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 | ||
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Proxy Summary | ||||||||||||||||||||||||||||||||
Items of Business | ||||||||||||||||||||||||||||||||
Proposal | Board Recommendation | Page | ||||||||||||||||||||||||||||||
1 | Election of Directors | FOR each director nominee | ||||||||||||||||||||||||||||||
2 | Ratification of Deloitte & Touche LLP as the independent registered public accounting firm for 2023 | FOR | ||||||||||||||||||||||||||||||
3 | Advisory vote to approve named executive officer compensation | FOR | ||||||||||||||||||||||||||||||
4 | Advisory vote on the frequency of the advisory votes on executive compensation | every 1 YEAR | ||||||||||||||||||||||||||||||
2022 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 through the use of the four components summarized in the table below. The components remain mostly unchanged from 2021, with the exception of the fourth component — the ERRP awards — which our Compensation Committee updated in 2022 to align with the market by removing the performance metric. The design of this program and its components are detailed in the Compensation Discussion and Analysis. | ||||||||||||||||||||||||||||||||
Percent of Total Compensation | ||||||||||||||||||||||||||||||||
Component | Description | CEO | Other NEO Avg. | |||||||||||||||||||||||||||||
Base Salary Fixed, paid in cash | Target middle of competitive range of peer group, with adjustments for trade area economics, turnover, tenure, and experience | 21% | 35% | |||||||||||||||||||||||||||||
Annual Cash Incentive Variable, paid in cash | Based on net income, safety, reliability, and customer satisfaction metrics and individual performance | 21% | 20% | |||||||||||||||||||||||||||||
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% | 36% | |||||||||||||||||||||||||||||
Executive Retention / Retirement Program Awards (ERRP) Time-based, paid in equity | Vests over a five-year period and paid following separation from service over five-year period. | 12% | 9% | |||||||||||||||||||||||||||||
The performance-based incentive awards and time-based equity award place a significant percentage of executive compensation at risk — approximately 79 percent of the compensation of our CEO and about 65 percent of the compensation of our other named executive officers (NEOs). Our Board establishes the metrics and targets for these incentive awards based upon advice from the Board’s independent compensation consultant, WTW. With the exception of the change to the ERRP awards (noted above), the 2022 performance metrics did not change from 2021. We also require our executives to retain meaningful ownership of our stock (from 2x to 6x their annual base salary). This compensation 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 2022 was 26 to 1. | ||||||||||||||||||||||||||||||||
Performance Against Incentive Targets With a pending general rate review in Montana, last year was critical in setting the stage for future growth. While we planned for a higher, more sustainable level of operating expense, and issued | ||||||||||||||||||||||||||||||||
NorthWestern Energy | Proxy Statement | Page 6 | ||||||||||||||||||||||||||||||||
Proxy Summary | |||||||||||||||||||||||||||||
incremental equity to fund our capital plan while protecting our credit ratings, our earnings were impacted by the challenges associated with the economic climate coming out of the pandemic, the delayed recovery of power purchases at extremely high prices, a significant increase in interest rates, and continued inflation, along with higher depreciation and property taxes from our significant investments in critical infrastructure. In short, our net income declined. For the three-year period ending December 31, 2022, we achieved an average return on equity of 7.8 percent, but our total | |||||||||||||||||||||||||||||
shareholder return and EPS growth rate were unfavorable, at negative 7.9 percent and negative 5.0 percent, respectively, and thus failed to reach target for our long-term incentive awards that vested in 2022. | |||||||||||||||||||||||||||||
As a result of working safely, improving customer satisfaction levels, and providing reliable service, we were able to achieve near target performance for our 2022 annual incentive awards. Further details regarding these awards and how performance is calculated are provided in the Compensation Discussion and Analysis. | |||||||||||||||||||||||||||||
2022 Annual Cash Incentive Outcome | 96% | Long-Term Incentive Program Vesting in 2022 | 20% | ||||||||||||||||||||||||||
Shareholder Feedback on Executive Pay At our 2022 virtual annual meeting, shareholders approved our 2021 NEO pay by 97.6 percent of the votes cast. In light of the overwhelming approval from our shareholders, we have not changed the overall structure of our NEO pay program for 2022. We continue to use the same executive pay components and operate within the general parameters our shareholders previously approved. Pay Versus Performance Based on the information in our pay versus performance disclosure, the compensation actually paid (CAP) to our NEOs is less than the compensation disclosed in the Summary Compensation Table. In some respects, this appears to correlate with performance — CAP appeared to increase with increased total shareholder return. With half of our LTIP awards tied to relative total shareholder return, this result is not surprising. In other respects, CAP does not appear to correlate with performance — CAP increased even though net income and our supplemental company selected metric (three-year return on average equity) decreased. This result also is not surprising because these metrics represent a small percentage of incentive compensation. Corporate Governance Overview Corporate Governance is a pillar at NorthWestern Corporation, and we believe our governance practices are sound, as demonstrated by our ranking from Moody’s Investor Service as the 5th best utility for governance practices. In addition to the overview summarized here, we provide details of our governance practices in the Corporate Governance section of this proxy statement. We are nominating 10 individuals for election as director. Nine of the nominees currently serve on our Board, and Sherina Edwards, our new nominee, will begin serving if elected by shareholders at the annual meeting. Each of the nominees is independent, with the sole exception of our CEO. Our Board is diverse from several | |||||||||||||||||||||||||||||
perspectives (including four of 10 female nominees and two of 10 ethnic minority nominees). Detailed biographies of our nominees are provided later in this proxy statement. Our Board is led by an independent chair, and our four Board committees – Audit, Compensation, Governance, and Operations – are chaired by and composed entirely of independent directors. Last year, shareholders elected our 2022 nominees by an average of 99.5 percent of the votes cast. | |||||||||||||||||||||||||||||
NorthWestern Energy | Proxy Statement | Page 7 |
Items of Business | ||||||||||||||||||||||||||||||||
Proposal No. 1 Election of Directors | ||||||||||||||||||||||||||||||||
Our Board is nominating 10 people for election as directors at the annual meeting. All but one 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 diverse slate of nominees is 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 56. | ||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote “FOR” each of the 10 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 following director nominees: | ||||||||||||||||||||||||||||||||
Name Occupation | Independent | Age | Director Since | Committee Membership | ||||||||||||||||||||||||||||
Brian Bird President and CEO, NorthWestern Energy | No | 60 | 2023 | N/A | ||||||||||||||||||||||||||||
Anthony Clark Senior Advisor, Wilkinson Barker Knauer, LLP; former Commissioner, FERC and NDPSC (and Chair) | Yes | 51 | 2016 | Comp; Gov. | ||||||||||||||||||||||||||||
Dana Dykhouse CEO, First PREMIER Bank | Yes | 66 | 2009 | Independent Board Chair | ||||||||||||||||||||||||||||
Sherina Edwards Former Chief Strategy Officer, Mastec, Inc. | Yes | 39 | New Nominee | TBD | ||||||||||||||||||||||||||||
Jan Horsfall Chief Operations Officer, Sparq Games, Inc. | Yes | 62 | 2015 | Operations (Chair); Audit | ||||||||||||||||||||||||||||
Britt Ide CEO, Ide Energy & Strategy | Yes | 51 | 2017 | Comp.; Gov. | ||||||||||||||||||||||||||||
Kent Larson Retired Executive Vice President and Group President, Xcel Energy | Yes | 63 | 2022 | Audit; Operations | ||||||||||||||||||||||||||||
Linda Sullivan Retired Executive Vice President and CFO, American Water | Yes | 59 | 2017 | Audit (Chair); Operations | ||||||||||||||||||||||||||||
Mahvash Yazdi President, Feasible Management Consulting | Yes | 71 | 2019 | Comp. (Chair); Operations | ||||||||||||||||||||||||||||
Jeffrey Yingling Co-Founder, General Partner, Energy Capital Ventures | Yes | 63 | 2019 | Audit; Gov. (chair) | ||||||||||||||||||||||||||||
NorthWestern Energy | Proxy Statement | Page 9 |
Board Recommendation | ||||||||
Proposal | Page | |||||||
1 | Election of eight directors | FOR each director nominee | ||||||
2 | Approval of Deloitte & Touche LLP as the Independent Registered Accounting Firm for 2018 | FOR | ||||||
3 | Advisory Vote to Approve Named Executive Officer Compensation | FOR |
Proxy Summary Items of Business to Be Considered at the Annual Meeting | ||||||||||||
Proposal | Board Recommendation | Page | ||||||||||
1 | FOR each director nominee | |||||||||||
2 | FOR | |||||||||||
3 | FOR | |||||||||||
2017 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 78 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. Other than the addition of a safety training metric, 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 2017 was 23:1. | ||||||||||||
Executive Pay Components at a Glance | ||||||||||||
Percent of Total Compensation | ||||||||||||
Component | Description | CEO | Other NEO Avg. | Changes in 2017 | ||||||||
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% | 42% | One executive received 3.00 percent increase; CEO and remaining executives received 2.75 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 | 22% | 18% | Updated performance targets; added safety training metric; CEO target opportunity increased to align with market median | ||||||||
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 | 44% | 32% | Increased target opportunity for one executive to align with market median; no change to performance metrics; 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 | 11% | 9% | No change in 2017 | ||||||||
Performance Against Incentive Targets In 2017, we managed our business through warmer than average winter weather and achieved all-time high customer satisfaction and near all-time high safety performance, while providing shareholders a 17.4 percent return for the three‑year period ending December 31, 2017, which lagged our peer group. As a result, we achieved near target performance for our 2017 annual incentive awards and below target performance for our long-term incentive awards. | |||||||||||||||
2017 Annual Cash Incentive Outcome | 2015 Long-Term Incentive Program Vesting | ||||||||||||||
Financial (55%) – % of Target Achieved | 93 | % | ROAE / Avg. Net Inc. Growth – % of Target Achieved | 35 | % | ||||||||||
Safety (15%) – % of Target Achieved | 107 | % | Relative TSR – % of Target Achieved | 10 | % | ||||||||||
Reliability (15%) – % of Target Achieved | 95 | % | Total Payout to Participants* | 45 | % | ||||||||||
Customer Sat. (15%) – % of Target Achieved | 116 | % | |||||||||||||
Total Funding | 99 | % | * Each component weighted 50% for total payout | ||||||||||||
Shareholder Feedback on Executive Pay At our 2017 annual meeting, our 2016 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 2017. We continue to use the same executive pay components and operate within the parameters previously approved by our shareholders. 2017 Corporate Governance Overview Our Board has nominated eight individuals for election. We list all nominees on the following page in Proposal No. 1—Election of Directors. Last year, shareholders elected our eight director nominees by at least 99 percent of the votes cast. Our ninth current Board member, Dr. E. Linn Draper, Jr., announced in February 2018 that he would be retiring as a Board member and would not be seeking re-election at this year’s annual meeting. As a result of his announcement, our Board has elected Mr. Stephen P. Adik, current chair of our Audit Committee, to serve as non-executive chair of the Board following Dr. Draper’s retirement, subject to Mr. Adik’s election to serve as a director at our 2018 annual meeting. Each of our Board members and nominees is independent, with the sole exception of our CEO. Our Board currently is led by an independent non-executive chair, and our three Board committees – Audit; Compensation; and Governance – are chaired by and composed entirely of independent directors. Following Dr. Draper’s retirement, our Board will continue to be led by an independent non-executive chair. In addition, diversity is important to our Board, as reflected in the graphs below regarding our slate of nominees. We made no material changes to our corporate governance practices in 2017. | |||||||||||||||
Diverse Slate of Director Nominees | |||||||||||||||
Proposal No. 1 Election of Directors | |||||||||
The Board of Directors recommends you vote “FOR” each of the eight director nominees. | The Board of Directors recommends you vote “FOR” each of the eight director nominees. | Our Board is nominating eight people for election as directors at the annual meeting. All of the nominees currently serve as a director 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 44. | |||||||
Name Occupation | Independent | Age | Director Since | Committee Membership | |||||
Stephen P. Adik Retired Vice Chair, NiSource, Inc. | Yes | 74 | 2004 | Audit (Chair); Comp. | |||||
Anthony T. Clark Senior Advisor, Wilkinson Barker Knauer, LLP; former Commissioner, FERC and NDPSC (and Chair) | Yes | 46 | 2016 | Gov. | |||||
Dana J. Dykhouse CEO, First PREMIER Bank | Yes | 61 | 2009 | Comp. (Chair); Audit | |||||
Jan R. Horsfall CEO, Maxletics Corporation | Yes | 57 | 2015 | Audit; Gov. | |||||
Britt E. Ide President, Ide Energy & Strategy; Executive Director, Yellowstone Club Community Foundation | Yes | 46 | 2017 | Gov. | |||||
Julia L. Johnson President, NetCommunications, LLC; former Commissioner and Chair, Florida PSC | Yes | 55 | 2004 | Gov. (Chair); Comp. | |||||
Robert C. Rowe President and CEO, NorthWestern Energy | No | 62 | 2008 | N/A | |||||
Linda G. Sullivan Executive Vice President and CFO, American Water | Yes | 54 | 2017 | Audit | |||||
Items of Business | |||||||||||||||||||||||
All nominees have advised the Board that they are able and willing to serve as directors. | |||||||||||||||||||||||
becomes unavailable for any reason, 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 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 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 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 longer tenured directors while preserving the culture of the Board. The process includes a review of individual skill sets and tenures of current members and considers additional attributes that could be beneficial for the Board in the future, with a particular focus on company strategy, emerging risks, and a diversity of perspectives. 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 at the virtual annual meeting or by proxy and entitled to vote, | |||||||||||||||||||||||
Items of Business | ||||||||||||||||||||||||||||||||
Proposal No. 2 Ratification of Deloitte & Touche LLP as the Independent Registered Public Accounting Firm for 2023 | ||||||||||||||||||||||||||||||||
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 2023. 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. | ||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote “FOR” the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for 2023. | ||||||||||||||||||||||||||||||||
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 Audit Fees The table below presents a summary of the fees Deloitte billed us for professional services for the fiscal years ended December 31, 2021 and 2022. | ||||||||||||||||||||||||||||||||
Fee Category | 2021 Fees ($) | 2022 Fees ($) | 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 2022, this amount includes estimated billings for the completion of the 2022 audit, which Deloitte rendered after year-end. | |||||||||||||||||||||||||||||
Audit fees | 1,339,144 | 1,393,630 | ||||||||||||||||||||||||||||||
Audit-related fees | 199,300 | 3,790 | ||||||||||||||||||||||||||||||
Tax Fees | 104,733 | 95,159 | ||||||||||||||||||||||||||||||
All other fees | — | — | ||||||||||||||||||||||||||||||
Total Fees | 1,643,177 | |||||||||||||||||||||||||||||||
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.” The 2022 audit-related fees concerned Deloitte’s review of the company’s registration statements (and preparation of comfort letters) and our use of certain Deloitte research tools. 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 2021 and 2022, there were no other fees. | ||||||||||||||||||||||||||||||||
NorthWestern Energy | Proxy Statement | Page 11 |
Items of Business | ||||||||||||||||||||
Pre-approval Policies and Procedures | ||||||||||||||||||||
SEC rules require public company audit committees to pre-approve audit and non-audit services. Our Audit Committee | ||||||||||||||||||||
non-audit services are pre-approved by category of service. The fees are budgeted, and actual fees versus the it may become necessary to engage the independent public accountants for additional services not contemplated in the pre-approved budget. 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 2022, 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 Vote Required The affirmative vote of the holders of a majority in voting power of the shares of our common stock which are present online at the virtual annual meeting or represented by proxy and | ||||||||||||||||||||
Audit Committee Report Based on its review of 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, 2022, filed with the SEC. Audit Committee Linda Sullivan, Chair Jan Horsfall Kent Larson Jeffrey Yingling | ||||||||||||||||||||
NorthWestern Energy | Proxy Statement | Page 12 |
Fee Category | 2016 Fees ($) | 2017 Fees ($) | |||||||||
Audit fees | 1,350,850 | 1,382,084 | |||||||||
Audit-related fees | — | — | |||||||||
Tax fees | 325,400 | 85,221 | |||||||||
All other fees | — | ||||||||||
Total fees | 1,676,250 | 1,467,305 | |||||||||
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 2017, 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 2017 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, 2018. | |||||||||||
Items of Business | ||||||||||||||||||||||
Proposal No. 3 Advisory Vote to Approve Named Executive Officer Compensation | ||||||||||||||||||||||
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 | ||||||||||||||||||||||
The Board of Directors recommends you vote “FOR” the resolution approving named executive officer compensation. | ||||||||||||||||||||||
Last year, through the say-on-pay vote, We view your voting guidance over the years as strong support for the way we pay our executives. Thus, in or to reflect increased responsibilities following a recent promotion; (3) a one-time grant of restricted common stock as a promotion award to our incoming CEO; and (4) removal of the performance metric from our retention/retirement awards as we transition to a market-based approach. If you would like additional information 35. 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. 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 | ||||||||||||||||||||||
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. | ||||||||||||||
NorthWestern Energy | Proxy Statement | Page 13 |
Items of | ||||||||||||||||||||
Vote Required | ||||||||||||||||||||
The affirmative vote of the holders of a majority in voting power of the shares of our common stock which are present | ||||||||||||||||||||
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 is present, broker non-votes or the failure to vote – either by not returning a properly executed proxy card or not voting Proposal No. 4 Advisory Vote on the Frequency of Advisory Votes on Executive Compensation Based on the input of our shareholders (80 percent in 2011 and 72 percent in 2017), we have been conducting an annual say-on-pay vote since the requirement began. 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.” | ||||||||||||||||||||
The Board of Directors recommends you vote to hold a Say-on-Pay vote to approve executive pay 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. The Board recommends that you vote to conduct the say-on-pay vote every “1 YEAR.” Your vote on this proposal is an advisory vote. It is not binding on our Board. However, as with our two prior votes, the Board will take into account the result of this year’s vote when determining the frequency of future say-on-pay votes. 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 your proxy, the proxy holder(s) will vote the shares represented by your proxy to conduct the say-on-pay vote every “1 YEAR.” | ||||||||||||||||||||
NorthWestern Energy | Proxy Statement | Page 14 |
Section | Summary | Page | ||||||||||||
Highlights of our | ||||||||||||||
Details about how our Board uses shareholder feedback to set pay | ||||||||||||||
How our Compensation Committee governs our executive pay programs | ||||||||||||||
How our Compensation Committee determined the amount of | ||||||||||||||
Details about the different parts of | ||||||||||||||
Information on other aspects of our pay program | ||||||||||||||
Our basic | Total Shareholder Return OurTSR was | Dividend Yield Our dividend of of 2022. | ||||||||||||||||||||||||||||||
Safety In | Reliability The reliability of our electric and natural gas systems | Customer Service | ||||||||||||||||||||||||||||||
NorthWestern Energy | Proxy Statement | Page 16 |
Compensation Discussion and Analysis |
Named Executive Officers | |||||||||||||||
Robert Rowe | Crystal Lail | ||||||||||||||
Vice President and Chief Financial Officer | |||||||||||||||
Brian Bird | Curtis Pohl | ||||||||||||||
President and Chief Operating Officer | Vice President - Distribution | ||||||||||||||
Heather Grahame | |||||||||||||||
General Counsel | |||||||||||||||
Bob Rowe and Heather Grahame retired from their respective positions listed above effective January 1, 2023. Their commitment and contributions to the Company over the years have proven invaluable. We offer our sincere thanks for their dedicated service. | |||||||||||||||
Compensation Discussion and Analysis |
2022 Peer Group ALLETE, Inc. (ALE) Avista Corporation (AVA) Black Hills Corporation (BKH) IDACORP, Inc. (IDA) MGE Energy Inc. (MGEE) NorthWestern Energy (NWE) Northwest Natural Holding Co. (NWN) OGE Energy Corp. (OGE) ONE Gas Inc. (OGS) Otter Tail Corporation (OTTR) PNM Resources Inc. (PNM) Portland General Electric Company (POR) Spire Inc. (SR) | Market Capitalization (1) | Revenue (2) | |||||||||||||||
NorthWestern Energy | Proxy Statement | Page 18 |
Analysis |
Component | Description | Why we include this component | How we determine amount | Decisions for | 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 | ||||||||||||||
Annual Cash Incentive | Short-term variable cashcompensation, based on corporate performance against annually established metrics (financial, safety, reliability, and customer satisfaction) andindividual 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 | ||||||||||||||
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 | ||||||||||||||
Restricted Share Grants under Executive Retention / Retirement Program (ERRP) | Long-term | 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 |
Relative 1-Year CEO Pay* | Relative 1-Year TSR* | Relative 3-Year CEO Pay* | Relative 3-Year TSR* | |||||||
Great Plains Energy | 100% | Avista Corp. | 100% | PNM Resources Inc. | 100% | Otter Tail Corporation | 100% | |||
Vectren Corporation | 96% | Vectren Corporation | 89% | Vectren Corporation | 94% | Avista Corp. | 100% | |||
Black Hills Corporation | 92% | Great Plains Energy | 71% | Avista Corp. | 83% | Vectren Corporation | 90% | |||
PNM Resources Inc. | 89% | El Paso Electric Co. | 70% | Black Hills Corporation | 73% | El Paso Electric Co. | 81% | |||
Avista Corp. | 82% | PNM Resources Inc. | 67% | Great Plains Energy | 72% | IDACORP, Inc. | 81% | |||
OGE Energy Corp. | 79% | ALLETE, Inc. | 62% | Portland General Electric | 60% | ALLETE, Inc. | 81% | |||
IDACORP, Inc. | 74% | IDACORP, Inc. | 53% | IDACORP, Inc. | 58% | MGE Energy Inc. | 78% | |||
Portland General Electric | 62% | Otter Tail Corporation | 41% | OGE Energy Corp. | 46% | PNM Resources Inc. | 78% | |||
El Paso Electric Co. | 50% | NorthWestern Energy | 30% | NorthWestern Energy | 36% | Portland General Electric | 50% | |||
NorthWestern Energy | 42% | Portland General Electric | 29% | El Paso Electric Co. | 34% | Great Plains Energy | 41% | |||
ALLETE, Inc. | 28% | OGE Energy Corp. | 10% | ALLETE, Inc. | 28% | Black Hills Corporation | 37% | |||
Otter Tail Corporation | 25% | Black Hills Corporation | 7% | Otter Tail Corporation | 20% | NorthWestern Energy | 24% | |||
MGE Energy Inc. | —% | MGE Energy Inc. | —% | MGE Energy Inc. | —% | OGE Energy Corp. | —% | |||
*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 2016 total compensation and for the three-year period is the 2014-16 total compensation, as published in the 2015, 2016, and 2017 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, 2017, and assumes reinvestment of dividends. We have excluded the CEO compensation and TSR for one of our peers, Westar Energy, Inc., from this presentation due to a pending merger transaction and the related lack of proxy statement compensation disclosure. |
NorthWestern Energy | Proxy Statement | Page 19 |
Compensation Discussion and Analysis |
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. | ||||||||||||||||||||||||||||||
NorthWestern Energy | Proxy Statement | Page 20 |
Compensation Discussion and Analysis |
July Review and discuss timeline for setting executive pay | October Review materials from independent compensation consultant: | |||||||||||||||||||||||||
•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 | ||||||||||||||||||||||||||
•Approve upcoming annual incentive plan grants | ||||||||||||||||||||||||||
•Review proposed long-term incentive grants | ||||||||||||||||||||||||||
•Approve annual executive retention / retirement grants | •Review final five-year financial plan •Approve executive pay •Approve long-term incentive program grants •Review performance metrics results for prior year and approve payouts for current annual incentive plan and vesting of long-term incentive program | |||||||||||||||||||||||||
CEO PAY MIX | OTHER NAMED EXECUTIVE OFFICER AVERAGE PAY MIX | |||||||||||||
Charts represent target level for each component of compensation. |
NorthWestern Energy | Proxy Statement | Page 22 |
Compensation Discussion and Analysis |
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 | CEO Pay Ratio |
CEO to Median Employee | ||||||||||
Pay Ratio | ||||||||||
President and CEO | Median Employee | |||||||||
Base Salary | $ | 607,232 | $ | 81,939 | ||||||
Stock Awards | 1,497,280 | — | ||||||||
Non-Equity Incentive Plan Compensation | 605,836 | 3,363 | ||||||||
Change in Pension Value and Nonqualified Deferred Compensation Earnings (1) | 94,609 | 9,617 | ||||||||
All Other Compensation | 43,322 | 29,580 | ||||||||
TOTAL | $ | 2,848,279 | $ | 124,499 | ||||||
CEO Pay to Median Employee Pay Ratio | 23 | : | 1 | |||||||
(1) These amounts are attributable to a change in the value of each individual’s defined benefit pension account balance and do not represent earned or paid compensation. Pension values are dependent on many variables including years of service, earnings, and actuarial assumptions. | ||||||||||
NorthWestern Energy | Proxy Statement | Page 23 |
Compensation Discussion and Analysis |
CEO to Median Employee Pay Ratio | ||||||||||||||||||||
CEO | Median Employee | |||||||||||||||||||
Base Salary | $691,669 | $96,248 | ||||||||||||||||||
Stock Awards | $1,940,934 | — | ||||||||||||||||||
Annual Incentive Plan Compensation | $669,175 | $1,909 | ||||||||||||||||||
Change in Pension Value and Nonqualified Deferred Compensation Earnings (1) | $0 | — | ||||||||||||||||||
All Other Compensation | $73,794 | $32,735 | ||||||||||||||||||
TOTAL | $3,375,572 | $130,892 | ||||||||||||||||||
CEO Pay to Median Employee Pay Ratio | 26 | : | 1 | |||||||||||||||||
(1) These amounts are attributable to a change in the value of each individual’s defined benefit pension account balance and do not represent earned or paid compensation. Pension values are dependent on many variables including years of service, earnings, and actuarial assumptions. | ||||||||||||||||||||
The primary pay components for our executive officers in | |||||||||||
•Base Salary; | |||||||||||
•Annual performance-based cash incentive awards; and | |||||||||||
•Long-term performance-based equity incentive awards in the form of performance units and ERRP restricted share units. | |||||||||||
NorthWestern Energy | Proxy Statement | Page 24 |
Compensation Discussion and Analysis |
The Compensation Committee considers adjustments to base salaries for executive officers on an annual basis. For 2022, the Compensation Committee felt that an increase to the base salaries of our executive officers in line with the increases generally provided to our employees was reasonable in light of the company’s operating results in 2021. In early 2021, we announced that Ms. Lail had been promoted to vice president and CFO. Her base salary | ||||||||||||||||||||||||||
increase of 10 percent for 2022 reflected the continued transition of her compensation to match her increased responsibilities. The 2.3% increase for Mr. Pohl was based on a market median analysis. The table to the right sets forth the base salaries for our NEOs. The base salary adjustments for 2022 were effective April 1, 2022. | ||||||||||||||||||||||||||
Annualized Base Salary | Increase (%) | |||||||||||||||||||||||||
2021 | 2022 | |||||||||||||||||||||||||
Name | ($) | ($) | ||||||||||||||||||||||||
Robert Rowe | 676,754 | 697,057 | 3.0 | |||||||||||||||||||||||
Brian Bird | 500,000 | 515,000 | 3.0 | |||||||||||||||||||||||
Heather Grahame | 441,475 | 454,719 | 3.0 | |||||||||||||||||||||||
Crystal Lail | 375,000 | 412,500 | 10.0 | |||||||||||||||||||||||
Curtis Pohl | 318,076 | 325,233 | 2.3 |
Annualized Base Salary | Increase (%) | |||||
2016 | 2017 | |||||
Name | ($) | ($) | ||||
Robert C. Rowe | 595,578 | 611,956 | 2.75 | |||
Brian B. Bird | 411,951 | 423,280 | 2.75 | |||
Heather H. Grahame | 360,714 | 370,634 | 2.75 | |||
Curtis T. Pohl | 279,922 | 287,620 | 2.75 | |||
Bobbi L. Schroeppel | 258,068 | 265,810 | 3.00 |
(1) | (2) | (3) | (4) | |||||||||||||||||||||||
Base Salary | x | Individual Target Incentive (% of Base Salary) | x | Plan Funding Percentage (performance vs. metrics) | x | Individual Performance Multiple | = | Individual Payout |
$697,057 | x | 100% | x | 96% | x | 1 | = | $669,175 |
NorthWestern Energy | Proxy Statement | Page 25 |
$611,956 | x | 100% | x | 99% | x | 1 | = | $605,836 |
Compensation Discussion and Analysis |
In 2017, the Compensation Committee adjusted the target incentive opportunity for our chief executive officer only, increasing the opportunity to 100 percent from 80 percent in 2016. The Compensation Committee believed this increase was appropriate to align his incentive opportunity with his peers. The table to the right sets forth the 2017 annual incentive target opportunity for our named executive officers. | 2017 | |||||||
Name | Base Salary | Target Incentive Opportunity (% of base salary) | Target Incentive Opportunity ($) | |||||
Robert C. Rowe | $611,956 | 100% | $611,956 | |||||
Brian B. Bird | $423,280 | 50% | $211,640 | |||||
Heather H. Grahame | $370,634 | 45% | $166,785 | |||||
Curtis T. Pohl | $287,620 | 40% | $115,048 | |||||
Bobbi L. Schroeppel | $265,810 | 35% | $93,034 |
The table to the right shows the 2022 annual incentive target opportunity for our NEOs. In 2022, the Compensation Committee adjusted the target incentive opportunity for Ms. Lail in connection with the ongoing transition of her compensation to match her responsibilities as CFO. The other NEOs remained at 2021 levels after the Compensation Committee determined that the existing target incentive opportunities were generally aligned with the incentive opportunity in the market place. | 2022 | |||||||||||||||||||||||||
Name | Base Salary ($) | Target Incentive Opportunity (% of base salary) | Target Incentive Opportunity ($) | |||||||||||||||||||||||
Robert Rowe | 697,057 | 100% | 697,057 | |||||||||||||||||||||||
Brian Bird | 515,000 | 75% | 386,250 | |||||||||||||||||||||||
Heather Grahame | 454,719 | 55% | 250,095 | |||||||||||||||||||||||
Crystal Lail | 412,500 | 55% | 226,875 | |||||||||||||||||||||||
Curtis Pohl | 325,233 | 40% | 130,093 |
For our executives, the funding (as a percentage of target) under the annual incentive plan has ranged from 74 percent to 136 percent for the five previous years, as illustrated in the table to the right. | Historical Funding of Annual Cash Incentive (as a percentage of target) | ||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | |||||||||||||||||||
99% | 136% | 126% | 74% | 106% | |||||||||||||||||||
For many years, including 2022, the annual incentive plan has used four categories of performance measures to determine the plan funding percentage – financial, safety, reliability, and customer satisfaction. The relative weightings of these measures are set forth in the graphic to the left. In order for any awards under the 2022 annual incentive plan to be earned and paid out, the company must attain at least 90 percent of the budgeted net income target, which coincides with the threshold net income target for the plan. This metric for determining performance against our financial goal is derived from our audited financial statements. |
NorthWestern Energy | Proxy Statement | Page 26 |
For our executives, the funding (as a percentage of target) under the annual incentive plan has ranged from 80 percent to 125 percent for the five previous years, as set forth in the table to the right. | Historical Funding of Annual Cash Incentive (as a percentage of target) | |||||
2012 | 2013 | 2014 | 2015 (1) | 2016 | ||
98% | 108% | 125% | 80% | 113% | ||
(1) Due to a work-related fatality in 2015, the funding level of the annual cash incentive for executives was 80% (for non-executive employees, the plan was funded at 88%). |
Compensation Discussion and Analysis |
2022 | |||||||||||||||||||||||||||||||||||||||||
Annual Incentive Plan Information | |||||||||||||||||||||||||||||||||||||||||
Performance Measures | Weight (% of Total Plan Payout) | Performance Level | Target % Achieved | Final Funding % of Total | |||||||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Actual Achieved | ||||||||||||||||||||||||||||||||||||||
Financial (55%) (1) | |||||||||||||||||||||||||||||||||||||||||
Net Income ($ in millions) | 55 | % | $165.1 | $ | 183.5 | $ | 201.8 | $183.0 | 98.7 | 54.3 | |||||||||||||||||||||||||||||||
Safety (15%) (2) | |||||||||||||||||||||||||||||||||||||||||
Lost Time Incident Rate | 5 | % | 0.57 | 0.46 | 0.24 | 0.59 | — | — | |||||||||||||||||||||||||||||||||
Total Recordable Incident Rate | 5 | % | 1.78 | 1.50 | 1.06 | 1.57 | 87.5 | 4.4 | |||||||||||||||||||||||||||||||||
Safety Training Completion | 5 | % | 99.0 | % | 99.5 | % | 100.0 | % | 99.9 | % | 140.0 | 7.0 | |||||||||||||||||||||||||||||
Reliability (15%) (3) | |||||||||||||||||||||||||||||||||||||||||
SAIDI (excluding major event days) | 5.0 | % | 117.00 | 103.00 | 89.00 | 101.10 | 106.8 | 5.3 | |||||||||||||||||||||||||||||||||
SAIDI (including major event days) | 5.0 | % | 168.00 | 122.00 | 94.00 | 119.40 | 104.6 | 5.2 | |||||||||||||||||||||||||||||||||
Gas – Leaks per 100 Miles of Main | 2.5 | % | 15.00 | 10.10 | 7.60 | 9.65 | 109.0 | 2.7 | |||||||||||||||||||||||||||||||||
Gas – Damages per 1000 Locates | 2.5 | % | 3.80 | 3.00 | 1.30 | 3.26 | 83.8 | 2.1 | |||||||||||||||||||||||||||||||||
Customer Satisfaction (15%) (4) | |||||||||||||||||||||||||||||||||||||||||
J.D. Power Residential Electric and Gas Survey Performance Ranking | 5 | % | 714.00 | 722.00 | 726.00 | 729.40 | 150.0 | 7.5 | |||||||||||||||||||||||||||||||||
Operational Performance – Customer Survey by Flynn Wright | 5 | % | 34.38 | 38.20 | 42.02 | 36.72 | 80.6 | 4.0 | |||||||||||||||||||||||||||||||||
Reputational Perceptions – Customer Survey by Flynn Wright | 5 | % | 33.91 | 37.67 | 41.44 | 34.83 | 62.2 | 3.1 | |||||||||||||||||||||||||||||||||
TOTAL FUNDING PERCENTAGE | 96 |
2017 Annual Incentive Plan Information | |||||||||||||||||||||||
Performance Measures | Weight (% of Total Plan Payout) | Performance Level | Target % Achieved | Final Funding % of Total | |||||||||||||||||||
Threshold | Target | Maximum | Actual Achieved | ||||||||||||||||||||
Financial (55%) (1) | |||||||||||||||||||||||
Net Income ($ in millions) | 55 | % | $148.4 | $ | 164.9 | $ | 181.4 | $162.7 | 93.4 | % | 51.3 | ||||||||||||
Safety (15%) (2) | |||||||||||||||||||||||
Lost Time Incident Rate | 5 | % | 0.70 | 0.55 | 0.30 | 0.51 | 108.0 | % | 5.4 | ||||||||||||||
Total Recordable Incident Rate | 5 | % | 2.00 | 1.70 | 1.40 | 1.92 | 63.3 | % | 3.2 | ||||||||||||||
Safety Training Completion | 5 | % | 93.0 | % | 96.0 | % | 99.0 | % | 99.2 | % | 150.0 | % | 7.5 | ||||||||||
Reliability (15%) (3) | |||||||||||||||||||||||
SAIDI (excluding major event days) | 5.0 | % | 122.00 | 107.00 | 94.00 | 114.96 | 73.5 | % | 3.7 | ||||||||||||||
SAIDI (including major event days) | 5.0 | % | 191.00 | 130.00 | 103.00 | 131.81 | 98.5 | % | 4.9 | ||||||||||||||
Gas – Leaks per 100 Miles of Main | 2.5 | % | 7.50 | 6.00 | 4.20 | 4.20 | 150.0 | % | 3.8 | ||||||||||||||
Gas – Damages per 1000 Locates | 2.5 | % | 2.50 | 2.10 | 1.70 | 2.30 | 75.0 | % | 1.9 | ||||||||||||||
Customer Satisfaction (15%) (4) | |||||||||||||||||||||||
JD Power Residential Electric and Gas Survey Performance Ranking | 5 | % | 650.00 | 688.00 | 692.00 | 696.60 | 150.0 | % | 7.5 | ||||||||||||||
Operational Performance – Customer Survey by Flynn Wright | 5 | % | 33.73 | 37.48 | 41.23 | 37.54 | 100.8 | % | 5.0 | ||||||||||||||
Reputational Perceptions – Customer Survey by Flynn Wright | 5 | % | 33.16 | 36.84 | 40.52 | 36.54 | 95.9 | % | 4.8 | ||||||||||||||
TOTAL FUNDING PERCENTAGE | 99.0 | % |
NorthWestern Energy | Proxy Statement | Page 27 |
Compensation Discussion and Analysis |
2022 | |||||||||||||||||||||||||||||||||||
Name | Base Salary ($) | Target Cash Incentive, as % of Base Salary | Funding Percentage (%) | Individual Performance Multiple | Actual Cash Incentive, as % of Base Salary | Cash Incentive Award ($) | |||||||||||||||||||||||||||||
Robert Rowe | 697,057 | 100% | 96 | 1.0 | 96.0% | 669,175 | |||||||||||||||||||||||||||||
Brian Bird | 515,000 | 75% | 96 | 1.0 | 72.0% | 370,800 | |||||||||||||||||||||||||||||
Heather Grahame | 454,719 | 55% | 96 | 1.0 | 52.8% | 240,092 | |||||||||||||||||||||||||||||
Crystal Lail | 412,500 | 55% | 96 | 1.0 | 52.8% | 217,800 | |||||||||||||||||||||||||||||
Curtis Pohl | 325,233 | 40% | 96 | 1.0 | 38.4% | 124,889 |
2017 | |||||||||||||||
Name | Base Salary | Target Cash Incentive, as % of Base Salary | Funding Percentage | Individual Performance Multiple | Actual Cash Incentive, as % of Base Salary | Cash Incentive Award ($) | |||||||||
Robert C. Rowe | $ | 611,956 | 100% | 99% | 1.00 | 99.0% | $ | 605,836 | |||||||
Brian B. Bird | $ | 423,280 | 50% | 99% | 1.00 | 49.5% | $ | 209,524 | |||||||
Heather H. Grahame | $ | 370,634 | 45% | 99% | 1.00 | 44.6% | $ | 165,117 | |||||||
Curtis T. Pohl | $ | 287,620 | 40% | 99% | 1.00 | 39.6% | $ | 113,898 | |||||||
Bobbi L. Schroeppel | $ | 265,810 | 35% | 99% | 1.00 | 34.7% | $ | 92,103 |
Clawback of Annual Cash Incentive Awards | ||||||||
Although we have not adopted a formal clawback policy, the annual cash incentive awards are specifically made subject to any formal clawback policy that we may adopt in the future. In light of the SEC’s recent adoption of final clawback rules, we will be adopting a formal clawback policy in 2023. | ||||||||
NorthWestern Energy | Proxy Statement | Page 28 |
Compensation Discussion and Analysis |
Historical Funding of LTIP (as a percentage of target) | ||||||||||||||
2016-2018 | 2017-2019 | 2018-2020 | 2019-2021 | 2020-2022 | ||||||||||
94.3% | 122.2% | 50% | 72.7% | 20% |
Historical Funding of LTIP (as a percentage of target) | ||||
2011-2013 | 2012-2014 | 2013-2015 | 2014-2016 | 2015-2017 |
92.5% | 168.4% | 167.3% | 108.3% | 44.9% |
NorthWestern Energy | Proxy Statement | Page 29 |
Compensation Discussion and Analysis |
The target equity opportunities (value at target and number of shares) for the 2017 grants of LTIP performance units are shown in the table to the right. The table also compares the target opportunities (expressed as a percentage of base salary) applicable to the 2016 and 2017 awards. | Target LTIP Performance Unit Opportunity for 2017 | ||||||||||
2016 | 2017 | 2017 | |||||||||
Name | Base Salary (%) | Base Salary (%) | Value at Target ($) | LTIP Stock Awards (1) | |||||||
Robert C. Rowe | 200% | 200% | 1,191,156 | 24,821 | |||||||
Brian B. Bird | 100% | 100% | 411,951 | 8,584 | |||||||
Heather H. Grahame | 80% | 80% | 288,571.2 | 6,013 | |||||||
Curtis T. Pohl | 60% | 60% | 167,953.2 | 3,500 | |||||||
Bobbi L. Schroeppel | 40% | 50% | 129,034 | 2,689 | |||||||
(1) Based on a weighted average grant date fair value of $47.99, which was calculated using the closing stock price of $57.40 on February 16, 2017, less the present value of expected dividends |
Target LTIP Performance Unit Opportunity for 2022 | |||||||||||||||||||||||
2021 | 2022 | 2022 | 2022 | ||||||||||||||||||||
Name | Base Salary (%) | Base Salary (%) | Value at Target ($) | LTIP Stock Awards (1) | |||||||||||||||||||
Robert Rowe | 225% | 225 | 1,522,697 | 29,504 | |||||||||||||||||||
Brian Bird | 140% | 140 | 700,000 | 13,563 | |||||||||||||||||||
Heather Grahame | 90% | 90 | 397,328 | 7,699 | |||||||||||||||||||
Crystal Lail | 90% | 100 | 375,000 | 7,266 | |||||||||||||||||||
Curtis Pohl | 60% | 60 | 190,846 | 3,698 | |||||||||||||||||||
(1) Based on a weighted average grant date fair value of $51.61, which was calculated using the closing stock price of $56.52 on February 10, 2022, less the present value of expected dividends. |
Performance Measures — 2017-2019 | Threshold | Target | Maximum | ||||||
Financial Goals – 50% | |||||||||
ROAE | 9 | % | 9.60 | % | 10.2 | % | |||
Simple Average EPS Growth | 0.4 | % | 2.4 | % | 4.4 | % | |||
TSR – 50% | |||||||||
Relative Average vs. Peers | 13th | 6th | 1st |
NorthWestern Energy | Proxy Statement | Page 30 |
Compensation Discussion and Analysis |
2022 Target ERRP Opportunity | ||||||||||||||||||||||||||
Name | 2022 Base Salary ($) | Award % of Base Salary (%) | Value at Grant Date ($) | ERRP Stock Awards (#) (1) | ||||||||||||||||||||||
Robert Rowe | (2) | 697,057 | 60 | 418,233 | 8,891 | |||||||||||||||||||||
Brian Bird | 515,000 | 45 | 231,766 | 4,927 | ||||||||||||||||||||||
Heather Grahame | (2) | 454,719 | 25 | 113,696 | 2,417 | |||||||||||||||||||||
Crystal Lail | 412,500 | 30 | 123,762 | 2,631 | ||||||||||||||||||||||
Curtis Pohl | 325,233 | 20 | 65,056 | 1,383 |
2017 Target ERRP Opportunity | ||||||||||
Name | 2017 Base Salary ($) | Award % of Base Salary (%) | Value at Grant Date ($) | ERRP Stock Awards (1) (#) | ||||||
Robert C. Rowe | $611,956 | 50.0% | 305,978 | 5,862 | ||||||
Brian B. Bird | $423,280 | 25.0% | 105,820 | 2,027 | ||||||
Heather H. Grahame | $370,634 | 20.0% | 74,127 | 1,420 | ||||||
Curtis T. Pohl | $287,620 | 20.0% | 57,524 | 1,102 | ||||||
Bobbi L. Schroeppel | $265,810 | 15.0% | 39,872 | 764 |
Compensation Discussion and Analysis |
Performance Measures — 2020-2022 | Threshold | Target | Maximum | Actual | |||||||||||||||||||||||||
Financial Goals – 50% | |||||||||||||||||||||||||||||
ROAE | 8.25 | % | 8.70 | % | 9.15 | % | 7.8 | % | |||||||||||||||||||||
Simple Average EPS Growth | (2.2) | % | (0.7) | % | 0.8 | % | (5.0) | % | |||||||||||||||||||||
Market Goal – 50% | |||||||||||||||||||||||||||||
Relative TSR Average vs. Peers | 13th | 6th | 1st | 10th |
Performance Measures — 2015-2017 | Threshold | Target | Maximum | Actual | ||||||||
Financial Goals – 50% | ||||||||||||
ROAE | 9.0 | % | 9.6 | % | 10.2 | % | 9.8 | % | ||||
Average EPS Growth | 0.4 | % | 2.4 | % | 4.4 | % | 3.7 | % | ||||
Market Goal – 50% | ||||||||||||
Relative TSR Average vs. Peers | 13th | 6th | 1st | 12th |
Based on the Compensation Committee’s calculation of these performance measures, the 2015 LTIP performance unit grants vested at 44.9 percent. The table to the right summarizes the performance results with respect to each | |||||||||||
of the performance measures applicable to the 2015 LTIP performance unit grants and the corresponding contributions to the vesting percentage. | |||||||||||
Performance Measures — 2015-2017 | Result | Weight | Vesting | ||||||||
Financial Goals – ROAE and Average Net Income Growth | 69.8 | % | 50 | % | 34.9 | % | |||||
Market Goal – TSR | 20.0 | % | 50 | % | 10.0 | % | |||||
TOTAL | 44.9 | % |
Performance Measures — 2020-2022 | Result | Weight | Vesting | ||||||||
Financial Goals – ROAE and Simple Avg. EPS Growth | — | 50.0 | % | — | % | ||||||
Market Goal – TSR | 40.0 | % | 50.0 | % | 20.0 | % | |||||
TOTAL | 20.0 | % |
Vesting of 2020 Performance Unit Grants | |||||||||||||||||
Name | Units at Grant Date (#) | Vesting Percentage (%) | Units upon Vesting (#) | ||||||||||||||
Robert Rowe | 17,755 | 20.0% | 3,551 | ||||||||||||||
Brian Bird | 6,141 | 20.0% | 1,228 | ||||||||||||||
Heather Grahame | 5,212 | 20.0% | 1,042 | ||||||||||||||
Crystal Lail | 1,412 | 20.0% | 282 | ||||||||||||||
Curtis Pohl | 2,504 | 20.0% | 501 |
NorthWestern Energy | Proxy Statement | Page 32 |
Vesting of 2015 Performance Unit Grants | ||||||||
Name | Units at Grant Date (#) | Vesting Percentage (%) | Units upon Vesting (#) | |||||
Robert C. Rowe | 19,828 | 44.9% | 8,903 | |||||
Brian B. Bird | 8,672 | 44.9% | 3,894 | |||||
Heather H. Grahame | 5,524 | 44.9% | 2,480 | |||||
Curtis T. Pohl | 3,728 | 44.9% | 1,674 | |||||
Bobbi L. Schroeppel | 2,291 | 44.9% | 1,029 |
Compensation Discussion and Analysis |
Net Income (millions) | |||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | ||||||||||||
$172.7 | $197.0 | $202.1 | $155.2 | $186.8 | $183.0 |
Net Income (millions) | |||||
2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
$98.4 | $94.0 | $120.7 | $151.2 | $164.2 | $162.7 |
Name | ||||||
Robert Rowe | 5,862 | |||||
Brian Bird | ||
Heather Grahame | 1,420 | ||||
699 | |||||
Curtis Pohl | 1,102 |
2022 CEO Promotion Restricted Common Stock Grant | |||||||||||
Name | Value at Grant Date ($) | Restricted Common Stock Shares (#) (1) | |||||||||
Brian Bird | $800,022 | 15,905 |
NorthWestern Energy | Proxy Statement | Page 33 |
Compensation Discussion and Analysis |
Compensation Committee | ||
NorthWestern Energy | Proxy Statement | Page 34 |
Name and Principal Position (1) | Year | Salary ($) | Bonus ($) (2) | Stock Awards ($) (3) | Non-Equity Incentive Plan Compensation ($) (2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (4) | All Other Compen- sation ($) (5) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||
Robert Rowe | ||||||||||||||||||||||||||||||||||||||||||||||||||
Chief Executive Officer | 2022 | 691,669 | — | 1,940,934 | 669,175 | — | 73,794 | 3,375,572 | ||||||||||||||||||||||||||||||||||||||||||
2021 | 674,138 | — | 1,906,246 | 717,359 | 77,372 | 70,252 | 3,445,367 | |||||||||||||||||||||||||||||||||||||||||||
2020 | 687,206 | 493,397 | 1,698,500 | — | 165,530 | 57,415 | 3,102,048 | |||||||||||||||||||||||||||||||||||||||||||
Brian Bird | ||||||||||||||||||||||||||||||||||||||||||||||||||
President and Chief Operating Officer | 2022 | 511,019 | — | 1,731,774 | 370,800 | — | 61,218 | 2,674,811 | ||||||||||||||||||||||||||||||||||||||||||
2021 | 494,774 | — | 850,000 | 397,500 | 8,196 | 62,157 | 1,812,627 | |||||||||||||||||||||||||||||||||||||||||||
2020 | 475,329 | 204,765 | 564,353 | — | 28,446 | 58,672 | 1,331,565 | |||||||||||||||||||||||||||||||||||||||||||
Heather Grahame | ||||||||||||||||||||||||||||||||||||||||||||||||||
General Counsel and Vice President - Regulatory & Federal Gov't Affairs | 2022 | 451,204 | — | 511,041 | 240,092 | — | 62,134 | 1,264,471 | ||||||||||||||||||||||||||||||||||||||||||
2021 | 439,769 | — | 501,825 | 257,380 | — | 53,163 | 1,252,137 | |||||||||||||||||||||||||||||||||||||||||||
2020 | 448,293 | 177,025 | 468,154 | — | — | 55,026 | 1,148,498 | |||||||||||||||||||||||||||||||||||||||||||
Crystal Lail | ||||||||||||||||||||||||||||||||||||||||||||||||||
Vice President and Chief Financial Officer | 2022 | 402,548 | — | 501,846 | 217,800 | — | 62,937 | 1,185,131 | ||||||||||||||||||||||||||||||||||||||||||
2021 | 362,307 | — | 431,250 | 198,750 | 1,954 | 51,193 | 1,045,454 | |||||||||||||||||||||||||||||||||||||||||||
Curtis Pohl | ||||||||||||||||||||||||||||||||||||||||||||||||||
Vice President - Distribution | 2022 | 323,334 | — | 255,910 | 124,889 | — | 62,467 | 766,600 | ||||||||||||||||||||||||||||||||||||||||||
2021 | 316,847 | — | 251,640 | 134,864 | 2,553 | 57,519 | 763,423 | |||||||||||||||||||||||||||||||||||||||||||
2020 | 322,988 | 92,759 | 245,757 | — | 52,154 | 56,770 | 770,428 |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards (1) ($) | Non-Equity Incentive Plan Compensation (2) ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (3) ($) | All Other Compen- sation (4) ($) | Total ($) | |||||||||||||||
Robert C. Rowe | |||||||||||||||||||||||
President and Chief Executive Officer | 2017 | 607,232 | — | 1,497,280 | 605,836 | 94,609 | 43,322 | 2,848,279 | |||||||||||||||
2016 | 590,641 | — | 1,454,138 | 538,403 | 68,952 | 27,933 | 2,680,067 | ||||||||||||||||
2015 | 573,567 | — | 1,131,121 | 370,068 | 39,285 | 41,564 | 2,155,605 | ||||||||||||||||
Brian B. Bird | |||||||||||||||||||||||
Vice President and Chief Financial Officer | 2017 | 420,012 | — | 517,798 | 209,524 | 22,378 | 54,923 | 1,224,635 | |||||||||||||||
2016 | 408,536 | — | 502,909 | 232,752 | 15,458 | 50,027 | 1,209,682 | ||||||||||||||||
2015 | 391,181 | — | 468,227 | 159,981 | 9,264 | 49,677 | 1,078,330 | ||||||||||||||||
Heather H. Grahame | |||||||||||||||||||||||
Vice President - General Counsel / Regulatory & Federal Gov't Affairs | 2017 | 367,773 | — | 362,718 | 165,117 | — | 49,527 | 945,135 | |||||||||||||||
2016 | 357,724 | — | 352,303 | 183,423 | — | 51,496 | 944,946 | ||||||||||||||||
2015 | 346,032 | — | 304,597 | 126,075 | — | 48,360 | 825,064 | ||||||||||||||||
Curtis T. Pohl | |||||||||||||||||||||||
Vice President - Distribution | 2017 | 285,399 | — | 225,507 | 113,898 | 38,024 | 49,257 | 712,085 | |||||||||||||||
2016 | 277,602 | — | 219,010 | 126,525 | 21,421 | 59,155 | 703,713 | ||||||||||||||||
2015 | 269,577 | — | 212,661 | 86,966 | 5,814 | 59,702 | 634,720 | ||||||||||||||||
Bobbi L. Schroeppel | |||||||||||||||||||||||
Vice President - Customer Care, Communications and HR | 2017 | 263,577 | — | 168,940 | 92,103 | 24,602 | 53,984 | 603,206 | |||||||||||||||
2016 | 255,929 | — | 164,014 | 102,066 | 13,992 | 50,221 | 586,222 | ||||||||||||||||
2015 | 248,530 | — | 134,849 | 70,154 | 5,012 | 49,823 | 508,368 |
(4) | The table to the right identifies the items included in the “All Other Compensation” column for 2017. Employee benefits include employer contributions, as applicable, for health benefits (medical, dental, vision, employee assistance plan and health savings account), group term life and 401(k) plan, which are generally available to all employees on a nondiscriminatory basis. Life insurance also includes imputed | ||||||||||||||||||||||
income consistent with IRS guidelines for coverage amounts in excess of $50,000 for each of the named executive officers. Mr. Rowe’s, Mr. Bird’s and Ms. Schroeppel’s other income for 2017 includes imputed income related to executive physicals. Mr. Rowe’s other income also includes vacation sold back to the company at a rate of 75 percent. | |||||||||||||||||||||||
Health Benefits | Life Insurance | 401(k) Contributions | Other Income | Total All Other Compensation | |||||||||||||||||||
Robert C. Rowe | $ | 7,763 | $ | 5,204 | $ | 10,800 | $ | 19,555 | $ | 43,322 | |||||||||||||
Brian B. Bird | 22,744 | 2,357 | 27,000 | 2,822 | 54,923 | ||||||||||||||||||
Heather H. Grahame | 19,528 | 2,999 | 27,000 | — | 49,527 | ||||||||||||||||||
Curtis T. Pohl | 16,423 | 3,134 | 29,700 | — | 49,257 | ||||||||||||||||||
Bobbi L. Schroeppel | 22,743 | 1,419 | 27,000 | 2,822 | 53,984 |
2022 Executive Pay |
Health Benefits | Life Insurance | 401(k) Contributions | Other Income | Total All Other Compensation | ||||||||||||||||||||||||||||
Robert Rowe | $ | 17,126 | $ | 10,218 | $ | 12,200 | $ | 34,250 | $ | 73,794 | ||||||||||||||||||||||
Brian Bird | 23,706 | 3,962 | 33,550 | — | 61,218 | |||||||||||||||||||||||||||
Heather Grahame | 15,656 | 6,398 | 33,550 | 6,530 | 62,134 | |||||||||||||||||||||||||||
Crystal Lail | 17,926 | 1,395 | 30,500 | 13,116 | 62,937 | |||||||||||||||||||||||||||
Curtis Pohl | 18,726 | 5,341 | 33,550 | 4,850 | 62,467 |
Name | Grant Date | Estimated Future Payouts Under Non-equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards (1) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards (2) ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Robert Rowe | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive | — | 348,529 | 697,057 | 1,045,586 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Performance Units | 2/10/2022 | — | — | — | — | 29,504 | 59,008 | — | 1,522,701 | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted Share Units | 12/13/2022 | — | — | — | — | 8,891 | 8,891 | — | 418,233 | |||||||||||||||||||||||||||||||||||||||||||||||
Brian Bird | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive | — | 193,125 | 386,250 | 579,375 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Performance Units | 2/10/2022 | — | — | — | — | 13,563 | 27,126 | — | 699,986 | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted Share Units | 12/13/2022 | — | — | — | — | 4,927 | 4,927 | — | 231,766 | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Award | 12/13/2022 | — | — | — | — | — | — | 15,905 | 800,022 | |||||||||||||||||||||||||||||||||||||||||||||||
Heather Grahame | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive | — | 125,048 | 250,095 | 375,143 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Performance Units | 2/10/2022 | — | — | — | — | 7,699 | 15,398 | — | 397,345 | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted Share Units | 12/13/2022 | — | — | — | — | 2,417 | 2,417 | — | 113,696 | |||||||||||||||||||||||||||||||||||||||||||||||
Crystal Lail | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive | — | 113,438 | 226,875 | 340,313 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Performance Units | 2/10/2022 | — | — | — | — | 7,266 | 14,532 | — | 374,998 | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted Share Units | 12/13/2022 | — | — | — | — | 2,631 | 2,631 | — | 123,762 | |||||||||||||||||||||||||||||||||||||||||||||||
Curtis Pohl | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Cash Incentive | — | 65,047 | 130,093 | 195,140 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Performance Units | 2/10/2022 | — | — | — | — | 3,698 | 7,396 | — | 190,854 | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted Share Units | 12/13/2022 | — | — | — | — | 1,383 | 1,383 | — | 65,056 |
Name | Grant Date | Estimated Future Payouts Under Non-equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards (1) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards (2) ($) | ||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||
Robert C. Rowe | |||||||||||||||||||||||||||
Annual Cash Incentive | — | 305,978 | 611,956 | 917,934 | — | — | — | — | — | ||||||||||||||||||
Performance Units | 2/16/2017 | — | — | — | — | 24,821 | 49,642 | — | 1,191,284 | ||||||||||||||||||
Restricted Share Units | 12/12/2017 | — | — | — | — | 5,862 | 5,862 | — | 305,996 | ||||||||||||||||||
Brian B. Bird | |||||||||||||||||||||||||||
Annual Cash Incentive | — | 105,820 | 211,640 | 317,460 | — | — | — | — | — | ||||||||||||||||||
Performance Units | 2/16/2017 | — | — | — | — | 8,584 | 17,168 | — | 411,989 | ||||||||||||||||||
Restricted Share Units | 12/12/2017 | — | — | — | — | 2,027 | 2,027 | — | 105,809 | ||||||||||||||||||
Heather H. Grahame | |||||||||||||||||||||||||||
Annual Cash Incentive | — | 83,393 | 166,785 | 250,178 | — | — | — | — | — | ||||||||||||||||||
Performance Units | 2/16/2017 | — | — | — | — | 6,013 | 12,026 | — | 288,594 | ||||||||||||||||||
Restricted Share Units | 12/12/2017 | — | — | — | — | 1,420 | 1,420 | — | 74,124 | ||||||||||||||||||
Curtis T. Pohl | |||||||||||||||||||||||||||
Annual Cash Incentive | — | 57,524 | 115,048 | 172,572 | — | — | — | — | — | ||||||||||||||||||
Performance Units | 2/16/2017 | — | — | — | — | 3,500 | 7,000 | — | 167,983 | ||||||||||||||||||
Restricted Share Units | 12/12/2017 | — | — | — | — | 1,102 | 1,102 | — | 57,524 | ||||||||||||||||||
Bobbi L. Schroeppel | |||||||||||||||||||||||||||
Annual Cash Incentive | — | 46,517 | 93,034 | 139,550 | — | — | — | — | — | ||||||||||||||||||
Performance Units | 2/16/2017 | — | — | — | — | 2,689 | 5,378 | — | 129,059 | ||||||||||||||||||
Restricted Share Units | 12/12/2017 | — | — | — | — | 764 | 764 | — | 39,881 |
Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of LTIP Shares Acquired on Vesting (#) (1) | Value Realized on LTIP Vesting ($) | Number of ERRP Shares Acquired on Vesting (#) (2) | Value Realized on ERRP Vesting ($) | Total Shares Acquired on Vesting (#) | Total Value Realized ($) | |||||||||||||||||||||||||||||
Robert Rowe | 3,551 | 210,716 | 5,862 | 347,851 | 9,413 | 558,567 | |||||||||||||||||||||||||||||
Brian Bird | 1,228 | 72,881 | 2,027 | 120,282 | 3,255 | 193,164 | |||||||||||||||||||||||||||||
Heather Grahame | 1,042 | 61,856 | 1,420 | 84,263 | 2,462 | 146,119 | |||||||||||||||||||||||||||||
Crystal Lail | 282 | 16,758 | 699 | 41,479 | 981 | 58,236 | |||||||||||||||||||||||||||||
Curtis Pohl | 501 | 29,717 | 1,102 | 65,393 | 1,603 | 95,110 |
Stock Awards | ||||||||||||||
Name | Number of LTIP Shares Acquired on Vesting (#) (1) | Value Realized on LTIP Vesting ($) | Number of ERRP Shares Acquired on Vesting (#) (2) | Value Realized on ERRP Vesting ($) | Total Value Realized ($) | |||||||||
Robert C. Rowe | 8,903 | 531,495 | 3,814 | 227,696 | 759,191 | |||||||||
Brian B. Bird | 3,894 | 232,456 | 1,251 | 74,685 | 307,140 | |||||||||
Heather H. Grahame | 2,480 | 148,072 | 911 | 54,387 | 202,459 | |||||||||
Curtis T. Pohl | 1,674 | 99,930 | 717 | 42,805 | 142,735 | |||||||||
Bobbi L. Schroeppel | 1,029 | 61,411 | 482 | 28,775 | 90,186 |
Stock Awards | |||||||||||||||||||||||||||||
Type of Award | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (1) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) (2) (3) | ||||||||||||||||||||||||
Robert Rowe | |||||||||||||||||||||||||||||
ERRP | 12/13/2022 | 8,891 | 527,592 | ||||||||||||||||||||||||||
LTIP | 2/10/2022 | 29,504 | 1,750,767 | ||||||||||||||||||||||||||
ERRP | 12/14/2021 | 9,380 | 556,609 | ||||||||||||||||||||||||||
LTIP | 2/11/2021 | 29,689 | 1,761,745 | ||||||||||||||||||||||||||
ERRP | 12/22/2020 | 8,976 | 532,636 | ||||||||||||||||||||||||||
(4) | ERRP | 12/18/2019 | 6,414 | 380,607 | |||||||||||||||||||||||||
(4) | ERRP | 12/13/2018 | 6,976 | 413,956 | |||||||||||||||||||||||||
Brian Bird | |||||||||||||||||||||||||||||
Restricted | 12/13/2022 | 15,905 | 943,803 | ||||||||||||||||||||||||||
ERRP | 12/13/2022 | 4,927 | 292,368 | ||||||||||||||||||||||||||
LTIP | 2/10/2022 | 13,563 | 804,828 | ||||||||||||||||||||||||||
ERRP | 12/14/2021 | 3,465 | 205,613 | ||||||||||||||||||||||||||
LTIP | 2/11/2021 | 13,853 | 822,037 | ||||||||||||||||||||||||||
ERRP | 12/22/2020 | 2,587 | 153,513 | ||||||||||||||||||||||||||
(4) | ERRP | 12/18/2019 | 1,849 | 109,720 | |||||||||||||||||||||||||
(4) | ERRP | 12/13/2018 | 2,011 | 119,333 | |||||||||||||||||||||||||
Heather Grahame | |||||||||||||||||||||||||||||
ERRP | 12/13/2022 | 2,417 | 143,425 | ||||||||||||||||||||||||||
LTIP | 2/10/2022 | 7,699 | 456,859 | ||||||||||||||||||||||||||
ERRP | 12/14/2021 | 2,550 | 151,317 | ||||||||||||||||||||||||||
LTIP | 2/11/2021 | 7,747 | 459,707 | ||||||||||||||||||||||||||
ERRP | 12/22/2020 | 1,952 | 115,832 | ||||||||||||||||||||||||||
(4) | ERRP | 12/18/2019 | 1,395 | 82,779 | |||||||||||||||||||||||||
(4) | ERRP | 12/13/2018 | 1,474 | 87,467 | |||||||||||||||||||||||||
Crystal Lail | |||||||||||||||||||||||||||||
ERRP | 12/13/2022 | 2,631 | 156,124 | ||||||||||||||||||||||||||
LTIP | 2/10/2022 | 7,266 | 431,164 | ||||||||||||||||||||||||||
ERRP | 12/14/2021 | 2,166 | 128,530 | ||||||||||||||||||||||||||
LTIP | 2/11/2021 | 6,679 | 396,332 | ||||||||||||||||||||||||||
ERRP | 12/22/2020 | 1,260 | 74,768 | ||||||||||||||||||||||||||
(4) | ERRP | 12/18/2019 | 638 | 37,859 | |||||||||||||||||||||||||
(4) | ERRP | 12/13/2018 | 694 | 41,182 | |||||||||||||||||||||||||
Curtis Pohl | |||||||||||||||||||||||||||||
ERRP | 12/13/2022 | 1,383 | 82,067 | ||||||||||||||||||||||||||
LTIP | 2/10/2022 | 3,698 | 219,439 | ||||||||||||||||||||||||||
ERRP | 12/14/2021 | 1,470 | 87,230 | ||||||||||||||||||||||||||
LTIP | 2/11/2021 | 3,721 | 220,804 | ||||||||||||||||||||||||||
ERRP | 12/22/2020 | 1,406 | 83,432 | ||||||||||||||||||||||||||
(4) | ERRP | 12/18/2019 | 1,005 | 59,637 | |||||||||||||||||||||||||
(4) | ERRP | 12/13/2018 | 1,093 | 64,859 |
Stock Awards | ||||||||
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (1) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (1) (2) (3) ($) | |||||||
Robert C. Rowe | ||||||||
12/12/2017 | 5,862 | 349,961 | ||||||
2/16/2017 | 24,821 | 1,481,814 | ||||||
12/7/2016 | 6,505 | 388,349 | ||||||
2/10/2016 | 22,982 | 1,372,025 | ||||||
12/9/2015 | 6,458 | 385,543 | ||||||
12/16/2014 | 6,410 | 382,677 | ||||||
12/10/2013 | 3,878 | 231,517 |
Stock Awards | ||||||||
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (1) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (1) (2) (3) ($) | |||||||
Brian B. Bird | ||||||||
12/12/2017 | 2,027 | 121,012 | ||||||
2/16/2017 | 8,584 | 512,465 | ||||||
12/7/2016 | 2,250 | 134,325 | ||||||
2/10/2016 | 7,948 | 474,496 | ||||||
12/9/2015 | 2,233 | 133,310 | ||||||
12/16/2014 | 2,103 | 125,549 | ||||||
12/10/2013 | 1,272 | 75,938 | ||||||
Heather H. Grahame | ||||||||
12/12/2017 | 1,420 | 84,774 | ||||||
2/16/2017 | 6,013 | 358,976 | ||||||
12/7/2016 | 1,576 | 94,087 | ||||||
2/10/2016 | 5,568 | 332,410 | ||||||
12/9/2015 | 1,564 | 93,371 | ||||||
12/16/2014 | 1,531 | 91,401 | ||||||
12/10/2013 | 926 | 55,282 | ||||||
Curtis T. Pohl | ||||||||
12/12/2017 | 1,102 | 65,789 | ||||||
2/16/2017 | 3,500 | 208,950 | ||||||
12/7/2016 | 1,223 | 73,013 | ||||||
2/10/2016 | 3,240 | 193,428 | ||||||
12/9/2015 | 1,214 | 72,476 | ||||||
12/16/2014 | 1,205 | 71,939 | ||||||
12/10/2013 | 729 | 43,521 | ||||||
Bobbi L. Schroeppel | ||||||||
12/12/2017 | 764 | 45,611 | ||||||
2/16/2017 | 2,689 | 160,533 | ||||||
12/7/2016 | 846 | 50,506 | ||||||
2/10/2016 | 2,490 | 148,653 | ||||||
12/9/2015 | 839 | 50,088 | ||||||
12/16/2014 | 833 | 49,730 | ||||||
12/10/2013 | 490 | 29,253 |
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | ||||||||||||||||
Robert Rowe (1) | NorthWestern Energy Pension Plan | 14.00 | 865,172 | — | ||||||||||||||||
Brian Bird | NorthWestern Corporation Pension Plan | 19.08 | 269,271 | — | ||||||||||||||||
Heather Grahame (1) | — | — | — | — | ||||||||||||||||
Crystal Lail | NorthWestern Corporation Pension Plan | 19.93 | 105,903 | — | ||||||||||||||||
Curtis Pohl | NorthWestern Corporation Pension Plan | 36.39 | 479,524 | — |
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | |||||||
Robert C. Rowe | NorthWestern Energy Pension Plan | 9.00 | 527,773 | — | |||||||
Brian B. Bird | NorthWestern Corporation Pension Plan | 14.08 | 208,099 | — | |||||||
Heather H. Grahame (1) | — | — | — | — | |||||||
Curtis T. Pohl | NorthWestern Corporation Pension Plan | 31.39 | 424,285 | — | |||||||
Bobbi L. Schroeppel | NorthWestern Corporation Pension Plan | 19.63 | 200,711 | — |
We calculated the present value of accumulated benefits assuming benefits commence at age 65 and using the discount rate, mortality assumption, and assumed payment form consistent with those disclosed in Note 14 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, | Name | Cash Balance ($) | |||||||||
Robert | |||||||||||
Brian | |||||||||||
Heather | — | ||||||||||
NorthWestern Energy | Proxy Statement | Page 39 |
2022 Executive Pay |
Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($) (1) | Aggregate Earnings in Last Fiscal Year ($) (1) | Aggregate Withdrawals/ Distributions in Last Fiscal Year ($) | Aggregate Balance on December 31, 2022 ($) (2) | ||||||||||||||||||||||
Robert Rowe (3) | — | 359,072 | 474,725 | — | 11,477,285 | |||||||||||||||||||||
Brian Bird | — | 124,231 | 27,525 | — | 666,409 | |||||||||||||||||||||
Heather Grahame | — | 86,984 | 19,682 | — | 476,526 | |||||||||||||||||||||
Crystal Lail | — | 41,825 | 3,828 | — | 92,681 | |||||||||||||||||||||
Curtis Pohl | — | 67,881 | 15,439 | — | 373,791 |
Executive Contributions in 2017 | Registrant Contributions in 2017 | Aggregate Earnings in 2017 | Aggregate Withdrawals/ Distributions in 2017 | Aggregate Balance on December 31, 2017 | ||||||||||||||||
Robert C. Rowe (1) | $ | 206,165 | $ | — | $ | 643,984 | $ | — | $ | 8,008,104 |
NorthWestern Energy | Proxy Statement | Page 40 |
2022 Executive Pay |
Name | Base Salary ($) | Targeted Annual Incentive ($) | 2x Base Salary + 2x Targeted Annual Incentive ($) | Interrupted Annual Bonus ($) (1) | COBRA Premiums ($) (2) | Outplacement Services ($) | Amount of Potential Severance Benefit ($) | |||||||||||||
Robert C. Rowe | 611,956 | 611,956 | 2,447,824 | 560,960 | 13,020 | 12,000 | 3,033,804 | |||||||||||||
Brian B. Bird | 423,280 | 211,640 | 1,269,840 | 194,003 | 42,280 | 12,000 | 1,518,123 | |||||||||||||
Heather H. Grahame | 370,634 | 166,785 | 1,074,838 | 152,886 | 45,334 | 12,000 | 1,285,058 | |||||||||||||
Curtis T. Pohl | 287,620 | 115,048 | 805,336 | 105,461 | 29,386 | 12,000 | 952,183 | |||||||||||||
Bobbi L. Schroeppel | 265,810 | 93,034 | 717,688 | 85,281 | 43,215 | 12,000 | 858,184 |
Name | Base Salary ($) | Targeted Annual Incentive ($) | 2x Base Salary + 2x Targeted Annual Incentive ($) | Interrupted Annual Bonus ($) (1) | COBRA Premiums ($) (2) | Outplacement Services ($) | Amount of Potential Severance Benefit ($) | |||||||||||||||||||||||||||||||||||||
Robert Rowe (3) | 697,057 | 697,057 | 2,788,228 | 638,969 | 35,193 | 12,000 | 3,474,390 | |||||||||||||||||||||||||||||||||||||
Brian Bird | 515,000 | 386,250 | 1,802,500 | 354,063 | 34,490 | 12,000 | 2,203,053 | |||||||||||||||||||||||||||||||||||||
Heather Grahame (3) | 454,719 | 250,095 | 1,409,629 | 229,254 | 38,075 | 12,000 | 1,688,958 | |||||||||||||||||||||||||||||||||||||
Crystal Lail | 412,500 | 226,875 | 1,278,750 | 207,969 | 35,193 | 12,000 | 1,533,912 | |||||||||||||||||||||||||||||||||||||
Curtis Pohl | 325,233 | 130,093 | 910,652 | 119,252 | 34,490 | 12,000 | 1,076,394 |
The table to the right shows the amount of potential stock value that would have been received, based on (i) an assumed change in control date of December 31, | Name | Value of Accelerated Stock Vesting ($) | ||||||||||||
Robert | ||||||||||||||
3,451,214 | |||||||||||
Heather Grahame | 1,497,386 | ||||||||||
Crystal Lail | 1,265,960 | ||||||||||
Curtis Pohl | 817,468 |
NorthWestern Energy | Proxy Statement | Page 41 |
2022 Executive Pay |
Future Vesting Date | Assumed 12/31/22 Death / Disability | Assumed 12/31/22 Retirement | ||||||||||||||||||||||||||||||||||||||||||||||||
Original Grant (#) | Percent to Vest (%) | Vesting Value ($) (1) | Original Grant (#) | Percent to Vest (%) | Vesting Value ($) (1) | |||||||||||||||||||||||||||||||||||||||||||||
Robert Rowe | (2) | |||||||||||||||||||||||||||||||||||||||||||||||||
Chief Executive Officer | ERRP | 12/31/2026 | 8,891 | 100.0 | % | 527,592 | 8,891 | — | % | — | ||||||||||||||||||||||||||||||||||||||||
LTIP | 12/31/2023 | 29,504 | 33.3 | % | 583,589 | 29,504 | 33.3 | % | 583,589 | |||||||||||||||||||||||||||||||||||||||||
ERRP | 12/31/2025 | 9,380 | 100.0 | % | 556,609 | 9,380 | 20.0 | % | 111,322 | |||||||||||||||||||||||||||||||||||||||||
LTIP | 12/31/2022 | 29,689 | 66.7 | % | 1,175,084 | 29,689 | 66.7 | % | 1,175,084 | |||||||||||||||||||||||||||||||||||||||||
ERRP | (3) | 12/31/2024 | 8,976 | 100.0 | % | 532,636 | 8,976 | 40.0 | % | 213,054 | ||||||||||||||||||||||||||||||||||||||||
ERRP | (3) | 12/31/2023 | 6,414 | 100.0 | % | 380,607 | 6,414 | 60.0 | % | 228,364 | ||||||||||||||||||||||||||||||||||||||||
ERRP | 12/31/2022 | 6,976 | 100.0 | % | 413,956 | 6,976 | 80.0 | % | 331,165 | |||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | 4,170,072 | TOTAL | $ | 2,642,578 | |||||||||||||||||||||||||||||||||||||||||||||
Brian Bird | ||||||||||||||||||||||||||||||||||||||||||||||||||
President and Chief Operating Officer | ERRP | 12/31/2026 | 4,927 | 100.0 | % | 292,368 | 4,927 | — | % | — | ||||||||||||||||||||||||||||||||||||||||
LTIP | 12/31/2023 | 13,563 | 33.3 | % | 268,276 | 13,563 | 33.3 | % | 268,276 | |||||||||||||||||||||||||||||||||||||||||
ERRP | 12/31/2025 | 3,465 | 100.0 | % | 205,613 | 3,465 | 20.0 | % | 41,123 | |||||||||||||||||||||||||||||||||||||||||
LTIP | 12/31/2022 | 13,853 | 66.7 | % | 548,299 | 13,853 | 66.7 | % | 548,299 | |||||||||||||||||||||||||||||||||||||||||
ERRP | (3) | 12/31/2024 | 2,587 | 100.0 | % | 153,513 | 2,587 | 40.0 | % | 61,405 | ||||||||||||||||||||||||||||||||||||||||
ERRP | (3) | 12/31/2023 | 1,849 | 100.0 | % | 109,720 | 1,849 | 60.0 | % | 65,832 | ||||||||||||||||||||||||||||||||||||||||
ERRP | 12/31/2022 | 2,011 | 100.0 | % | 119,333 | 2,011 | 80.0 | % | 95,466 | |||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | 1,697,121 | TOTAL | $ | 1,080,400 | |||||||||||||||||||||||||||||||||||||||||||||
Heather Grahame | (2) | |||||||||||||||||||||||||||||||||||||||||||||||||
General Counsel and Vice President - Regulatory & Federal Gov't Affairs | ERRP | 12/31/2026 | 2,417 | 100.0 | % | 143,425 | 2,417 | — | % | — | ||||||||||||||||||||||||||||||||||||||||
LTIP | 12/31/2023 | 7,699 | 33.3 | % | 152,286 | 7,699 | 33.3 | % | 152,286 | |||||||||||||||||||||||||||||||||||||||||
ERRP | 12/31/2025 | 2,550 | 100.0 | % | 151,317 | 2,550 | 20.0 | % | 30,263 | |||||||||||||||||||||||||||||||||||||||||
LTIP | 12/31/2022 | 7,747 | 66.7 | % | 306,625 | 7,747 | 66.7 | % | 306,625 | |||||||||||||||||||||||||||||||||||||||||
ERRP | (3) | 12/31/2024 | 1,952 | 100.0 | % | 115,832 | 1,952 | 40.0 | % | 46,333 | ||||||||||||||||||||||||||||||||||||||||
ERRP | (3) | 12/31/2023 | 1,395 | 100.0 | % | 82,779 | 1,395 | 60.0 | % | 49,668 | ||||||||||||||||||||||||||||||||||||||||
ERRP | 12/31/2022 | 1,474 | 100.0 | % | 87,467 | 1,474 | 80.0 | % | 69,974 | |||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | 1,039,731 | TOTAL | $ | 655,148 |
Future Vesting Date | Assumed 12/31/17 Death / Disability | Assumed 12/31/17 Retirement | ||||||||||||||||||||||
Original Grant (#) | Percent to Vest (%) | Vesting Value ($) (1) | Original Grant (#) | Percent to Vest (%) | Vesting Value ($) (1) | |||||||||||||||||||
Robert C. Rowe | ||||||||||||||||||||||||
President and Chief Executive Officer | ERRP | 12/31/2022 | 5,862 | 100.0 | % | 349,961 | 5,862 | — | % | — | ||||||||||||||
LTIP | 12/31/2019 | 24,821 | 33.3 | % | 493,937 | 24,821 | 33.3 | % | 493,937 | |||||||||||||||
ERRP | 12/31/2021 | 6,505 | 100.0 | % | 388,349 | 6,505 | 20.0 | % | 77,670 | |||||||||||||||
LTIP | 12/31/2018 | 22,982 | 66.7 | % | 915,141 | 22,982 | 66.7 | % | 915,141 | |||||||||||||||
ERRP | 12/31/2020 | 6,458 | 100.0 | % | 385,543 | 6,458 | 40.0 | % | 154,217 | |||||||||||||||
ERRP | 12/31/2018 | 6,410 | 100.0 | % | 382,677 | 6,410 | 60.0 | % | 229,606 | |||||||||||||||
ERRP | 12/31/2018 | 3,878 | 100.0 | % | 231,517 | 3,878 | 80.0 | % | 185,213 | |||||||||||||||
TOTAL | $ | 3,147,124 | TOTAL | $ | 2,055,785 | |||||||||||||||||||
Brian B. Bird | ||||||||||||||||||||||||
Vice President and Chief Financial Officer | ERRP | 12/31/2022 | 2,027 | 100.0 | % | 121,012 | 2,027 | — | % | — | ||||||||||||||
LTIP | 12/31/2019 | 8,584 | 33.3 | % | 170,821 | 8,584 | 33.3 | % | 170,821 | |||||||||||||||
ERRP | 12/31/2021 | 2,250 | 100.0 | % | 134,325 | 2,250 | 20.0 | % | 26,865 | |||||||||||||||
LTIP | 12/31/2018 | 7,948 | 66.7 | % | 316,489 | 7,948 | 66.7 | % | 316,489 | |||||||||||||||
ERRP | 12/31/2020 | 2,233 | 100.0 | % | 133,310 | 2,233 | 40.0 | % | 53,324 | |||||||||||||||
ERRP | 12/31/2018 | 2,103 | 100.0 | % | 125,549 | 2,103 | 60.0 | % | 75,329 | |||||||||||||||
ERRP | 12/31/2018 | 1,272 | 100.0 | % | 75,938 | 1,272 | 80.0 | % | 60,751 | |||||||||||||||
TOTAL | $ | 1,077,444 | TOTAL | $ | 703,579 |
2022 Executive Pay |
(continued) | Future Vesting Date | Assumed 12/31/22 Death / Disability | Assumed 12/31/22 Retirement | |||||||||||||||||||||||||||||||||||||||||||||||
Original Grant (#) | Percent to Vest (%) | Vesting Value ($) (1) | Original Grant (#) | Percent to Vest (%) | Vesting Value ($) (1) | |||||||||||||||||||||||||||||||||||||||||||||
Crystal Lail | ||||||||||||||||||||||||||||||||||||||||||||||||||
Vice President and Chief Financial Officer | ERRP | 12/31/2026 | 2,631 | 100.0 | % | 156,124 | 2,631 | — | % | — | ||||||||||||||||||||||||||||||||||||||||
LTIP | 12/31/2023 | 7,266 | 33.3 | % | 143,721 | 7,266 | 33.3 | % | 143,721 | |||||||||||||||||||||||||||||||||||||||||
ERRP | 12/31/2025 | 2,166 | 100.0 | % | 128,530 | 2,166 | 20.0 | % | 25,706 | |||||||||||||||||||||||||||||||||||||||||
LTIP | 12/31/2022 | 6,679 | 66.7 | % | 264,353 | 6,679 | 66.7 | % | 264,353 | |||||||||||||||||||||||||||||||||||||||||
ERRP | (3) | 12/31/2024 | 1,260 | 100.0 | % | 74,768 | 1,260 | 40.0 | % | 29,907 | ||||||||||||||||||||||||||||||||||||||||
ERRP | (3) | 12/31/2023 | 638 | 100.0 | % | 37,859 | 638 | 60.0 | % | 22,715 | ||||||||||||||||||||||||||||||||||||||||
ERRP | 12/31/2022 | 694 | 100.0 | % | 41,182 | 694 | 80.0 | % | 32,946 | |||||||||||||||||||||||||||||||||||||||||
TOTAL | 846,538 | TOTAL | 519,349 | |||||||||||||||||||||||||||||||||||||||||||||||
Curtis Pohl | ||||||||||||||||||||||||||||||||||||||||||||||||||
Vice President - Retail Operations | ERRP | 12/31/2026 | 1,383 | 100.0 | % | 82,067 | 1,383 | — | % | — | ||||||||||||||||||||||||||||||||||||||||
LTIP | 12/31/2023 | 3,698 | 33.3 | % | 73,146 | 3,698 | 33.3 | % | 73,146 | |||||||||||||||||||||||||||||||||||||||||
ERRP | 12/31/2025 | 1,470 | 100.0 | % | 87,230 | 1,470 | 20.0 | % | 17,446 | |||||||||||||||||||||||||||||||||||||||||
LTIP | 12/31/2022 | 3,721 | 66.7 | % | 147,276 | 3,721 | 66.7 | % | 147,276 | |||||||||||||||||||||||||||||||||||||||||
ERRP | (3) | 12/31/2024 | 1,406 | 100.0 | % | 83,432 | 1,406 | 40.0 | % | 33,373 | ||||||||||||||||||||||||||||||||||||||||
ERRP | (3) | 12/31/2023 | 1,005 | 100.0 | % | 59,637 | 1,005 | 60.0 | % | 35,782 | ||||||||||||||||||||||||||||||||||||||||
ERRP | 12/31/2022 | 1,093 | 100.0 | % | 64,859 | 1,093 | 80.0 | % | 51,887 | |||||||||||||||||||||||||||||||||||||||||
TOTAL | $ | 597,647 | TOTAL | $ | 358,910 |
Future Vesting Date | Assumed 12/31/17 Death / Disability | Assumed 12/31/17 Retirement | ||||||||||||||||||||||
Original Grant (#) | Percent to Vest (%) | Vesting Value ($) (1) | Original Grant (#) | Percent to Vest (%) | Vesting Value ($) (1) | |||||||||||||||||||
Heather H. Grahame | ||||||||||||||||||||||||
Vice President - General Counsel / Regulatory & Federal Gov't Affairs | ERRP | 12/31/2022 | 1,420 | 100.0 | % | 84,774 | 1,420 | — | % | — | ||||||||||||||
LTIP | 12/31/2019 | 6,013 | 33.3 | % | 119,659 | 6,013 | 33.3 | % | 119,659 | |||||||||||||||
ERRP | 12/31/2021 | 1,576 | 100.0 | % | 94,087 | 1,576 | 20.0 | % | 18,817 | |||||||||||||||
LTIP | 12/31/2018 | 5,568 | 66.7 | % | 221,717 | 5,568 | 66.7 | % | 221,717 | |||||||||||||||
ERRP | 12/31/2020 | 1,564 | 100.0 | % | 93,371 | 1,564 | 40.0 | % | 37,348 | |||||||||||||||
ERRP | 12/31/2018 | 1,531 | 100.0 | % | 91,401 | 1,531 | 60.0 | % | 54,840 | |||||||||||||||
ERRP | 12/31/2018 | 926 | 100.0 | % | 55,282 | 926 | 80.0 | % | 44,226 | |||||||||||||||
TOTAL | $ | 760,291 | TOTAL | $ | 496,608 | |||||||||||||||||||
Curtis T. Pohl | ||||||||||||||||||||||||
Vice President - Retail Operations | ERRP | 12/31/2022 | 1,102 | 100.0 | % | 65,789 | 1,102 | — | % | — | ||||||||||||||
LTIP | 12/31/2019 | 3,500 | 33.3 | % | 69,650 | 3,500 | 33.3 | % | 69,650 | |||||||||||||||
ERRP | 12/31/2021 | 1,223 | 100.0 | % | 73,013 | 1,223 | 20.0 | % | 14,603 | |||||||||||||||
LTIP | 12/31/2018 | 3,240 | 66.7 | % | 129,016 | 3,240 | 66.7 | % | 129,016 | |||||||||||||||
ERRP | 12/31/2020 | 1,214 | 100.0 | % | 72,476 | 1,214 | 40.0 | % | 28,990 | |||||||||||||||
ERRP | 12/31/2018 | 1,205 | 100.0 | % | 71,939 | 1,205 | 60.0 | % | 43,163 | |||||||||||||||
ERRP | 12/31/2018 | 729 | 100.0 | % | 43,521 | 729 | 80.0 | % | 34,817 | |||||||||||||||
TOTAL | $ | 525,405 | TOTAL | $ | 320,239 | |||||||||||||||||||
Bobbi L. Schroeppel | ||||||||||||||||||||||||
Vice President - Customer Care, Communications, and Human Resources | ERRP | 12/31/2022 | 764 | 100.0 | % | 45,611 | 764 | — | % | — | ||||||||||||||
LTIP | 12/31/2019 | 2,689 | 33.3 | % | 53,511 | 2,689 | 33.3 | % | 53,511 | |||||||||||||||
ERRP | 12/31/2021 | 846 | 100.0 | % | 50,506 | 846 | — | % | — | |||||||||||||||
LTIP | 12/31/2018 | 2,490 | 66.7 | % | 99,152 | 2,490 | 66.7 | % | 99,152 | |||||||||||||||
ERRP | 12/31/2020 | 839 | 100.0 | % | 50,088 | 839 | — | % | — | |||||||||||||||
ERRP | 12/31/2018 | 833 | 100.0 | % | 49,730 | 833 | — | % | — | |||||||||||||||
ERRP | 12/31/2018 | 490 | 100.0 | % | 29,253 | 490 | — | % | — | |||||||||||||||
TOTAL | $ | 377,851 | TOTAL | $ | 152,663 |
2022 Non-Employee Director Compensation Schedule | Cash ($) | Shares (#) | ||||||
New Member Initial Stock Grant | — | 1,000 | ||||||
Board Chair Annual Retainer (1) | 150,000 | 3,750 | ||||||
Board Member Annual Retainer | 50,000 | 2,750 | ||||||
Committee Chair Annual Retainer | 10,000 | — | ||||||
Committee Member Annual Retainer | 10,000 | — | ||||||
(1) The Board chair does not receive the Board Member annual cash and stock retainers. |
NorthWestern Energy | Proxy Statement | Page 43 |
In 2017, the Compensation Committee asked Willis Towers Watson to update its review of the competitive market data concerning Board compensation from peer company comparisons so that the Compensation Committee could determine 2018 compensation levels for non-employee directors. Based upon this review, the Compensation Committee made no changes to the compensation provided to our non-employee directors. The table to the right presents the 2018 compensation schedule for non-employee directors. | Cash ($) | Shares (#) | |||||
Annual Retainer | |||||||
New Member Initial Stock Grant | — | 1,000 | |||||
Board Chair | 125,000 | 3,750 | |||||
Board Member | 25,000 | 2,750 | |||||
Committee Chair | 10,000 | — | |||||
Meeting Fees (Board Chair does not receive meeting fees) | |||||||
Board Meeting | 2,000 | — | |||||
Committee Meeting | 2,000 | — |
2022 Director Pay |
Fees Earned or Paid in Cash ($) | Stock Awards (1) ($) | Total ($) | |||||||||||||||
Dana Dykhouse, Board Chair | 150,000 | 213,113 | 363,113 | ||||||||||||||
Anthony Clark | 70,000 | 157,702 | 227,702 | ||||||||||||||
Jan Horsfall, Operations Chair | 80,000 | 156,283 | 236,283 | ||||||||||||||
Britt Ide | 70,000 | 156,283 | 226,283 | ||||||||||||||
Kent Larson (2) | 29,167 | 119,854 | 149,021 | ||||||||||||||
Linda Sullivan, Audit Chair (3) | 80,000 | 159,830 | 239,830 | ||||||||||||||
Mahvash Yazdi, Compensation Chair | 80,000 | 159,830 | 239,830 | ||||||||||||||
Jeffrey Yingling, Governance Chair | 80,000 | 159,830 | 239,830 |
Fees Earned or Paid in Cash (1) ($) | Stock Awards (2) ($) | Total ($) | |||||||
E. Linn Draper Jr., Board Chair | 125,000 | 214,163 | 339,163 | ||||||
Stephen P. Adik, Audit Chair | 67,000 | 157,053 | 224,053 | ||||||
Dorothy M. Bradley (retired April 27, 2017) | 19,000 | 157,053 | 176,053 | ||||||
Anthony T. Clark | 47,000 | 213,923 | 260,923 | ||||||
Dana J. Dykhouse, Compensation Chair | 67,000 | 156,750 | 223,750 | ||||||
Jan R. Horsfall | 57,000 | 156,750 | 213,750 | ||||||
Britt E. Ide (joined April 27, 2017) | 30,700 | 159,666 | 190,366 | ||||||
Julia L. Johnson, Governance Chair | 67,000 | 157,053 | 224,053 | ||||||
Linda G. Sullivan (joined April 27, 2017) | 30,700 | 159,666 | 190,366 |
NorthWestern Energy | Proxy Statement | Page 44 |
Pay Versus Performance |
Year | Summary Compensation Table Total for PEO ($) (1) | Compensation Actually Paid to PEO ($) (1) (2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers ($) (1) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($) (1) (2) | Value of Initial Fixed $100 Investment Based on | Net Income ($ thousands) | Company Selected Measure (4) | SUPPLEMENTAL MEASURE: | |||||||||||||||||||||||||||||||||||||||
Total Shareholder Return ($) | Peer Group Total Shareholder Return ($) (3) | 3-Year Return on Average Equity (4) | |||||||||||||||||||||||||||||||||||||||||||||
2022 | 3,375,572 | 2,901,940 | 1,472,753 | 1,397,422 | 94.09 | 98.78 | 183,008 | N/A | 7.4% | ||||||||||||||||||||||||||||||||||||||
2021 | 3,445,367 | 1,956,387 | 1,116,582 | 813,038 | 86.70 | 97.38 | 186,840 | N/A | 8.5% | ||||||||||||||||||||||||||||||||||||||
2020 | 3,102,048 | (436,596) | 985,536 | 220,071 | 84.94 | 82.85 | 155,215 | N/A | (12.9)% |
Adjustments to Determine CAP for PEO | 2022 | 2021 | 2020 | ||||||||||||||
Summary Compensation Table (SCT) Total | $ | 3,375,572 | $ | 3,445,367 | $ | 3,102,048 | |||||||||||
Adjustments to arrive at CAP | |||||||||||||||||
Deduction for change in pension values reported in the SCT | $ | — | $ | (77,372) | $ | (165,530) | |||||||||||
Increase for "Service Cost" for Pension Plans | $ | 30,723 | $ | 44,145 | $ | 54,333 | |||||||||||
Increase for "Prior Service Cost" for Pension Plans | $ | — | $ | — | |||||||||||||
Deduction for stock awards amounts reported in the SCT | $ | (1,940,934) | $ | (1,906,246) | $ | (1,698,500) | |||||||||||
Fair value of current year equity awards at year-end | $ | 2,554,097 | $ | 1,253,305 | $ | 1,267,128 | |||||||||||
Change in value of prior years' awards unvested at year-end | $ | (1,152,262) | $ | (749,144) | $ | (628,926) | |||||||||||
Change in value of prior years' awards that vested during current year | $ | 34,744 | $ | (53,668) | $ | (2,367,149) | |||||||||||
Deduction of value of prior years' awards that were forfeited during year | $ | — | $ | — | $ | — | |||||||||||
Dividends | $ | — | $ | — | $ | — | |||||||||||
Total adjustments | $ | (473,632) | $ | (1,488,980) | $ | (3,538,644) | |||||||||||
CAP Total | $ | 2,901,940 | $ | 1,956,387 | $ | (436,596) | |||||||||||
Adjustments to Determine Average CAP for Non-PEO NEOs | 2022 | 2021 | 2020 | ||||||||||||||
Summary Compensation Table (SCT) Total | $ | 1,472,753 | $ | 1,116,582 | $ | 985,536 | |||||||||||
Adjustments to arrive at CAP | |||||||||||||||||
Deduction for change in pension values reported in the SCT | $ | — | $ | (2,842) | $ | (29,693) | |||||||||||
Increase for "Service Cost" for Pension Plans | $ | 9,746 | $ | 10,230 | $ | 9,606 | |||||||||||
Increase for "Prior Service Cost" for Pension Plans | $ | — | $ | — | $ | — | |||||||||||
Deduction for stock awards amounts reported in the SCT | $ | (750,143) | $ | (451,752) | $ | (370,377) | |||||||||||
Fair value of current year equity awards at year-end | $ | 916,343 | $ | 296,729 | $ | 273,952 | |||||||||||
Change in value of prior years' awards unvested at year-end | $ | (259,428) | $ | (145,623) | $ | (135,161) | |||||||||||
Change in value of prior years' awards that vested during current year | $ | 8,151 | $ | (10,286) | $ | (513,792) | |||||||||||
Deduction of value of prior years' awards that were forfeited during year | $ | — | $ | — | $ | — | |||||||||||
Dividends | $ | — | $ | — | $ | — | |||||||||||
Total adjustments | $ | (75,331) | $ | (303,544) | $ | (765,465) | |||||||||||
CAP Total | $ | 1,397,422 | $ | 813,038 | $ | 220,071 |
NorthWestern Energy | Proxy Statement | Page 45 |
Pay Versus Performance |
CAP vs. Total Shareholder Return (including Peer Group TSR) | ||||||||
As illustrated by the graphic to the left, as our TSR increased from 2020 to 2022, so to did the CAP to our PEO and our other NEOs. Indeed, there appears to be a high correlation between CAP and TSR. In 2020, the value of a $100 investment in our common stock actually declined to approximately $83 over the course of the year, and the CAP to our PEO turned out to be a negative number. When our TSR increased over the next two years (2021 and 2022), the CAP showed a similar increase. |
CAP vs. Net Income | ||||||||
Net Income does not appear to have the same correlative relationship with CAP as TSR does. As illustrated in the graphic to the right, CAP increased considerably from 2020 to 2021 with a corresponding increase to net income. However, CAP again increased in 2022, even though net income declined. This can be explained through an examination of our compensation program. Our long-term equity incentive awards make up the largest percentage of the compensation package provided to our executives, and those awards use TSR as a primary metric. We use net income as a metric in our annual cash incentive, but that annual incentive is a smaller percentage of the overall compensation package. |
SUPPLEMENTAL INFORMATION — CAP vs. Return on Average Equity | ||||||||
Like net income, ROAE does not appear to have the same correlative relationship with CAP. The pattern in the graphic to the left nearly mirrors the pattern in the net income graphic above, and our compensation program provides the explanation. While ROAE is a metric we use in our long-term equity incentive awards, it is a secondary metric and does not drive the performance under those awards as much as TSR does. Thus, ROAE contributes less to the CAP to our executives. |
NorthWestern Energy | Proxy Statement | Page 46 |
Pay Versus Performance |
Most Important Performance Measures | |||||||||||
Earnings Per Share (3-year period) | Net Income | Relative Total Shareholder Return (3-year period) | Return on Average Equity (3-year period) |
THREE-YEAR TSR | ||
NorthWestern Energy | Proxy Statement | Page 47 |
Supplemental Pay Versus Performance Information |
CEO PAY FOR PERFORMANCE VS. 2022 PEERS | ||||||||
1-YEAR | 3-YEAR | |||||||
Relative 1-Year CEO Pay* | Relative 1-Year TSR* | Relative 3-Year CEO Pay* | Relative 3-Year TSR* | |||||||||||||||||||||||||||||
OGE Energy Corp. | 100% | PNM Resources Inc. | 100% | PNM Resources Inc. | 100% | Otter Tail Corporation | 100% | |||||||||||||||||||||||||
ONE Gas Inc. | 86% | Spire Inc. | 98% | OGE Energy Corp. | 85% | MGE Energy Inc. | 71% | |||||||||||||||||||||||||
PNM Resources Inc. | 81% | Avista Corp. | 95% | Spire Inc. | 61% | PNM Resources Inc. | 61% | |||||||||||||||||||||||||
Portland General Electric | 77% | NorthWestern Energy | 93% | ONE Gas Inc. | 61% | Avista Corp. | 60% | |||||||||||||||||||||||||
Spire Inc. | 75% | ONE Gas Inc. | 90% | Portland General Electric | 54% | OGS | 56% | |||||||||||||||||||||||||
Otter Tail Corporation | 64% | Black Hills Corporation | 72% | IDACORP, Inc. | 52% | Black Hills Corporation | 51% | |||||||||||||||||||||||||
Black Hills Corporation | 58% | OGE Energy Corp. | 66% | Black Hills Corporation | 51% | Portland General Electric | 49% | |||||||||||||||||||||||||
IDACORP, Inc. | 47% | ALLETE, Inc. | 66% | Otter Tail Corporation | 49% | Northwest Natural Holding | 43% | |||||||||||||||||||||||||
Avista Corp. | 42% | IDACORP, Inc. | 63% | NorthWestern Energy | 33% | NorthWestern Energy | 41% | |||||||||||||||||||||||||
NorthWestern Energy | 36% | MGE Energy Inc. | 53% | Northwest Natural Holding | 28% | Spire Inc. | 39% | |||||||||||||||||||||||||
Northwest Natural Holding | 30% | Portland General Electric | 45% | Avista Corp. | 24% | ALLETE, Inc. | 33% | |||||||||||||||||||||||||
ALLETE, Inc. | 12% | Northwest Natural Holding | 12% | ALLETE, Inc. | 13% | IDACORP, Inc. | 31% | |||||||||||||||||||||||||
MGE Energy Inc. | —% | Otter Tail Corporation | —% | MGE Energy Inc. | —% | OGE Energy Corp. | —% | |||||||||||||||||||||||||
*Relative CEO pay and relative TSR are expressed as a percentile of the range between the highest and lowest values of actual CEO pay and actual TSR. | ||||||||||||||||||||||||||||||||
Source: CEO Pay for the one-year period is the 2021 total compensation and for the three-year period is the 2019-2021 total compensation, as published in the 2020, 2021, and 2022 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. TSR is from S&P Global Market Intelligence for the one- and three-year periods ended December 31, 2022, and assumes reinvestment of dividends. |
NorthWestern Energy | Proxy Statement | Page 48 |
Supplemental Pay Versus Performance Information |
AGGREGATE NEO PAY VS. 2022 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. For companies that had more than five NEOs, our analysis includes only the top five total compensation amounts for such NEO group. |
NorthWestern Energy | Proxy Statement | Page 49 |
Corporate Governance |
•Corporate Governance Guidelines | and Senior Financial Officers •Insider Trading Policy •Related Persons Transactions Policy •Complaint Procedures for the Audit Committee of the Board | |||||
What We Do | ||||||
•Annual election of all directors. | ||||||
•Majority vote plus resignation standard in uncontested elections. If a director receives more “WITHHOLD AUTHORITY” votes than “FOR” votes, the director must submit a resignation for the Board to consider. | ||||||
•Allow shareholders owning 25 percent of our shares to call a special meeting. | ||||||
•Independent board. Our Board is comprised entirely of independent directors, except our CEO. | ||||||
•Independent Board Chair. | ||||||
•Independent Board committees. Each of our Board committees (audit, compensation, governance, and | ||||||
•Committee authority to retain independent advisors. Each of our Board committees has the authority to retain independent advisors, which will be paid for by the company. | ||||||
•Code of Conduct and Ethics. We are committed to operating with honesty and integrity and maintaining the highest level of ethical conduct. Our Code of Conduct and Ethics applies to all employees, as well as the Board. We also have a separateCode of Ethics for the Chief Executive Officer and Senior Financial Officersconcerning financial reporting and other related matters. | ||||||
•Robust stock ownership guidelines for executive officers (2x to 6x) and •Annual Board Evaluation. Historically, our Board has completed a self-evaluation. The Board believes conducting an annual evaluation is an important exercise that increases accountability to shareholders, identifies areas for growth, highlights best practices, enhances efficiency, and promotes good governance. In 2022, our Board engaged an independent consultant to help conduct the evaluation. | ||||||
NorthWestern Energy | Proxy Statement | Page 51 |
Corporate Governance |
What We Don’t Do | ||||||
•Poison pill. We do not have a shareholders rights plan or poison pill. | ||||||
•Hedging of company securities. We do not allow our directors, executives, or employees to hedge company securities. | ||||||
•Corporate political contributions. We do not make contributions to candidates for political office, political parties, or committees, or political committees organized to advance political candidates. | ||||||
•Supermajority voting. We do not have supermajority voting provisions in our certificate of incorporation or bylaws, except to approve (or amend provisions concerning) certain business combinations or mergers. | ||||||
Strategic Executive Leadership. Experience as an executive officer and/or senior leader in business or public service helps us develop strategic direction, drive change and growth, and enable a healthy corporate culture. | Integrity and Ethics. Unblemished integrity and ethics are key to our directors representing the interests of shareholders and our company before a wide array of audiences. We believe our directors must reflect our corporate values. | Board Service and Governance. Experience on other public, private and non-profit boards provides essential comparison points for our operations and governance. |
NorthWestern Energy | Proxy Statement | Page 53 |
Corporate Governance |
Director Skills Matrix | ||||||||||||||||||||||||||||||||
Financial Executive.High level, public company financial experience (principal financial officer, principal accounting officer, or public accountant or auditor) or a background in strategic financial and capital markets assists board oversight of our financial reporting, internal controls, and capital structure. | ||||||||||||||||||||||||||||||||
Utility Operations.Executive operational leadership experience in the energy or utility industry or in-depth knowledge of electric and natural gas transmission and distribution systems, energy markets, or electric generation facilities enables effective direction of operational improvements. | ||||||||||||||||||||||||||||||||
Regulatory and Public Policy. Positions in the public utility regulatory arena, experience in other regulated industries or areas, and/or a public policy background involving interactions with the government, policymakers, and government agencies helps guide our regulated utility strategies. | ||||||||||||||||||||||||||||||||
Risk Management / Oversight.Experience identifying, assessing, managing, and mitigating business and financial risk factors – including environmental, social, and governance (ESG) – and/or management responsibility of enterprise risk management enhances our Board’s oversight capabilities. | ||||||||||||||||||||||||||||||||
Human Capital Management.Leadership experience with attracting, motivating, and retaining high-performing employees helps us enhance our work environment through workforce diversity, worker health and safety, compensation, and company culture. | ||||||||||||||||||||||||||||||||
Technology and Security.Understanding business and operations technology – including financial systems, grid operations, critical infrastructure, and customer information systems – and the potential for physical and cyber threats to these systems helps guide our strategy and development. | ||||||||||||||||||||||||||||||||
Innovation and Transformation.Experience leading or managing change and driving innovation within an organization assists us as we evolve with our industry. | ||||||||||||||||||||||||||||||||
Customers and Communities. Direct experience within the local business and political environment of our customer and employee base permits our Board to understand the needs and interests of our customers and communities. Expertise in marketing and customer service helps oversee the public image we cultivate. |
Denotes extensive experience, knowledge, and/or expertise and indicates a primary qualification supporting the Director’s nomination. | Denotes an area in which the director has a demonstrated proficiency and indicates an ancillary qualification supporting the director’s nomination. |
NorthWestern Energy | Proxy Statement | Page 54 |
Corporate Governance |
NorthWestern Corporation Board Diversity Matrix (as of March 14, 2023) | ||||||||||||||
Total Number of Directors | 9 | |||||||||||||
Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender | ||||||||||
Directors | 3 | 6 | 0 | 0 | ||||||||||
Part II: Demographic Background | ||||||||||||||
African American or Black | 0 | 0 | 0 | 0 | ||||||||||
Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||||||||
Asian | 0 | 0 | 0 | 0 | ||||||||||
Hispanic or Latinx | 0 | 0 | 0 | 0 | ||||||||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||||||||
White | 3 | 6 | 0 | 0 | ||||||||||
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | ||||||||||
LGBTQ+ | 0 | |||||||||||||
Did not disclose Demographic Background | 0 |
NorthWestern Energy | Proxy Statement | Page 55 |
Corporate Governance |
President and Chief Executive Officer, NorthWestern Corporation | ||
Biography:Mr. Mr. Bird is a member of the Board of Directors of Energy Insurance Mutual Limited (since January 2023), a provider of insurance and risk management services to utilities and the energy services industry. He also shares his leadership and financial experience as a member of the Board of Directors for Feeding South Dakota (Treasurer), Sioux Empire United Way (2021 Campaign Chair), North Central Electric Association (Past President), and University of Idaho Utility Executive | |||||||||
Financial Executive Utility Regulatory and Risk Management / Oversight Customers and Communities Non-Independent Director NorthWestern Committees: None Other Public Boards: None | |||||||||
Anthony Clark Director since 2016 Age 51 | |||||||||||
Senior Advisor, Wilkinson Barker; former Commissioner, FERC and NDPSC | |||||||||||
Biography:Mr. Clark is a Senior Advisor with Wilkinson Barker Knauer, Why have we nominated Mr. | |||||||||||
Utility Operations Independent Director NorthWestern Committees Compensation, Governance Other Public Boards None | |||||||||||
NorthWestern Energy | Proxy Statement | Page 56 |
Corporate Governance |
Dana DykhouseDirector since 2009 Age 66 | |||||||||||
Chief Executive Officer, First PREMIER Bank | |||||||||||
Biography:Since 1995, Mr. Dykhouse | |||||||||||
Financial Executive Customers and Communities Independent Director NorthWestern Committees None, Board Chair Other Public Boards None | |||||||||||
Sherina EdwardsDirector sinceNew NomineeAge 39 | |||||||||||
Former Chief Strategy Officer, MasTec, Inc. | |||||||||||
Biography: Ms. Edwards is the former Chief Strategy Officer for MasTec (NYSE: MTZ), a Fortune 500 utility infrastructure company (2022). She previously served as President and Ms. Edwards is a member of the board of directors of SouthWest Water Company, an American-owned regulated water and wastewater utility serving over half a million residential and business customers in seven states (AL, CA, FL, LA, OR, SC, and TX); (b) Midland States Bancorp, Inc., a community-based financial holding company headquartered in Effingham, Illinois, and the sole shareholder of Midland States Bank, and (c) Resource Innovations, Inc., a woman led company offering software-enabled clean energy solutions for utilities, as well as commercial, industrial, and residential energy consumers. Why have we nominated Ms. Edwards?Our Board concluded that Ms. Edwards is qualified to serve as a Board member because of her utility regulatory expertise and her leadership regarding innovation and transformation. Her experience as a state regulatory commissioner and a lawyer concerning state and federal regulatory strategies and innovation will help our Board oversee our regulatory relationships, and her leadership driving change as a chief strategy officer will help us evolve with our industry. In addition, through her career, she has developed proficiencies in the areas of utility operations, human capital management, and technology and security. | |||||||||||
Skill Highlights Regulatory and Public Policy Innovation and Transformation Independent Director NorthWestern Committees N/A Other Public Boards None |
NorthWestern Energy | Proxy Statement | Page 57 |
Corporate Governance |
Jan HorsfallDirector since 2015 Age 62 | ||||||||
Chief Operations Officer at Sparq Games, Inc. | ||||||||
Biography:Mr. Horsfall is the He sits on the board of Why have we nominated Mr. | ||||||||
Technology and Security Transformation Customers and Communities Independent Director NorthWestern Committees Audit, Operations (Chair) Other Public Boards None | ||||||||
Britt IdeDirector since 2017 Age 51 | |||||||||||
Biography:Ms. Ide is the She is the lead independent director of the Board of Directors of Atlis Motor Vehicles (Nasdaq: AMV) (since 2021), | |||||||||||
Risk Management / Oversight Customers and Communities Independent Director NorthWestern Committees Compensation, Governance Other Public Atlis Motor Vehicles | |||||||||||
NorthWestern Energy | Proxy Statement | Page 58 |
Corporate Governance |
Kent LarsonDirector since 2022 Age 63 | |||||||||||
Retired Executive Vice President and Group President, Xcel Energy, Inc. | |||||||||||
Biography:In 2020, Mr. Larson concluded a 38-year career with Xcel Energy, Inc., an electric and natural gas utility holding company, retiring as its Executive Vice President | |||||||||||
He currently serves on the | |||||||||||
Skill Highlights Utility Customers and Independent Director NorthWestern Committees Audit, Operations Other Public Boards None | ||||||||
Linda SullivanDirector since 2017 Age 59 | |||||||||||
Retired Executive Vice President and Chief Financial Officer of American Water | |||||||||||
Ms. Sullivan is a | |||||||||||
Skill Highlights Financial Executive Utility Technology and Security Independent Director NorthWestern Committees Audit (Chair), Operations Other Public AltaGas, Ltd. | |||||||||||
PPL Corporation |
NorthWestern Energy | Proxy Statement | Page 59 |
Mahvash YazdiDirector since 2019 Age 71 | ||||||||
President, Feasible Management Consulting | ||||||||
Biography:Ms. Yazdi is the President of Feasible Management Consulting, a company that provides strategic consulting in energy, innovation, technology, and telecommunication (since 2012). She is the former Senior Vice President of Business Integration and Chief Information Officer (1997-2012) of Edison International and Southern California Edison. Ms. Yazdi is on the board of Anterix, Inc. (Nasdaq: ATEX), a telecommunication company with the largest licensed 900MHZ spectrum in the United States. She is the Chair of Prologis (NYSE: PLD) Energy Advisory Board, focusing on transportation and energy for one of the world’s largest logistic companies and also is a member of the Advisory Board of Infosys Corporation. Ms. Yazdi also serves in a strategic advisory role for Energy Capital Ventures. Why have we nominated Ms. Yazdi?Our Board concluded that Ms. Yazdi is qualified to serve as a Board member because of her executive experience with a large public utility and expertise in the areas of human capital management, technology and security, and innovation and transformation. As a nationally recognized former chief information officer, she possesses cyber security expertise with extensive experience leading transformation and technology implementation, such as smart meter and smart grid programs. In the utility/power industry, she was charged with setting strategies and leading people to achieve greater growth, efficiency and performance. In addition, through her accomplished career, she has developed proficiencies in the areas of regulatory and public policy and risk management and oversight. | ||||||||
Skill Highlights Utility Operations Human Capital Management Technology and Security Innovation and Transformation Independent Director NorthWestern Committees Compensation (Chair), Operations Other Public Boards Anterix, Inc. |
Jeffrey YinglingDirector since 2019 Age 63 | ||||||||
Co-Founder, General Partner, Energy Capital Ventures | ||||||||
Biography:Mr. Yingling is a Co-Founder and General Partner of Energy Capital Ventures, a strategic venture fund formed to invest in early stage energy companies (since 2020). Immediately prior to forming this fund, Mr. Yingling concluded an investment banking career with over 30 years involved in the power and utility sector. Most recently, he served as Senior Advisor in Investment Banking at Guggenheim Securities, specializing in power, energy and renewables (2017-20). Prior to that, he held various roles at J.P. Morgan Securities, including as Managing Director and Head of Midwest Investment Banking, and at Morgan Stanley, Dean Witter Reynolds, and The First Boston Corporation. Mr. Yingling is a member of the board of directors of LendingPoint Consolidated, Inc., a data and technology platform that originates unsecured personal loans both direct to consumer online and at the point of sale . He previously served on the board of directors of Navigant Consulting, Inc. (formerly NYSE: NCI) (2018-19), before it was acquired by another company. Why have we nominated Mr. Yingling? Our Board concluded that Mr. Yingling is qualified to serve as a Board member because of his 35+ years of financial, managerial, and strategy experience acquired from senior executive and management-level positions at leading international financial institutions and in the professional service sector, particularly with respect to the power and energy industry. He is financially literate under Nasdaq rules. Mr. Yingling’s investment banking career and current position with Energy Capital Ventures has also provided him with expertise with respect to innovations and transformations occurring within the utility industry and managing the associated risks, as well as a developed proficiency concerning technology issues. | ||||||||
Skill Highlights Financial Executive Risk Management / Oversight Innovation and Transformation Independent Director NorthWestern Committees Audit, Governance (Chair) Other Public Boards None |
NorthWestern Energy | Proxy Statement | Page 60 |
Corporate Governance |
NorthWestern Energy | Proxy Statement | Page 61 |
Corporate Governance |
NorthWestern Energy | Proxy Statement | Page 62 |
Corporate Governance |
NorthWestern Energy | Proxy Statement | Page 63 |
Corporate Governance |
We have •Human Resources | COMMITTEES 100% INDEPENDENT |
Audit Committee | ||||||||||||||||
“The Audit Committee Linda Sullivan, Audit Committee Chair | Members | ||||||||||||||
Linda Sullivan (Chair) | |||||||||||||||
Jan Horsfall | |||||||||||||||
Kent Larson | |||||||||||||||
Jeffrey Yingling | |||||||||||||||
Meetings in 2022 | 5 |
NorthWestern Energy | Proxy Statement | Page 64 |
Corporate Governance |
Governance Committee | ||||||||||||||||||||||||
“Corporate governance is Governance Committee Chair | Members | |||||||||||||||||||||||
Jeffrey Yingling (Chair) | ||||||||||||||||||||||||
Anthony Clark | ||||||||||||||||||||||||
Britt Ide | ||||||||||||||||||||||||
Meetings in 2022 | 5 |
NorthWestern Energy | Proxy Statement | Page 65 |
Corporate Governance |
Compensation Committee | ||||||||||||||||||||||||
“Our Compensation Committee | Members | |||||||||||||||||||||||
Mahvash Yazdi (Chair) | ||||||||||||||||||||||||
Anthony Clark | ||||||||||||||||||||||||
Britt Ide | ||||||||||||||||||||||||
Meetings | 5 |
NorthWestern Energy | Proxy Statement | Page 66 |
Corporate Governance |
3.The policies or procedures of 4.Any business or personal relationship of a member of the Compensation Committee with the regular members of the 5.Any stock of the company owned by the regular members of the 6. Any business or personal relationships between the executive officers of the company and the regular members of the The Compensation Committee also obtained a representation letter from |
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. Operations Committee Independence Each member of our Operations Committee is independent. Operations Committee Charter The Operations Committee was created in early 2020 to allow the Board, through this committee, to devote more time to safety, environmental, technology, and operations matters. The Operations Committee operates pursuant to a charter that is reviewed annually and was last amended in October 2021. The Charter is available on our website at NorthWesternEnergy.com under About Us / Investors / Corporate Governance.
ESG Sustainability At NorthWestern Energy, we are guided by our commitment to sustainability and our robust environmental, social and governance (ESG) policies and practices. Sustainability means meeting today’s needs while planning for tomorrow’s as well. We have focused our ESG efforts on providing safe, reliable and innovative energy solutions that sustain and create value for our customers, communities, employees and investors. We are honored to have been named by Newsweek as one of America’s Most Responsible Companies for 2023. This distinction focuses on a holistic view of corporate responsibility that considers all three pillars of ESG and is based upon quantitative data from more than 30 key performance indicators and a corporate social responsibility reputation metric derived from an extensive survey of United States residents.
In early 2022, we took our commitment a step further and announced our plan to reach net-zero emissions by 2050. By accomplishing this, we will continue to serve our customers with reliable, affordable energy, while deploying new, clean technology as it becomes available and cost effective. Our ESG progress is highlighted in our 2022 Sustainability Report which is available on our website at NorthWesternenergy.com/about-us/environmental-social-governance. This report provides transparency into the social, environmental and economic impacts of our Company and offers further insight into how we view sustainability. It also includes Sustainability Accounting Standards Board and Task Force on Climate-Related Financial Disclosures aligned reporting. Our website and these ESG reports and related website content are not incorporated by reference into this proxy statement. Other Governance Practices Code of Conduct Our Board adopted a Code of Conduct and Ethics (Code of Conduct) which it reviews annually and requires each employee to certify 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 About Us / Investors / Corporate Governance |
NorthWestern Energy | Proxy Statement | Page 68 |
Corporate Governance |
NorthWestern Energy | Proxy Statement | Page 69 |
Corporate Governance |
NorthWestern Energy | Proxy Statement | Page 70 |
Stock Information |
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 (%) | ||||||||||||||||||||||||
Anthony Clark | 1,900 | — | 15,448 | 17,348 | * | ||||||||||||||||||||||||
Dana Dykhouse | 37,750 | — | — | 37,750 | * | ||||||||||||||||||||||||
Jan Horsfall | 4,425 | — | — | 4,425 | * | ||||||||||||||||||||||||
Sherina Edwards | — | — | — | — | * | ||||||||||||||||||||||||
Britt Ide | 111 | — | 9,839 | 9,950 | * | ||||||||||||||||||||||||
Kent Larson | 2,146 | — | — | 2,146 | * | ||||||||||||||||||||||||
Linda Sullivan | 74 | — | 18,836 | 18,910 | * | ||||||||||||||||||||||||
Mahvash Yazdi | 1,990 | — | 8,132 | 10,122 | * | ||||||||||||||||||||||||
Jeffrey Yingling | 1,000 | — | 10,668 | 11,668 | * | ||||||||||||||||||||||||
Robert Rowe | 5,331 | 192,396 | 197,727 | * | |||||||||||||||||||||||||
Brian Bird | 98,449 | — | 11,230 | 109,679 | * | ||||||||||||||||||||||||
Heather Grahame | 21,330 | — | 8,030 | 29,360 | * | ||||||||||||||||||||||||
Crystal Lail | 8,044 | — | 1,561 | 9,605 | * | ||||||||||||||||||||||||
Curtis Pohl | 16,076 | — | 6,299 | 22,375 | * | ||||||||||||||||||||||||
Directors and Executive Officers as a Group (18 persons) | 233,154 | — | 327,610 | 560,764 | * | ||||||||||||||||||||||||
*Less than one percent |
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 (%) | ||||||||
Stephen P. Adik (1) | — | 20,000 | 70,735 | 90,735 | * | ||||||||
E. Linn Draper Jr. | — | — | 129,031 | 129,031 | * | ||||||||
Anthony T. Clark | — | — | 6,635 | 6,635 | * | ||||||||
Dana J. Dykhouse | 25,750 | — | — | 25,750 | * | ||||||||
Jan R. Horsfall | 6,955 | — | — | 6,955 | * | ||||||||
Britt E. Ide | — | — | 5,420 | 5,420 | * | ||||||||
Julia L. Johnson | — | — | 85,647 | 85,647 | * | ||||||||
Linda G. Sullivan | 5,420 | 5,420 | * | ||||||||||
Robert C. Rowe | 11,953 | — | 137,044 | 148,997 | * | ||||||||
Brian B. Bird | 64,797 | — | 2,268 | 67,065 | * | ||||||||
Heather H. Grahame | 23,938 | — | 1,647 | 25,585 | * | ||||||||
Curtis T. Pohl | 36,156 | — | 1,297 | 37,453 | * | ||||||||
Bobbi L. Schroeppel | 17,920 | — | 859 | 18,779 | * | ||||||||
Directors and Executive Officers as a Group (16 persons) | 201,984 | 20,000 | 469,271 | 691,255 | 1.40 | ||||||||
*Less than one percent |
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. 26, 2018 (1) (%) | Percent of Guideline Achieved Last Year (2) (%) | |||||||||||||
Directors | |||||||||||||||||||
E. Linn Draper Jr., Board Chair | $125,000 | 10x | 1,250,000 | 129,031 | 6,676,064 | 534 | % | 557 | % | ||||||||||
Stephen P. Adik, Audit Chair | $35,000 | 10x | 350,000 | 90,735 | 4,694,629 | 1,341 | % | 1,419 | % | ||||||||||
Anthony T. Clark | $25,000 | 10x | 250,000 | 6,635 | 343,295 | 137 | % | 87 | % | ||||||||||
Dana J. Dykhouse, Comp. Chair | $35,000 | 10x | 350,000 | 25,750 | 1,332,305 | 381 | % | 381 | % | ||||||||||
Jan R. Horsfall | $25,000 | 10x | 250,000 | 6,955 | 359,852 | 144 | % | 138 | % | ||||||||||
Britt E. Ide | $25,000 | 10x | 250,000 | 5,420 | 280,431 | 112 | % | N/A | |||||||||||
Julia L. Johnson, Gov. Chair | $35,000 | 10x | 350,000 | 85,647 | 4,431,376 | 1,266 | % | 1,326 | % | ||||||||||
Linda G. Sullivan | $25,000 | 10x | 250,000 | 5,420 | 280,431 | 112 | % | N/A | |||||||||||
Executives | |||||||||||||||||||
Robert C. Rowe | $595,578 | 6x | 3,573,468 | 148,997 | 7,709,105 | 216 | % | 208 | % | ||||||||||
Brian B. Bird | $411,951 | 4x | 1,647,804 | 67,065 | 3,469,943 | 211 | % | 185 | % | ||||||||||
Heather H. Grahame | $360,714 | 3x | 1,082,142 | 25,585 | 1,323,768 | 122 | % | 123 | % | ||||||||||
Curtis T. Pohl | $279,922 | 3x | 839,766 | 37,453 | 1,937,818 | 231 | % | 115 | % | ||||||||||
Bobbi L. Schroeppel | $258,068 | 2x | 516,136 | 18,779 | 971,625 | 188 | % | 170 | % |
Satisfaction of Stock Ownership Guidelines | ||||||||||||||||||||||||||||||||||||||
Pay Subject to Multiple ($) | Multiple Required | Stock Ownership Requirement ($) | Number of Shares and DSUs Owned (#) | Value of Shares and DSUs Owned ($) (1) | Percent of Guideline Achieved as of Dec. 31, 2022 (1) | |||||||||||||||||||||||||||||||||
Directors | ||||||||||||||||||||||||||||||||||||||
Anthony Clark | 50,000 | 5x | 250,000 | 17,348 | 1,029,430 | 412 | % | |||||||||||||||||||||||||||||||
Dana Dykhouse, Board Chair | 150,000 | 5x | 750,000 | 37,750 | 2,240,085 | 299 | % | |||||||||||||||||||||||||||||||
Jan Horsfall | 50,000 | 5x | 250,000 | 4,425 | 262,580 | 105 | % | |||||||||||||||||||||||||||||||
Britt Ide | 50,000 | 5x | 250,000 | 9,950 | 590,433 | 236 | % | |||||||||||||||||||||||||||||||
Kent Larson (2) | 50,000 | 5x | 250,000 | 2,146 | 127,344 | 51 | % | |||||||||||||||||||||||||||||||
Linda Sullivan, Audit Chair | 50,000 | 5x | 250,000 | 18,910 | 1,122,119 | 449 | % | |||||||||||||||||||||||||||||||
Mahvash Yazdi, Compensation Chair | 50,000 | 5x | 250,000 | 10,122 | 600,639 | 240 | % | |||||||||||||||||||||||||||||||
Jeffrey Yingling, Governance Chair | 50,000 | 5x | 250,000 | 11,668 | 692,379 | 277 | % | |||||||||||||||||||||||||||||||
Executives | ||||||||||||||||||||||||||||||||||||||
Robert Rowe | 697,057 | 6x | 4,182,342 | 197,727 | 11,733,120 | 281 | % | |||||||||||||||||||||||||||||||
Brian Bird | 515,000 | 5x | 2,575,000 | 109,679 | 6,508,352 | 253 | % | |||||||||||||||||||||||||||||||
Heather Grahame | 454,719 | 3x | 1,364,157 | 29,360 | 1,742,222 | 128 | % | |||||||||||||||||||||||||||||||
Crystal Lail (3) | 412,500 | 4x | 1,650,000 | 9,605 | 569,961 | 35 | % | |||||||||||||||||||||||||||||||
Curtis Pohl | 325,233 | 3x | 975,699 | 22,375 | 1,327,733 | 136 | % |
Name of Beneficial Owner | Shares of Common Stock Beneficially Owned (#) | Percent of Common Stock (%) | ||||||||||||
BlackRock, Inc. (1) | 8,761,422 | 15.20 | ||||||||||||
55 East 52nd Street, New York, NY 10022 | ||||||||||||||
The Vanguard Group (2) | 6,266,775 | 10.85 | ||||||||||||
100 Vanguard Blvd., Malvern, PA 19355 | ||||||||||||||
American Century Investment Management, Inc. (3) | 3,750,620 | 6.49 | ||||||||||||
4500 Main Street, 9th Floor, Kansas City, MO 64111 |
Name of Beneficial Owner | Shares of Common Stock Beneficially Owned (#) | Percent of Common Stock (%) | ||
BlackRock, Inc. (1) | 8,688,874 | 17.9 | ||
55 East 52nd Street, New York, NY 10022 | ||||
The Vanguard Group (2) | 4,551,759 | 9.4 | ||
100 Vanguard Blvd., Malvern, PA 19355 | ||||
JP Morgan Chase & Co. (3) | 2,478,534 | 5.1 | ||
270 Park Avenue, New York, NY 10017 |
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) | ||||||||||||||||||||
Equity compensation plans approved by security holders (1) | 293,692 | (2) | $50.22 | (3) | 828,486 | (4) | |||||||||||||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||||||||||||||||
Total | 293,692 | 828,486 |
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) | |||||||
Equity compensation plans approved by security holders (1) | 243,008 | (2) | $47.44 | (3) | 822,695 | (4) | ||||
Equity compensation plans not approved by security holders | — | — | — | |||||||
Total | 243,008 | 822,695 |
(2) Consists of (a) 194,407 unvested performance units, with a weighted average grant date fair value of $51.04, granted to employees who participate in our LTIP, and (b) 99,285 unvested restricted share units, with a weighted average grant date fair value of $48.62, granted to executive officers under our ERRP. For descriptions of our LTIP and ERRP, please see the Compensation Discussion and Analysissection. (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. |
NorthWestern Energy | Proxy Statement | Page 74 |
Annual Meeting Information |
NorthWestern Energy | Proxy Statement | Page 76 |
Annual Meeting Information |
NorthWestern Energy | Proxy Statement | Page 76 |
Annual Meeting Information |
: | 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 | ||||||||||
) | Voting by Telephone. You may vote by proxy by telephone at 1 (800) 690-6903 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 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. | ||||||||||
? | Voting online during the Virtual Annual Meeting. If you attend the virtual annual meeting and wish to vote online during the meeting, you will need the 16-digit control number that can be | ||||||||||
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 voting another time using one of the methods described above or by attending the annual meeting and voting online during the meeting. 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. | ||||||||||
NorthWestern Energy | Proxy Statement | Page 77 |
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 nominees with the most“FOR” votes are 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 | No effect | ||||||||||
Proposal 2: Ratification of Deloitte & Touche LLP as the independent registered public accounting firm for 2023 | FOR | If a quorum exists, the majority of votes present online at the meeting | Vote against | Not applicable; broker may vote shares without instruction | ||||||||||
Proposal 3: Advisory vote to approve named executive officer compensation (Say on Pay) | FOR | If a quorum exists, the | Vote against | No effect | ||||||||||
Proposal 4: Advisory vote on the frequency of the advisory votes on executive compensation (Say When on Pay) | 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 |
NorthWestern Energy |
Annual Meeting Information |
Travis Meyer Director Corporate Finance and (605) 978-2945 | ||||||||
or | Assistant Corporate Secretary (605) 978-2871 |
Annual Meeting Information |
(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; (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. |
NorthWestern Energy | Proxy Statement | Page 80 |
AGA | American Gas Association | ||||
Board | Board of Directors of NorthWestern Corporation | ||||
CAP | Compensation actually paid, as determined in accordance with the calculations required by Item 402(v) of Regulation S-K | ||||
CD&A | Compensation Discussion and Analysis | ||||
CEO or PEO | |||||
CFO | |||||
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 or 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 | ||||
ESG | Environmental, social, and governance | ||||
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 | ||||
Governance Committee | Nominating and Governance | ||||
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 Nasdaq Stock Market LLC | |||||
NorthWestern, our, us, or we | 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 | ||||
ROAE | Return on average equity | ||||
SAIDI | System Average Interruption Duration Index | ||||
SEC | Securities and Exchange Commission | ||||
TSR | Total shareholder return | ||||
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 |
NORTHWESTERN CORPORATION 3010 W. 69TH STREET SIOUX FALLS, SD 57108 | VOTE BY INTERNET Before the Meeting - Go to www.proxyvote.com or scan the QR Barcode above 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 You may attend the 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 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 | ||||||||
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: | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vote on Directors 1. Election of Directors Nominees: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01) Brian Bird 02) Anthony 03) Dana 04) Sherina Edwards 05) Jan | 07) Kent Larson 08) Linda 09) Mahvash Yazdi 10) Jeffrey Yingling | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends that you vote FOR Proposal 2: | For | Against | Abstain | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2. Ratification of Deloitte & Touche LLP as the independent registered public accounting firm for | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends that you vote FOR Proposal 3: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3. Advisory vote to approve named executive officer compensation. | o | o | o | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends that you vote | 1 Year | 2 Years | 3 Years | Abstain | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4. | o | o | o | o | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) | Date |
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 SHAREHOLDERS TO BE HELD ON April 28, 2023 The undersigned hereby appoints THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED MEETING, OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF, UTILIZING THEIR OWN DISCRETION. Continued and to be signed on the reverse side |