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 Directors | FOR each director nominee | ||||||
2 | Ratification of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for 2020 | 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 | Election of Directors | FOR each director nominee | ||||||||||
2 | Ratification of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for 2020 | FOR | ||||||||||
3 | FOR | |||||||||||
2019 Executive Pay Overview Alignment of Pay with Shareholder and Customer Interests Our executive pay program is designed to align the long-term interests of our executives, shareholders, and customers. Approximately 78 percent of the compensation of our CEO and about 60 percent of the compensation of our other named executive officers is at risk in the form of performance-based incentive awards. Our Board establishes the metrics and targets for these incentive awards, based upon advice from the Board’s independent compensation consultant. The 2019 performance metrics did not change from 2018. We also require our executives to retain meaningful ownership of our stock (from 2x to 6x their annual base salary). This structure encourages our executives to focus on short- and long-term performance and provides a reward to our executives, shareholders, and customers when we achieve our financial and operating objectives. Our CEO to median employee pay ratio for 2019 was 27:1. | ||||||||||||
Executive Pay Components at a Glance | ||||||||||||
Percent of Total Compensation | ||||||||||||
Component | Description | CEO | Other NEO Avg. | Changes in 2019 | ||||||||
Base Salary Fixed, paid in cash | Target middle of competitive range of peer group, with adjustments for trade area economics, turnover, tenure, and experience | 22% | 40% | Named executive officers received a 3 percent cost of living adjustment provided to some employees; one named executive officer received an additional increase to remain market competitive | ||||||||
Annual Cash Incentive Variable, paid in cash | Based on net income, safety, reliability, and customer satisfaction metrics and individual performance | 22% | 20% | Increased target opportunity for two executives to align with market median; updated performance targets | ||||||||
Long-Term Incentive Program Awards Variable, paid in equity | Based on earnings per share, return on average equity and relative total shareholder return performance over a three-year vesting period | 43% | 32% | Updated performance targets | ||||||||
Executive Retention / Retirement Program Awards Variable, paid in equity | Based on net income performance over a five-year vesting period; paid over five-year period following separation from service | 13% | 8% | None | ||||||||
Performance Against Incentive Targets In 2019, we managed our business through a challenging electric rate case, with significant increases in net income, all-time high customer satisfaction and near all-time best safety performance. We achieved an average return on equity of 10.0 percent, an EPS growth rate of nearly 6.0 percent, and a total shareholder return of 37.0 percent for the three‑year period ending December 31, 2019. As a result, we achieved above target performance for our 2019 annual incentive awards and our long-term incentive awards. | |||||||||||||||
2019 Annual Cash Incentive Outcome | 2017 Long-Term Incentive Program Vesting | ||||||||||||||
Financial (55%) – % of Target Achieved | 150 | % | ROAE / Avg. EPS Growth – % of Target Achieved | 92 | % | ||||||||||
Safety (15%) – % of Target Achieved | 92 | % | Relative TSR – % of Target Achieved | 30 | % | ||||||||||
Reliability (15%) – % of Target Achieved | 79 | % | Total Payout to Participants* | 122 | % | ||||||||||
Customer Sat. (15%) – % of Target Achieved | 118 | % | |||||||||||||
Total Funding | 126 | % | * Each component weighted 50% for total payout | ||||||||||||
Shareholder Feedback on Executive Pay At our 2019 annual meeting, shareholders approved our 2018 named executive officer pay by over 96 percent of the votes cast. In light of the overwhelming approval from our shareholders, we have not changed the overall structure of our named executive officer pay program for 2019. We continue to use the same executive pay components and operate within the parameters our shareholders previously approved. 2019 Corporate Governance Overview Last year, shareholders elected eight of our director nominees by an average of 98 percent of the votes cast. Our Board has nominated each of those eight individuals for re-election as director. Our Board also has nominated Mahvash Yazdi and Jeffrey Yingling for election. Ms. Yazdi and Mr. Yingling joined our board during the fourth quarter of 2019 as part of our Board’s ongoing succession planning process to serve terms through our 2020 annual meeting. Ms. Yazdi was recommended by a Board member, and Mr. Yingling was recommended by the Board and management. As described in more detail later in this Proxy Statement, our Board also determined that it was advantageous to the company to have Stephen Adik and Julia Johnson continue their service as Board members beyond 15 years. Thus, our Board has nominated 10 individuals for election as director. Each of the nominees currently serves on our Board, and we list these individuals in Proposal No. 1—Election of Directors. Each of our nominees is independent, with the sole exception of our CEO. Our Board is led by an independent non-executive chair, and our four Board committees – Audit, Compensation, Governance, and Operations – are chaired by and composed entirely of independent directors. In 2020, we added the Operations Committee to oversee safety, environment, technology, and operations matters. We made no other material changes to our corporate governance practices in 2019. Diversity is important to our Board, as reflected in the graphs below regarding our slate of nominees. | |||||||||||||||
Diverse Slate of Director Nominees | |||||||||||||||
Items of Business | ||||||||||||||||||||||
Proposal No. 1 Election of Directors | |||||||||
The Board of Directors recommends you vote “FOR” each of the 10 director nominees. | Our Board is nominating 10 people for election as directors at the annual meeting. All of the nominees currently serve as a director of our Board. Elected directors will serve for one year, until the next annual meeting of shareholders (or until a successor is able to serve). Our nominees are listed below, and we provide additional background information and individual qualifications for each nominee in the Corporate Governance—Individual Directors section of this proxy statement, beginning on page 46. | ||||||||
Name Occupation | Independent | Age | Director Since | Committee Membership | |||||
Stephen P. Adik, Board Chair Retired Vice Chair, NiSource, Inc. | Yes | 76 | 2004 | N/A | |||||
Anthony T. Clark Senior Advisor, Wilkinson Barker Knauer, LLP; former Commissioner, FERC and NDPSC (and Chair) | Yes | 48 | 2016 | Comp.; Gov. | |||||
Dana J. Dykhouse CEO, First PREMIER Bank | Yes | 63 | 2009 | Comp. (Chair); Audit | |||||
Jan R. Horsfall CEO, Maxletics Corporation | Yes | 59 | 2015 | Operations (Chair); Audit | |||||
Britt E. Ide President, Ide Energy & Strategy | Yes | 48 | 2017 | Gov.; Operations | |||||
Julia L. Johnson President, NetCommunications, LLC; former Commissioner and Chair, Florida PSC | Yes | 57 | 2004 | Gov. (Chair); Comp. | |||||
Robert C. Rowe President and CEO, NorthWestern Energy | No | 64 | 2008 | N/A | |||||
Linda G. Sullivan Retired Executive Vice President and CFO, American Water | Yes | 56 | 2017 | Audit (Chair); Operations | |||||
Mahvash Yazdi President, Feasible Management Consulting | Yes | 68 | 2019 | Comp.; Operations | |||||
Jeffrey W. Yingling Partner, Energy Capital Ventures | Yes | 60 | 2019 | Audit; Gov. | |||||
(continued on next page) |
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 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 | ||||||||||||||||||
Proposal No. 2 Ratification of Deloitte & Touche LLP, as Independent Registered Public Accounting Firm for 2020 | ||||||||||||
Our Audit Committee oversees the integrity of our accounting, financial reporting and auditing processes. To assist with those responsibilities, the committee has appointed Deloitte & Touche LLP as our independent registered public accounting firm to audit our financial statements for 2020. The Board is asking you to ratify the committee’s decision at the annual meeting. The Board values your input on the committee’s appointment of Deloitte, but approval by shareholders is not required by law. If shareholders do not ratify the appointment of Deloitte, the committee will reconsider its selection. Regardless of the voting result, the committee may appoint a new firm at any time if the committee believes a change would be in the best interests of the company and its shareholders. | ||||||||||||
Deloitte representatives will be present at the annual meeting. They will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions. Description of Fees The table below presents a summary of the fees Deloitte billed us for professional services for the fiscal years ended December 31, 2018 and 2019. | ||||||||||||
The Board of Directors recommends you vote “FOR” the ratification of Deloitte as our independent accounting firm for 2020. | ||||||||||||
Fee Category | 2019 Fees ($) | 2018 Fees ($) | ||||||||||
Audit fees | 1,349,114 | 1,418,264 | ||||||||||
Audit-related fees | — | — | ||||||||||
Tax fees | 187,395 | 91,971 | ||||||||||
All other fees | — | — | ||||||||||
Total fees | 1,536,509 | 1,510,235 | ||||||||||
As reflected in the table: Audit fees are fees billed for professional services rendered for the audit of our financial statements, internal control over financial reporting, review of the interim financial statements included in quarterly reports, services in connection with debt and equity securities offerings, and services that are normally provided by Deloitte in connection with statutory and regulatory filings or engagements. For 2019, this amount includes estimated billings for the completion of the 2019 audit, which Deloitte rendered after year-end. Audit-related fees are fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” There were no audit-related fees in fiscal 2018 and 2019. Tax fees are fees billed for tax compliance, tax advice and tax planning. All other fees are fees for products and services other than the services reported above. In fiscal years 2018 and 2019, there were no other fees. | ||||||||||||
(continued on next page) |
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 follows procedures pursuant to which audit, audit-related, | ||||||||||||||||||||||||||
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 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 | ||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||
Audit Committee Report In the performance of the Audit Committee’s oversight function, and in connection with the December 31, 2022, financial statements, the Audit Committee reviewed and discussed the audited financial statements with management. The Audit Committee has discussed the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. The Audit Committee received the written disclosures and the letter from Deloitte & Touche LLP (Deloitte), our independent registered public accounting firm, required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence; and the Audit Committee has discussed with Deloitte the firm’s independence. The compatibility of non-audit services was considered with the auditor’s independence. Based on its review of the consolidated financial statements and discussions with and representations from management and Deloitte referred to above, the Audit Committee recommended to the Board that the | ||||||||||||||||||||||||||
audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC. Audit Committee Linda Sullivan, Chair Jan Horsfall Kent Larson Jeffrey Yingling | ||||||||||||||||||||||||||
NorthWestern Energy | Proxy Statement | Page 12 |
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 |
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 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 Business | ||||||||||||||||||||
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 proposal, as it is considered a “non-routine” matter. Assuming a quorum is present, broker non-votes or the failure to vote – either by not returning a properly executed proxy card or not voting 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 EPS | Total Shareholder Return OurTSR was | Dividend Yield Our dividend of of 2022. | ||||||||||||||||||||||||||||||
Safety In | Reliability The reliability of our electric | Customer Service | ||||||||||||||||||||||||||||||
NorthWestern Energy | Proxy Statement | Page |
Compensation Discussion and Analysis |
Named Executive Officers | ||||||||||||||||
Robert Rowe | Crystal Lail | |||||||||||||||
Chief Executive Officer | Vice President and Chief | |||||||||||||||
Brian Bird | Curtis Pohl | |||||||||||||||
President and Chief Operating Officer | Vice President - Distribution | |||||||||||||||
Heather Grahame | ||||||||||||||||
General Counsel and Vice President - Regulatory & Federal Gov't Affairs | ||||||||||||||||
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. | ||||||||||||||||
NorthWestern Energy | Proxy Statement | Page |
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) | |||||||||||||||
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 | Remain market competitive and provide cost of living adjustment and reflect increased responsibilities | |||||||||||||
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 | Updated performance | |||||||||||||
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 |
NorthWestern Energy | Proxy Statement | Page |
Compensation Discussion and Analysis |
Relative 1-Year CEO Pay* | Relative 1-Year TSR* | Relative 3-Year CEO Pay* | Relative 3-Year TSR* | |||||||
OGE Energy Corp. | 100% | El Paso Electric Co. | 100% | OGE Energy Corp. | 100% | PNM Resources Inc. | 100% | |||
PNM Resources Inc. | 80% | MGE Energy Inc. | 86% | PNM Resources Inc. | 91% | El Paso Electric Co. | 92% | |||
IDACORP, Inc. | 73% | Black Hills Corporation | 69% | IDACORP, Inc. | 79% | OGE Energy Corp. | 64% | |||
Black Hills Corporation | 65% | PNM Resources Inc. | 62% | Black Hills Corporation | 75% | IDACORP, Inc. | 48% | |||
Avista Corp. | 59% | Northwest Natural Holding | 59% | Avista Corp. | 68% | Spire Inc. | 41% | |||
Spire Inc. | 58% | Portland General Electric | 58% | Spire Inc. | 65% | Portland General Electric | 40% | |||
Portland General Electric | 45% | NorthWestern Energy | 56% | Portland General Electric | 60% | NorthWestern Energy | 37% | |||
NorthWestern Energy | 43% | IDACORP, Inc. | 35% | NorthWestern Energy | 45% | Black Hills Corporation | 37% | |||
Otter Tail Corporation | 40% | OGE Energy Corp. | 35% | El Paso Electric Co. | 45% | ALLETE, Inc. | 32% | |||
El Paso Electric Co. | 38% | Avista Corp. | 34% | ALLETE, Inc. | 36% | Otter Tail Corporation | 29% | |||
ALLETE, Inc. | 35% | Spire Inc. | 29% | Otter Tail Corporation | 35% | Northwest Natural Holding | 21% | |||
Northwest Natural Holding | 27% | ALLETE, Inc. | 10% | Northwest Natural Holding | 25% | Avista Corp. | 13% | |||
MGE Energy Inc. | —% | Otter Tail Corporation | —% | MGE Energy Inc. | —% | MGE Energy Inc. | —% | |||
*Relative CEO pay and TSR are expressed as a percentile of the range between the highest and lowest values. | ||||||||||
Source: CEO Pay for the one-year period is the 2018 total compensation and for the three-year period is the 2016-18 total compensation, as published in the 2017, 2018, and 2019 proxy statement Summary Compensation Tables for each respective company. We have excluded any change in pension value from the total compensation calculation because its inclusion could lead to inconsistent comparisons from company to company based upon differing pension plan provisions, length of employee tenure, and other factors. Total Shareholder Return is from S&P Global Market Intelligence for the one- and three-year periods ended December 31, 2019, and assumes reinvestment of dividends. |
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 | |||||||||||||||||||||||||
NorthWestern Energy | Proxy Statement | Page 21 |
Compensation Discussion and Analysis |
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 |
NorthWestern Energy | Proxy Statement | Page 23 |
Compensation Discussion and Analysis |
CEO to Median Employee | |||||||
Pay Ratio | |||||||
President and CEO | Median Employee | ||||||
Base Salary | $643,770 | $94,151 | |||||
Stock Awards | $1,650,164 | — | |||||
Non-Equity Incentive Plan Compensation | $818,022 | $0 | |||||
Change in Pension Value and Nonqualified Deferred Compensation Earnings (1) | $144,501 | 11,313 | |||||
All Other Compensation | $41,847 | $18,404 | |||||
TOTAL | $3,298,304 | $123,868 | |||||
CEO Pay to Median Employee Pay Ratio | 27 | : | 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. | |||||||
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 | $130,892 | ||||||||||||||||||
CEO Pay to Median Employee Pay Ratio | 26 | : | 1 | |||||||||||||||||
(1) These amounts are attributable to a change in the value of each individual’s defined benefit pension account balance and do not represent earned or paid compensation. Pension values are dependent on many variables including years of service, earnings, and actuarial assumptions. | ||||||||||||||||||||
The primary pay components for our executive officers in | |||||||||||
•Base Salary; | |||||||||||
•Annual performance-based cash incentive awards; and | |||||||||||
•Long-term performance-based equity incentive awards in the form of performance units and ERRP restricted share units. | |||||||||||
NorthWestern Energy | Proxy Statement | Page 24 |
Compensation Discussion and Analysis |
The Compensation Committee considers adjustments to base salaries for executive officers on an annual basis. For 2022, the Compensation Committee felt that an increase to the base salaries of our executive officers in line with the increases generally provided to our employees was reasonable in light of the company’s operating results in 2021. In early 2021, we announced that Ms. Lail had been promoted to vice president and CFO. Her base salary | ||||||||||||||||||||||||||
increase of 10 percent for 2022 reflected the continued transition of her compensation to match her increased responsibilities. The 2.3% increase for Mr. Pohl was based on a market median analysis. The table to the right sets forth the base salaries for our NEOs. The base salary adjustments for 2022 were effective April 1, 2022. | ||||||||||||||||||||||||||
Annualized Base Salary | Increase (%) | |||||||||||||||||||||||||
2021 | 2022 | |||||||||||||||||||||||||
Name | ($) | ($) | ||||||||||||||||||||||||
Robert Rowe | 676,754 | 697,057 | 3.0 | |||||||||||||||||||||||
Brian Bird | 500,000 | 515,000 | 3.0 | |||||||||||||||||||||||
Heather Grahame | 441,475 | 454,719 | 3.0 | |||||||||||||||||||||||
Crystal Lail | 375,000 | 412,500 | 10.0 | |||||||||||||||||||||||
Curtis Pohl | 318,076 | 325,233 | 2.3 |
The Compensation Committee considers adjustments to base salaries for executive officers on an annual basis. For 2019, the Compensation Committee felt that an increase to the base salaries of our executive officers in line with the increases generally provided to our employees was reasonable in light of the company’s operating results | ||||||||
in 2018. To remain competitive with the market, the Compensation Committee also considered the effect of such increased salaries for our executive officers in relation to the median of our 2019 peer group. One named executive officer received a further increase to align with the market median. The table to the right sets forth the base salaries for our named executive officers. The base salary adjustments for 2019 were effective April 1, 2019. | ||||||||
Annualized Base Salary | Increase (%) | |||||||
2018 | 2019 | |||||||
Name | ($) | ($) | ||||||
Robert C. Rowe | 630,315 | 649,224 | 3.0 | |||||
Brian B. Bird | 435,978 | 449,057 | 3.0 | |||||
Heather H. Grahame | 399,543 | 423,516 | 6.0 | |||||
Curtis T. Pohl | 296,249 | 305,136 | 3.0 | |||||
Bobbi L. Schroeppel | 279,101 | 287,474 | 3.0 | |||||
Although base salary is included as an expense we recover from customers in our rates approved by our regulators, our recent Montana general electric rate case which established new rates used base salary figures from 2017, instead of the 2018 and 2019 base salary figures listed above. |
(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 |
$649,224 | x | 100% | x | 126% | x | 1 | = | $818,022 |
NorthWestern Energy | Proxy Statement | Page 25 |
Compensation Discussion and Analysis |
The table to the right sets forth the 2019 annual incentive target opportunity for our named executive officers. In 2019, the Compensation Committee adjusted the target incentive opportunity for our chief financial officer and our general counsel, increasing their opportunity, respectively, to 60 percent from 55 percent, and to 55 percent from 50 percent in 2018, to align the incentive opportunity with the market. | 2019 | |||||||
Name | Base Salary ($) | Target Incentive Opportunity (% of base salary) | Target Incentive Opportunity ($) | |||||
Robert C. Rowe | 649,224 | 100% | 649,224 | |||||
Brian B. Bird | 449,057 | 60% | 269,434 | |||||
Heather H. Grahame | 423,516 | 55% | 232,934 | |||||
Curtis T. Pohl | 305,136 | 40% | 122,054 | |||||
Bobbi L. Schroeppel | 287,474 | 40% | 114,990 |
The table to the right shows the 2022 annual incentive target opportunity for our NEOs. In 2022, the Compensation Committee adjusted the target incentive opportunity for Ms. Lail in connection with the ongoing transition of her compensation to match her responsibilities as CFO. The other NEOs remained at 2021 levels after the Compensation Committee determined that the existing target incentive opportunities were generally aligned with the incentive opportunity in the market place. | 2022 | |||||||||||||||||||||||||
Name | Base Salary ($) | 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 136 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) | |||||
2014 | 2015 (1) | 2016 | 2017 | 2018 | ||
125% | 80% | 113% | 99% | 136% | ||
(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 | $183.0 | 98.7 | 54.3 | |||||||||||||||||||||||||||||||
Safety (15%) (2) | |||||||||||||||||||||||||||||||||||||||||
Lost Time Incident Rate | 5 | % | 0.57 | 0.46 | 0.24 | 0.59 | — | — | |||||||||||||||||||||||||||||||||
Total Recordable Incident Rate | 5 | % | 1.78 | 1.50 | 1.06 | 1.57 | 87.5 | 4.4 | |||||||||||||||||||||||||||||||||
Safety Training Completion | 5 | % | 99.0 | % | 99.5 | % | 100.0 | % | 99.9 | % | 140.0 | 7.0 | |||||||||||||||||||||||||||||
Reliability (15%) (3) | |||||||||||||||||||||||||||||||||||||||||
SAIDI (excluding major event days) | 5.0 | % | 117.00 | 103.00 | 89.00 | 101.10 | 106.8 | 5.3 | |||||||||||||||||||||||||||||||||
SAIDI (including major event days) | 5.0 | % | 168.00 | 122.00 | 94.00 | 119.40 | 104.6 | 5.2 | |||||||||||||||||||||||||||||||||
Gas – Leaks per 100 Miles of Main | 2.5 | % | 15.00 | 10.10 | 7.60 | 9.65 | 109.0 | 2.7 | |||||||||||||||||||||||||||||||||
Gas – Damages per 1000 Locates | 2.5 | % | 3.80 | 3.00 | 1.30 | 3.26 | 83.8 | 2.1 | |||||||||||||||||||||||||||||||||
Customer Satisfaction (15%) (4) | |||||||||||||||||||||||||||||||||||||||||
J.D. Power Residential Electric and Gas Survey Performance Ranking | 5 | % | 714.00 | 722.00 | 726.00 | 729.40 | 150.0 | 7.5 | |||||||||||||||||||||||||||||||||
Operational Performance – Customer Survey by Flynn Wright | 5 | % | 34.38 | 38.20 | 42.02 | 36.72 | 80.6 | 4.0 | |||||||||||||||||||||||||||||||||
Reputational Perceptions – Customer Survey by Flynn Wright | 5 | % | 33.91 | 37.67 | 41.44 | 34.83 | 62.2 | 3.1 | |||||||||||||||||||||||||||||||||
TOTAL FUNDING PERCENTAGE | 96 |
2019 | |||||||||||||||||||||||
Annual Incentive Plan Information | |||||||||||||||||||||||
Performance Measures | Weight (% of Total Plan Payout) | Performance Level | Target % Achieved | Final Funding % of Total | |||||||||||||||||||
Threshold | Target | Maximum | Actual Achieved | ||||||||||||||||||||
Financial (55%) (1) | |||||||||||||||||||||||
Net Income ($ in millions) | 55 | % | $155.9 | $ | 172.9 | $ | 190.2 | $202.1 | 150.0 | % | 82.5 | ||||||||||||
Safety (15%) (2) | |||||||||||||||||||||||
Lost Time Incident Rate | 5 | % | 0.65 | 0.50 | 0.27 | 0.58 | 73.3 | % | 3.7 | ||||||||||||||
Total Recordable Incident Rate | 5 | % | 1.90 | 1.60 | 1.30 | 1.87 | 52.2 | % | 2.6 | ||||||||||||||
Safety Training Completion | 5 | % | 95.0 | % | 97.0 | % | 99.0 | % | 99.7 | % | 150.0 | % | 7.5 | ||||||||||
Reliability (15%) (3) | |||||||||||||||||||||||
SAIDI (excluding major event days) | 5.0 | % | 119.00 | 105.00 | 89.00 | 103.22 | 105.6 | % | 5.3 | ||||||||||||||
SAIDI (including major event days) | 5.0 | % | 178.00 | 126.00 | 101.00 | 110.43 | 131.1 | % | 6.6 | ||||||||||||||
Gas – Leaks per 100 Miles of Main | 2.5 | % | 7.40 | 5.60 | 3.50 | 8.80 | — | % | — | ||||||||||||||
Gas – Damages per 1000 Locates | 2.5 | % | 2.40 | 2.00 | 1.65 | 3.10 | — | % | — | ||||||||||||||
Customer Satisfaction (15%) (4) | |||||||||||||||||||||||
J.D. Power Residential Electric and Gas Survey Performance Ranking | 5 | % | 680.00 | 712.00 | 716.00 | 718.90 | 150.0 | % | 7.5 | ||||||||||||||
Operational Performance – Customer Survey by Flynn Wright | 5 | % | 34.83 | 38.71 | 42.58 | 38.94 | 103.0 | % | 5.1 | ||||||||||||||
Reputational Perceptions – Customer Survey by Flynn Wright | 5 | % | 34.14 | 37.93 | 41.72 | 38.09 | 102.1 | % | 5.1 | ||||||||||||||
TOTAL FUNDING PERCENTAGE | 126.0 | % |
NorthWestern Energy | Proxy Statement | Page 27 |
Compensation Discussion and Analysis |
2022 | |||||||||||||||||||||||||||||||||||
Name | Base Salary ($) | Target Cash Incentive, as % of Base Salary | Funding Percentage (%) | Individual Performance Multiple | Actual Cash Incentive, as % of Base Salary | Cash Incentive Award ($) | |||||||||||||||||||||||||||||
Robert Rowe | 697,057 | 100% | 96 | 1.0 | 96.0% | 669,175 | |||||||||||||||||||||||||||||
Brian Bird | 515,000 | 75% | 96 | 1.0 | 72.0% | 370,800 | |||||||||||||||||||||||||||||
Heather Grahame | 454,719 | 55% | 96 | 1.0 | 52.8% | 240,092 | |||||||||||||||||||||||||||||
Crystal Lail | 412,500 | 55% | 96 | 1.0 | 52.8% | 217,800 | |||||||||||||||||||||||||||||
Curtis Pohl | 325,233 | 40% | 96 | 1.0 | 38.4% | 124,889 |
2019 | |||||||||||||
Name | Base Salary ($) | Target Cash Incentive, as % of Base Salary | Funding Percentage (%) | Individual Performance Multiple | Actual Cash Incentive, as % of Base Salary | Cash Incentive Award ($) | |||||||
Robert C. Rowe | 649,224 | 100% | 126% | 1.0 | 126.0% | 818,022 | |||||||
Brian B. Bird | 449,057 | 60% | 126% | 1.0 | 75.6% | 339,487 | |||||||
Heather H. Grahame | 423,516 | 55% | 126% | 1.0 | 69.3% | 293,497 | |||||||
Curtis T. Pohl | 305,136 | 40% | 126% | 1.0 | 50.4% | 153,789 | |||||||
Bobbi L. Schroeppel | 287,474 | 40% | 126% | 1.0 | 50.4% | 144,887 |
Clawback of Annual Cash Incentive Awards | ||||||||
Although we have not adopted a formal clawback policy, the annual cash incentive awards are specifically made subject to any formal clawback policy that we may adopt in the future. In light of the SEC’s recent adoption of final clawback rules, we will be adopting a formal clawback policy in 2023. | ||||||||
NorthWestern Energy | Proxy Statement | Page 28 |
Compensation Discussion and Analysis |
Historical Funding of LTIP (as a percentage of target) | ||||||||||||||
2016-2018 | 2017-2019 | 2018-2020 | 2019-2021 | 2020-2022 | ||||||||||
94.3% | 122.2% | 50% | 72.7% | 20% |
Historical Funding of LTIP (as a percentage of target) | ||||
2013-2015 | 2014-2016 | 2015-2017 | 2016-2018 | 2017-2019 |
167.3% | 108.3% | 44.9% | 94.3% | 122.2% |
NorthWestern Energy | Proxy Statement | Page 29 |
Compensation Discussion and Analysis |
The target equity opportunities (value at target and number of shares) for the 2019 grants of LTIP performance units are shown in the table to the right. The table also compares the target opportunities (expressed as a percentage of base salary) applicable to the 2018 and 2019 awards. | Target LTIP Performance Unit Opportunity for 2019 | ||||||||||
2018 | 2019 | 2019 | 2019 | ||||||||
Name | Base Salary (%) | Base Salary (%) | Value at Target ($) | LTIP Stock Awards (1) | |||||||
Robert C. Rowe | 200% | 200% | 1,260,630 | 20,868 | |||||||
Brian B. Bird | 100% | 100% | 435,978 | 7,217 | |||||||
Heather H. Grahame | 90% | 90% | 359,589 | 5,952 | |||||||
Curtis T. Pohl | 60% | 60% | 177,749 | 2,942 | |||||||
Bobbi L. Schroeppel | 50% | 50% | 139,551 | 2,310 | |||||||
(1) Based on a weighted average grant date fair value of $60.41, which was calculated using the closing stock price of $64.98 on February 11, 2019, less the present value of expected dividends |
Target LTIP Performance Unit Opportunity for 2022 | |||||||||||||||||||||||
2021 | 2022 | 2022 | 2022 | ||||||||||||||||||||
Name | Base Salary (%) | Base Salary (%) | Value at Target ($) | 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 $56.52 on February 10, 2022, less the present value of expected dividends. |
Performance Measures — 2019-2021 | Threshold | Target | Maximum | |||||||
Financial Goals – 50% | ||||||||||
ROAE | 8.35 | % | 8.80 | % | 9.25 | % | ||||
Simple Average EPS Growth | 1.7 | % | 3.2 | % | 4.7 | % | ||||
TSR – 50% | ||||||||||
Relative Average vs. Peers | 13th | 6th | 1st |
NorthWestern Energy | Proxy Statement | Page 30 |
Compensation Discussion and Analysis |
2022 Target ERRP Opportunity | ||||||||||||||||||||||||||
Name | 2022 Base Salary ($) | Award % of Base Salary (%) | Value at Grant Date ($) | ERRP Stock Awards (#) (1) | ||||||||||||||||||||||
Robert Rowe | (2) | 697,057 | 60 | 418,233 | 8,891 | |||||||||||||||||||||
Brian Bird | 515,000 | 45 | 231,766 | 4,927 | ||||||||||||||||||||||
Heather Grahame | (2) | 454,719 | 25 | 113,696 | 2,417 | |||||||||||||||||||||
Crystal Lail | 412,500 | 30 | 123,762 | 2,631 | ||||||||||||||||||||||
Curtis Pohl | 325,233 | 20 | 65,056 | 1,383 |
2019 Target ERRP Opportunity | ||||||||||
Name | 2019 Base Salary ($) | Award % of Base Salary (%) | Value at Grant Date ($) | ERRP Stock Awards (#) (1) | ||||||
Robert C. Rowe | 649,224 | 60% | 389,534 | 6,414 | ||||||
Brian B. Bird | 449,057 | 25% | 112,264 | 1,849 | ||||||
Heather H. Grahame | 423,516 | 20% | 84,703 | 1,395 | ||||||
Curtis T. Pohl | 305,136 | 20% | 61,027 | 1,005 | ||||||
Bobbi L. Schroeppel | 287,474 | 15% | 43,121 | 710 |
NorthWestern Energy | Proxy Statement | Page 31 |
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 — 2017-2019 | Threshold | Target | Maximum | Actual | |||||||||
Financial Goals – 50% | |||||||||||||
ROAE | 9.0 | % | 9.6 | % | 10.2 | % | 10.0 | % | |||||
Simple Average EPS Growth | 0.4 | % | 2.4 | % | 4.4 | % | 6.0 | % | |||||
Market Goal – 50% | |||||||||||||
Relative TSR Average vs. Peers | 13th | 6th | 1st | 8th |
Based on the Compensation Committee’s calculation of these performance measures, the 2017 LTIP performance unit grants vested at 122.2 percent. The table to | Performance Measures — 2017-2019 | Result | Weight | Vesting | |||||||
Financial Goals – ROAE and Simple Average EPS Growth | 184.3 | % | 50 | % | 92.2 | % | |||||
Market Goal – TSR | 60.0 | % | 50 | % | 30.0 | % | |||||
TOTAL | 122.2 | % | |||||||||
the right summarizes the performance results with respect to each of the performance measures applicable to the 2017 LTIP performance unit grants and the corresponding contributions to the vesting percentage. |
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 2017 Performance Unit Grants | ||||||||
Name | Units at Grant Date (#) | Vesting Percentage (%) | Units upon Vesting (#) | |||||
Robert C. Rowe | 24,821 | 122.2% | 30,331 | |||||
Brian B. Bird | 8,584 | 122.2% | 10,490 | |||||
Heather H. Grahame | 6,013 | 122.2% | 7,348 | |||||
Curtis T. Pohl | 3,500 | 122.2% | 4,277 | |||||
Bobbi L. Schroeppel | 2,689 | 122.2% | 3,286 |
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) | |||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 |
$120.7 | $151.2 | $162.7 | $172.7 | $197.0 | $202.1 |
Name | ||||||||
Robert Rowe | 5,862 | |||||||
Brian Bird | 2,027 | |||||||
Heather Grahame | 1,420 | |||||||
Crystal Lail | 699 | |||||||
Curtis Pohl | 1,102 | |||||||
2022 CEO Promotion Restricted Common Stock Grant | |||||||||||
Name | Value at Grant Date ($) | Restricted Common Stock Shares (#) (1) | |||||||||
Brian Bird | $800,022 | 15,905 |
NorthWestern Energy | Proxy Statement | Page 33 |
Compensation Discussion and Analysis |
NorthWestern Energy | Proxy Statement | Page 34 |
Name and Principal Position (1) | Year | Salary ($) | 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 ($) (1) | Bonus ($) | Stock Awards ($) (1) (2) | Non-Equity Incentive Plan Compensation ($) (1) (3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (1) (4) | All Other Compen- sation ($) (5) | Total ($) (1) | |||||||||||||||||
Robert C. Rowe | |||||||||||||||||||||||||
President and Chief Executive Officer | 2019 | 643,770 | — | 1,650,164 | 818,022 | 144,501 | 41,847 | 3,298,304 | |||||||||||||||||
2018 | 625,019 | — | 1,602,080 | 857,228 | 34,793 | 46,811 | 3,165,931 | ||||||||||||||||||
2017 | 607,232 | — | 1,497,280 | 605,836 | 94,609 | 43,322 | 2,848,279 | ||||||||||||||||||
Brian B. Bird | |||||||||||||||||||||||||
Chief Financial Officer | 2019 | 445,284 | — | 548,242 | 339,487 | 31,861 | 57,387 | 1,422,261 | |||||||||||||||||
2018 | 432,315 | — | 532,315 | 326,112 | 5,939 | 52,676 | 1,349,357 | ||||||||||||||||||
2017 | 420,012 | — | 517,798 | 209,524 | 22,378 | 54,923 | 1,224,635 | ||||||||||||||||||
Heather H. Grahame | |||||||||||||||||||||||||
General Counsel and Vice President - Regulatory & Federal Gov't Affairs | 2019 | 416,601 | — | 444,292 | 293,497 | — | 51,505 | 1,205,895 | |||||||||||||||||
2018 | 391,204 | — | 413,461 | 271,689 | — | 55,210 | 1,131,564 | ||||||||||||||||||
2017 | 367,773 | — | 362,718 | 165,117 | — | 49,527 | 945,135 | ||||||||||||||||||
Curtis T. Pohl | |||||||||||||||||||||||||
Vice President - Distribution | 2019 | 302,572 | — | 238,776 | 153,789 | 59,131 | 53,608 | 807,876 | |||||||||||||||||
2018 | 293,760 | — | 231,817 | 161,159 | — | 52,910 | 739,646 | ||||||||||||||||||
2017 | 285,399 | — | 225,507 | 113,898 | 38,024 | 49,257 | 712,085 | ||||||||||||||||||
Bobbi L. Schroeppel | |||||||||||||||||||||||||
Vice President - Customer Care, Communications and HR | 2019 | 285,059 | — | 182,672 | 144,887 | 39,441 | 56,915 | 708,974 | |||||||||||||||||
2018 | 275,267 | — | 174,755 | 151,831 | — | 52,214 | 654,067 | ||||||||||||||||||
2017 | 263,577 | — | 168,940 | 92,103 | 24,602 | 53,984 | 603,206 |
(5) | The table to the right identifies the items included in the “All Other Compensation” column for 2019. 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 | Health Benefits | Life Insurance | 401(k) Contributions | Other Income | Total All Other Compensation | |||||||||||||||||
Robert C. Rowe | $ | 22,373 | $ | 5,547 | $ | 11,200 | $ | 2,727 | $ | 41,847 | |||||||||||||
Brian B. Bird | 24,161 | 2,516 | 28,000 | 2,710 | 57,387 | ||||||||||||||||||
Heather H. Grahame | 17,253 | 3,452 | 30,800 | — | 51,505 | ||||||||||||||||||
Curtis T. Pohl | 17,411 | 5,397 | 30,800 | — | 53,608 | ||||||||||||||||||
Bobbi L. Schroeppel | 24,161 | 2,044 | 28,000 | 2,710 | 56,915 | ||||||||||||||||||
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 other income includes vacation sold back to the company at a rate of 75 percent. Mr. Bird’s and Ms. Schroeppel’s other income for 2019 includes imputed income related to executive physicals. |
NorthWestern Energy | Proxy Statement | Page |
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 (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (1) (2) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards (3) ($) | ||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||
Robert C. Rowe | |||||||||||||||||||||||||||
Annual Cash Incentive | — | 324,612 | 649,224 | 973,836 | — | — | — | — | — | ||||||||||||||||||
Performance Units | 2/11/2019 | — | — | — | — | 20,868 | 41,736 | — | 1,260,630 | ||||||||||||||||||
Restricted Share Units | 12/18/2019 | — | — | — | — | 6,414 | 6,414 | — | 389,534 | ||||||||||||||||||
Brian B. Bird | |||||||||||||||||||||||||||
Annual Cash Incentive | — | 134,717 | 269,434 | 404,151 | — | — | — | — | — | ||||||||||||||||||
Performance Units | 2/11/2019 | — | — | — | — | 7,217 | 14,434 | — | 435,978 | ||||||||||||||||||
Restricted Share Units | 12/18/2019 | — | — | — | — | 1,849 | 1,849 | — | 112,264 | ||||||||||||||||||
Heather H. Grahame | |||||||||||||||||||||||||||
Annual Cash Incentive | — | 116,467 | 232,934 | 349,401 | — | — | — | — | — | ||||||||||||||||||
Performance Units | 2/11/2019 | — | — | — | — | 5,952 | 11,904 | — | 359,589 | ||||||||||||||||||
Restricted Share Units | 12/18/2019 | — | — | — | — | 1,395 | 1,395 | — | 84,703 | ||||||||||||||||||
Curtis T. Pohl | |||||||||||||||||||||||||||
Annual Cash Incentive | — | 61,027 | 122,054 | 183,081 | — | — | — | — | — | ||||||||||||||||||
Performance Units | 2/11/2019 | — | — | — | — | 2,942 | 5,884 | — | 177,749 | ||||||||||||||||||
Restricted Share Units | 12/18/2019 | — | — | — | — | 1,005 | 1,005 | — | 61,027 | ||||||||||||||||||
Bobbi L. Schroeppel | |||||||||||||||||||||||||||
Annual Cash Incentive | — | 57,495 | 114,990 | 172,484 | — | — | — | — | — | ||||||||||||||||||
Performance Units | 2/11/2019 | — | — | — | — | 2,310 | 4,620 | — | 139,551 | ||||||||||||||||||
Restricted Share Units | 12/18/2019 | — | — | — | — | 710 | 710 | — | 43,121 |
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 ($) | |||||||||||||||||||||||||||||
Robert Rowe | 3,551 | 210,716 | 5,862 | 347,851 | 9,413 | 558,567 | |||||||||||||||||||||||||||||
Brian Bird | 1,228 | 72,881 | 2,027 | 120,282 | 3,255 | 193,164 | |||||||||||||||||||||||||||||
Heather Grahame | 1,042 | 61,856 | 1,420 | 84,263 | 2,462 | 146,119 | |||||||||||||||||||||||||||||
Crystal Lail | 282 | 16,758 | 699 | 41,479 | 981 | 58,236 | |||||||||||||||||||||||||||||
Curtis Pohl | 501 | 29,717 | 1,102 | 65,393 | 1,603 | 95,110 |
Stock Awards | |||||||||||||||||
Name | Number of LTIP Shares Acquired on Vesting (#) (1) | Value Realized on LTIP Vesting ($) (2) | Number of ERRP Shares Acquired on Vesting (#) (3) | Value Realized on ERRP Vesting ($) (2) | Total Shares Acquired on Vesting (#) | Total Value Realized ($) (2) | |||||||||||
Robert C. Rowe | 30,331 | 2,173,842 | 6,410 | 459,405 | 36,741 | 2,633,246 | |||||||||||
Brian B. Bird | 10,490 | 751,793 | 2,103 | 150,722 | 12,593 | 902,515 | |||||||||||
Heather H. Grahame | 7,348 | 526,623 | 1,531 | 109,727 | 8,879 | 636,350 | |||||||||||
Curtis T. Pohl | 4,277 | 306,533 | 1,205 | 86,362 | 5,482 | 392,895 | |||||||||||
Bobbi L. Schroeppel | 3,286 | 235,505 | 834 | 59,773 | 4,120 | 295,277 |
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 | ||||||||||||||
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 C. Rowe | ||||||||||||||
ERRP | 12/18/2019 | 6,414 | 459,691 | |||||||||||
LTIP | 2/11/2019 | 20,868 | 1,495,610 | |||||||||||
ERRP | 12/13/2018 | 6,976 | 499,970 | |||||||||||
LTIP | 2/12/2018 | 61,534 | 4,410,142 | |||||||||||
ERRP | 12/12/2017 | 5,862 | 420,130 | |||||||||||
ERRP | 12/7/2016 | 6,505 | 466,213 | |||||||||||
ERRP | 12/9/2015 | 6,458 | 462,845 | |||||||||||
Brian B. Bird | ||||||||||||||
ERRP | 12/18/2019 | 1,849 | 132,518 | |||||||||||
LTIP | 2/11/2019 | 7,217 | 517,242 | |||||||||||
ERRP | 12/13/2018 | 2,011 | 144,128 | |||||||||||
LTIP | 2/12/2018 | 21,282 | 1,525,281 | |||||||||||
ERRP | 12/12/2017 | 2,027 | 145,275 | |||||||||||
ERRP | 12/7/2016 | 2,250 | 161,258 | |||||||||||
ERRP | 12/9/2015 | 2,233 | 160,039 | |||||||||||
Heather H. Grahame | ||||||||||||||
ERRP | 12/18/2019 | 1,395 | 99,980 | |||||||||||
LTIP | 2/11/2019 | 5,952 | 426,580 | |||||||||||
ERRP | 12/13/2018 | 1,474 | 105,642 | |||||||||||
LTIP | 2/12/2018 | 16,770 | 1,201,906 | |||||||||||
ERRP | 12/12/2017 | 1,420 | 101,771 | |||||||||||
ERRP | 12/7/2016 | 1,576 | 112,952 | |||||||||||
ERRP | 12/9/2015 | 1,564 | 112,092 | |||||||||||
Curtis T. Pohl | ||||||||||||||
ERRP | 12/18/2019 | 1,005 | 72,028 | |||||||||||
LTIP | 2/11/2019 | 2,942 | 210,853 | |||||||||||
ERRP | 12/13/2018 | 1,093 | 78,335 | |||||||||||
LTIP | 2/12/2018 | 8,676 | 621,809 | |||||||||||
ERRP | 12/12/2017 | 1,102 | 78,980 | |||||||||||
ERRP | 12/7/2016 | 1,223 | 87,652 | |||||||||||
ERRP | 12/9/2015 | 1,214 | 87,007 | |||||||||||
Bobbi L. Schroeppel | ||||||||||||||
ERRP | 12/18/2019 | 710 | 50,886 | |||||||||||
LTIP | 2/11/2019 | 2,310 | 165,558 | |||||||||||
ERRP | 12/13/2018 | 772 | 55,329 | |||||||||||
LTIP | 2/12/2018 | 6,682 | 478,899 | |||||||||||
ERRP | 12/12/2017 | 764 | 54,756 | |||||||||||
ERRP | 12/7/2016 | 846 | 60,633 | |||||||||||
ERRP | 12/9/2015 | 839 | 60,131 |
NorthWestern Energy | Proxy Statement | Page 38 |
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 | 11.00 | 707,067 | — | |||||||
Brian B. Bird | NorthWestern Corporation Pension Plan | 16.08 | 245,899 | — | |||||||
Heather H. Grahame (1) | — | — | — | — | |||||||
Curtis T. Pohl | NorthWestern Corporation Pension Plan | 33.39 | 480,935 | — | |||||||
Bobbi L. Schroeppel | NorthWestern Corporation Pension Plan | 21.63 | 238,950 | — |
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 | 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 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, 2019 ($) (2) | |||||||||||
Robert C. Rowe (3) | — | 244,910 | 2,114,705 | — | 10,870,741 | ||||||||||
Brian B. Bird | — | 77,391 | 45,667 | — | 266,060 | ||||||||||
Heather H. Grahame | — | 55,623 | 33,096 | — | 192,617 | ||||||||||
Curtis T. Pohl | — | 43,797 | 26,066 | — | 151,698 | ||||||||||
Bobbi L. Schroeppel | — | 29,436 | 17,439 | — | 101,550 |
NorthWestern Energy | Proxy Statement | Page 40 |
2022 Executive Pay |
Name | Base Salary ($) | 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 | 649,224 | 649,224 | 2,596,896 | 595,122 | 44,940 | 12,000 | 3,248,958 | ||||||||||||||
Brian B. Bird | 449,057 | 269,434 | 1,436,982 | 246,981 | 45,172 | 12,000 | 1,741,135 | ||||||||||||||
Heather H. Grahame | 423,516 | 232,934 | 1,312,900 | 213,523 | 34,510 | 12,000 | 1,572,933 | ||||||||||||||
Curtis T. Pohl | 305,136 | 122,054 | 854,381 | 111,883 | 31,402 | 12,000 | 1,009,666 | ||||||||||||||
Bobbi L. Schroeppel | 287,474 | 114,990 | 804,927 | 105,408 | 46,108 | 12,000 | 968,443 |
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 | ||||||||||||||
Brian | ||||||||||||||
Heather | ||||||||||||||
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 12/31/19 Death / Disability | Assumed 12/31/19 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 | 12/31/2023 | 6,414 | 100.0 | % | 459,691 | 6,414 | — | % | — | ||||||||||||||
LTIP | 12/31/2020 | 20,868 | 33.3 | % | 498,534 | 20,868 | 33.3 | % | 498,534 | |||||||||||||||
ERRP | 12/31/2022 | 6,976 | 100.0 | % | 499,970 | 6,976 | 20.0 | % | 99,994 | |||||||||||||||
LTIP | 12/31/2019 | 30,767 | 66.7 | % | 1,470,782 | 30,767 | 66.7 | % | 1,470,782 | |||||||||||||||
ERRP | 12/31/2021 | 5,862 | 100.0 | % | 420,130 | 5,862 | 40.0 | % | 168,052 | |||||||||||||||
ERRP | 12/31/2020 | 6,505 | 100.0 | % | 466,213 | 6,505 | 60.0 | % | 279,728 | |||||||||||||||
ERRP | 12/31/2019 | 6,458 | 100.0 | % | 462,845 | 6,458 | 80.0 | % | 370,276 | |||||||||||||||
TOTAL | $ | 4,278,165 | TOTAL | $ | 2,887,366 | |||||||||||||||||||
Brian B. Bird | ||||||||||||||||||||||||
Vice President and Chief Financial Officer | ERRP | 12/31/2023 | 1,849 | 100.0 | % | 132,518 | 1,849 | — | % | — | ||||||||||||||
LTIP | 12/31/2020 | 7,217 | 33.3 | % | 172,414 | 7,217 | 33.3 | % | 172,414 | |||||||||||||||
ERRP | 12/31/2022 | 2,011 | 100.0 | % | 144,128 | 2,011 | 20.0 | % | 28,826 | |||||||||||||||
LTIP | 12/31/2019 | 10,641 | 66.7 | % | 508,681 | 10,641 | 66.7 | % | 508,681 | |||||||||||||||
ERRP | 12/31/2021 | 2,027 | 100.0 | % | 145,275 | 2,027 | 40.0 | % | 58,110 | |||||||||||||||
ERRP | 12/31/2020 | 2,250 | 100.0 | % | 161,258 | 2,250 | 60.0 | % | 96,755 | |||||||||||||||
ERRP | 12/31/2019 | 2,233 | 100.0 | % | 160,039 | 2,233 | 80.0 | % | 128,031 | |||||||||||||||
TOTAL | $ | 1,424,313 | TOTAL | $ | 992,816 | |||||||||||||||||||
Heather H. Grahame | ||||||||||||||||||||||||
General Counsel and Vice President - Regulatory & Federal Gov't Affairs | ERRP | 12/31/2023 | 1,395 | 100.0 | % | 99,980 | 1,395 | — | % | — | ||||||||||||||
LTIP | 12/31/2020 | 5,952 | 33.3 | % | 142,204 | 5,952 | 33.3 | % | 142,204 | |||||||||||||||
ERRP | 12/31/2022 | 1,474 | 100.0 | % | 105,642 | 1,474 | 20.0 | % | 21,128 | |||||||||||||||
LTIP | 12/31/2019 | 8,385 | 66.7 | % | 400,836 | 8,385 | 66.7 | % | 400,836 | |||||||||||||||
ERRP | 12/31/2021 | 1,420 | 100.0 | % | 101,771 | 1,420 | 40.0 | % | 40,709 | |||||||||||||||
ERRP | 12/31/2020 | 1,576 | 100.0 | % | 112,952 | 1,576 | 60.0 | % | 67,771 | |||||||||||||||
ERRP | 12/31/2019 | 1,564 | 100.0 | % | 112,092 | 1,564 | 80.0 | % | 89,674 | |||||||||||||||
TOTAL | $ | 1,075,477 | TOTAL | $ | 762,322 | |||||||||||||||||||
Curtis T. Pohl | ||||||||||||||||||||||||
Vice President - Retail Operations | ERRP | 12/31/2023 | 1,005 | 100.0 | % | 72,028 | 1,005 | — | % | — | ||||||||||||||
LTIP | 12/31/2020 | 2,942 | 33.3 | % | 70,293 | 2,942 | 33.3 | % | 70,293 | |||||||||||||||
ERRP | 12/31/2022 | 1,093 | 100.0 | % | 78,335 | 1,093 | 20.0 | % | 15,667 | |||||||||||||||
LTIP | 12/31/2019 | 4,338 | 66.7 | % | 207,373 | 4,338 | 66.7 | % | 207,373 | |||||||||||||||
ERRP | 12/31/2021 | 1,102 | 100.0 | % | 78,980 | 1,102 | 40.0 | % | 31,592 | |||||||||||||||
ERRP | 12/31/2020 | 1,223 | 100.0 | % | 87,652 | 1,223 | 60.0 | % | 52,591 | |||||||||||||||
ERRP | 12/31/2019 | 1,214 | 100.0 | % | 87,007 | 1,214 | 80.0 | % | 69,606 | |||||||||||||||
TOTAL | $ | 681,670 | TOTAL | $ | 447,123 | |||||||||||||||||||
Bobbi L. Schroeppel | ||||||||||||||||||||||||
Vice President - Customer Care, Communications, and Human Resources | ERRP | 12/31/2023 | 710 | 100.0 | % | 50,886 | 710 | — | % | — | ||||||||||||||
LTIP | 12/31/2020 | 2,310 | 33.3 | % | 55,187 | 2,310 | 33.3 | % | 55,187 | |||||||||||||||
ERRP | 12/31/2022 | 772 | 100.0 | % | 55,329 | 772 | 20.0 | % | 11,066 | |||||||||||||||
LTIP | 12/31/2019 | 3,341 | 66.7 | % | 159,713 | 3,341 | 66.7 | % | 159,713 | |||||||||||||||
ERRP | 12/31/2021 | 764 | 100.0 | % | 54,756 | 764 | 40.0 | % | 21,902 | |||||||||||||||
ERRP | 12/31/2020 | 846 | 100.0 | % | 60,633 | 846 | 60.0 | % | 36,380 | |||||||||||||||
ERRP | 12/31/2019 | 839 | 100.0 | % | 60,131 | 839 | 80.0 | % | 48,105 | |||||||||||||||
TOTAL | $ | 496,635 | TOTAL | $ | 332,353 |
NorthWestern Energy | Proxy Statement | Page 42 |
(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 |
2022 Non-Employee Director Compensation Schedule | Cash ($) | Shares (#) | ||||||
New Member Initial Stock Grant | — | 1,000 | ||||||
Board Chair Annual Retainer (1) | 150,000 | 3,750 | ||||||
Board Member Annual Retainer | 50,000 | 2,750 | ||||||
Committee Chair Annual Retainer | 10,000 | — | ||||||
Committee Member Annual Retainer | 10,000 | — | ||||||
(1) The Board chair does not receive the Board Member annual cash and stock retainers. |
NorthWestern Energy | Proxy Statement | Page 43 |
Cash ($) | 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 | — | |||
Field Visit (up to one visit per quarter) | 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) ($) | Total ($) | |||||||
Stephen P. Adik, Board Chair | 125,000 | 239,663 | 364,663 | ||||||
Anthony T. Clark | 65,000 | 167,832 | 232,832 | ||||||
Dana J. Dykhouse, Compensation Chair | 75,000 | 159,583 | 234,583 | ||||||
Jan R. Horsfall | 67,000 | 159,583 | 226,583 | ||||||
Britt E. Ide | 61,000 | 175,753 | 236,753 | ||||||
Julia L. Johnson, Governance Chair | 75,000 | 159,583 | 234,583 | ||||||
Linda G. Sullivan, Audit Chair (1) | 81,250 | 175,753 | 257,003 | ||||||
Mahvash Yazdi (3) | 4,083 | 87,355 | 91,438 | ||||||
Jeffrey W. Yingling (3) | 18,167 | 106,755 | 124,922 |
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 operations) is made up solely of independent directors. | ||||||
•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 directors •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. | ||||||
NorthWestern Energy | Proxy Statement | Page 52 |
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 | ||||||||||||||||||||||
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. | |||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||
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 |
Brian BirdDirector since 2023 Age 60 | ||||||||
President and Chief Executive Officer, NorthWestern Corporation | ||||||||
Biography:Mr. Bird is the President and Chief Executive Officer of NorthWestern Corporation (since January 2023). Prior to that 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, LLP 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 Innovation and 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 Operations Risk Management / Oversight Technology and Security Independent Director NorthWestern Committees Audit (Chair), Operations Other Public Boards AltaGas, Ltd. PPL Corporation |
NorthWestern Energy | Proxy Statement | Page 59 |
Corporate Governance |
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 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 | |||||||||||
Utility Operations 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 Mr. Yingling is a member of the board of directors of | |||||||||||
Financial Executive 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 four Board committees composed solely of independent directors, each with a different independent director serving as chairperson of the committee. Our Board committees are: •Human Resources | COMMITTEES 100% INDEPENDENT |
Audit Committee | ||||||||||||||||
“The Audit Committee Linda 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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Oversight of the Company Our Audit Committee is primarily responsible for overseeing the company’s risk management processes on behalf of the full Board by monitoring company processes for management’s identification, control, response, and The Board oversees the company’s risk management, and our CEO and executive Enterprise Risk Management Committee act to ensure that our enterprise risk management and business continuity programs (ERM) achieve their objectives. In addition, the Audit Committee ensures that the company’s key risks are reviewed in the various responsible committees on at least an annual basis. While management is responsible for the day-to-day risk management processes, we have structured our ERM reporting relationship through our Chief Audit and Compliance Officer who has a direct reporting relationship to the Audit Committee. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our Board leadership structure supports this approach. Cyber and Physical Security Oversight Our company provides critical infrastructure to meet the needs of states, communities, and Transactions with Related Persons Our Audit Committee has adopted a written Related Persons Transaction Policy. The policy requires that any related person transaction be reviewed and approved by the Audit Committee based on its consideration of all available relevant facts and circumstances. The Audit Committee approves a related person transaction only if it determines in good faith that such transaction is in, or is consistent with, the best interests of the company and its shareholders. Specifically, the Audit Committee considers whether (1) the transaction is on terms comparable to those that could be obtained in arms-length dealing with an unrelated third party, (2) there are business reasons to enter into the transactions, (3) the transaction could impair the independence of a director, and (4) the transaction would present an improper conflict of interest. No material related person transactions were identified during Under the policy, a “related person” is an officer, director, director nominee, or five percent or more shareholder of the company The policy also provides ratification procedures for approval of transactions that have been commenced or consummated prior to any knowledge by the Audit Committee or the Company of the involvement of a related person and for the annual review of ongoing related person transactions to ensure that such transactions continue to remain in the best interests of the company and its shareholders. The policy is available on our website at NorthWesternEnergy.com under
Hedging and Pledging Our Securities Our Insider Trading Policy prohibits all of our directors, officers, and employees from engaging in certain transactions involving our securities, including hedging or other monetization transactions and publicly traded options. Specifically, the policy prohibits transactions involving publicly traded options, such as puts, calls, and other derivative securities, as well as hedging and monetization transactions, such as zero-cost collars and forward sales contracts. Our policy aims to align the interests of a director, officer, or employee with our and our shareholders’ interests and prohibits publicly traded option and hedging and monetization transactions because such transactions could create the appearance that a director, officer, or employee is trading on material non-public information, is focused on short-term performance, or otherwise misaligned. The Insider Trading Policy also prohibits our directors, officers, and employees from pledging any of our securities as collateral for a loan, unless pre-cleared by our general counsel. None of our directors or executive officers have pledged any of our securities as collateral for a loan. The policy is available on our website at NorthWesternEnergy.com under Political Contributions Policy As a public utility, we are subject to various laws and regulations at the federal, state, and local levels; and changes to these laws can affect our business, employees, communities and shareholders. Accordingly, we are committed to being an active and responsible corporate citizen. We use our resources, through legally permissible participation in the political process, to advance matters of public policy that are consistent with our values, our legal obligations, and our Code of Conduct. We also encourage our employees to be active in civic and community activities, including by participating in the political and democratic process. We have a formal political contributions policy. We do not make (and our policy prohibits) corporate contributions to candidates for political office, political parties, or committees, or political committees organized for the advancement of political candidates, whether federal, state, or local. State and local ballot initiatives and referenda on important policy issues do have the potential to impact our business and our stakeholders. Accordingly, the policy permits corporate contributions in connection with such matters, as well as lobbying efforts and contributions to trade and local associations. In addition, the policy allows individual employees to make personal contributions to political action committees. The policy is available on our website at NorthWesternEnergy.com under Communications with Our Board You may contact our Board, Board Chair or independent directors, individually or as a group, by sending your communication to our NorthWestern Corporation 3010 West 69th Street Sioux Falls, South Dakota 57108 Attn: Corporate Secretary
Who Our common stock is currently our only class of voting securities. The number of shares noted in the table below are those beneficially owned, as determined under the rules of the SEC, and such information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power and any shares which the person has the right to acquire within 60 days through the exercise of option, warrant, or right. Stock Ownership by Directors and Executives The following table provides information as of
Stock Ownership Guidelines We believe it is important that our interests are aligned with the interests of our shareholders. Accordingly, our Board has established robust stock ownership guidelines for our non-employee directors and executive officers. Our stock ownership guidelines are set forth in our Corporate Governance Guidelines on our website at NorthWesternEnergy.com under Under our stock ownership guidelines and as shown on the table on the next page, each non-employee director must retain at least For executives, the stock ownership guidelines range from two to six times base salary as summarized in the table Our Board instituted stock ownership guidelines to require its members and our executives to hold a meaningful financial stake in the company to align our interests with those of our shareholders. As summarized in the table
exceptions of Mr. Kent Larson, who was appointed to the Board on July 28, 2022, and Ms. Crystal Lail, who became a NEO for the first time in 2021 upon her promotion to vice president and CFO.
(1)Value of shares and DSUs owned and percent of percent of guideline achieved are calculated as of December 31, 2022, using the closing stock price from December 30, 2022, of $59.34. (2)Mr. Larson joined our Board on July 28, 2022. As of the date of this Proxy Statement, he satisfies his stock ownership guideline. (3)Ms. Lail became subject to the 4x stock ownership guideline in February 2021 when we promoted her to vice president and CFO. Largest Shareholders The table below sets forth information regarding whom we know to be the beneficial owners of more than five percent of our issued and outstanding common
(1) Reflects shares beneficially owned by BlackRock, Inc. as of December 31, 2022, according to a statement on Schedule 13G/A filed with the SEC on January 23, 2023, which indicates that the beneficial owner, a holding company or control person in accordance with Rule 13d-1(b), has sole voting power with respect to 8,644,255 shares and sole dispositive power with respect to 8,761,422 shares. The beneficial owner holds shared voting or dispositive power with respect to none of the shares. The Schedule 13G/A certifies that the securities were acquired in the ordinary course and not with the purpose or with the effect of changing or influencing the control of NorthWestern Corporation. (2) Reflects shares beneficially owned by The Vanguard Group, as of December 30, 2022, according to a statement on Schedule 13G/A filed with the SEC on February 9, 2023, which indicates that the beneficial owner, an investment adviser in accordance with Rule 13d-1, has sole voting power with respect to 0 shares and sole dispositive power with respect to 6,146,900 shares. The beneficial owner has shared voting power with respect to 70,183 shares and shared dispositive power with respect to 119,875 shares. The Schedule 13G/A certifies that the
securities were acquired in the ordinary course and not with the purpose or with the effect of changing or influencing the control of NorthWestern Corporation. (3) Reflects shares beneficially owned by American Century Investment Management, Inc., American Century Companies, Inc., and Stowers Institute for Medical Research, as of December 31, 2022, according to a statement on Schedule 13G filed with the SEC on February 8, 2023, which indicates that the beneficial owners – respectively, an investment adviser in accordance with Rule 13d-1, a parent holding company or control person in accordance with Rule 13d-1(b), and a parent holding company or control person in accordance with Rule 13d-1(b) – has sole voting power with respect to 3,634,096 shares and sole dispositive power with respect to 3,750,620 shares. The beneficial owner has shared voting or dispositive power with respect to none of the shares. The Schedule 13G certifies that the securities were acquired in the ordinary course and not with the purpose or with the effect of changing or influencing the control of NorthWestern Corporation. Stock for Compensation Plans The table below presents summary information about our Equity Compensation Plan, as of the close of business on December 31, a.The aggregate number of shares of our common stock subject to outstanding stock options, warrants, and rights, including unvested performance units and unvested restricted share units; b.The weighted average exercise price (or grant date fair value) of those outstanding stock options, warrants, and rights; and c.The number of shares that remain available for future option grants, excluding the number of shares to be issued upon the exercise of outstanding options, warrants, and rights. For additional information regarding our long-term incentive plans and the accounting effects of our stock-based compensation, please see Note 15 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31,
(1) Consists of the Equity Compensation Plan, which is the company’s only equity compensation plan. (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.
Attending the Virtual Annual Meeting Annual Meeting Details We will hold our virtual Annual Meeting of Shareholders for NorthWestern Corporation on April 28, 2023, at 10:00 a.m. Mountain Daylight Time at www.virtualshareholdermeeting.com/NWE2023. Only shareholders of record or their legal proxy holders as of the record date and our invited guests may participate in the virtual annual meeting. If you wish to attend the virtual annual meeting and your shares are held in street name at a brokerage firm, bank, or other nominee, you will need to have the 16-digit control number that can be found on your notice. A webcast of the Annual Meeting will be available on our website at NorthWesternEnergy.comunder About Us / Investors / Presentations, Webcasts & Reports through April 28, 2024. Electronic Access to Proxy Statement and Annual Report The proxy statement, annual report, voting card, and voting instructions are available at www.proxyvote.com where you can also cast your vote and request to receive future proxy materials in printed form by mail or electronically by email. These materials will be available for one year following the annual meeting. You will need the control number provided on your notice to access the electronic materials. Available Information On or about March 14, 2023, we mailed to our shareholders either (1) a Notice of Internet Availability of Proxy Materials or (2) a copy of our proxy statement, a proxy card, and our 2022 Annual Report. We file annual, quarterly, and current reports, proxy statements and other information with the SEC. These filings are available through a website maintained by a third-party and accessible through our company website at NorthWesternEnergy.comunder About Us /Investors / Financials / SEC Filings. Our public filings also are available to the public from document retrieval services and the website maintained by the SEC at www.sec.gov. Voting Procedures Appointment of Proxy Holders Our Board asks you to appoint our independent Board Chair, If appointed by you, the proxy holders will vote your shares as you direct on the matters described in this proxy statement. If you sign and date your proxy card, but do not provide direction, they will vote your shares as recommended by our Board. We are not aware of any matters to be brought before the annual meeting other than the matters described in the notice of annual meeting accompanying this proxy statement. The persons named in the form of proxy solicited by our Board will vote all proxies that have been properly executed, and if any matters not set forth in the notice of annual meeting are properly brought before the meeting, such persons will use their best judgment to vote on such matters.
Available Information On or about March 14, 2023, we mailed to our shareholders either (1) a Notice of Internet Availability of Proxy Materials or (2) a copy of our We file annual, quarterly, and current reports, proxy statements and other information with the SEC. These filings are available through a website maintained by a third-party and accessible through our company website at NorthWesternEnergy.comunder About Us /Investors / Financials / SEC Filings. Our public filings also are available to the Voting Procedures Appointment of Our Board asks you If appointed by you, the proxy holders will vote your shares as you direct on the matters described in this proxy statement. If you sign and date your proxy card, but do not provide direction, they will vote your shares as recommended by our Board. We are not aware of any matters to be brought before the annual meeting other than the matters described in the notice of annual meeting accompanying this proxy statement. The
Electronic Access to Proxy Statement and Annual Report The proxy statement, annual report, voting card, and voting instructions are available We file annual, quarterly, and current reports, proxy statements and other information with the Voting Procedures Appointment of Proxy Holders Our Board asks you to appoint our independent Board Chair, Dana Dykhouse, and our President and CEO, Brian Bird, as your proxy holders to vote your shares at the annual meeting. You make this appointment by voting the proxy card provided to you or by We are not aware of any matters to be brought before the annual meeting other than the matters described in the notice of annual meeting accompanying this proxy statement. The persons named in the form of proxy solicited by our Board will
Record Date and Voting All shareholders of record
Quorum At the close of business on the record date, there were 59,769,441 shares of NorthWestern Corporation common stock A quorum, which is a majority of the outstanding shares as of the record Broker Non-Votes Under Nasdaq rules, certain shareholder nominees (such as brokers) have the election of directors, the advisory vote to approve NEO compensation, and the advisory vote
on the frequency of advisory votes on executive compensation) unless they receive instruction from the beneficial owner. A “broker non-vote” occurs when your broker submits a proxy for your shares but does not indicate a vote for a particular proposal because the broker does not have authority to vote on that proposal and has not received voting instructions from you. Broker non-votes are not counted as votes for or against the proposal in question or as abstentions, and are not counted to determine the number of votes present for the particular proposal. Under Nasdaq rules, if your broker holds shares in your name and delivers this proxy statement to you, the broker is entitled to vote your shares on Proposal 2 — Ratification of Independent Registered Public Accounting Firmeven if the broker does not receive voting instructions from you. Without your instructions, the broker is not entitled to vote your shares on Proposal 1 — Election of Directors,Proposal 3 — Advisory Vote to Approve Named Executive Officer Compensation, or Proposal 4 — Advisory Vote to Approve Frequency of Advisory Votes on Executive Compensation. We encourage you to provide instructions to your broker, bank, or other nominee. This ensures your shares will be voted at the annual meeting. Required Vote and Method of Counting The required vote and method of counting votes for the various business matters to be considered at the annual meeting are described in the table below. If you sign and return your proxy card without indicating your vote, your shares will be voted “FOR” each of the nominees for director, “FOR” ratification of Deloitte & Touche LLP as our independent registered public accounting firm, “FOR” the advisory vote to approve NEO compensation, for every “1 YEAR” on the advisory vote on the frequency of advisory votes on executive compensation, and in accordance with the recommendations of our Board on any other matters properly brought before the annual meeting for a vote.
Method and Cost of Soliciting and Tabulating Votes The Board is providing these proxy materials to you in connection with the solicitation by the Board of proxies to be voted at our virtual annual meeting. NorthWestern will pay the cost of the solicitation, which will be made primarily by the use of mail and the internet. Proxies also may be solicited in person or by telephone, facsimile, or similar means by our directors, officers, or employees without additional compensation. We will, on request, reimburse shareholders who are brokers, banks, or other nominees for their reasonable expenses in sending proxy materials and annual reports to the beneficial owners of the shares they hold of record. Broadridge Financial Solutions, Inc., will be the proxy tabulator. Assistance If you need assistance with voting your proxy or have questions regarding our annual meeting, please contact:
Householding; Receipt of Multiple Notices Under the rules of the SEC, a single Notice of Internet Availability of Proxy Materials or set of annual reports and proxy statements may be sent to any household at which two or more shareholders reside if they appear to be members of the same family. Each shareholder continues to receive a separate proxy card. This procedure, referred to as householding, reduces the volume of duplicate information shareholders receive and reduces mailing and printing expenses. In accordance with a notice sent to certain shareholders who shared a single address, only one annual report and proxy statement were sent to that address unless any shareholder at that address requested that multiple sets of documents be sent. However, if any shareholder who agreed to householding wishes to receive a separate annual report or proxy statement for Future Shareholder Proposals and Director Nominations Shareholder Proposals for Inclusion in Next Year’s Proxy Statement. To be considered for inclusion in the proxy statement for our annual meeting to be held in
Other Shareholder Proposals for Presentation at the Universal Proxy Card.To comply with the universal proxy rules, shareholders who intend to solicit proxies of director nominees for the 2024 Annual Meeting must provide notice to the corporate secretary of NorthWestern Corporation that sets forth the information required by Rule 14a-19 under the Exchange Act, as well as the information specified below, between December 29, 2023 and January 28, 2024. Shareholder proposals should be delivered or mailed to and received by the Company at its principal executive offices in accordance with the dates set forth above and addressed to the corporate secretary of NorthWestern Corporation at 3010 West 69th Street, Sioux Falls, South Dakota, To be in proper written form, a shareholder’s notice for both annual and special meetings must set forth:
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;
Proxy Statement Glossary The list below defines the various terms, abbreviations, and acronyms used in this proxy statement.
VOTING CARD [Front Side]
VOTING CARD [Back Side]
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