| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On February 15, 2021, the Compensation, Nominating and Corporate Governance Committee (the “Committee”) of the Board of Directors (the “Board”) of Avangrid, Inc. (the “Corporation”) adopted the Corporation’s 2020 – 2022 Long-Term Incentive Plan (“LTIP”) pursuant to the Corporation’s Amended and Restated Omnibus Incentive Plan (the “Omnibus Incentive Plan”) approved by the shareholders of the Corporation. The LTIP is designed to align the interests of executives and key employees with the Corporation’s shareholders and motivate sustained performance over the long term by promoting the achievement of the Corporation’s key strategic business, environmental, social and governance goals. Under the LTIP, performance stock units are earned at the end of the two-year performance period measured from January 1, 2021 through December 31, 2022 to the extent that the Corporation has met the performance objectives established by Committee. Earned performance stock units are then paid in the Corporation’s common shares over an additional three-year retention period, provided the grantee remains employed by the Corporation or any affiliate through the applicable payment date or is separated from service due to death, disability or retirement.
The Corporation’s performance will be assessed on the basis of the following financial, business and sustainable development performance objectives:
| | | | | | | | |
Weight | | Objective | | Threshold (0%) | | Target (50%) | | Maximum (100%) |
| 35% | | Adjusted Net Income | | $731M | | $877M | | $1.023B |
| | | | |
| 35% | | Relative total shareholder return compared to peers within the S&P Utility Index | | Less than 25th percentile | | 50th percentile | | 75th percentile or greater |
| | | | |
| 30% | | Major sustainable project investment milestones, supply chain improvements, and diversity training | | Zero Achievements | | Two Achievements | | Four Achievements |
A summary of all outstanding performance stock unit grants made under the LTIP to certain executive officers of the Corporation including the following “named executive officers” as defined in Item 402 of Regulation S-K under the Securities Act of 1933, as amended (“NEOs”), is as follows:
| | | | |
Name | | Performance Share
Units | |
Dennis V. Arriola | | | 250,000 | |
Robert D. Kump | | | 83,000 | |
Douglas Stuver | | | 45,000 | |
R. Scott Mahoney | | | 42,000 | |
The Committee also adopted a form of performance stock unit award agreement for awards under the LTIP, a copy of which will be filed by the Corporation as an exhibit to its quarterly report on Form 10-Q for the quarterly period ending March 31, 2021.
Additionally, on February 16, 2021, the Board, upon recommendation by the Committee, approved an amendment to the Avangrid, Inc. Amended and Restated Omnibus Incentive Plan (the “Plan”), subject to shareholder approval, to increase the maximum aggregate number of shares of the Corporation’s common stock that may be granted to any one person during any fiscal year from 250,000 to 300,000. The amendment to the Plan will become effective upon shareholder approval. The foregoing description is only a summary of the amendment to the Plan and does not purport to be complete and is qualified in its entirety by reference to the provisions in such Plan, as amended, a copy of which will be filed by the Corporation as an exhibit to its quarterly report on Form 10-Q for the quarterly period ending March 31, 2021.
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