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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NorthWestern Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)



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This proxy statement contains information related to the solicitation of proxies by the Board of Directors (the Board) of NorthWestern Corporation d/b/a NorthWestern Energy (NorthWestern, the company, we, us, or our) in connection with our ~~2017~~2020 Annual Meeting of Shareholders. See the Proxy Statement Glossary on the inside back cover for additional definitions used in this proxy statement.




	IMPORTANT VOTING INFORMATION If you owned shares of NorthWestern Corporation common stock at the close of business on February ~~27, 2017~~24, 2020 (the Record Date), you are entitled to one vote per share upon each matter presented at the annual meeting of shareholders to be held on April ~~27, 2017.~~23, 2020. Shareholders whose shares are held in an account at a brokerage firm, bank, or other nominee ~~(i.e.~~(i.e., in “street name”) will need to obtain a proxy from the broker, bank, or other nominee that holds their shares authorizing them to vote at the annual meeting. Your broker is not permitted to vote on your behalf on the election of directors and other matters to be considered at this shareholders meeting, except on the ratification of our appointment of Deloitte & Touche LLP as our independent registered public accounting firm for ~~2017,~~2020, unless you provide specific instructions by completing and returning the voting instruction form or following the instructions provided to you to vote your shares via telephone or the internet. For your vote to be counted, you will need to communicate your voting decisions to your broker, bank, or other financial institution before the date of the annual meeting. YOUR VOTE IS IMPORTANT Your vote is important. Our Board strongly encourages you to exercise your right to vote. Voting early helps ensure that we receive a quorum of shares necessary to hold the annual meeting. ASSISTANCE If you have any questions about the proxy voting process, please contact the broker, bank, or other financial institution where you hold your shares. The Securities and Exchange Commission also has a website (www.sec.gov/spotlight/proxymatters.shtml) with more information about your rights as a shareholder. You also may contact our Investor Relations Department by phone at (605) 978-2945 or by email at investor.relations@northwestern.com.

	IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL ~~27, 2017~~23, 2020 The Notice of Annual Meeting, Proxy Statement, and ~~2016~~2019 Annual Report to Shareholders are available on the internet at www.proxyvote.com.

	ATTENDING THE ANNUAL MEETING IN PERSON OR BY WEBCAST Only shareholders of record or their legal proxy holders as of the record date or our invited guests may attend the annual meeting in person. If you wish to attend the annual meeting and your shares are held in street name at a brokerage firm, bank, or other nominee, you will need to bring your notice or a copy of your brokerage statement or other documentation reflecting your stock ownership as of the record date. You may be asked to provide photo identification, such as a driver’s license. The annual meeting will be webcast (audio and slides) simultaneously with the meeting. You may access the webcast from our website at NorthWesternEnergy.com under Our Company / Investor Relations / Presentations and Webcasts. A replay of the webcast will be available at the same location on our website through April ~~27, 2018.~~23, 2021.



	Notice of ~~2017~~2020 Annual Meeting and Proxy Statement March ~~16, 2017~~6, 2020 Dear Fellow NorthWestern Corporation Shareholder: You are cordially invited to attend the ~~2017~~2020 Annual Meeting of Shareholders to be held on ~~Wednesday,~~Thursday, April ~~27, 2017,~~23, 2020, at 10:00 a.m. ~~Central~~Mountain Daylight Time at the ~~NorthWestern Energy South Dakota / Nebraska Operational Support Office, 600 Market Street SW, Huron, South Dakota.~~Big Horn Hotel, 1801 Majestic Lane, Billings, Montana. At the meeting, shareholders will be asked to elect the Board of Directors, to ratify the appointment of our independent registered public accounting firm for ~~2017,~~2020, to hold an advisory “say-on-pay” vote on the compensation of our named executive officers ~~to hold an advisory vote on how frequently to conduct the “say-on-pay” vote,~~ and to transact any other matters and business as may properly come before the annual meeting or any postponement or adjournment of the annual meeting. The proxy statement included with this letter provides you with information about the annual meeting and the business to be conducted. YOUR VOTE IS IMPORTANT. We urge you to read this proxy statement carefully. Whether or not you plan to attend the annual meeting in person, we ~~urge~~encourage you to vote promptly through the internet, by telephone, or by mail. If you are unable to attend our annual meeting in person, we are pleased to offer an audio webcast of the meeting. The webcast can be accessed live on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Presentations and Webcasts, or you can listen to a replay of the webcast, which will be archived on our website at the above location for one year after the meeting. Thank you for your continued support of NorthWestern Corporation.
		Very truly yours,

		Robert C. Rowe President and Chief Executive Officer
3010 West 69th Street\|Sioux Falls, SD 57108 NorthWesternEnergy.com




Table of Contents

Annual Meeting Notice		1
Proxy Summary		2
	~~2016~~2019 Executive Pay Overview	2
	~~2016~~2019 Corporate Governance Overview	3
~~Items of Business to Be Consider at the Annual Meeting~~		4
	~~Proposal 1 – Election of Directors~~Environmental Stewardship	4
	Social Initiatives	5
Items of Business to Be Considered at the Annual Meeting		6
	Proposal 1 – Election of Directors	6
	Proposal 2 – Ratification of Deloitte & Touche LLP as the Independent Registered Public Accounting Firm for ~~2017~~2020	6	8
	Proposal 3 – Advisory Vote to Approve Named Executive Officer Compensation	8 9
Executive Pay		11
	~~Proposal 4 – Advisory Vote on the Frequency of the Advisory Votes on Executive~~ Compensation Discussion and Analysis	10
~~Executive Pay~~		11
	Compensation ~~Discussion and Analysis~~Committee Report	11	32
	~~Compensation Committee Report~~2019 Executive Pay	32	33
	~~2016 Executive~~2019 Director Pay ~~(2016 Summary Compensation Table)~~	33 41
Audit Committee Report		42
Corporate Governance		43
	~~2016 Director Pay~~ Board of Directors	41
~~Corporate Governance~~		42	44
	Board ~~of Directors~~Diversity	43	45
	~~Board Diversity~~ Individual Directors	44	46
	~~Individual Directors~~ Board Independence	45	52
	Board ~~Independence~~Committees	49	53
	~~Board Committees~~ Other Governance Practices	50 57
Stock Information		59
	~~Other Governance Practices~~ Who Owns Our Stock	55
~~Stock Information~~		57	59
	~~Who Owns Our~~ Stock for Compensation Plans	57 61
Annual Meeting Information		62
	~~Stock for Compensation Plans~~ Voting Procedures	59
~~Audit Committee Report~~		60
~~Annual Meeting Information~~		61	62
	~~Voting Procedures~~	61
	General Information	63	64
Proxy Statement Glossary(inside back cover)

Notice

~~2017~~2020 Annual Meeting of Shareholders

Shareholders owning NorthWestern Corporation common stock at the close of business on February 24, 2020, the record date, or their legal proxy holders, are entitled to vote at the annual meeting. Only our shareholders, their legal proxy holders as of the record date, or our invited guests may attend the annual meeting in person. The annual meeting will be webcast (audio and slides) simultaneously with the meeting.




	Meeting Date:	April ~~27, 2017~~23, 2020
	Meeting Time:	10:00 a.m. ~~Central~~Mountain Daylight Time
	Location:	~~NorthWestern Energy~~ ~~South Dakota / Nebraska Operational Support Office~~
		~~600 Market Street SW~~ ~~Huron, South Dakota~~ Big Horn Hotel, 1801 Majestic Lane, Billings, Montana
	Record Date:	February ~~27, 2017~~24, 2020

Annual Meeting Business:

On or about March ~~16, 2017,~~6, 2020, we mailed to our shareholders either (1) a Notice of Internet Availability of Proxy Materials, which indicates how to access our proxy materials on the internet, or (2) a copy of our proxy statement, a proxy card, and our ~~2016~~2019 Annual Report.

Board
Recommendation
Proposal Page
1 Election of nine directors
FOR each director nominee 4
2 Approval of Deloitte & Touche LLP as the Independent Registered Accounting Firm for 2017
FOR 6
3 Advisory Vote to Approve Named Executive Officer Compensation
FOR 8
4 Advisory Vote on the Frequency of the Advisory Votes on Executive Compensation
every 1 YEAR 10



		Board Recommendation
Proposal		Board Recommendation		Page
1	Election of Directors		FOR each director nominee	6
2	Ratification of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for 2020		FOR	8
3	Advisory Vote to Approve Named Executive Officer Compensation		FOR	9

By Order of the Board of Directors,

Timothy P. Olson

Corporate Secretary

Proxy Summary
Items of Business to Be Considered at the Annual Meeting

Proposal Board
Recommendation Page

1 Election of nine directors
FOR each director nominee 4
2
Approval of Deloitte & Touche LLP as the Independent Registered
Accounting Firm for 2017
FOR 6
3 Advisory Vote to Approve Named Executive Officer Compensation
FOR 8
4
Advisory Vote on the Frequency of the Advisory Votes on
Executive Compensation
every 1 YEAR 10

2016 Executive Pay Overview
Alignment of Pay with Shareholder and Customer Interests
Our executive pay program is designed to align the long-term interests of our executives, shareholders, and customers. About 77 percent of the compensation of our chief executive officer, or CEO, and about 58 percent of the compensation of our other named executive officers is at risk in the form of performance-based incentive awards that use Board-established metrics and targets, based upon advice from the Board’s independent compensation consultant. The performance metrics did not change from the prior year. We also require our executives to retain meaningful ownership of our stock. This structure encourages our executives to focus on short- and long-term performance and provides a reward to our executives, shareholders, and customers when we achieve our financial and operating objectives. Our CEO to median employee pay ratio for 2016 was 22:1.

Executive Pay Components at a Glance
Percent of Total Compensation
Component Description CEO Other NEO Avg. Changes in 2016

Base Salary
Fixed, paid in cash
Target middle of competitive range of peer group, with adjustments for trade area economics, turnover, tenure, and experience 23% 42% Executives received three percent cost of living adjustment provided to all employees

Annual Cash Incentive
Variable, paid in cash
Based on net income, safety, reliability, and customer satisfaction metrics and individual performance 19% 18% No change to performance metrics in 2016; performance targets updated to encourage improvement over prior year

Long-Term Incentive Program Awards
Variable, paid in equity
Based on earnings per share, return on average equity and relative total shareholder return performance over a three-year vesting period 46% 31% Increased target opportunity for three executives to align with market median; no change to performance metrics; performance targets updated

Executive Retention / Retirement Program Awards
Variable, paid in equity
Based on net income performance over a five-year vesting period; paid over five-year period following separation from service 12% 9% No change in 2016



3010 West 69th Street\|Sioux Falls, SD 57108			NorthWesternEnergy.com

Proxy Summary

Performance Against Incentive Targets
In 2016, we managed our business through warmer than average winter weather and achieved all-time high safety performance and customer satisfaction, while providing shareholders a 45.7 percent return for the three‑year period ending December 31, 2016. As a result, we achieved above target performance for our 2016 incentive awards.

2016 Annual Cash Incentive Outcome 2014 Long-Term Incentive Program Vesting

Financial (55%) – % of Target Achieved
112 %
ROAE / Avg. Net Inc. Growth – % of Target Achieved
157 %

Safety (15%) – % of Target Achieved
150 %
Relative TSR – % of Target Achieved
60 %

Reliability (15%) – % of Target Achieved
123 % Total Payout to Participants* 108 %

Customer Sat. (15%) – % of Target Achieved
73 %
Total Funding 113 % * Each component weighted 50% for total payout

Shareholder Feedback on Executive Pay
At our 2016 annual meeting, our 2015 named executive officer pay program was approved by 99.2 percent of the votes cast. In light of the overwhelming approval from our shareholders, we have not changed the overall structure of our named executive officer pay program for 2016. We continue to use the same executive pay components and operate within the parameters previously approved by our shareholders.
2016 Corporate Governance Overview
Our Board has nominated nine individuals for election – seven current members and two new candidates, Ms. Britt E. Ide (director and interim CEO of Big Sky Chamber of Commerce) and Ms. Linda G. Sullivan (chief financial officer for American Water). We list all nominees on the following page in Proposal No. 1—Election of Directors.
Last year, shareholders elected six of our current director nominees by at least 99.7 percent of the votes cast. Another current director nominee, Mr. Anthony T. Clark (former FERC commissioner), joined our Board in December 2016, following the April 2016 retirement of director Denton Louis Peoples. Our eighth current Board member, Ms. Dorothy M. Bradley announced in February 2017 that she would not be seeking re-election.
Each of our Board members and nominees is independent, with the sole exception of our CEO. Our Board is led by an independent chair, and our three Board committees – Audit; Compensation; and Governance – are chaired by and composed entirely of independent directors. In addition, diversity is important to our Board, as reflected in the graphs below regarding our slate of nominees.
In 2016, our Board doubled the amount of stock that they are required to hold under our stock ownership guidelines, increasing the guidelines to ten times (from five times) the annual cash Board and committee chair retainers. Other than that change, we made no material changes to our corporate governance practices in 2016.

Diverse Slate of Director Nominees

Proxy Summary

Items of Business to Be Considered

at the Annual Meeting

Proposal

Board
Recommendation

Page

Election of Directors

FOR each director nominee

Ratification of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for 2020

FOR

Advisory Vote to Approve Named Executive Officer Compensation

FOR

2019 Executive Pay Overview

Alignment of Pay with Shareholder and Customer Interests

Our executive pay program is designed to align the long-term interests of our executives, shareholders, and customers. Approximately 78 percent of the compensation of our CEO and about 60 percent of the compensation of our other named executive officers is at risk in the form of performance-based incentive awards. Our Board establishes the metrics and targets for these incentive awards, based upon advice from the Board’s independent compensation consultant. The 2019 performance metrics did not change from 2018. We also require our executives to retain meaningful ownership of our stock (from 2x to 6x their annual base salary). This structure encourages our executives to focus on short- and long-term performance and provides a reward to our executives, shareholders, and customers when we achieve our financial and operating objectives. Our CEO to median employee pay ratio for 2019 was 27:1.

Executive Pay Components at a Glance

Percent of Total Compensation

Component

Description

CEO

Other NEO Avg.

Changes in 2019

Base Salary
Fixed, paid in cash

Target middle of competitive range of peer group, with adjustments for trade area economics, turnover, tenure, and experience

22%

40%

Named executive officers received a 3 percent cost of living adjustment provided to some employees; one named executive officer received an additional increase to remain market competitive

Annual Cash Incentive
Variable, paid in cash

Based on net income, safety, reliability, and customer satisfaction metrics and individual performance

22%

20%

Increased target opportunity for two executives to align with market median; updated performance targets

Long-Term Incentive Program Awards
Variable, paid in equity

Based on earnings per share, return on average equity and relative total shareholder return performance over a three-year vesting period

43%

32%

Updated performance targets

Executive Retention / Retirement Program Awards
Variable, paid in equity

Based on net income performance over a five-year vesting period; paid over five-year period following separation from service

13%

None

~~Items of Business~~Proxy Summary

NorthWestern Energy | Proxy Statement | Page 52

Corporate Governance


3.	~~The policies or procedures~~ Determination of ~~Willis Towers Watson that~~Independence and Family Relationships All of our directors are ~~designed to prevent conflicts of interest.~~


4.	~~Any business or personal relationship of a member of the Compensation Committee~~independent, with the ~~regular members~~sole exception of ~~the Willis Towers Watson executive compensation team serving the company.~~

~~Any stock~~our CEO. A director is considered independent if he or she qualifies as “independent” under (1) NYSE standards and any applicable laws and (2) he or she (a) has never been an employee of the company ~~owned by the regular members~~or any of its subsidiaries, (b) is not a close relative of any management employee of the ~~Willis Towers Watson~~company, (c) provides no services to the company, and is not employed by any firm providing major services to the company, other than as a director, and (d) receives no compensation from the company other than director fees and benefits. The Board’s determination of independence is based upon a review of the questionnaires submitted on an annual basis by each director, the company’s relevant business records, publicly available information and the applicable SEC and NYSE requirements.

Based on its review, the Board determined that all of the non-employee directors (Messrs. Adik, Clark, Dykhouse, Horsfall, and Yingling and Mses. Ide, Johnson, Sullivan, and Yazdi) are independent as defined in the listing standards noted above. Our final director, Mr. Rowe, is an executive ~~compensation team serving the company.~~

~~Any business or personal relationships between the executive officers~~officer of the company and, therefore, is not independent.

In addition to the ~~regular~~independence assessment of our current directors, our Board reviewed the family relationships of our current directors and executive officers to determine the existence of any family relationships not more remote than first cousins. Based on this review, our Board determined that no such family relationships exist, except current directors Dana J. Dykhouse and Jan R. Horsfall are first cousins.

Board Committees



We have four Board committees composed solely of independent directors, each with a different independent director serving as chairperson of the committee. Our Board committees are: ● Audit Committee; ● Human Resources Committee (Compensation Committee); ● Nominating and Governance Committee; and ● Safety, Environment, Technology and Operations Committee (Operations).		COMMITTEES 100% INDEPENDENT

Our Board holds its committee meetings sequentially (i.e., committee meetings do not overlap with one another). As a result of holding sequential meetings, each of our Board members is able to attend each committee meeting. We believe this practice is highly beneficial to our Board as a whole and the company in general because each of our Board members is aware of the ~~Willis Towers Watson executive compensation team serving the company.~~

The Compensation Committee also obtained a representation letter from Willis Towers Watson addressing these six factors and certain other matters related to its independence. Based on the Compensation Committee’s evaluation of these factors and the representations from Willis Towers Watson, the Compensation Committee concluded that Willis Towers Watson is an independent adviser and has no conflicts of interest with us.

~~Governance Committee~~

~~Primary Responsibilities~~

~~Our Governance and Innovation Committee (Governance Committee) assists the~~detailed work conducted by each Board ~~in:~~

●~~Identifying qualified individuals to become~~committee. This practice also affords each of our Board members ~~including succession planning regarding current Board members;~~the opportunity to provide input to the committee members before a committee reaches any conclusions.

●~~Determining the composition of the Board and its committees;~~




Audit Committee
Audit Committee			Primary Responsibilities Our Audit Committee assists the Board with oversight of: ●~~Monitoring a process to assess Board effectiveness;~~The company’s accounting and financial reporting processes; ●The audit and integrity of the company’s financial statements; ●The company’s compliance with legal and regulatory requirements; ●The independent auditor’s qualifications and independence; ●The performance of the company’s internal audit function and independent auditors; ●The preparation of the Audit Committee Report for the company’s proxy statement; ●Significant financings and dividend policy and dividend payment recommendations; ● The company’s key business, financial and regulatory risks; and ●Such other duties as directed by the Board.

	5	Meetings in 2019

	Members
	Linda G. Sullivan (Chair)
	Dana J. Dykhouse
	Jan R. Horsfall
	Jeffrey W. Yingling

			(continued on next page)

●~~Developing and implementing corporate governance principles; and~~

●~~Overseeing the company’s efforts concerning innovation, including emerging or competing technologies and alternative energy resources.~~

Further, the Governance Committee reviews and oversees our position on corporate social responsibilities, such as environmental and public policy issues that significantly affect us, our shareholders, our customers and our other key stakeholders.

NorthWestern Energy | Proxy Statement | Page 53

Corporate Governance

~~Independence~~

~~Each member of our Governance Committee meets the independence requirements under the NYSE corporate governance listing standards.~~

~~Governance and Innovation Committee Charter~~

~~The Governance and Innovation Committee operates pursuant to a charter that is reviewed annually and was last amended in October 2016.~~




						Financial Expertise, Financial Literacy, and Independence The Board determined that each member of the Audit Committee is financially literate within the meaning of NYSE listing standards and is independent, as defined in the listing standards of the NYSE and the SEC regulations. The Board also determined that Ms. Sullivan qualifies as an audit committee financial expert under the applicable SEC regulations. Audit Committee Report The Audit Committee Report is included on page 42 of this proxy statement. Audit Committee Charter The Audit Committee operates pursuant to a charter that is reviewed annually and was last amended in October 2019. The Charter is available on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Corporate Governance.
	“The Audit Committee encourages broad attendance and participation by management at its meetings. In addition, at each meeting, the Committee conducts private and separate executive sessions with the company’s chief audit and compliance officer, company management, external auditors and the Board and Committee itself. This permits direct and candid communication.” Linda G. Sullivan, Audit Committee Chair



	5	~~Meetings in 2016~~
Governance Committee
Governance Committee			Primary Responsibilities Our Nominating and Governance Committee (Governance Committee) assists the Board in: ●Identifying qualified individuals to become Board members, including recommending nominees for the Board and succession planning regarding current Board members; ●Determining the composition of the Board and its committees; ●Monitoring a process to assess Board effectiveness; and ●Developing and implementing corporate governance principles. The Governance Committee also reviews and oversees our position on corporate social responsibilities, such as public policy issues that significantly affect us, and our shareholders, customers, and other key stakeholders. Independence Each member of our Governance Committee meets the independence requirements under the NYSE corporate governance listing standards. Nominating and Governance Committee Charter The Nominating and Governance Committee operates pursuant to a charter that is reviewed annually and was last amended in November 2017. The Charter is available on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Corporate Governance.

	5	Meetings in 2019

	Members
	Julia L. Johnson (Chair)
	Anthony T. Clark
	Britt E. Ide
	Jeffrey W. Yingling

	“Corporate governance is emphasized at NorthWestern. We believe strong governance leads to investor confidence in the company and are proud of the national recognition our governance practices have received.” Julia L. Johnson, Governance Committee Chair

NorthWestern Energy | Proxy Statement | Page 54

Corporate Governance


							~~Members~~
	~~Julia L. Johnson~~ ~~(Chair)~~
	~~Dorothy M. Bradley~~
	~~Anthony T. Clark~~
	~~Jan R. Horsfall~~

	“Corporate governance is emphasized at NorthWestern. We believe strong governance leads to investor confidence in the company and are proud of the national recognition our governance practices have received.” ~~Julia L. Johnson,~~ ~~Governance~~ ~~Committee Chair~~

~~Director Candidate Evaluation~~

Our Governance Committee evaluates each director candidate to determine whether the Board should recommend such candidate as a director nominee. In considering new individuals for nomination as directors, the Governance Committee typically solicits recommendations from its current directors and is authorized to engage third-party advisers, including search firms, to assist in the identification and evaluation of candidates, if necessary.

Our goal is to maintain a diverse Board that operates cohesively and challenges management in a constructive way. The Governance Committee has not established specific minimum qualifications for director nominees or set forth specific qualities or skills that the committee believes are necessary for one or more directors to possess. Instead, in considering director candidates, the Governance Committee considers the diversity of our Board and takes into account whether the Board as a whole has the skills, experience, and background that add to and complement the



52
Compensation Committee

Primary Responsibilities

Our Human Resources Committee (Compensation Committee) acts on behalf of and with the concurrence of the Board with respect to:

●Compensation, benefits and other employment matters for executives;

●Stock-based compensation plans for employees;

●The election and appointment of executive officers and other officers;

●The assessment of the performance of the CEO;

● Succession planning for the CEO, executives and other officers; and

●The compensation of non-employee members of the Board.

As discussed in the Compensation Discussion and Analysis section of this proxy statement, the Compensation Committee also considers input on executive compensation from our CEO and CFO.

Our Compensation Committee has delegated some of the administration of our executive compensation and benefits plans to our Compensation and Benefits Department.

Independence

Each member of our Compensation Committee is an “outside director” as formerly defined under Section 162(m) of the Internal Revenue Code, a “non-employee” director within the meaning of Rule 16b-3 under the Exchange Act, and independent under the standards of the NYSE.

Compensation Committee Report

The Compensation Committee Report is included at page 32 of this proxy statement.

~~Corporate Governance~~

range of skills, experience, and background of each director, based on the following: integrity, accomplishments, business judgment, experience and education, commitment, representation of shareholders, industry knowledge, independence, and financial literacy. With the exception of the company’s CEO, all of our directors are independent, as required by our Corporate Governance Guidelines.

When nominating persons to serve on our Board, the Governance Committee considers individuals who can add value to the strategic policymaking and oversight responsibilities of the Board. A director’s ability and available time to contribute to the Board and his or her participation on other boards also are considered because we believe these are important factors that enhance the quality of the Board’s decision-making, its oversight of management, and our business overall. The Governance Committee believes that the nominees for election at this year’s annual meeting collectively possess the experience, skills, and attributes necessary to lead the company to a long and successful future.

Our Governance Committee also has the responsibility for considering nominees for directors properly recommended by shareholders. A shareholder who wishes to submit a candidate for consideration at the annual meeting of shareholders must notify our Corporate Secretary in writing not less than 90 days and no more than 120 days prior to the first anniversary date of the preceding year’s annual meeting. The shareholder’s written notice must include information about each proposed nominee, including name, age, business address, principal occupation and other information required in proxy solicitations. The nomination notice also must include the nominating shareholder’s name and address, the number of shares of our common stock beneficially owned by the shareholder and any arrangements or understandings between the nominee and the shareholder. The shareholder also must furnish a statement from the nominee indicating that the nominee wishes and is able to serve as a director.

The manner in which the Governance Committee evaluates candidates recommended by shareholders is generally the same as candidates from other sources. However, the Governance Committee also will seek and consider information concerning the relationship between the recommending shareholder and the candidate to determine if the candidate can represent the interests of all of the shareholders. The Governance Committee will not evaluate a candidate recommended by a shareholder unless the shareholder notice states that the potential candidate has indicated a willingness to serve as a director, to comply with the expectations and requirements for Board service publicly disclosed by NorthWestern and to provide all of the information required to conduct an evaluation.

Director Resignation Vote Policy

The Board has in place a Majority Plus Resignation Vote Policy for the election of directors. The policy provides that, in an uncontested election, any nominee for director who receives a greater number of “WITHHOLD AUTHORITY” votes from his or her election than votes “FOR” such election (or a Majority Withheld Vote) shall promptly offer his or her resignation following certification of the shareholder vote.

Under this policy, the Governance Committee shall promptly make a recommendation to the Board regarding the resignation offer and possible responses based on the circumstances that led to the Majority Withheld Vote, if known. The Board must act on the Governance Committee’s recommendation within 90 days following certification of the shareholder vote. Thereafter, the Board will promptly disclose its decision-making process and decision regarding whether to accept the director’s resignation offer (or the reason(s) for rejecting the resignation offer, if applicable) in a Current Report on Form 8-K.

Any director who tenders his or her resignation pursuant to this policy shall not participate in the Governance Committee’s recommendation or Board action regarding whether to accept the resignation offer. However, if each member of the Governance Committee receives a Majority Withheld Vote at the same election, then the independent directors who did not receive a Majority Withheld Vote shall appoint a committee among themselves to consider the resignation offers and recommend to the Board whether to accept them. If the only directors who did not receive a Majority Withheld Vote in the same election constitute three or fewer directors, all directors may participate in the action regarding whether to accept the resignation offers, with each director recusing himself or herself from consideration of his or her resignation offer.

Board Independence

Independent Board Chair

Our Board has placed the responsibilities of Chair with an independent member of the Board. We believe this provides optimum accountability between the Board and our management team. We believe it is beneficial to have an independent Chair whose sole responsibility is leading our Board members as they provide leadership to our executive team.

Our Chair is responsible for providing leadership to the Board and facilitating communication among the directors; setting the Board meeting agendas in consultation with the CEO; presiding at Board meetings, executive sessions and shareholder meetings; and serving as an ex-officio member of each Board committee. This delineation of duties allows the CEO to focus his attention on managing the day-to-day business of the company. We believe this structure provides strong leadership for our Board, while positioning our CEO as the leader of the company in the eyes of our customers, employees, and other stakeholders.

Each regularly scheduled Board and committee meeting provides the opportunity for executive sessions of the non-employee directors without management in attendance. These executive sessions are chaired by our Board Chair or the independent Chair of the respective committee.

NorthWestern Energy | Proxy Statement | Page 52

Corporate Governance

Determination of Independence and Family Relationships

All of our directors are independent, with the sole exception of our CEO. A director is considered independent if he or she qualifies as “independent” under (1) NYSE standards and any applicable laws and (2) he or she (a) has never been an employee of the company or any of its subsidiaries, (b) is not a close relative of any management employee of the company, (c) provides no services to the company, and is not employed by any firm providing major services to the company, other than as a director, and (d) receives no compensation from the company other than director fees and benefits. The Board’s determination of independence is based upon a review of the questionnaires submitted on an annual basis by each director, the company’s relevant business records, publicly available information and the applicable SEC and NYSE requirements.

In addition to the independence assessment of our current directors, our Board reviewed the family relationships of our current directors and executive officers to determine the existence of any family relationships not more remote than first cousins. Based on this review, our Board determined that no such family relationships exist, except current directors Dana J. Dykhouse and Jan R. Horsfall are first cousins.

Board Committees



We have four Board committees composed solely of independent directors, each with a different independent director serving as chairperson of the committee. Our Board committees are: ● Audit Committee; ● Human Resources Committee (Compensation Committee); ● Nominating and Governance Committee; and ● Safety, Environment, Technology and Operations Committee (Operations).		COMMITTEES 100% INDEPENDENT

Our Board holds its committee meetings sequentially (i.e., committee meetings do not overlap with one another). As a result of holding sequential meetings, each of our Board members is able to attend each committee meeting. We believe this practice is highly beneficial to our Board as a whole and the company in general because each of our Board members is aware of the detailed work conducted by each Board committee. This practice also affords each of our Board members the opportunity to provide input to the committee members before a committee reaches any conclusions.




Audit Committee
Audit Committee			Primary Responsibilities Our Audit Committee assists the Board with oversight of: ●The company’s accounting and financial reporting processes; ●The audit and integrity of the company’s financial statements; ●The company’s compliance with legal and regulatory requirements; ●The independent auditor’s qualifications and independence; ●The performance of the company’s internal audit function and independent auditors; ●The preparation of the Audit Committee Report for the company’s proxy statement; ●Significant financings and dividend policy and dividend payment recommendations; ● The company’s key business, financial and regulatory risks; and ●Such other duties as directed by the Board.

	5	Meetings in 2019

	Members
	Linda G. Sullivan (Chair)
	Dana J. Dykhouse
	Jan R. Horsfall
	Jeffrey W. Yingling

			(continued on next page)

NorthWestern Energy | Proxy Statement | Page 53

Corporate Governance




						Financial Expertise, Financial Literacy, and Independence The Board determined that each member of the Audit Committee is financially literate within the meaning of NYSE listing standards and is independent, as defined in the listing standards of the NYSE and the SEC regulations. The Board also determined that Ms. Sullivan qualifies as an audit committee financial expert under the applicable SEC regulations. Audit Committee Report The Audit Committee Report is included on page 42 of this proxy statement. Audit Committee Charter The Audit Committee operates pursuant to a charter that is reviewed annually and was last amended in October 2019. The Charter is available on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Corporate Governance.
	“The Audit Committee encourages broad attendance and participation by management at its meetings. In addition, at each meeting, the Committee conducts private and separate executive sessions with the company’s chief audit and compliance officer, company management, external auditors and the Board and Committee itself. This permits direct and candid communication.” Linda G. Sullivan, Audit Committee Chair




Governance Committee
Governance Committee			Primary Responsibilities Our Nominating and Governance Committee (Governance Committee) assists the Board in: ●Identifying qualified individuals to become Board members, including recommending nominees for the Board and succession planning regarding current Board members; ●Determining the composition of the Board and its committees; ●Monitoring a process to assess Board effectiveness; and ●Developing and implementing corporate governance principles. The Governance Committee also reviews and oversees our position on corporate social responsibilities, such as public policy issues that significantly affect us, and our shareholders, customers, and other key stakeholders. Independence Each member of our Governance Committee meets the independence requirements under the NYSE corporate governance listing standards. Nominating and Governance Committee Charter The Nominating and Governance Committee operates pursuant to a charter that is reviewed annually and was last amended in November 2017. The Charter is available on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Corporate Governance.

	5	Meetings in 2019

	Members
	Julia L. Johnson (Chair)
	Anthony T. Clark
	Britt E. Ide
	Jeffrey W. Yingling

	“Corporate governance is emphasized at NorthWestern. We believe strong governance leads to investor confidence in the company and are proud of the national recognition our governance practices have received.” Julia L. Johnson, Governance Committee Chair

NorthWestern Energy | Proxy Statement | Page 54

Corporate Governance




Compensation Committee
Compensation Committee			Primary Responsibilities Our Human Resources Committee (Compensation Committee) acts on behalf of and with the concurrence of the Board with respect to: ●Compensation, benefits and other employment matters for executives; ●Stock-based compensation plans for employees; ●The election and appointment of executive officers and other officers; ●The assessment of the performance of the CEO; ● Succession planning for the CEO, executives and other officers; and ●The compensation of non-employee members of the Board. As discussed in the Compensation Discussion and Analysis section of this proxy statement, the Compensation Committee also considers input on executive compensation from our CEO and CFO. Our Compensation Committee has delegated some of the administration of our executive compensation and benefits plans to our Compensation and Benefits Department. Independence Each member of our Compensation Committee is an “outside director” as formerly defined under Section 162(m) of the Internal Revenue Code, a “non-employee” director within the meaning of Rule 16b-3 under the Exchange Act, and independent under the standards of the NYSE. Compensation Committee Report The Compensation Committee Report is included at page 32 of this proxy statement. Compensation Committee Charter We call this committee the Human Resources Committee because its responsibilities extend beyond the realm of compensation to other human resources and employee issues. The Human Resources Committee operates pursuant to a charter that is reviewed annually and was last amended in November 2017. The Charter is available on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Corporate Governance.

	5	Meetings in 2019

	Members
	Dana J. Dykhouse (Chair)
	Anthony T. Clark
	Julia L. Johnson
	Mahvash Yazdi

	“We evaluate executive compensation annually and believe we have developed a program for compensation that we can consistently apply year after year. The performance metrics attempt to align our interests with those of our shareholders, customers, employees and regulators.” Dana J. Dykhouse, Compensation Committee Chair



		Independent Compensation Consultant The Compensation Committee has directly retained Willis Towers Watson as its independent, external compensation consultant for the last several years. Willis Towers Watson is an independent consulting firm that provides services in the areas of executive compensation and benefits and has specific expertise in evaluating compensation in the utility industry. Willis Towers Watson reports directly to the Compensation Committee and, at the Compensation Committee’s request, provides an annual evaluation and analysis of trends in both executive compensation and director compensation. Willis Towers Watson also evaluates other compensation issues at the direct request of the Compensation Committee. The Compensation Committee evaluated the following six factors to assess independence and conflicts of interest before it engaged Willis Towers Watson to do work in 2018 and 2019: 1. The provision of other services to the company by Willis Towers Watson. 2. The amount of fees received from the company by Willis Towers Watson, as a percentage of the firm's total revenues.
			(continued on next page)

NorthWestern Energy | Proxy Statement | Page 55

Corporate Governance




		3. The policies or procedures of Willis Towers Watson that are designed to prevent conflicts of interest. 4. Any business or personal relationship of a member of the Compensation Committee with the regular members of the Willis Towers Watson executive compensation team serving the company. 5. Any stock of the company owned by the regular members of the Willis Towers Watson executive compensation team serving the company. 6. Any business or personal relationships between the executive officers of the company and the regular members of the Willis Towers Watson executive compensation team serving the company. The Compensation Committee also obtained a representation letter from Willis Towers Watson addressing these six factors and certain other matters related to its independence. Based on the Compensation Committee’s evaluation of these factors and the representations from Willis Towers Watson, the Compensation Committee concluded that Willis Towers Watson is an independent adviser and has no conflicts of interest with us.




Operations Committee
Operations Committee			Primary Responsibilities Our Board has delegated to our Safety, Environmental, Technology, and Operations Committee (Operations Committee) the following areas of oversight: ● Safety; ● Environmental compliance practices; ● Security (including physical and cyber security, and business continuity); ● Operations; and ● Innovation, including emerging or competing technologies and alternative energy resources. Independence Each member of our Operations Committee is independent. Operations Committee Charter The Operations Committee operates pursuant to a charter that is reviewed annually. The Charter is available on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Corporate Governance.

		New in 2020

	Members
	Jan R. Horsfall (Chair)
	Britt Ide
	Linda G. Sullivan
	Mahvash Yazdi

	“In early 2020, our Board established the Operations Committee to allow us to focus on some of the most important issues the company faces (safety, environmental, technology and operational).” Jan R. Horsfall, Operations Committee Chair

NorthWestern Energy | Proxy Statement | Page 56

Corporate Governance

Other Governance Practices

Code of Conduct

Our Board adopted a Code of Conduct and Ethics (Code of Conduct) which it reviews annually. Our Code of Conduct embodies the standards that form our culture and sets forth expectations of conduct for all of our officers, directors, and employees, including all full- and part-time employees and certain persons that provide services on our behalf. Our Code of Conduct focuses on our corporate vision, mission and values. You may review our Code of Conduct on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Corporate Governance. We intend to post on our website any amendments to, or waivers from, our Code of Conduct. In addition, our Board adopted a separate Code of Ethics for the Chief Executive Officer and Senior Financial Officers that applies to our principal executive officer, principal financial officer, and principal accounting officer or controller (or persons performing similar functions), which includes complaint procedures that specifically apply to this separate code. Our Board also annually reviews this separate code of ethics, which is available on our website at the location noted above. We intend to post on our website any amendments to, or waivers from, this special code of ethics.

Risk Oversight of the Company

Our Audit Committee is primarily responsible for overseeing the company’s risk management processes on behalf of the full Board by monitoring company processes for management’s identification and control of key strategic, operational, financial, regulatory, compliance, and security risks. The Audit Committee receives reports from management at least quarterly regarding the company’s assessment of risks. The Compensation Committee oversees risks in compensation plans, ~~and~~ the Governance Committee oversees risks in corporate governance and social responsibilities, ~~including~~and the Operations Committee addresses risks regarding environmental, health, security (cyber and physical), and safety matters. In addition, the Audit Committee reports regularly to the full Board, which also considers the company’s risk profile. The Audit Committee and the full Board focus on the most significant risks facing the company and review the corporate risk appetite in evaluating strategic alternatives and business development opportunities. The Board oversees the company’s risk management, and our CEO and executive Enterprise Risk Management Committee act to ensure that our enterprise risk management and business continuity programs (ERM) achieve their objectives. While management is responsible for the day-to-day risk management processes, we have structured our ERM reporting relationship through our Chief Audit and Compliance Officer who has a direct reporting relationship to the Audit Committee. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our Board leadership structure supports this approach.

Cyber and Physical Security Oversight

Our company provides critical infrastructure to meet the needs of states and communities we serve. We recognize the importance of maintaining the trust and confidence of our customers, employees, regulators, and shareholders, and our Board devotes significant time and attention to oversight of cyber and physical security risk. From 2016 to early 2020, our Audit Committee had oversight responsibilities concerning cyber and physical security, as well as steps taken by management to understand and mitigate such risks. In early 2020, our Board established the Operations Committee and moved cyber and physical security oversight to this new committee. In 2019, our Audit Committee received quarterly updates on cyber security risk, which updates we anticipate will continue in the Operations Committee. Our Board and Operations Committee each receive regular reporting on cyber and physical security topics. Cyber security also has been a topic addressed in connection with four of our previous annual NACD-provided director education sessions.

Transactions with Related Persons

Our Audit Committee has adopted a written Related Persons Transaction Policy. The policy requires that any related person transaction be reviewed and approved by the Audit Committee based on its consideration of all available relevant facts and circumstances. The Audit Committee approves a related person transaction only if it determines in good faith that such transaction is in, or is consistent with, the best interests of the company and its shareholders.

NorthWestern Energy | Proxy Statement | Page 57

Corporate Governance

Specifically, the Audit Committee considers whether (1) the transaction is on terms comparable to those that could be obtained in arms-length dealing with an unrelated third party, (2) there are business reasons to enter into the transactions, (3) the transaction could impair the independence of a director, and (4) the transaction would present an improper conflict of interest. No material related person transactions were identified during ~~2016.~~2019.

Under the policy, a “related person” is an officer, director, director nominee, or five percent or more shareholder of the company, as well as any immediate family member of such individuals or any entity which is owned or controlled by any of such individuals; and a “related person transaction” is a transaction involving (1) the company, (2) a related person and (3) an aggregate annual amount in excess of $120,000.

The policy also provides ratification procedures for approval of transactions that have been commenced or consummated prior to any knowledge by the Audit Committee or the Company of the involvement of a related person and for the annual review of ongoing related person transactions to ensure that such transactions continue to remain in the best interests of the company and its shareholders. The policy is available on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Corporate Governance.

~~Corporate Governance~~

Hedging and Pledging Our Securities

Our Insider Trading Policy prohibits all of our directors, officers, and employees from engaging in certain transactions involving our securities, including hedging or other monetization transactions and publicly traded options. Specifically, the policy prohibits transactions involving publicly traded options, such as puts, calls, and other derivative securities, as well as hedging and monetization transactions, such as zero-cost collars and forward sales contracts. Our policy aims to align the interests of a director, officer, or employee with our and our shareholders’ interests and prohibits publicly traded option and hedging and monetization transactions because such transactions could create the appearance that a director, officer, or employee is trading on material non-public information, is focused on short-term performance, or otherwise misaligned. The Insider Trading Policy also prohibits our directors, officers, and employees from pledging any of our securities as collateral for a loan, unless pre-cleared by our general counsel. None of our directors or executive officers have pledged any of our securities as collateral for a loan. The policy is available on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Corporate Governance.

Political Contributions Policy

As a public utility, we are subject to various laws and regulations at the federal, state, and local levels; and changes to these laws can affect our business, employees, communities and shareholders. Accordingly, we are committed to being an active and responsible corporate citizen.

We use our resources, through legally permissible participation in the political process, to advance matters of public policy that are consistent with our values, our legal obligations, and our Code of Conduct. We also encourage our employees to be active in civic and community activities, including by participating in the political and democratic process.

We have a formal political contributions policy. We do not make (and our policy prohibits) corporate contributions to candidates for political office, political parties, or committees, or political committees organized for the advancement of political candidates, whether federal, state, or local.

State and local ballot initiatives and referenda on important policy issues do have the potential to impact our business and our stakeholders. Accordingly, the policy permits corporate contributions in connection with such matters, as well as lobbying efforts and contributions to trade and local associations. In addition, the policy allows individual employees to make personal contributions to political action committees. The policy is available on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Corporate Governance.

Communications with Our Board

You may contact our Board, Board Chair or independent directors, individually or as a group, by sending your communication to our Corporate Secretary at NorthWestern Corporation, 3010 West 69th Street, Sioux Falls, South Dakota 57108. The Corporate Secretary will forward any communication received to the intended recipient.

NorthWestern Energy | Proxy Statement | Page 58

Stock Information

Who owns our stock

Our common stock is currently our only class of voting securities. The number of shares noted in the table below are those beneficially owned, as determined under the rules of the SEC, and such information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power and any shares which the person has the right to acquire within 60 days through the exercise of option, warrant, or right.

Stock Ownership by Directors and Executives

The following table provides information as of February ~~27, 2017,~~24, 2020, with respect to the beneficial ownership of shares of our common stock owned by our current non-employee directors, our named executive officers, and by all of our directors and executive officers as a group.


	Amount and Nature of Beneficial Ownership					Amount and Nature of Beneficial Ownership
Name of Beneficial Owner	Unrestricted Shares of Common Stock Beneficially Owned Directly (#)	Unrestricted Shares of Common Stock Beneficially Owned Indirectly (#)	Deferred Stock Units (#)	Total Shares of Common Stock Beneficially Owned (#)	Percent of Common Stock (%)	Unrestricted Shares of Common Stock Beneficially Owned Directly (#)	Unrestricted Shares of Common Stock Beneficially Owned Indirectly (#)	Deferred Stock Units (#)	Total Shares of Common Stock Beneficially Owned (#)	Percent of Common Stock (%)
Stephen P. Adik (1)	—	20,000	65,629	85,629	*	—	20,000	84,195	104,195	*
E. Linn Draper Jr.	—	—	118,825	118,825	*
Dorothy M. Bradley	3,987	—	22,564	26,551	*
Anthony T. Clark	—	—	3,750	3,750	*	2,722	—	9,939	12,661	*
Dana J. Dykhouse	23,000	—	—	23,000	*	31,250	—	—	31,250	*
Jan R. Horsfall	5,950	—	—	5,950	*	3,555	—	—	3,555	*
Britt E. Ide						4	—	8,651	8,655	*
Julia L. Johnson	—	—	80,027	80,027	*	5,500	—	91,886	97,386	*
Linda G. Sullivan						74		11,401	11,475	*
Mahvash Yazdi						1,990		1,990	3,980
Jeffrey W. Yingling						—		4,220	4,220
Robert C. Rowe	2,818	—	125,273	128,091	*	2,264	—	157,293	159,557	*
Brian B. Bird	52,469	—	—	52,469	*	76,162	—	5,766	81,928	*
Heather H. Grahame	22,907	—	—	22,907	*	19,912	—	4,184	24,096	*
Curtis T. Pohl	16,653	—	—	16,653	*	15,140	—	3,294	18,434	*
Bobbi L. Schroeppel	15,147	—	—	15,147	*	19,542	—	2,231	21,773	*
Directors and Executive Officers as a Group (16 persons)	190,757	20,000	434,387	645,144	1.33	179,316	20,000	413,215	612,531	1.22
*Less than one percent.
*Less than one percent


(1)	Shares held indirectly by Mr. Adik represent shares held in a trust of which Mr. Adik and his spouse are co-trustees.

Stock Ownership Guidelines

We believe it is important that our interests are aligned with the interests of our shareholders. Accordingly, our Board has established robust stock ownership guidelines for our non-employee directors and executive officers. Our stock ownership guidelines are set forth in our Corporate Governance Guidelines on our website at NorthWesternEnergy.com under Our Company / Investor Relations / Corporate Governance.

~~In 2016,~~Under our ~~Board doubled the amount of stock ownership required for non-employee directors. Under the increased~~ stock ownership guidelines, each non-employee director must retain at least ~~ten~~10 times the value of his or her annual cash Board and committee chair retainer(s) in common stock or deferred stock units within five years of commencing service on our Board. ~~The previous guideline was five times.~~

For executives, the stock ownership guidelines ~~are~~range from two to six times base salary ~~for~~as summarized in the CEO, four times base salary for the CFO, three times base salary for our Vice President and General Counsel and our Vice President - Distribution, and two times base salary for our Vice President - Customer Care, Communications and Human Resources.

~~Stock Ownership Information~~

table below. Each executive is restricted, absent a hardship and prior Board approval, from selling stock until his or her guideline amount is achieved and must continue to maintain the required ownership level once it is obtained.

NorthWestern Energy | Proxy Statement | Page 59

Stock Information

Our Board instituted stock ownership guidelines to require its members and our executives to hold a meaningful financial stake in the company to align our interests with those of our shareholders. As summarized in the table below, all of our directors and ~~our~~ named executive officers who have been ~~serving~~in their respective positions more than one year have satisfied ~~his or her~~the applicable stock ownership guideline.

As important as it was to achieve the required stock ownership levels, we believe it is equally significant that our non-employee directors have continued to retain and increase their stock ownership after meeting their stock ownership guidelines. For 2016, our directors deferred 51 percent of their aggregate compensation into the company’s common stock, even though they previously had satisfied their stock ownership guideline requirements.


Satisfaction of Stock Ownership Guidelines	Satisfaction of Stock Ownership Guidelines										Satisfaction of Stock Ownership Guidelines
		Pay Subject to Multiple	Multiple Required	Stock Ownership Requirement ($)	Number of Shares and DSUs Owned (#)	Value of Shares and DSUs Owned (1) ($)	Percent of Guideline Achieved as of Feb. 27, 2017 (1) (%)		Percent of Guideline Achieved as of 12/31/15 (%)		Pay Subject to Multiple ($)	Multiple Required	Stock Ownership Requirement ($)	Number of Shares and DSUs Owned (#)	Value of Shares and DSUs Owned ($) (1)	Percent of Guideline Achieved as of Feb. 24, 2020 (1)
Directors
E. Linn Draper Jr., Board Chair		$125,000	10x	1,250,000	118,825	6,889,474	551	%	455	%
Stephen P. Adik, Audit Chair		$35,000	10x	350,000	85,629	4,964,769	1,419	%	1,201	%
Dorothy M. Bradley		$25,000	10x	250,000	26,551	1,539,427	616	%	440	%
Anthony T. Clark (2)		$25,000	10x	250,000	3,750	217,425	87	%	N/A
Stephen P. Adik, Board Chair											125,000	10x	1,250,000	104,195	8,174,098	654	%
Anthony T. Clark											25,000	10x	250,000	12,661	993,255	397	%
Dana J. Dykhouse, Comp. Chair		$35,000	10x	350,000	23,000	1,333,540	381	%	272	%	35,000	10x	350,000	31,250	2,451,563	700	%
Jan R. Horsfall		$25,000	10x	250,000	5,950	344,981	138	%	62	%	25,000	10x	250,000	3,555	278,890	112	%
Britt E. Ide											25,000	10x	250,000	8,655	678,985	272	%
Julia L. Johnson, Gov. Chair		$35,000	10x	350,000	80,027	4,639,965	1,326	%	1,541	%	35,000	10x	350,000	97,386	7,639,932	2,183	%
Linda G. Sullivan, Audit Chair											35,000	10x	350,000	11,475	900,214	257	%
Mahvash Yazdi											25,000	10x	250,000	3,980	312,231	125	%
Jeffrey W. Yingling											25,000	10x	250,000	4,220	331,059	132	%
Executives
Robert C. Rowe		$595,578	6x	3,573,468	128,091	7,426,716	208	%	230	%	649,224	6x	3,895,344	159,557	12,517,247	321	%
Brian B. Bird		$411,951	4x	1,647,804	52,469	3,042,153	185	%	201	%	449,057	4x	1,796,228	81,928	6,427,252	358	%
Heather H. Grahame		$360,714	3x	1,082,142	22,907	1,328,148	123	%	161	%	423,516	3x	1,270,548	24,096	1,890,331	149	%
Curtis T. Pohl		$279,922	3x	839,766	16,653	965,541	115	%	142	%	305,136	3x	915,408	18,434	1,446,147	158	%
Bobbi L. Schroeppel		$258,068	2x	516,136	15,147	878,223	170	%	205	%	287,474	2x	574,948	21,773	1,708,092	297	%


(1)	Value of shares orand DSUs owned and ~~ownership as a~~ percent of ~~stock ownership requirement~~percent of guideline achieved are calculated as of February ~~27, 2017~~24, 2020, using a closing stock price of $~~57.98~~78.45.


~~(2)~~	~~Mr. Clark joined our Board on December 6, 2016.~~

~~Section 16(a) Beneficial Ownership Reporting Compliance~~

Based solely on information furnished to us and contained in reports filed with the SEC, as well as written representations that no other reports were required, NorthWestern believes that during 2016 all of its directors and executive officers timely filed all reports required by Section 16 of the Exchange Act.

Largest Shareholders

The table ~~on the following page~~below sets forth information regarding whom we know to be the beneficial owners of more than five percent of our issued and outstanding common stock as of February ~~27, 2017.~~24, 2020. The information reflected in the table is based solely on a review of statements filed with the SEC pursuant to Sections 13(d), 13(f), and 13(g) of the Exchange Act.

~~Stock Ownership Information~~


Name of Beneficial Owner	Shares of Common Stock Beneficially Owned (#)	Percent of Common Stock (%)	Shares of Common Stock Beneficially Owned (#)		Percent of Common Stock (%)
BlackRock, Inc. (1)	8,208,262	17.0	7,401,638		14.7
55 East 52^nd Street, New York, NY 10022
Deutsche Bank AG (2)	5,710,128	11.8
Taunusanlage 12, 60325 Frankfurt am Main, Federal Republic of Germany
The Vanguard Group (3)	4,099,389	8.5
The Vanguard Group (2)				5,363,995		10.6
100 Vanguard Blvd., Malvern, PA 19355

(1)

Reflects shares beneficially owned by BlackRock, Inc. as of December 31, ~~2016,~~2019, according to a statement on Schedule 13G/A filed with the SEC on ~~January 11, 2017,~~February 4, 2020, which indicates that the beneficial owner, a holding company, or control person in accordance with Rule 13d-1(b), has sole voting power with respect to ~~8,072,370~~7,283,908 shares and sole dispositive power with respect to ~~8,208,262~~7,401,638 shares. The beneficial owner holds shared voting or dispositive power with respect to none of the shares. The Schedule 13G/A certifies that the securities were acquired in the ordinary course and not with the purpose or with the effect of changing or influencing the control of NorthWestern Corporation.

(2)

Reflects shares beneficially owned by ~~Deutsche Bank AG,~~The Vanguard Group, as of December 31, ~~2016,~~2019, according to a statement on Schedule ~~13G~~13G/A filed with the SEC on February ~~13, 2017,~~12, 2020, which indicates that the beneficial owner, an investment adviser in accordance with Rule ~~13d-1(b),~~13d-1, has sole voting power with respect to ~~5,508,176~~63,886 shares and sole dispositive power with respect to 5,710,128 shares. The beneficial owner holds shared voting or dispositive power with respect to none of the shares. The Schedule 13G certifies that, to the best of the beneficial owner’s knowledge and belief, the foreign regulatory scheme applicable to the beneficial owner, a bank organized under the laws of the Federal Republic of Germany, is substantially comparable to the regulatory scheme applicable to the functionally equivalent U.S. institution. The beneficial owner also undertakes to furnish to the Commission staff, upon request, information that would otherwise be disclosed in a Schedule 13D.

~~(3)~~

Reflects shares beneficially owned by The Vanguard Group, as of December 31, 2016, according to a statement on Schedule 13G filed with the SEC on February 9, 2017, which indicates that the beneficial owner, an investment adviser in accordance with Rule 13d-1(b), has sole voting power with respect to 62,691 shares and sole dispositive power with respect to 4,038,6005,300,292 shares. The beneficial owner has shared voting power with respect to ~~5,400~~21,530 shares and shared dispositive power with respect to ~~60,789 shares and shared voting power with respect to none of the~~63,705 shares. The Schedule ~~13G~~13G/A certifies that the securities were acquired in the ordinary course and not with the purpose or with the effect of changing or influencing the control of NorthWestern Corporation.

NorthWestern Energy | Proxy Statement | Page 60

Stock Information

Stock for Compensation Plans

The ~~following~~ table below presents summary information about our Equity Compensation Plan, as of the close of business on December 31, ~~2016:~~2019:


a.	The aggregate number of shares of our common stock subject to outstanding stock options, warrants, and rights, including unvested performance units and unvested restricted share units;


b.	The weighted average exercise price (or grant date fair value) of those outstanding stock options, warrants, and rights; and


c.	The number of shares that remain available for future option grants, excluding the number of shares to be issued upon the exercise of outstanding options, warrants, and rights.

For additional information regarding our long-term incentive plans and the accounting effects of our stock-based compensation, please see Note 1615 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019.


Plan category	Number of securities to be issued upon exercise of outstanding options, warrants, and rights (a)		Weighted average exercise price of outstanding options, warrants, and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)		Number of securities to be issued upon exercise of outstanding options, warrants, and rights (a)		Weighted average exercise price of outstanding options, warrants, and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders (1)	258,168	(2)	$44.97	(3)	870,186	(4)	251,103	(2)	$52.52	(3)	357,866	(4)
Equity compensation plans not approved by security holders	—		—		—		—		—		—
Total	258,168				870,186		251,103				357,866


(1)	Consists of the Equity Compensation Plan, which is the company’s only equity compensation plan.

(2)

Consists of (a) ~~195,577~~178,245 unvested performance units, with a weighted average grant date fair value of ~~$46.35,~~$52.99, granted to employees who participate in our LTIP, and (b) ~~62,591~~72,858 unvested restricted share units, with a weighted average grant date fair value of ~~$41.14,~~$51.34, granted to executive officers under our ERRP. For descriptions of our LTIP and ERRP, please see theCompensation Discussion and Analysis section of this proxy statement.


(3)	Amount represents the weighted average grant date fair value of the outstanding awards reflected in column (a).


(4)	Awards under the Equity Compensation Plan can take the form of stock options, share appreciation rights, restricted and unrestricted share awards, deferred share units, and performance awards.




	~~Audit Committee Report~~ In the performance of the Audit Committee’s oversight function, and in connection with the December 31, 2016, financial statements, the Audit Committee reviewed and discussed the audited financial statements with management. The Audit Committee has discussed the matters required to be discussed byNorthWestern Energy \| Proxy Statement ~~on Auditing Standards No.~~\| Page 61 as amended, as adopted by the Public Company Accounting Oversight Board (PCAOB) in Rule 3200T. The Audit Committee received the written disclosures and the letter from Deloitte & Touche LLP (Deloitte), our independent registered public accounting firm, required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence; and the Audit Committee has discussed with Deloitte the firm’s independence. The compatibility of non-audit services was considered with the auditor’s independence.
	Based on its review of the consolidated financial statements and discussions with and representations from management and Deloitte referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC.
	~~Audit Committee~~ ~~Stephen P. Adik,~~ ~~Chair~~ ~~Dana J. Dykhouse~~ ~~Jan R. Horsfall~~

Annual Meeting Information

Voting Procedures

Appointment of Proxy Holders

Our Board asks you to appoint our independent Board Chair, ~~E. Linn Draper Jr.,~~Stephen P. Adik, and our CEO, Robert C. Rowe, as your proxy holders to vote your shares at the annual meeting. You make this appointment by voting the proxy card provided to you or by using one of the voting methods described below.

If appointed by you, the proxy holders will vote your shares as you direct on the matters described in this proxy statement. If you sign and date your proxy card, but do not provide direction, they will vote your shares as recommended by our Board.

~~Management is~~We are not aware of any matters to be brought before the annual meeting other than the matters described in the notice of annual meeting accompanying this proxy statement. The persons named in the form of proxy solicited by our Board will vote all proxies that have been properly executed, and if any matters not set forth in the notice of annual meeting are properly brought before the meeting, such persons will ~~vote thereon in accordance with~~use their best ~~judgment.~~judgment to vote on such matters.

Record Date and Voting

All shareholders of record as of the close of business on the record date, February ~~27, 2017,~~24, 2020, are entitled to receive notice of and to vote, in person or by proxy, at the annual meeting or any postponement or adjournment of the annual meeting. If you owned shares of our common stock at the close of business on the record date, you are entitled to one vote per share upon each matter presented at the annual meeting. The company does not have any other outstanding class of voting stock. Shareholders whose shares are held in an account at a brokerage firm, bank, or other nominee (i.e., in “street name”) will need to obtain a proxy from the broker, bank, or other nominee that holds their shares authorizing them to vote at the annual meeting.




	:	Voting on the Internet. You may vote by proxy on the internet up until 11:59 p.m. Eastern Daylight Time the day before the annual meeting. The website for internet voting is www.proxyvote.com. Easy-to-follow prompts allow you to vote your shares and confirm that your instructions have been properly recorded. If you vote on the internet, you can request electronic delivery of future proxy materials.

	)	Voting by Telephone. You may vote by proxy by telephone up until 11:59 p.m. Eastern Daylight Time the day before the annual meeting by using the toll-free number listed on your proxy card or voting instruction form. Easy-to-follow prompts allow you to vote your shares and confirm that your instructions have been properly recorded.

	+	Voting by Mail.Mark, sign and date your proxy card or voting instruction form and return it in the postage-paid envelope provided. Your proxy card or voting instruction form must be received far enough in advance of the annual meeting to allow sufficient time for processing.

NorthWestern Energy | Proxy Statement | Page 62

Annual Meeting Information




	?	Voting in Person at the Annual Meeting. If you attend the annual meeting and wish to vote in person, you will be given a ballot at the annual meeting. Please note, however, that if your shares are held in street name by a broker, bank, or other nominee and you wish to vote at the annual meeting, you must bring to the annual meeting a proxy from the record holder of the shares authorizing you to vote at the annual meeting. Submitting your vote by proxy will not affect your right to attend the annual meeting and to vote in person.

	r	Revoking Your Proxy or Your Voting Instructions to Your Proxy Holders.If you are a record holder of our common stock, you can change your vote at any time before your proxy is voted at the annual meeting by again voting by one of the methods described above or by attending the annual meeting and voting in person. You also may revoke your proxy by delivering a notice of revocation to our corporate secretary at NorthWestern Corporation, 3010 West 69th Street, Sioux Falls, South Dakota 57108, prior to the vote at the annual meeting. If your shares are held in street name, you must contact your broker, bank, or other nominee to revoke your proxy.

Quorum

At the close of business on the record date, there were ~~48,335,246~~50,494,915 shares of NorthWestern Corporation common stock outstanding and entitled to vote at the annual meeting. Each outstanding share is entitled to one vote.

A quorum, which is a majority of the outstanding shares as of the record date, is necessary to hold a valid annual meeting. A quorum will be present at the annual meeting if the holders of a majority of the shares of our common stock outstanding and entitled to vote on the record date are present in person or represented by proxy. Abstentions and broker non-votes are included for determining whether a quorum is present. If a quorum is not present at the annual meeting, we expect that the annual meeting will be adjourned to solicit additional proxies.

Broker Non-Votes

Under the rules of the New York Stock Exchange (NYSE), certain shareholder nominees (such as brokers) have the discretion to vote shares on routine matters, such as the ratification of the appointment of our independent registered public accounting firm, when they do not receive voting instructions from the beneficial owner. They do not have authority to vote on non-routine matters (such as the election of directors, the advisory vote to approve named executive officer compensation, and the advisory vote on the frequency of advisory votes on executive compensation) unless they receive instruction from the beneficial owner.

A “broker non-vote” occurs when your broker submits a proxy for your shares but does not indicate a vote for a particular proposal because the broker does not have authority to vote on that proposal and has not received voting instructions from you. Broker non-votes are not counted as votes for or against the proposal in question or as abstentions, and are not counted to determine the number of votes present for the particular proposal.

Under the rules of the NYSE, if your broker holds shares in your name and delivers this proxy statement to you, the broker is entitled to vote your shares on Proposal 2 — Ratification of Independent Registered Public Accounting Firm even if the broker does not receive voting instructions from you. Without your instructions, the broker is not entitled to vote your shares on Proposal 1 — Election of Directors or Proposal 3 — Advisory Vote to Approve Named Executive Officer Compensation ~~or Proposal 4 — Advisory Vote to Approve Frequency of Advisory Votes on Executive Compensation.~~. We encourage you to provide instructions to your broker, bank, or other nominee. This ensures your shares will be voted at the annual meeting.

Required Vote and Method of Counting

The required vote and method of counting votes for the various business matters to be considered at the annual meeting are described in the table on the following page. If you sign and return your proxy card without indicating your vote, your shares will be voted “FOR” each of the nominees for director, “FOR” ratification of Deloitte & Touche LLP as our independent registered public accounting firm, and “FOR” the advisory vote to approve named executive officer ~~compensation, for every “1 YEAR” on the advisory vote on the frequency of advisory votes on executive~~ compensation and in accordance with the recommendations of our Board on any other matters properly brought before the annual meeting for a vote.

NorthWestern Energy | Proxy Statement | Page 63

Annual Meeting Information



Item of Business	Board Recommendation	Voting Approval Standard	Effect of Abstention	Effect of Broker Non-Vote
Proposal 1: Election of Directors	FOR election of each director nominee	If a quorum exists, the ~~nominee~~nominees with the most~~most~~ “FOR” votes isare elected. If a Nominee receives more “WITHHOLD AUTHORITY” votes than “FOR” votes, the Nominee must submit resignation for consideration by the Governance Committee and final Board decision.	No effect	No effect
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm	FOR	If a quorum exists, the majority of votes present in person or represented by proxy and entitled to vote.	Vote against	Not applicable; broker may vote shares without instruction
Proposal 3: Advisory “Say-on-Pay” Vote to Approve Executive Compensation	FOR	If a quorum exists, the majority of votes present in person or represented by proxy and entitled to vote. This advisory vote is not binding on the Board, but the Board will consider the vote results when making future executive compensation decisions.	Vote against	No effect
~~Proposal 4:~~ ~~Advisory Vote on Frequency of Future Say-on-Pay Votes~~	~~for every~~ ~~1 YEAR~~	~~If a quorum exists, the~~ ~~pluralityof votes present in person or represented by proxy and entitled to vote.~~ ~~This~~ ~~advisory voteis not binding on the Board, but the Board will consider the vote results when determining the frequency of future Say-on-Pay votes.~~	~~No effect~~	~~No effect~~

Method and Cost of Soliciting and Tabulating Votes

The Board is providing these proxy materials to you in connection with the solicitation by the Board of proxies to be voted at our annual meeting. NorthWestern will pay the cost of the solicitation, which will be made primarily by the use of mail and the internet. Proxies also may be solicited in person or by telephone, facsimile, or similar means by our directors, officers, or employees without additional compensation.

We will, on request, reimburse shareholders who are brokers, banks, or other nominees for their reasonable expenses in sending proxy materials and annual reports to the beneficial owners of the shares they hold of record. Broadridge Financial Solutions, Inc., will be the proxy tabulator, and a representative from NorthWestern will act as the Inspector of Election.

Electronic Access to Proxy Statement and Annual Report

The proxy statement, annual report, voting card, and voting instructions are available on the internet at www.proxyvote.com where you can also cast your vote and request to receive future proxy materials in printed form by mail or electronically by email. These materials will be available for one year following the annual meeting. You will need the control number provided on your notice to access the electronic materials.

General Information

Attending the Annual Meeting in Person or by Webcast

The annual meeting will be held at the Big Horn Hotel, 1801 Majestic Lane, Billings, Montana. Only shareholders of record or their legal proxy holders as of the record date or our invited guests may attend the annual meeting in person. If you wish to attend the annual meeting and your shares are held in street name at a brokerage firm, bank, or other nominee, you will need to bring your notice or a copy of your brokerage statement or other documentation reflecting your stock ownership as of the record date. You may be asked to provide photo identification, such as a driver’s license.

No cameras, recording equipment, electronic devices, large bags, briefcases, or packages will be permitted at the annual meting. No banners, signs, firearms, or weapons will be allowed in the meeting room. We reserve the right to inspect all items entering the meeting room.

NorthWestern Energy | Proxy Statement | Page 64

Annual Meeting Information



No cameras, recording equipment, electronic devices, large bags, briefcases, or packages will be permitted at the annual meeting. No banners, signs, firearms, or weapons will be allowed in the meeting room.
~~We reserve the right to inspect all items entering the meeting room.~~ ~~The annual meeting will be held at the NorthWestern Energy South Dakota / Nebraska Operational Support Office, 600 Market Street West, Huron, South Dakota, as shown on the map to the right.~~ The annual meeting will be webcast (audio and slides) simultaneously with the live meeting. You may access the webcast from our website at NorthWesternEnergy.com under Our Company / Investor Relations / Presentations and Webcasts. A webcast replay will be available at the same location on our website through April 23, 2021.~~NorthWesternEnergy.com~~ ~~under~~ ~~Our Company / Investor Relations / Presentations and Webcasts. A webcast replay will be available at the same location on our website through April 27, 2018.~~

Householding; Receipt of Multiple Notices

Under the rules of the SEC, a single Notice of Internet Availability of Proxy Materials or set of annual reports and proxy statements may be sent to any household at which two or more shareholders reside if they appear to be members of the same family. Each shareholder continues to receive a separate proxy card. This procedure, referred to as householding, reduces the volume of duplicate information shareholders receive and reduces mailing and printing expenses. In accordance with a notice sent to certain shareholders who shared a single address, only one annual report and proxy statement were sent to that address unless any shareholder at that address requested that multiple sets of documents be sent. However, if any shareholder who agreed to householding wishes to receive a separate annual report or proxy statement for ~~2017~~2020 or in the future, he or she may ~~telephone toll-free~~call (800) 542-1061 or write to Broadridge Householding Department, 51 Mercedes Way, Edgewood, NY 11717, and the company will deliver promptly upon such written or oral request a separate Notice of Internet Availability of Proxy Materials or annual report or proxy statement. Shareholders sharing an address who wish to receive a single set of reports may do so by contacting their banks, brokers, or other nominees, if they are beneficial holders, or by contacting Broadridge at the address set forth above, if they are record holders.

Available Information

We file annual, quarterly, and current reports, proxy statements and other information with the SEC. These filings are available through a website maintained by a third-party and accessible through our company website at NorthWesternEnergy.com under Our Company / Investor Relations / SEC Filings.

Our public filings also are available to the public from document retrieval services and the website maintained by the SEC at www.sec.gov. You may read and copy any reports, proxy statements or other information that we file with the SEC at the SEC Public Reference Room, 100 F Street NE, Room 1580, Washington, DC 20549. You also may request copies of this information from the SEC by mail from the same address, at prescribed rates. Please call the SEC at (800) 732-0330 for further information on the public reference room.

Future Shareholder Proposals

Shareholder Proposals for Inclusion in Next Year’s Proxy Statement. To be considered for inclusion in the proxy statement for our annual meeting to be held in ~~2018,~~2021, shareholder proposals submitted under Exchange Act Rule 14a-8 must be received by the corporate secretary of NorthWestern Corporation not later than November ~~3, 2017.~~6, 2020. Such proposal must comply with all applicable SEC requirements that a shareholder must meet in order to have a shareholder proposal included in the company’s proxy statement.

~~Annual Meeting Information~~

Other Shareholder Proposals for Presentation at the ~~2018~~2021 Annual Shareholders’ Meeting. For nominations of persons for election as a director or for any proposal that is not submitted for inclusion in next year’s proxy statement, but is instead sought to be presented directly from the floor of the ~~2018~~2021 Annual Shareholders’ Meeting, the company’s bylaws require that timely notice must be given to the corporate secretary. To be timely, the notice must be received by the corporate secretary of NorthWestern Corporation between December ~~26, 2017,~~24, 2020 and January ~~25, 2018.~~23, 2021.

Shareholder proposals should be delivered or mailed to and received by the Company at its principal executive offices in accordance with the dates set forth above and addressed to:

Corporate Secretary

NorthWestern Corporation

3010 West 69th Street

Sioux Falls, South Dakota 57108

To be in proper written form, a shareholder’s notice for both annual and special meetings must set forth:

(1)

as to each person whom the shareholder proposes to nominate for election as a director, (a) the name, age, and business and residence address of the person, (b) the principal occupation or employment of the person, (c) the class or series and number of shares of capital stock of the company that are owned beneficially or of record by the person, (d) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities and Exchange Act of 1934, as amended (Exchange Act) and the rules and regulations promulgated thereunder, and (e) the written consent of each proposed nominee to being named as a nominee and to serve as a director if elected;

NorthWestern Energy | Proxy Statement | Page 65

Annual Meeting Information

Exchange Act of 1934, as amended (Exchange Act) and the rules and regulations promulgated thereunder, and (e) the written consent of each proposed nominee to being named as a nominee and to serve as a director if elected;

(2)

as to any other business that the shareholder proposes to bring before the meeting, (a) a brief description of the business desired to be brought before the meeting, (b) the text of the proposal or business (including the text of any resolutions proposed for consideration, and, in the event that such business includes a proposal to amend the bylaws of the company, the language of the proposed amendment), (c) the reasons for conducting such business at the meeting, and (d) any material interest of such shareholder in the business being proposed and the beneficial owner, if any, on whose behalf the proposal is being made; and

(3)

as to the shareholder giving this notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (a) the name and record address of such shareholder and any such beneficial owner, (b) the class or series and number of shares of capital stock of the company that are owned beneficially or of record by such shareholder and beneficial owner, (c) a description of all arrangements or understandings between such shareholder and any such beneficial owner and each proposed nominee and any other persons (including their names) pursuant to which the nomination(s) are to be made by such shareholder, (d) a representation that such shareholder is a shareholder of record entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the persons and/or conduct the business being proposed as described in the notice, and (e) a representation of whether such shareholder or any such beneficial owner intends or is part of a group which intends (i) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the company’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (ii) otherwise to solicit proxies from shareholders in support of such proposal or nomination. The foregoing notice requirements shall be deemed satisfied by a shareholder with respect to an annual meeting if the shareholder has notified the company of his or her intention to present a proposal at such annual meeting in compliance with Regulation 14A (or any successor thereof) promulgated under the Exchange Act and such shareholder’s proposal has been included in a proxy statement that has been prepared by the company to solicit proxies for such annual meeting. The company may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the company.

Assistance

If you need assistance with voting your proxy or have questions regarding our annual meeting, please contact:



Travis Meyer Director -Corporate Finance and Investor Relations ~~and Corporate Planning~~ Officer (605) 978-2945	or	Emily ~~Larkin~~Folsom Assistant Corporate Secretary (605) 978-2871

No persons have been authorized to give any information or to make any representations other than those contained in this proxy statement and, if given or made, such information or representations must not be relied upon as having been authorized by us or any other person. You should not assume that the information contained in this proxy statement is accurate as of any date other than the date of this proxy statement, and the mailing of this proxy statement to shareholders shall not create any implication to the contrary.

NorthWestern Energy | Proxy Statement | Page 66

Proxy Statement Glossary

The list below defines the various terms, abbreviations, and acronyms used in this proxy statement.



AGA	American Gas Association
Board	Board of Directors of NorthWestern Corporation
CD&A	Compensation Discussion and Analysis
CEO	President and Chief Executive Officer
CFO	Vice President and Chief Financial Officer
COBRA	Consolidated Omnibus Budget Reconciliation Act
Code of Conduct	Code of Conduct and Ethics
Company	NorthWestern Corporation d/b/a NorthWestern Energy
Compensation Committee	Human Resources Committee
Deloitte	Deloitte & Touche LLP
Director Deferred Plan	NorthWestern Corporation 2005 Deferred Compensation Plan for Non-Employee Directors
Equity Compensation Plan	NorthWestern Corporation Amended and Restated Equity Compensation Plan (f/k/a NorthWestern Corporation Amended and Restated 2005 Long-Term Incentive Plan)
EPS	Earnings per share
ERM	Enterprise Risk Management and Business Continuity Programs
ERRP	Executive Retention / Retirement Program
Exchange Act	Securities and Exchange Act of 1934, as amended
Executive Officer	The Named Executive Officers and other executives responsible for company policy, strategy and operations. For ~~2016,~~2019, there were ~~nine~~eight executive officers serving on our executive team.
Governance Committee	Governance and Innovation Committee
Key Employee Severance Plan	NorthWestern Corporation Key Employee Severance Plan, effective Oct. 19, 2016
LTIP	Long-Term Incentive Program
NACD	National Association of Corporate Directors
Named Executive Officer	The CEO, CFO, and the three most highly compensated officers, other than the CEO and CFO, who were serving as executive officers at the end of ~~2016.~~2019. Our named executive officers for ~~2016~~2019 are identified in the Compensation Discussion and Analysis section of this proxy statement.
NorthWestern	NorthWestern Corporation d/b/a NorthWestern Energy
NYSE	New York Stock Exchange
Officer Deferred Plan	NorthWestern Corporation 2009 Officer Deferred Compensation Plan
OSHA	Occupational Safety and Health Administration
Our	NorthWestern Corporation d/b/a NorthWestern Energy
PCAOB	Public Company Accounting Oversight Board
Record Date	February ~~27, 2017~~24, 2020
ROAE	Return on average equity
SAIDI	System Average Interruption Duration Index
SEC	Securities and Exchange Commission
TSR	Total shareholder return
Us	NorthWestern Corporation d/b/a NorthWestern Energy
We	NorthWestern Corporation d/b/a NorthWestern Energy




Montana Operational Support Office 11 East Park Street Butte, Montana 59701 (406) 497-1000	South Dakota / Nebraska Operational Support Office 600 Market Street West Huron, South Dakota 57350 (605) 353-7478	Corporate Support Office 3010 West 69th Street Sioux Falls, South Dakota 57108 (605) 978-2900



Connect With Us:

NorthWestern Energy.com

VOTING CARD

[Front Side]



NORTHWESTERN CORPORATION 3010 W. 69TH STREET SIOUX FALLS, SD 57108	VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via email or the Internet. To sign up for electronic delivery, please follow the VOTE BY INTERNET instructions above, and when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instruction prompts. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY, 11717.



TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLANK INK AS FOLLOWS:
		KEEP THIS PORTION FOR YOUR RECORDS
		DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

NORTHWESTERN CORPORATION

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

For All

Withhold All

For All Except

To withold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

The Board of Directors recommends that you vote FOR the following nominees:

Vote on Directors

1. Election of Directors

Nominees:

01) Stephen P. Adik

02) Anthony T. Clark

03) ~~E. Linn Draper~~

~~04)~~ Dana J. Dykhouse

~~05)~~ 04) Jan R. Horsfall

~~06)~~05) Britt E. Ide

~~07)~~06) Julia L. Johnson

~~08)~~07) Linda G. Sullivan

~~09)~~ 08) Robert C. Rowe

09) Mahvash Yazdi

10) Jeffrey W. Yingling

Vote on Proposals

For

Against

Abstain

The Board of Directors recommends that you vote FOR Proposal 2:

2. Ratification of Deloitte & Touche LLP as the independent registered public accounting firm for ~~2017.~~2020.

The Board of Directors recommends that you vote FOR Proposal 3:

3. Advisory vote to approve named executive officer compensation.

The Board of Directors recommends that you vote ~~1 Year on~~FOR Proposal 4:

~~1 Year~~

~~2 Years~~

~~3 Years~~

~~Abstain~~

~~4. Advisory vote on the frequency of the advisory votes on executive compensation.~~

~~The Board of Directors recommends that you vote FOR Proposal 5:~~

~~For~~

~~Against~~

~~Abstain~~

5.4. Transaction of any other matters and business as may properly come before the annual meeting or any postponement or adjournment of the annual meeting.

Please sign exactly as name(s) appear(s) on this Proxy. Joint owners should each sign personally. Corporation Proxies should be signed by an authorized officer. When signing as executors, administrators, trustees, etc., give full title.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

VOTING CARD

[Back Side]



	If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card. To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. PLEASE VOTE PROMPTLY BY INTERNET, PHONE OR MAIL. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report with 10-K Wrap are available at www.proxyvote.com.


	NORTHWESTERN CORPORATION 3010 W. 69TH STREET, SIOUX FALLS, SD 57108 PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL ~~27, 2017~~23, 2020 The undersigned hereby appoints ~~E. Linn Draper Jr.~~Stephen P. Adik and Robert C. Rowe, and each of them, with full power of substitution, attorneys and proxies to represent the undersigned at the ~~2017~~2020 Annual Meeting of Shareholders of NORTHWESTERN CORPORATION to be on held ~~Thursday,~~Wednesday, April ~~27, 2017,~~23, 2020, at 10:00 a.m. ~~Central~~Mountain Daylight Time at the ~~NorthWestern Energy South Dakota/Nebraska Operational Support Office, 600 Market Street West, Huron, South Dakota,~~Big Horn Hotel, 1801 Majestic Lane, Billings, Montana, or at any adjournment or postponement thereof, with all power which the undersigned would possess if personally present, and to vote all shares of common stock of the Company which the undersigned may be entitled to vote at said Meeting as directed on the reverse side. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” THE NOMINEES NAMED IN ITEM 1; “FOR” RATIFICATION OF DELOITTE & TOUCHE LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM IN ITEM 2; AND “FOR” THE ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION IN ITEM ~~3; AND FOR EVERY “1 YEAR” IN ITEM 4.~~ 3. Continued and to be signed on the reverse side




Proposal No. 1 Election of Directors
The Board of Directors recommends you vote “FOR” each of the nine director nominees.	Our Board is nominating nine people for election as directors at the annual meeting. Seven of the nominees currently serve as a director of the company and two nominees, if elected, will become new members of our Board. After election, nominees will serve for one year, until the next annual meeting of shareholders (or until a successor is able to serve). Our nominees are listed below, and we provide additional background information and individual qualifications for each nominee in the Corporate Governance—Individual Directors section of this proxy statement, beginning on page 45.

	Name Occupation	Independent	Age	Director Since	Committee Membership
��	Stephen P. Adik Retired vice chairman, NiSource, Inc.	Yes	73	2004	Audit (Chair); Comp.
	E. Linn Draper, Jr. Retired chairman, president and CEO, American Electric Power Company	Yes	75	2004	Board Chair
	Anthony T. Clark Former commissioner, FERC and NDPUC (and chair)	Yes	45	2016	Gov.
	Dana J. Dykhouse CEO, First PREMIER Bank	Yes	60	2009	Comp. (Chair); Audit
	Jan R. Horsfall CEO, Maxletics Corporation	Yes	56	2015	Audit; Gov.
	Britt E. Ide President, Ide Energy & Strategy; Interim CEO Big Sky Chamber of Commerce	Yes	45	New Nominee	N/A
	Julia L. Johnson President, NetCommunications, LLC; former commissioner and chair, Fla. PSC	Yes	54	2004	Comp.; Gov. (chair)
	Robert C. Rowe President and CEO, NorthWestern Energy	No	61	2008	N/A
	Linda G. Sullivan Executive Vice President and CFO, American Water	Yes	53	New Nominee	N/A




	Proposal No. 1 Election of Directors

The Board of Directors recommends you vote “FOR” each of the 10 director nominees.		Our Board is nominating 10 people for election as directors at the annual meeting. All of the nominees currently serve as a director of our Board. Elected directors will serve for one year, until the next annual meeting of shareholders (or until a successor is able to serve). Our nominees are listed below, and we provide additional background information and individual qualifications for each nominee in the Corporate Governance—Individual Directors section of this proxy statement, beginning on page 46.
		Name Occupation	Independent	Age	Director Since	Committee Membership
		Stephen P. Adik, Board Chair Retired Vice Chair, NiSource, Inc.	Yes	76	2004	N/A
		Anthony T. Clark Senior Advisor, Wilkinson Barker Knauer, LLP; former Commissioner, FERC and NDPSC (and Chair)	Yes	48	2016	Comp.; Gov.
		Dana J. Dykhouse CEO, First PREMIER Bank	Yes	63	2009	Comp. (Chair); Audit
		Jan R. Horsfall CEO, Maxletics Corporation	Yes	59	2015	Operations (Chair); Audit
		Britt E. Ide President, Ide Energy & Strategy	Yes	48	2017	Gov.; Operations
		Julia L. Johnson President, NetCommunications, LLC; former Commissioner and Chair, Florida PSC	Yes	57	2004	Gov. (Chair); Comp.
		Robert C. Rowe President and CEO, NorthWestern Energy	No	64	2008	N/A
		Linda G. Sullivan Retired Executive Vice President and CFO, American Water	Yes	56	2017	Audit (Chair); Operations
		Mahvash Yazdi President, Feasible Management Consulting	Yes	68	2019	Comp.; Operations
		Jeffrey W. Yingling Partner, Energy Capital Ventures	Yes	60	2019	Audit; Gov.

					(continued on next page)




	Proposal No. 2 Ratification of Deloitte & Touche LLP, as Independent Registered Public Accounting Firm for 2020

	Our Audit Committee oversees the integrity of our accounting, financial reporting and auditing processes. To assist with those responsibilities, the committee has appointed Deloitte & Touche LLP as our independent registered public accounting firm to audit our financial statements for 2020. The Board is asking you to ratify the committee’s decision at the annual meeting. The Board values your input on the committee’s appointment of Deloitte, but approval by shareholders is not required by law. If shareholders do not ratify the appointment of Deloitte, the committee will reconsider its selection. Regardless of the voting result, the committee may appoint a new firm at any time if the committee believes a change would be in the best interests of the company and its shareholders.
		Deloitte representatives will be present at the annual meeting. They will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions. Description of Fees The table below presents a summary of the fees Deloitte billed us for professional services for the fiscal years ended December 31, 2018 and 2019.


The Board of Directors recommends you vote “FOR” the ratification of Deloitte as our independent accounting firm for 2020.


			Fee Category	2019 Fees ($)	2018 Fees ($)
			Audit fees	1,349,114	1,418,264
			Audit-related fees	—	—
			Tax fees	187,395	91,971
			All other fees	—	—
			Total fees	1,536,509	1,510,235


	As reflected in the table: Audit fees are fees billed for professional services rendered for the audit of our financial statements, internal control over financial reporting, review of the interim financial statements included in quarterly reports, services in connection with debt and equity securities offerings, and services that are normally provided by Deloitte in connection with statutory and regulatory filings or engagements. For 2019, this amount includes estimated billings for the completion of the 2019 audit, which Deloitte rendered after year-end. Audit-related fees are fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” There were no audit-related fees in fiscal 2018 and 2019. Tax fees are fees billed for tax compliance, tax advice and tax planning. All other fees are fees for products and services other than the services reported above. In fiscal years 2018 and 2019, there were no other fees.
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Proposal No. 2 ~~Ratification of Deloitte & Touche LLP, as Independent Registered Public Accounting Firm for 2017~~
~~The Board of Directors recommends you vote~~ 3 ~~“FOR”~~ ~~Deloitte as our independent accounting firm~~.	Our Audit Committee oversees the integrity of our accounting, financial reporting and auditing processes. To assist with those responsibilities, the committee has appointed Deloitte & Touche LLP as our independent registered public accounting firmAdvisory Vote to audit our financial statements for 2017. The Board is asking you to ratify the committee’s decision at the annual meeting. Deloitte representatives will be present at the annual meeting. They will have the opportunity to make a statement and to respond to appropriate questions.Approve The Board values your input on the committee’s appointment of Deloitte, but approval by shareholders is not required by law. If shareholders do not ratify the appointment of Deloitte, the committee will reconsider its selection. Regardless of the voting result, the committee may appoint a new firm at any time if the committee believes a change would be in the best interests of the company and its shareholders.Named Executive Officer Compensation

		~~Description of Fees~~ ~~The table on the following page presents a summary of the fees Deloitte billed us for professional services for the fiscal years ended December 31, 2015 and 2016. As reflected in the table:~~ ~~Audit fees~~ are fees billed for professional services rendered for the audit of our financial statements, internal control over financial reporting, review of the interim financial statements included in quarterly reports, services in connection with debt and equity securities offerings, and services that are normally provided by Deloitte in connection with statutory and regulatory filings or engagements. For 2016, this amount includes estimated billings for the completion of the 2016 audit, which Deloitte rendered after year-end. ~~Audit-related fees~~ are fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” There were no audit-related fees in fiscal 2015 and 2016. ~~Tax fees~~ ~~are fees billed for tax compliance, tax advice and tax planning.~~ ~~All other fees~~ ~~are fees for products and services other than the services reported above. In fiscal years 2015 and 2016, there were no other fees.~~




		Fee Category	2015 Fees ($)	2016 Fees ($)
		Audit fees	1,285,875	1,350,850
		Audit-related fees	—	—
		Tax fees	168,628	325,400
		All other fees	—	—
		Total fees	1,454,503	1,676,250


Pre-approval Policies and Procedures Rules adopted by the SEC in order to implement requirements of the Sarbanes-Oxley Act of 2002 require public company audit committees to pre-approve audit and non-audit services. Our Audit Committee follows procedures pursuant to which audit, audit-related, and tax services and all permissible non-audit services, are pre-approved by category of service. The fees are budgeted, and actual fees versus the budget are monitored throughout the year. During the year, circumstances may arise when it may become necessary to engage the independent public accountants for additional services not contemplated in the original pre-approval. In those instances, we will obtain the specific pre-approval of the Audit Committee before engaging the independent public accountants. The procedures require the Audit Committee to be informed of each service, and the procedures do not include any delegation of the Audit Committee’s responsibilities to management. The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. Pursuant to the provisions of the Audit Committee Charter, before Deloitte is engaged to render audit or non-audit services, the Audit Committee must pre-approve such engagement. For 2016, the Audit Committee (or the Chair of the Audit Committee pursuant to delegated authority) pre-approved 100 percent of the tax fees
Leased Employees In connection with their audit of our 2016 annual financial statements, more than 50 percent of Deloitte’s work was performed by full-time, permanent employees of Deloitte. Vote Required The affirmative vote of the holders of a majority in voting power of the shares of our common stock which are present in person or represented by proxy and entitled to vote thereon is required to ratify the appointment of Deloitte. Brokers may vote a client’s proxy in their own discretion on this proposal. Abstentions will have the same effect as a vote against the proposal. Unless instructed to the contrary in the proxy, the shares represented by the proxies will be voted “FOR” the proposal to ratify the selection of Deloitte to serve as the independent registered public accounting firm for NorthWestern Corporation for the fiscal year ending December 31, 2017.
	The Board of Directors recommends a vote “FOR” the ratification of Deloitte & Touche LLP as our independent registered public accounting firm.




Performance Against Incentive Targets In 2016, we managed our business through warmer than average winter weather and achieved all-time high safety performance and customer satisfaction, while providing shareholders a 45.7 percent return for the three‑year period ending December 31, 2016. As a result, we achieved above target performance for our 2016 incentive awards.


	2016 Annual Cash Incentive Outcome			2014 Long-Term Incentive Program Vesting
	Financial (55%) – % of Target Achieved	112	%	ROAE / Avg. Net Inc. Growth – % of Target Achieved	157	%
	Safety (15%) – % of Target Achieved	150	%	Relative TSR – % of Target Achieved	60	%
	Reliability (15%) – % of Target Achieved	123	%	Total Payout to Participants*	108	%
	Customer Sat. (15%) – % of Target Achieved	73	%
	Total Funding	113	%	* Each component weighted 50% for total payout


Shareholder Feedback on Executive Pay At our 2016 annual meeting, our 2015 named executive officer pay program was approved by 99.2 percent of the votes cast. In light of the overwhelming approval from our shareholders, we have not changed the overall structure of our named executive officer pay program for 2016. We continue to use the same executive pay components and operate within the parameters previously approved by our shareholders. 2016 Corporate Governance Overview Our Board has nominated nine individuals for election – seven current members and two new candidates, Ms. Britt E. Ide (director and interim CEO of Big Sky Chamber of Commerce) and Ms. Linda G. Sullivan (chief financial officer for American Water). We list all nominees on the following page in Proposal No. 1—Election of Directors. Last year, shareholders elected six of our current director nominees by at least 99.7 percent of the votes cast. Another current director nominee, Mr. Anthony T. Clark (former FERC commissioner), joined our Board in December 2016, following the April 2016 retirement of director Denton Louis Peoples. Our eighth current Board member, Ms. Dorothy M. Bradley announced in February 2017 that she would not be seeking re-election. Each of our Board members and nominees is independent, with the sole exception of our CEO. Our Board is led by an independent chair, and our three Board committees – Audit; Compensation; and Governance – are chaired by and composed entirely of independent directors. In addition, diversity is important to our Board, as reflected in the graphs below regarding our slate of nominees. In 2016, our Board doubled the amount of stock that they are required to hold under our stock ownership guidelines, increasing the guidelines to ten times (from five times) the annual cash Board and committee chair retainers. Other than that change, we made no material changes to our corporate governance practices in 2016.

Diverse Slate of Director Nominees




Performance Against Incentive Targets In 2019, we managed our business through a challenging electric rate case, with significant increases in net income, all-time high customer satisfaction and near all-time best safety performance. We achieved an average return on equity of 10.0 percent, an EPS growth rate of nearly 6.0 percent, and a total shareholder return of 37.0 percent for the three‑year period ending December 31, 2019. As a result, we achieved above target performance for our 2019 annual incentive awards and our long-term incentive awards.


	2019 Annual Cash Incentive Outcome			2017 Long-Term Incentive Program Vesting
	Financial (55%) – % of Target Achieved	150	%	ROAE / Avg. EPS Growth – % of Target Achieved	92	%
	Safety (15%) – % of Target Achieved	92	%	Relative TSR – % of Target Achieved	30	%
	Reliability (15%) – % of Target Achieved	79	%	Total Payout to Participants*	122	%
	Customer Sat. (15%) – % of Target Achieved	118	%
	Total Funding	126	%	* Each component weighted 50% for total payout


Shareholder Feedback on Executive Pay At our 2019 annual meeting, shareholders approved our 2018 named executive officer pay by over 96 percent of the votes cast. In light of the overwhelming approval from our shareholders, we have not changed the overall structure of our named executive officer pay program for 2019. We continue to use the same executive pay components and operate within the parameters our shareholders previously approved. 2019 Corporate Governance Overview Last year, shareholders elected eight of our director nominees by an average of 98 percent of the votes cast. Our Board has nominated each of those eight individuals for re-election as director. Our Board also has nominated Mahvash Yazdi and Jeffrey Yingling for election. Ms. Yazdi and Mr. Yingling joined our board during the fourth quarter of 2019 as part of our Board’s ongoing succession planning process to serve terms through our 2020 annual meeting. Ms. Yazdi was recommended by a Board member, and Mr. Yingling was recommended by the Board and management. As described in more detail later in this Proxy Statement, our Board also determined that it was advantageous to the company to have Stephen Adik and Julia Johnson continue their service as Board members beyond 15 years. Thus, our Board has nominated 10 individuals for election as director. Each of the nominees currently serves on our Board, and we list these individuals in Proposal No. 1—Election of Directors. Each of our nominees is independent, with the sole exception of our CEO. Our Board is led by an independent non-executive chair, and our four Board committees – Audit, Compensation, Governance, and Operations – are chaired by and composed entirely of independent directors. In 2020, we added the Operations Committee to oversee safety, environment, technology, and operations matters. We made no other material changes to our corporate governance practices in 2019. Diversity is important to our Board, as reflected in the graphs below regarding our slate of nominees.

Diverse Slate of Director Nominees




	Unless you specifically withhold your authority to vote for the election of directors, the persons named in the accompanying proxy intend to vote “FOR” the election of each of the director nominees. All nominees have advised the Board that they are able and willing to serve as directors. If any nominee becomes unavailable for any reason (which is not anticipated), the shares represented by the proxies may be voted for such other person or persons as may be determined by the holders of the proxies (unless a proxy contains instructions to the contrary). In no event will the proxy be voted for more than ~~nine~~10 nominees. Board Nomination Process Our Board values the diversity of its members. When selecting this slate of nominees, our Board concluded these nominees will provide insight from a number of perspectives based on their diversity with respect to gender, age, ethnicity, skills and background, as well as location of residence. We believe these varied perspectives expand the Board’s ability to provide relevant guidance to our business. Our Board also concluded that these individuals bring extensive professional experience from both within and outside our industry. This diversity of experience provides our Board with a broad collective skill set which is advantageous to the Board’s oversight of our company. While the industry-specific expertise possessed by certain of the nominees is essential, we also will benefit from the viewpoints of directors with expertise outside our industry. ~~Thus,~~ Over the past several years, our Governance Committee has led our Board through a director succession planning process to allow for a smooth and gradual transition from our directors who were nearing 15 years of service to new directors, while preserving the culture of the Board. The process reviewed individual skill sets and tenures of current members and considered additional skills that could be beneficial for the Board in the future, with a particular focus on the company’s strategy and emerging risks. In October and December of 2019, our Board invited, respectively, Jeffrey Yingling and Mahvash Yazdi to join our Board and serve an initial term through our 2020 annual meeting. Mr. Yingling was recommended for the Board by management and members of the Board, and Ms. Yazdi was recommended by a member of the Board. Consistent with achieving a smooth and gradual succession plan for our Board, our Board also determined that it would be advantageous for Stephen Adik (Board chair) and Julia Johnson (Governance Committee chair) to continue their Board service beyond 15 years. Several factors contributed to this determination. The Board wanted to preserve continuity of culture while new board members transition to service. The Board also values the transaction and regulatory experience Mr. Adik and Ms. Johnson provide while the company completes its proposed acquisition of an additional interest in Colstrip Unit 4 and the Colstrip transmission system. Accordingly, the Board nominated Mr. Adik and Ms. Johnson to serve another term. Our Board recommends a vote “FOR” election of each of the nominees. Vote Required Directors will be elected by a favorable vote of a plurality of the shares of voting stock present in person or by proxy and entitled to vote, in person or by proxy, at the annual meeting. You may vote “FOR” all of the nominees or you may “WITHHOLD AUTHORITY” for one or more of the nominees. Withheld votes will not count as votes cast for the nominee, but will count for purposes of determining whether a quorum is present. Shareholders do not have the right to cumulate their vote for directors. If your shares are held through a broker, bank, or other nominee and you do not vote your shares, your bank, broker, or other nominee may not vote your shares in this proposal, as it is considered a “non-routine” matter. Abstentions or broker non-votes as to the election of directors will not affect the election of the candidates receiving a plurality of votes; however, under our Majority Plus Resignation Vote Policy described on page 5452 of this proxy statement, if a nominee for director receives more “WITHHOLD AUTHORITY” votes than “FOR” votes, such nominee shall immediately tender his or her resignation under the procedures in the policy.
						~~The Board of Directors recommends a vote “FOR” the election of each of the nine director nominees.~~




	Pre-approval Policies and Procedures SEC rules require public company audit committees to pre-approve audit and non-audit services. Our Audit Committee follows procedures pursuant to which audit, audit-related, and tax services and all permissible non-audit services, are pre-approved by category of service. The fees are budgeted, and actual fees versus the budget are monitored throughout the year. During the year, circumstances may arise when it may become necessary to engage the independent public accountants for additional services not contemplated in the original pre-approval. In those instances, we will obtain the specific pre-approval of the Audit Committee before engaging the independent public accountants. The procedures require the Audit Committee to be informed of each service, and the procedures do not include any delegation of the Audit Committee’s responsibilities to management. The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. Pursuant to the provisions of the Audit Committee Charter, before Deloitte is engaged to render audit or non-audit services, the Audit Committee must pre-approve such engagement. For 2019, the Audit Committee (or the Chair of the Audit Committee pursuant to delegated authority) pre-approved 100 percent of the audit and tax fees.
	Leased Employees In connection with their audit of our 2019 annual financial statements, more than 50 percent of Deloitte’s work was performed by full-time, permanent employees of Deloitte. Vote Required The affirmative vote of the holders of a majority in voting power of the shares of our common stock which are present in person or represented by proxy and entitled to vote thereon is required to ratify the appointment of Deloitte as our independent registered public accounting firm for 2020. If voting instructions are not provided, brokers may vote a client’s proxy in their own discretion on this proposal, as it is considered a “routine” matter. Abstentions will have the same effect as a vote against the proposal. Unless instructed to the contrary in the proxy, the shares represented by the proxies will be voted “FOR” the proposal to ratify the selection of Deloitte to serve as the independent registered public accounting firm for NorthWestern Corporation for the fiscal year ending December 31, 2020.




~~Proposal No. 3~~ ~~Advisory Vote to Approve Named Executive Officer Compensation~~

~~The Board of Directors recommends youvote “FOR”~~ ~~the resolution approving named executive officer pay~~.	We would like your input as to how we pay our named executive officers, as required by Section 14A of the Exchange Act, through an advisory vote to approve named executive officer compensation (or a say-on-pay vote). Your vote will provide insight and guidance to us and our Board regarding your sentiment about our executive pay philosophy, policies and practices, as described in this proxy statement. Our Board will consider the guidance received by the say-on-pay vote when determining executive pay for the remainder of ~~2017~~2020 and beyond. We ask you to support our executive pay and vote in favor of the say-on-pay resolution.
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	Last year, through the say-on-pay vote, over 9996 percent of the votes cast approved how we pay our named executive officers. In fact, since our first say-on-pay vote in 2011, at least 94 percent of the votes cast have approved our executive pay each year. We view your voting guidance over the years as strong support for the way we pay our executives. Thus, in ~~2016,~~2019, we left intact the executive pay program you previously approved and continued to use the same four ~~components -~~components: base salary, annual cash incentive awards, long-term incentive awards, and retention/retirement awards. We did not change the design of these components. In fact, the only changes for ~~2016~~2019 from the ~~2015~~2018 program you approved, were (1) three percent base salary increases (the same increase available to ~~all~~some employees) and (2) certain annual incentive adjustments for ~~our CEO and two of our named~~certain executive officers ~~an increase to the long-term incentive target opportunity~~ to align with the market median. If you would like additional information about what we do with our executive pay program, we have provided a more detailed discussion in the Compensation Discussion and Analysis section, or CD&A, starting on page 11 of this proxy statement, and the 2019 Executive Pay section, starting on page 33. Our Human Resources Committee, or Compensation Committee, and our Board believe the company’s overall executive pay program is structured to reflect a strong pay-for-performance philosophy and aligns the long-term interests of our executives and our shareholders. ~~If you would like additional information about what we do with our executive pay program, we have provided a more detailed discussion in the~~ ~~Compensation Discussion and Analysis~~ ~~section, or CD&A, starting on page 11 of this proxy statement, and the~~ ~~2016 Executive Pay~~ ~~section, starting on page 33.~~ ~~We believe we have designed our executive pay program appropriately to align the long-term interests of management and shareholders, and~~Accordingly, the Board recommends that shareholders approve our executive pay program by voting “FOR” the following advisory resolution:

		RESOLVED, that the compensation paid to the company’s named executive officers (as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and any related material disclosed in the company’s ~~2017~~2020 proxy statement) is hereby APPROVED.
The Board of Directors recommends you vote “FOR” the resolution approving named executive officer compensation.




	This advisory vote to approve named executive officer pay is not binding on the company. However, we and our Board will take into account the result of the vote when determining future executive pay arrangements. Vote Required The affirmative vote of the holders of a majority in voting power of the shares of our common stock which are present in person or represented by proxy and entitled to vote thereon is required to approve the say-on-pay resolution set forth above. If your shares are held through a broker, bank, or other nominee and you do not vote your shares, your bank, broker, or other nominee may not vote your shares in this ~~proposal.~~proposal, as it is considered a “non-routine” matter. Assuming a quorum is present, broker non-votes or the failure to vote – either by not returning a properly executed proxy card or not voting in person at the annual meeting – will have no effect on the outcome of the voting on this proposal. Abstentions will have the same effect as a vote against the proposal. Unless instructed to the contrary in the proxy, the shares represented by the proxies will be voted “FOR” the proposal to approve, on an advisory basis, the pay of the company’s named executive officers, as set forth in the company’s ~~2017~~2020 proxy statement.

		The Board of Directors recommends a vote “FOR” adoption of the resolution approving, on an advisory basis, the pay of the company’s named executive officers, as described in this proxy statement.




~~Proposal No. 4~~ ~~Advisory Vote on Frequency of Advisory Votes on Executive Compensation~~

~~The Board of Directors recommends you vote to~~ ~~hold a Say-on-Pay vote~~ ~~to approve executive pay every~~ ~~“1 YEAR”~~		In 2011, over 80 percent of our voting shareholders voted for a say-on-pay vote every year, and we have been conducting an annual say-on-pay vote ever since. Now, we would like your input again as to how often we should hold a say-on-pay vote – every one, two or three years. Our Board believes that continuing our say-on-pay vote every year is the appropriate frequency for our company. We are committed to maintaining high standards of corporate governance. We believe that conducting the say-on-pay vote every year will provide a high level of transparency to our shareholders and a frequent, direct opportunity for our shareholders to offer feedback concerning our executive pay programs. For these reasons, our Board is asking you to vote for a say-on-pay vote every “1 YEAR.” You have three choices for how frequently we should conduct our say-on-pay vote – every one, two or three years. You also may abstain from voting. Your vote on this proposal is an advisory vote. It is not binding on our Board. However, like in 2011, the Board will take into account the result of this year’s vote when determining the frequency of future say-on-pay votes. The Board recommends that you vote to conduct the say-on-pay vote every “1 YEAR.” Unless instructed to the contrary in your proxy, the proxy holder(s) will vote the shares represented by your proxy to conduct the say-on-pay vote every “1 YEAR.” Please note that you are voting for how often you feel the company should conduct a say-on-pay vote. You are not voting to approve or disapprove the Board of Directors’ recommendation. ~~Vote Required~~ If your shares are held through a broker, bank, or other nominee and you do not vote your shares, your bank, broker, or other nominee may not vote your shares in this proposal. Assuming a quorum is present, broker non-votes or the failure to vote – either by not returning a properly executed proxy card or not voting in person at the annual meeting - will have no effect on the outcome of the voting on this proposal. Abstentions also will have no effect on the outcome of this proposal. Unless instructed to the contrary in the proxy, the shares represented by the proxies will be voted “FOR” the proposal to approve, on an advisory basis, the pay of the company’s named executive officers, as set forth in the company’s 2017 proxy statement.




	~~The Board of Directors recommends you vote to hold an advisory vote to approve executive pay every “1 YEAR.”~~




Section	Summary	Page
Executive Summary	Highlights of our ~~2016~~2019 executive pay program and results	11
Pay for Performance	How our pay and performance, relative to our peers, provides value to shareholders	14
Say-on-Pay Results	Details about how our Board uses shareholder feedback to set pay	18
How We Set Pay	How our Compensation Committee governs our executive pay programs	18
Targeted Pay and Competitive Analysis	How our Compensation Committee determined the amount of ~~2016~~2019 executive pay	19
Pay Components	Details about the different parts of ~~2016~~2019 executive pay	22
Other Pay Policies	Information on other aspects of our pay program	31




~~2016~~2019 Basic Earnings Per Share Our ~~earnings per share grew 6.9~~basic EPS increased 1.8 percent to ~~$3.39~~$4.01 in ~~2016~~2019 from ~~$3.17~~$3.94 in ~~2015.~~2018.	Total Shareholder Return Our TSR was ~~45.7~~40.1 percent for the three-year period ending December 31, ~~2016.~~2019, ~~That was ninth highest in~~ranking 7th of our ~~14-member~~2019 peer group ~~and trailed the peer group average (53.4 percent)~~(41.8 percent average).	Dividend Yield Our dividend of ~~$2.00~~$2.30 per share provided a dividend yield of ~~3.5~~3.2 percent based on our stock price at the end of ~~2016.~~2019.



Safety In ~~2016,~~2019, we worked ~~more~~ safely, ~~than ever~~, with lost time and total recordable incident rates ~~at all-time lows.~~near target.	Reliability Thereliabilityof our electric ~~and~~system wasbetter than target, while our natural gas ~~systems~~system was~~at or slightly better than~~ below target.	Customer Service ~~Our~~ For the third year in a row, our JD Power~~rating for overall satisfaction~~ results showed customer satisfaction at our highest level ~~ever~~.ever.



● Our named executive officers had an average compensation per named executive officer that was less than all but ~~three~~five of the other 1312 companies in our 2019 peer group ($~~1.0~~1.4 million for us versus ~~$1.3~~$1.5 million for the ~~median of our peers)~~peer median). ● Our CEO’s total compensation was approximately 8098 percent of the median total compensation (excluding change in pension value) of the CEOs in our 2019 peer group.
			Named Executive Officers for ~~2016~~2019
			Robert C. Rowe ~~President and Chief Executive Officer~~
			~~Brian B. Bird~~ ~~Vice~~President and Chief ~~Financial~~Executive Officer
			~~Heather H. Grahame~~ ~~VicePresident and General Counsel~~ Brian B. Bird
			~~Curtis T. Pohl~~ ~~VicePresident - Distribution~~ Chief Financial Officer
			Heather H. Grahame
			General Counsel and Vice President - Regulatory & Federal Gov't Affairs
			Curtis T. Pohl
			Vice President - Distribution
			Bobbi L. Schroeppel
			VicePresident - Customer Care, Communications and HR


●	Attract and retain a high-quality executive team by providing competitive pay and benefits that reflect our financial operational size;


●	Reward executives for both individual and company performance (based on financial, reliability, customer care, and safety metrics) through performance-based, at-risk pay; and


●	Maximize long-term shareholder value by ~~putting a significant emphasis on~~emphasizing financial performance, reliability, safety, and customer satisfaction.




	Our Pay Practices

	Our executive pay program accomplishes our goals by incorporating certain pay practices while avoiding other, more problematic or controversial practices.

	What We Do
	●	Place a significant portion of executive pay at risk by granting incentive awards that are paid, if earned, based on continuing annual and long-term individual and company performance.
	●	Utilize multiple performance metrics for long-term incentive awards that align executive and shareholder interests.
	●	Target executive pay around the median of our peers, while also considering trade area economics, turn-over, tenure, experience, and other factors.

	What We Don’t Do
	●	Use employment or golden parachute agreements.
	●	Provide change in control payments exceeding three times base salary and target bonus. Our only change in control provision appears in our Equity Compensation Plan and provides for the immediate vesting or cash payment of any unvested equity awards upon a change in control.
	●	Grant stock options. No stock options are currently outstanding, and none have been issued under our Equity Compensation Plan.
	●	Allow option repricing or liberal share recycling. These practices are expressly prohibited under our Equity Compensation Plan.
	●	Promise multi-year guarantees for salary increases.
	●	Provide perquisites for executives that differ materially from those available to employees generally.
	●	Maintain a non-performance-based top hat plan or separate retirement plan available only to our executive officers. We do maintain a performance-based executive retirement / retention program, with five-year cliff vesting and a five-year payout period after the recipient’s separation from service.
	●	Pay tax gross-ups to our executives.
	●	Pay dividends or dividend equivalents on unvested performance shares or units.
	●	Allow our executives or directors to hedge company securities.



Component	Description	Why we include this component	How we determine amount	Decisions for ~~2016~~2019	Reason for Change
Base Salary	Short-term fixed cash compensation	Provide a base level of compensation for executive talent	Target middle of competitive range of peer group, with adjustments for trade area economics, turnover, tenure, and experience	~~Our CEO and other~~Most executives received the same three percent increase ~~generally~~we provided to ~~all~~some employees, and one named executive officer received an additional increase to align with market median	~~To remain~~Remain market competitive and provide cost of living adjustment
Annual Cash Incentive	Short-term variable cash compensation, based on corporate performance against annually established metrics (financial, safety, reliability, and customer satisfaction) and individual performance	Motivate employees to meet and exceed annual company objectives that are part of our strategic plan	Target middle of competitive range of peer group, with adjustments for trade area economics, turnover, tenure, and experience	~~There were no changes~~Increased target opportunity for two executives to ~~the annual cash incentive component for 2016, other than updating the~~align with market median; updated performance targets	~~Not applicable~~Increase cash compensation opportunity to align with market median
Performance Unit Awards under Long-Term Incentive Program (LTIP)	Long-term variable, equity compensation, paid following three-year vesting period if financial performance metrics (EPS, ROAE, and TSR) are achieved	Provide market-competitive, performance-based compensation opportunities while aligning interests of executives and shareholders	Market survey of similar peer group roles and responsibilities and assessment of the strategic value of each position	~~Increased target opportunity for our CEO and two executives and updated~~Updated performance targets	~~To increase the compensation opportunity for strategic positions to align with market median~~N/A
Restricted Share Grants under Executive Retention / Retirement Program (ERRP)	Long-term variable, equity compensation, with corporate performance metrics over a five-year vesting period; paid over five-year period following separation from service	In lieu of a non-performance based supplemental retirement benefit, provide market-competitive, performance-based compensation opportunity that aligns interests of executives and shareholders, while encouraging retention and the continuity of our strategic plan	Peer group and competitive survey data and judgment on internal equity of positions and scope of responsibilities, as well as an assessment of the strategic value of each position	~~There were no changes to the ERRP restricted share grants~~None	~~Not applicable~~N/A



5-YEAR CEO PAY ALIGNMENT
VS. BASIC EPS	VS. ROAE	VS. CUMULATIVE TSR

EPS reflects diluted earnings per average share of our common stock. TSR illustrates the growth of $100 invested in our common stock on December 31, ~~2011,~~2014, assuming reinvestment of dividends. CEO Compensation is total compensation (excluding change in pension value) as published in the proxy statement Summary Compensation Table.


Relative 1-Year CEO Pay*	Relative 1-Year CEO Pay*	Relative 1-Year TSR*		Relative 3-Year CEO Pay*		Relative 3-Year TSR*		Relative 1-Year CEO Pay*	Relative 1-Year TSR*		Relative 3-Year CEO Pay*		Relative 3-Year TSR*
OGE Energy Corp.								100%	El Paso Electric Co.	100%	OGE Energy Corp.	100%	PNM Resources Inc.	100%
PNM Resources Inc.	100%	Otter Tail Corporation	100%	Vectren Corporation	100%	Westar Energy, Inc.	100%	80%	MGE Energy Inc.	86%	PNM Resources Inc.	91%	El Paso Electric Co.	92%
Vectren Corporation	67%	MGE Energy Inc.	72%	PNM Resources Inc.	99%	MGE Energy Inc.	87%
IDACORP, Inc.								73%	Black Hills Corporation	69%	IDACORP, Inc.	79%	OGE Energy Corp.	64%
Black Hills Corporation								65%	PNM Resources Inc.	62%	Black Hills Corporation	75%	IDACORP, Inc.	48%
Avista Corp.	55%	Westar Energy, Inc.	59%	Avista Corp.	83%	IDACORP, Inc.	71%	59%	Northwest Natural Holding	59%	Avista Corp.	68%	Spire Inc.	41%
Westar Energy, Inc.	46%	Black Hills Corporation	58%	Great Plains Energy	70%	Vectren Corporation	63%
Spire Inc.								58%	Portland General Electric	58%	Spire Inc.	65%	Portland General Electric	40%
Portland General Electric	44%	OGE Energy Corp.	51%	Black Hills Corporation	67%	Avista Corp.	58%	45%	NorthWestern Energy	56%	Portland General Electric	60%	NorthWestern Energy	37%
Great Plains Energy	40%	ALLETE, Inc.	49%	Westar Energy, Inc.	65%	Otter Tail Corporation	57%
Black Hills Corporation	40%	Vectren Corporation	42%	Portland General Electric	58%	Portland General Electric	57%
IDACORP, Inc.	30%	El Paso Electric Co.	36%	IDACORP, Inc.	54%	PNM Resources Inc.	53%
OGE Energy Corp.	24%	Portland General Electric	34%	NorthWestern Energy	30%	NorthWestern Energy	43%
NorthWestern Energy								43%	IDACORP, Inc.	35%	NorthWestern Energy	45%	Black Hills Corporation	37%
Otter Tail Corporation								40%	OGE Energy Corp.	35%	El Paso Electric Co.	45%	ALLETE, Inc.	32%
El Paso Electric Co.								38%	Avista Corp.	34%	ALLETE, Inc.	36%	Otter Tail Corporation	29%
ALLETE, Inc.	23%	IDACORP, Inc.	32%	ALLETE, Inc.	28%	El Paso Electric Co.	42%	35%	Spire Inc.	29%	Otter Tail Corporation	35%	Northwest Natural Holding	21%
NorthWestern Energy	21%	Avista Corp.	24%	OGE Energy Corp.	28%	ALLETE, Inc.	41%
El Paso Electric Co.	21%	PNM Resources Inc.	21%	El Paso Electric Co.	26%	Black Hills Corporation	23%
Otter Tail Corporation	16%	NorthWestern Energy	8%	Otter Tail Corporation	10%	Great Plains Energy	20%
Northwest Natural Holding								27%	ALLETE, Inc.	10%	Northwest Natural Holding	25%	Avista Corp.	13%
MGE Energy Inc.	0%	Great Plains Energy	0%	MGE Energy Inc.	0%	OGE Energy Corp.	0%	—%	Otter Tail Corporation	—%	MGE Energy Inc.	—%	MGE Energy Inc.	—%

*Relative CEO pay and TSR are expressed as a percentile of the range between the highest and lowest values.
Source: CEO Pay for the one-year period is the 2015 total compensation and for the three-year period is the 2013-15 total compensation, as published in the 2014, 2015, and 2016 proxy statement Summary Compensation Tables for each respective company. We have excluded any change in pension value from the total compensation calculation because its inclusion could lead to inconsistent comparisons from company to company based upon differing pension plan provisions, length of employee tenure, and other factors. Total Shareholder Return is from SNL Financial for the one- and three-year periods ended December 31, 2016, and assumes reinvestment of dividends.
Source: CEO Pay for the one-year period is the 2018 total compensation and for the three-year period is the 2016-18 total compensation, as published in the 2017, 2018, and 2019 proxy statement Summary Compensation Tables for each respective company. We have excluded any change in pension value from the total compensation calculation because its inclusion could lead to inconsistent comparisons from company to company based upon differing pension plan provisions, length of employee tenure, and other factors. Total Shareholder Return is from S&P Global Market Intelligence for the one- and three-year periods ended December 31, 2019, and assumes reinvestment of dividends.								Source: CEO Pay for the one-year period is the 2018 total compensation and for the three-year period is the 2016-18 total compensation, as published in the 2017, 2018, and 2019 proxy statement Summary Compensation Tables for each respective company. We have excluded any change in pension value from the total compensation calculation because its inclusion could lead to inconsistent comparisons from company to company based upon differing pension plan provisions, length of employee tenure, and other factors. Total Shareholder Return is from S&P Global Market Intelligence for the one- and three-year periods ended December 31, 2019, and assumes reinvestment of dividends.



NAMED EXECUTIVE OFFICER PAY VS. 2019 PEERS			PAY MULTIPLE OF CEO TO SECOND HIGHEST PAID NAMED EXECUTIVE OFFICER


Source: Total compensation (excluding change in pension value) as published in the proxy statement summary compensation table for each respective company. We excluded change in pension value because its inclusion could lead to inconsistent comparisons from company to company based upon differing pension plan provisions, length of employee tenure, and other factors.




Our ~~2016~~2019 Peer Group
Our Compensation Committee (a) selects the members of our peer group and periodically examines whether peers continue to meet the criteria for inclusion described ~~below.~~below, and (b) uses our peer group for both compensation and performance benchmarking. As part of ~~this~~the peer group selection process, the Compensation Committee receives advice from its independent compensation consultant ~~and selects~~to create a peer group that includes companies that: (1) maintain a regulated utility industry perspective ~~emphasizing~~which emphasizes operational excellence and customer satisfaction as a means to create shareholder value; (2) reflect our labor market for key executive talent and are ~~referenced as relevant comparisons by other companies, the analyst community, and their advisors;~~part of high-cost geographic areas; and (3) have similar revenue, market capitalization and return-based measures of performance. For ~~2016,~~2019, based on these criteria and the advice of its independent compensation consultant, our Compensation Committee added ~~OGE Energy~~Avista Corp. ~~and Otter Tail Corporation to~~(which we previously had removed from our peer group in 2018 due to a proposed merger transaction that ultimately was not consummated) and removed ~~three companies that were in our 2015 peer group because of merger or~~Vectren Corporation following its acquisition ~~activity.~~by another company.

~~2016~~2019 Peer Group ALLETE, Inc. (ALE) Avista ~~Corp.~~Corporation (AVA) Black Hills Corporation (BKH) El Paso Electric Co. ~~Great Plains Energy Incorporated~~ (EE) IDACORP, Inc. (IDA) MGE Energy Inc. (MGEE) NorthWestern Energy (NWE) Northwest Natural Holding Co. (NWN) OGE Energy Corp. (OGE) Otter Tail Corporation (OTTR) PNM Resources Inc. (PNM) Portland General Electric Company (POR) ~~Vectren Corporation~~ ~~Westar Energy,~~Spire Inc. (SR)	Market Capitalization(1)	Revenue (2)








	(1) Market capitalization range of our peer group as of February ~~3, 2017.~~19, 2020.
	(2) Range of publicly available trailing twelve months total revenues for our peer group ~~over the four most recent publicly available fiscal quarters.~~as of February 19, 2020.




Align Interests. Provide pay that aligns management (and employee) interests with those of shareholders and customers.	Peer Comparison. Establish overall pay approximating the median of our peer group and applicable position comparisons.	Attract Talent. Set pay that will attract talent from both within and outside the utility industry.



Economic Circumstances. Set pay based on economic circumstances, including turnover and retention considerations.	Pay for Performance. Tie all components of incentive pay to the company’s short-and long-term financial and operational performance.	No Executive Perks. Executives participate in same benefits plans available to all non‑union employees, with no additional perquisites, other than executive physicals.




July Review and discuss timeline for setting executive pay		October Review materials from independent compensation consultant:
July Review and discuss timeline for setting executive pay				●	Executive pay overview
		●	Peer compensation analysis
		●	Preliminary design of annual and long-term incentive opportunities



December Evaluate overall executive pay program:		February Finalize executive pay:
●	Review preliminary five-year financial plan	●	Review final five-year financial plan
●	Approve upcoming annual incentive plan grants	●	Approve executive pay
●	Review proposed long-term incentive grants	●	Approve long-term incentive program grants
●	Approve annual executive retention / retirement grants	●	Review performance metrics results for prior year and approve payouts for current annual incentive plan and vesting of long-term incentive program


●	The level of achievement of our pre-established performance goals;


●	Individual performance and scope of job responsibilities;


●	Market competitiveness and internal executive turnover; and


●	The executive’s industry and position experience and tenure.



~~The target pay mix for our named executive officers changed slightly in 2016 from 2015. As part of the overall 2016 pay package our Compensation Committee increased the targeted long-term~~The target pay mix for our named executive officers generally was unchanged in 2019 from 2018. As part of the overall 2019 pay package, our Compensation Committee slightly increased the targeted annual incentive opportunity for ~~our CEO and~~ two of our named executive officers as described below in the Annual Cash Incentive Awards section. However, the percentage of at-risk pay component of the target pay mix remained the same for our named executive officers, as a whole, to 68 percent in both 2019 and 2018.~~2016 Long-Term Incentive Program Performance Unit Grants~~ ~~section. As a result, the percentage of at-risk pay component of the target pay mix increased for our named executive officers, as a whole, to 66 percent in 2016 from 62 percent in 2015.~~		~~percent of pay~~ ~~at risk~~ ~~increased for 2016~~



CEO PAY MIX			OTHER NAMED EXECUTIVE OFFICER AVERAGE PAY MIX


Charts represent target level for each component of compensation.



Based on this analysis and as illustrated in the chart to the right, the direct pay opportunity for our highest-paid employees is below the market median of the direct pay opportunity for the highest-paid employees for energy services companies. For the top five highest-paid employees, our employees’ pay opportunity is 91 percent of the median; while our top 10, 15, and 20 highest-paid employees have a pay opportunity that is 92 percent, 87 percent and 85 percent, respectively, of the median. We also conducted a separate analysis of the 2015 executive pay of the 13 other companies in our peer group. This internal analysis, which was based on proxy data, examined base salary, bonus, other annual compensation, equity awards, and non-equity incentive plan compensation (and excluded change in pension value). Using this analysis, our named executive officers had average pay of $1.03 million in 2015, which was less than all but three of the companies in our peer group; while the peer group median had average pay per named executive officer of approximately $1.33 million. For 2015, our CEO’s total pay was approximately 80 percent of the median		~~AGGREGATE PAY OPPORTUNITY~~ ~~FOR HIGHEST-PAID EMPLOYEES~~

		*Top 5 is based on 2016 proxy data of energy services companies. Top 10, Top 15, and Top 20 are based on a Willis Towers Watson survey of energy services companies. Values exclude any change in pension value.

~~total pay of CEOs in our peer group.~~



We believe executive pay must be internally consistent and equitable to motivate our employees to create shareholder value. We are committed to internal pay equity, and the Compensation Committee monitors the relationship between the pay our executive officers receive and the pay our non-managerial employees receive. The Compensation Committee reviewed a comparison of CEO pay (base salary and incentive pay) to the pay of all our employees (other than our CEO) in ~~2016.~~2019. The compensation for our CEO in ~~2016~~2019 was approximately 2227 times the median pay of our ~~full-time employees.~~employees, the same as it was in 2018, using the same methodology.	~~22:~~27:1 CEO Pay Ratio