extent a significant number of our shareholders vote against our compensation program.
Accordingly, we ask our shareholders to vote on the following resolution at the Annual Meeting:
RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 ofRegulation S-K, including our Compensation Discussion and Analysis, compensation tables, and the related narrative discussion, is hereby APPROVED.
The Board of Directors of UGI Corporation unanimously recommends a vote FOR the approval of the compensation paid to our named executive officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables and the related narrative discussion in this Proxy Statement.
|
ITEM 3
|
Pursuant to Section 14A of the Exchange Act, as amended, the Company is providing shareholders with the opportunity to vote, on a non-binding, advisory basis, for their preference as to how frequently to cast future advisory votes on the compensation of our named executive officers. Shareholders may indicate whether they would prefer that the Company conduct future advisory votes on executive compensation once every one, two, or three years.
The Board of Directors of UGI Corporation has determined that an advisory vote on executive compensation that occurs every year is the most appropriate alternative for the Company and recommends that shareholders vote for a one-year interval for the advisory vote on executive compensation.
In determining to recommend that shareholders vote for a frequency of once every year, the Board of Directors considered that an annual advisory vote on executive compensation will allow for frequent input from our shareholders on our compensation philosophy, policies and practices, rather than infrequent feedback every two or three years. Similarly, any shareholder concerns about our executive compensation program can be expressed through a vote without having to wait two or three years. In addition, the Board of Directors considered survey data on our institutional shareholders’ preferences as to the frequency of the advisory vote to approve the named executive officers’ compensation.
The vote on the frequency of the advisory vote on executive compensation is advisory only. This means that the vote on executive compensation is not binding on the Company, the Board of Directors, or the Compensation and Management Development Committee. The Company recognizes that shareholders may have different views as to the best approach for the Company. The Board of Directors and the Compensation and Management Development Committee will take into account the outcome of the vote; however, when considering the frequency of future advisory votes on executive compensation, the Board of Directors may decide that it is in the best interests of our shareholders and the Company to hold an advisory vote on executive compensation more or less frequently than the frequency receiving the most votes cast by our shareholders. Also, in accordance with applicable law, shareholders will have the opportunity to recommend the frequency of future advisory votes on executive compensation at least once every six years.
Shareholders may cast a vote on the preferred voting frequency by selecting the option of one year, two years, or three years (or abstain) when voting in response to the following resolution:
RESOLVED, that the shareholders determine, on an advisory basis, whether the preferred frequency of an advisory vote on the executive compensation of the Company’s named executive officers should be every one year, every two years, or every three years.
The enclosed proxy card provides shareholders with the opportunity to choose among four options (holding the vote every one, two, or three years, or abstain from voting) and, therefore, shareholders will not be voting to approve or disapprove the recommendation of the Board of Directors.
|
REGISTERED PUBLIC ACCOUNTING FIRM |
The Audit Committee of the Board of Directors has appointed Ernst & Young LLP to serve as our independent registered public accounting firm to examine and report on the consolidated financial statements of the Company for Fiscal 2017the fiscal year ending September 30, 2020. The Sarbanes-Oxley Act of 2002 requires the Audit Committee to be directly responsible for the appointment, compensation and recommends thatoversight of the audit work of the independent registered public accounting firm. The Board of Directors is submitting the appointment of Ernst & Young LLP to the shareholders ratifyfor ratification as a matter of good corporate practice. Should the appointment. If shareholders do notfail to ratify the appointment of Ernst & Young LLP, the Audit Committee will consider the appointment of another independent registered public accounting firm. One or more representativesRepresentatives of Ernst & Young LLP willare expected to be present at the 2020 Annual Meeting. TheyThe representatives will have the opportunity to respond to appropriate questions and to make a statement if they wishso desire and will be available to do so.respond to appropriate questions from our shareholders.
The Board of Directors of UGI Corporation unanimously recommends a vote FOR this proposal.
|
ITEM |
The Board of Directors is not aware of any other matter to be presented for action at the meeting. If any other matter requiring a vote of shareholders should arise, the Proxies (or their substitutes) will vote in accordance with their best judgment.
DIRECTIONSTO THE DIESMONDNN HAOTELANDT CVONFERENCEILLANOVA UNIVERSITY
CENTER
Directions from Philadelphia. Take the Schuylkill Expressway (I-76) West. Follow I-76 West to Route 202 South. Take Route 202 South to the Great Valley/Route 29 North Exit.Exit 330 (Gulph Mills). At the endbottom of the exit ramp, proceed throughturn left followed by another immediate left. (Signs for 320 South). At the traffic light, make a left onto Rt. 320 South. Follow 320 South Gulph Mills Road for approximately 1 mile and turn right at the 3rd traffic light onto Liberty Boulevard.Matsonford Road. Proceed on Matsonford Road and turn left at the 1st traffic light onto County Line Road. The Desmond will beInn’s entrance is the 2nd entrance on the right.
Directions from South Jersey.Philadelphia Airport.TakeI-95 South to Route 322 West. Take 322 West to Route 1 South to Route 202 North. Take Route 202Rt. 476 North (Plymouth Meeting). Follow Rt. 476 North to Great Valley/Route 29 North Exit.Exit 13 (St. David’s/Villanova). At the endbottom of the exit ramp, proceed straight at the traffic light onto King of Prussia Road. Follow King of Prussia Road to the 2nd traffic light and turn right onto MatthewsMatsonford Road. TurnFollow Matsonford Road approximately 1 mile and turn right at the next3rd traffic light onto Morehall Road (Route 29 North). Turn right at second light onto Liberty Boulevard.County Line Road. The Desmond will be onInn is the left.
Directions from Philadelphia Airport. Take I-95 South to 476 North. Follow 476 North to the Schuylkill Expressway (I-76) West to Route 202 South. Take Route 202 South to the Great Valley/Route 29 North Exit. At the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be2nd entrance on the right.
Directions from Wilmington and Points South (Delaware and Maryland). Take I-95 North to Route 202476 North. Take Route 476 North to the Great Valley/Route 29 North Exit.Exit 13 (St. David’s/Villanova). At the endbottom of the ramp traffic light, proceed straight onto King of Prussia Road. Follow King of Prussia Road to the 2nd traffic light and turn rightRight onto MatthewsMatsonford Road. TurnFollow Matsonford Road approximately 1 mile and turn right at the next3rd traffic light onto Morehall Road (Route 29 North). Turn right atCounty Line Road. The Inn’s entrance is the second light onto Liberty Boulevard. The Desmond will be2nd entrance on the left.right.
Directions from New York and Points North. Take the New JerseyNJ Turnpike South to Exit 6, I-276,the Pennsylvania Turnpike connector.West. Follow until you see the Turnpike I-276 Westexits forI-476. Take 476 South to Exit 326, Valley Forge. Take13 (St. David’s/Villanova). At the firstbottom of the exit Route 202 Southramp, turn right onto Rt. 30 East Lancaster Avenue. At the 1st traffic light, turn left onto King of Prussia Road. At the 2nd traffic light, turn right onto Matsonford Road. Travel approximately 1 mile to the Great Valley/Route 29 North Exit. At3rd traffic light and turn right onto County Line Road. The Inn’s entrance is the end of the ramp, proceed through the light onto Liberty Boulevard. The Desmond will be2nd entrance on the right.
Directions from Harrisburg and Points West. Take the PennsylvaniaPA Turnpike East toI-76 East (Exit 326 -Valley Forge). FollowI-76 East to Exit 326, Valley Forge. Take Route 202 South to Great Valley/Route 29 North Exit.330 (Gulph Mills Road). At the endbottom of the exit ramp, proceed throughturn right onto Rt. 320 South. Turn right at the 3rd traffic light onto Liberty Boulevard.Matsonford Road. Proceed on Matsonford Road to the 1st traffic light and turn left onto County Line road. The Desmond will beInn’s entrance is the 2nd entrance on the right.
E-Z Pass Holders: Take the Pennsylvania Turnpike, I-76 to Exit 320, Malvern (Exit 320 is an electronic interchange for E-Z pass holders only). At the end of the ramp, turn left at the traffic light onto Morehall Road (Route 29 South) toward Malvern. Proceed on Morehall Road (Route 29 South) to the fourth traffic light at Liberty Boulevard. Turn left onto Liberty Boulevard and The Desmond will be on your left.
Your vote matters – here’s how to vote! | ||||||||||
You may vote online or by phone instead of mailing this card. | ||||||||||
Votes submitted electronically must be received by 8:00 am, Eastern Standard Time, on January 22, 2020 | ||||||||||
Online | ||||||||||
Go towww.envisionreports.com/UGI or scan the QR code – login details are located in the shaded bar below. | ||||||||||
Phone | ||||||||||
Call toll free1-800-652-VOTE (8683) within the USA, US territories and Canada | ||||||||||
Using ablack ink pen, mark your votes with anX as shown in this example. Please do not write outside the designated areas. | ☒ | Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/UGI |
UGI CORPORATION IMPORTANT ANNUAL MEETING INFORMATION 000004 ENDORSEMENT LINE SACKPACK MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 9:00 a.m., Eastern Standard Time, on January 24, 2017. Vote by Internet • Go to www.envisionreports.com/UGI • Or scan the QR code with your smartphone • Follow the steps outlined on the secure website Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. x • Follow the instructions provided by the recorded message Annual Meeting Proxy Card 1234 5678 9012 345q IF YOU HAVE NOT VOTED OVER THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. A Proposals — The Board recommends a vote q
A | Proposals – The Board of Directors recommend a voteFOR all the nominees listed andFOR Proposals 2 - 3. |
1. Election of Directors: | + | |||||||||||||||||||||||
For | Against | Abstain | For | Against | Abstain | For | Against | Abstain | ||||||||||||||||
01 - M. S. Bort | ☐ | ☐ | ☐ | 02 - T. A. Dosch | ☐ | ☐ | ☐ | 03 - A. N. Harris | ☐ | ☐ | ☐ | |||||||||||||
04 - F. S. Hermance | ☐ | ☐ | ☐ | 05 - W. J. Marrazzo | ☐ | ☐ | ☐ | 06 - K. A. Romano | ☐ | ☐ | ☐ | |||||||||||||
07 - M. O. Schlanger | ☐ | ☐ | ☐ | 08 - J. B. Stallings, Jr. | ☐ | ☐ | ☐ | 09 - K. R. Turner | ☐ | ☐ | ☐ | |||||||||||||
10 - J. L. Walsh | ☐ | ☐ | ☐ |
For | Against | Abstain | For | Against | Abstain | |||||||||
2. Proposal to approve resolution on executive compensation. | ☐ | ☐ | ☐ | 3. Proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm. | ☐ | ☐ | ☐ |
B | Authorized Signatures – This section must be completed for your vote to count. Please date and sign below. |
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. | ||||||||
Date (mm/dd/yyyy) – Please print date below. | Signature 1 – Please keep signature within the box. | Signature 2 – Please keep signature within the box. | ||||||
/ / |
1 U P X | + |
0359JC
Important notice regarding the nominees and FOR Proposals 2 and 4 andInternet availability of proxy materials for the optionAnnual Meeting of “1 YEAR” for Proposal 3. 1. Election of Directors: For Against Abstain For Against Abstain For Against Abstain + 01 - M.S. Bort 02 - R.W. Gochnauer 03 - F.S. Hermance 04 - A. Pol 05 - M.O. Schlanger 06 - J.B. Stallings, Jr. 07 - R.B. Vincent 08 - J.L. Walsh For Against Abstain 1 Year 2 Years 3 Years Abstain 2. Proposal to approve resolution on executive compensation. 3. Recommend the frequency of future advisory votes on executive compensation. 4. Proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm. B Non-Voting Items Change of Address — Please print new address below. Comments — Please print your comments below. C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. / / C 1234567890 J N T 1 U P X 2 9 5 3 8 0 1 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 02GK0B
The material is available at: www.envisionreports.com/UGI
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qIF YOU HAVE NOT VOTED OVER THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. UGI CORPORATION Proxy — UGI CORPORATION q
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF UGI CORPORATION
The undersigned hereby appoints Marvin O. Schlanger, Roger B. VincentFrank S. Hermance and John L. Walsh, and each of them, with power to act without the other and with power of substitution, as proxies andattorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of UGI Corporation Common Stock which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Shareholders of the Company to be held Wednesday, January 24, 201722, 2020, or at any adjournment thereof, with all powers which the undersigned would possess if present at the Meeting.
For the participants in the UGI Utilities, Inc. Savings Plan, the AmeriGas Propane, Inc. Savings Plan and the UGI HVAC Enterprises, Inc. Savings Plan (together, the “Plans”), this Proxy Card will constitute voting instructions to the Trustee under the Plans, as indicated by me on the reverse side, but, if I make no indication as to a particular matter, then as recommended by the Board of Directors on such matter, and in their discretion, upon such other matters as may properly come before the Meeting. The Trustee will keep my vote completely confidential. If the Trustee does not receive my executed Proxy by January 19, 2017, I understand the Trustee will vote the shares
Shares represented by this Proxy inproxy will be voted by the same proportionshareholder. If no such directions are indicated, the Proxies will have authority to vote FOR the election of the Board of Directors and FOR items2-3.
In their discretion, the Proxies are authorized to vote upon such other business as it votes those shares for which it does receive amay properly executed Proxy. (Continued, andcome before the meeting.
(Items to be marked, dated and signed,voted appear on the otherreverse side)
C | Non-Voting Items |
Change of Address – Please print new address below. | Comments – Please print your comments below. | Meeting Attendance | ||||||
Mark box to the right if you plan to attend the Annual Meeting. | ☐ |