| Strong independent oversight of management | •Independent Board Chair •Fully independent membership on all standing Board committees •All directors independent other than the CEO •Executive sessions of non-management directors at all regularly scheduled Board meetings | | *Leadership accountability | Percentage is less than 1%•Annual election of PGE commondirectors by majority vote of the shareholders •Shareholder right to act by written consent •No "poison pill" anti-takeover defenses •No supermajority voting requirements •Robust Board and executive stock outstanding.ownership guidelines (see pages 14 and 64 for details) •Annual Advisory Vote on Executive Compensation |
| | (1)Focus on leadership refreshment and quality | As reported•Active Board refreshment program (5 new directors since the beginning of 2019) •Annual Board review of succession planning and talent development for senior leadership •Regular Board training focused on Schedule 13G/A filed with the Securitiessignificant business risks and Exchange Commission on February 12, 2018, reporting information as of December 31, 2017.opportunities •Directors' orientation and continuing education programs |
| | (2)Engaged Board oversight of strategy and risk management | As reported•Oversight of strategy, risk and ESG practices •Annual offsite Board strategy session •Quarterly updates to Audit and Risk Committee on Schedule 13G/A filed with the Securities and Exchange Commission on January 19, 2018, reporting information as of December 31, 2017. The Schedule 13G/A indicates that the shares are held by 17 separate entities and that none of these entities beneficially own 5% or more of the outstanding PGE common stock.enterprise risk management program •Annual independent compensation program risk analysis | | |
| | | (3) | As reportedFind our Corporate Governance Guidelines and other governance documents online. The Board has adopted Corporate Governance Guidelines, which, together with our articles of incorporation and bylaws, establish the governance framework for the management of the Company. Our Corporate Governance Guidelines address, among other matters, the role of our Board, Board membership criteria, director retirement policies, director independence criteria, director and officer stock ownership requirements, Board committees and leadership development. Our Corporate Governance Guidelines, Board committee charters, and certain other corporate governance policies are available on Schedule 13G filed with the Securities and Exchange Commission on January 11, 2018, reporting information as of December 31, 2017. |
| | (4) | Includes 487 shares of common stock that will be issued on March 31, 2018our website at https://investors.portlandgeneral.com/corporate-governance. These documents are also available in print to shareholders, without charge, upon the vesting of restricted stock units granted under therequest to Portland General Electric Company Stock Incentive Plan. Restricted stock units do not have voting or investment power until the units vest and the underlying common stock is issued.at its principal executive offices at 121 SW Salmon Street, 1WTC1301, Portland, Oregon 97204, Attention: Corporate Secretary. |
| | | | | | | | | (5)10 | Shares are held jointly with the individual's spouse, who shares voting and investment power. | Portland General Electric 2022 Proxy Statement |
SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE
The rules of the SecuritiesGovernance Structure and Exchange Commission require that we disclose late filings of reports of stock ownership (and changes in stock ownership) by our directors and executive officers and persons who beneficially own more than 10% of our common stock. To the best of our knowledge, all of the filings required by Section 16(a) of the Securities Exchange Act of 1934 for our directors and executive officers and persons who beneficially own more than 10% of our common stock were made on a timely basis in 2017.Processes
EXECUTIVE OFFICERS
MARIA M. POPE President and Chief Executive Officer, age 53.
Appointed President on October 1, 2017 and appointed Chief Executive Officer on January 1, 2018. Served as Senior Vice President, Power Supply, Operations and Resource Strategy from March 1, 2013 until appointed to current position. Served as Senior Vice President, Finance, Chief Financial Officer and Treasurer from January 2009 to February 2013 and was a member of the company’s board of directors from January 2006 to December 2008. Served as Vice President and Chief Financial Officer of Mentor Graphics Corporation, a software company based in Wilsonville, Oregon, from July 2007 to December 2008. Prior to joining Mentor Graphics, served as Vice President and General Manager, Wood Products Division of Pope & Talbot, Inc., a pulp and wood products company, from December 2003 to April 2007.
JAMES F. LOBDELLSenior Vice President, Finance, Chief Financial Officer and Treasurer, age 59.
Appointed to current position on March 1, 2013. Served as Vice President, Power Operations and Resource Strategy from August 2, 2004 until appointed to current position. Served as Vice President, Power Operations from September 2002 until August 2, 2004. Served as Vice President, Risk Management Reporting, Controls and Credit from May 2001 until September 2002.
WILLIAM O. NICHOLSONSenior Vice President, Customer Service, Transmission and Distribution, age 59.
Appointed to current position on April 18, 2011. Served as Vice President, Distribution Operations from August 2009 until appointed to current position. Served as Vice President, Customers and Economic Development from May 2007 until August 2009. Served as General Manager, Distribution Western Region from April 2004 until May 2007. Served as General Manager, Distribution Line Operations and Services from February 2002 until April 2004.
LARRY N. BEKKEDAHLVice President, Transmission and Distribution, age 57.
Appointed to current position on August 25, 2014. Served as Senior Vice President of Transmission Services at Bonneville Power Administration from June 2012 to August 2014, and as Vice President of Engineering and Technical Services from April 2008 to June 2012. Prior to joining Bonneville Power Administration, served as Director of Engineering and Technical Services for Clark Public Utilities from 2001 to 2008, and served in various capacities for PacifiCorp from 1984 to 2001.
CAROL A. DILLIN Vice President, Customer Strategies and Business Development, age 60.
Appointed to current position on August 1, 2009. Served as Vice President, Public Policy from February 2004 until appointed to current position.
BRADLEY Y. JENKINS Vice President, Generation and Power Operations, age 54.
Appointed to current position on October 1, 2017. Served as Vice President, Power Supply Generation from September 2015 until appointed to current position and as General Manager, Diversified Plant Operations, from November 2013 to August 2015. Served as Plant General Manager, Boardman Power Plant from September 2012 to November 2013 and as Operations Manager, Boardman Power Plant from March 2012 to September 2012. Prior to joining PGE, Mr. Jenkins served in a variety of leadership and management roles in the utility industry with 24 years of experience in large generating facilities. He served as Maintenance Manager for Sandvik Special Metals from March 2011 to March 2012, as Lead Maintenance Assessor for Tecmer from February 2011 to March 2011, and as Maintenance Manager for Energy Northwest from April 2006 to November 2010. His experience also includes time at Entergy Louisiana, Entergy Nuclear South, Energy Northwest and the Tennessee Valley Authority.
LISA A. KANERVice President, General Counsel and Corporate Compliance Officer, age 57.
Joined PGE and appointed to current position on June 29, 2017. Prior to joining PGE, was a trial attorney and shareholder at the Portland, Oregon law firm of Markowitz Herbold PC from 1994 to June 2017, where she specialized in complex commercial litigation.
JOHN T. KOCHAVATR Vice President, Information Technology and Chief Information Officer, age 44.
Joined PGE and appointed to current position on February 1, 2018. Prior to joining PGE, served as Senior Vice President and Chief Information Officer at SUEZ Water Technologies & Solutions (formerly General Electric Water and Process Technologies) from October 2017 to January 2018 and as Chief Information Officer and Chief Digital Officer for General Electric Water and Process Technologies from November 2012 to September 2017. His experience also includes various other Chief Information Officer and Information Technology leadership positions at General Electric’s energy and capital divisions from June 2001 to October 2012.
ANNE F. MERSEREAUVice President, Human Resources, Diversity and Inclusion, age 55.
Appointed to current position on January 4, 2016. Served as Employee Services Manager for Human Resources from January 2014 until appointed to current position. As Employee Services Manager, she led Human Resources Operations, including Systems Reporting and Analytics, Payroll, Human Resources Service Center, and Health Services. Served as Consultant to Change Management from January 2012 to January 2014 and as Human Resources Business Partner from July 2009 to December 2011. Prior to joining PGE, served as Senior Consultant for Waldron, a global human resources consulting firm, from December 2008 to July 2009 and held various positions with Marsh USA from January 2000 to October 2006, most
recently as Managing Director and U.S. Region Human Resources Director.
W. DAVID ROBERTSONVice President, Public Policy, age 51.
Appointed to current position on August 1, 2009. Served as Director of Government Affairs from June 2004 until appointed to current position.
KRISTIN A. STATHIS Vice President, Customer Service Operations, age 54.
Appointed to current position on June 1, 2011. Served as general manager of Revenue Operations from August 2009 until May 2011. Served as assistant treasurer and manager of Corporate Finance from October 2005 until July 2009. Served as general manager of Power Supply Risk Management from August 2003 until September 2005.
CORPORATE GOVERNANCE
Our Board of Directors has implemented a corporate governance program, including the adoption of charters for our Audit Committee, Compensation and Human Resources Committee, Nominating and Corporate Governance Committee and Finance Committee; Corporate Governance Guidelines (including Categorical Standards for Determination of Director Independence); a Process for Handling Communications to the Board of Directors and Board Committees; a Code of Business Ethics and Conduct; and a Code of Ethics for Chief Executive and Senior Financial Officers. These documents are published under the “Corporate Governance” section of our website at investors.portlandgeneral.com and are available in print to shareholders, without charge, upon request to Portland General Electric Company at its principal executive offices at 121 SW Salmon Street, 1WTC1301, Portland, Oregon 97204, Attention: Corporate Secretary.
Board of Directors
Our business, property and affairs are managed under the direction of our Board of Directors. Members of the board are kept informed of our business by consulting with our Chief Executive Officer and other officers and senior management, by reviewing and approving capital and operating plans and budgets and other materials provided to them, by visiting our offices and plants and by participating in meetings of the board and its committees.
During 2017, the Board of Directors met five times. During 2017, each director attended at least 75% of the aggregate of the meetings of the Board of Directors and meetings held by all committees on which the director served. Under our Corporate Governance Guidelines, the non-management directors must meet in executive session without management at least quarterly. The Chairman of the board (or if the Chairman is not an independent director, the lead independent director) presides over these executive sessions. The non-management directors met in executive session four times in 2017, generally at the end of each regular quarterly board meeting. In the event that the non-management directors include directors who are not independent under the New York Stock Exchange listing standards, our Corporate Governance Guidelines require the independent directors to meet separately in executive session at least once a year. Throughout 2017, all of our non-management directors were
independent under the New York Stock Exchange listing standards. Accordingly, the four meetings of our non-management directors in 2017 also constituted meetings of our independent directors.
It is our policy that directors are expected to attend the annual meeting of shareholders. A director who is unable to attend the annual meeting of shareholders (which it is understood may occur on occasion) is expected to notify the Chairman of the board. All of our directors attended the 2017 annual meeting of shareholders.
BOARD LEADERSHIP STRUCTURE Our Board believes that the Company is best served by maintaining the flexibility to determine its leadership structure based on the evolving needs of the Company. Our Corporate Governance Guidelines call for the appointment of a Board Chair but permit the Board to appoint any director to serve in this role. The duties of our Board Chair include: •Presiding over and managing meetings of the Board; •Approving agendas and materials for Board meetings; •With the Nominating, Governance and Sustainability Committee, overseeing the annual evaluation of the Board; •Serving as the principal liaison between management and the other non-management directors; •Conducting the annual CEO performance review after reviewing with the non-management directors in close coordination with the Compensation and Human Resources Committee; •Advising senior management on strategy and significant matters as appropriate; •Representing the Board at the Company's Annual Meeting of Shareholders; and •Attending and participating in committee meetings as desired. We currently separate the roles of Chief Executive OfficerCEO and Chairman of the board in recognition of the differences between the two roles. The Chief Executive Officer is responsible for setting the strategic direction for the company and the day-to-day leadership and performance of the company. The Chairman of the board provides leadership to the board in exercising its role of providing advice to, and independent oversight of, management. The Chairman of the board also provides leadership in defining the board’s structure and activities in the fulfillment of its responsibilities, provides guidance to the Chief Executive Officer, sets the board meeting agendas with board and management input, and presides over meetings of the Board of Directors and meetings of shareholders. The board recognizes the significant time, effort and energy that the Chief Executive Officer is required to devote to the company in the current business environment. The board also recognizes the significant commitment that is required from the Chairman, particularly as the board’s oversight responsibilities continue to grow. While our bylaws and Corporate Governance Guidelines do not require that our Chairman and Chief Executive Officer positions be separate, the board believes that having separate positions and having an independent outside director serve as Chairman is the appropriate leadership structure for the company at this time and demonstrates our commitment to good corporate governance.Chair. Jack E. Davis, our current Chairman,Board Chair, is an independent director as defined in the New York Stock ExchangeNYSE listing standards and the company’sour own Categorical Standards for Determination of Director Independence.Independence, which are described in our Corporate Governance Guidelines. BOARD OVERSIGHT OF RISK
Management is responsible forWe believe our current leadership structure promotes strong independent Board oversight and management accountability and allows our CEO to focus her time and efforts on establishing our strategic direction and managing the day-to-day managementaffairs of the company’s risks, whileCompany.
Our Board periodically reviews our leadership structure to determine whether it continues to serve the board, asinterests of the Company. Our Corporate Governance Guidelines require the independent directors to appoint a wholeLead Independent Director if the Board Chair is not independent. The Lead Independent Director’s duties would include coordinating the activities of the independent directors, coordinating the agenda for and through its committees, has responsibility for overseeingmoderating sessions of the company’s management of risk. The board’s role innon-management directors, and facilitating communications among the company’s risk oversight process includes receiving regular reports fromother members of senior management on areasthe Board. DIRECTOR INDEPENDENCE The NYSE listing standards require a majority of material risk to the company, including operational, financial, legal, regulatoryour directors and strategic risks. These reports provide insight on the material risks faced by the company,each member of our Audit and help the board understand the company’s risk management framework and risk mitigation strategies and processes. While the board has ultimate responsibility for oversight of the risk management process, various committees of the board assist the board in fulfilling its oversight responsibilities for certain areas of risk. The AuditRisk Committee, oversees risk management in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements and reviews quarterly reports from the company’s Corporate Compliance Committee. In addition, the Audit Committee assists the board in fulfilling its risk management oversight responsibilities by reviewing periodic reports on the company’s overall risk management strategy, including guidelines and policies governing the process by which the company assesses and manages its exposure to risk and discussing the company’s major risk exposures and the steps management has taken to monitor and control such exposures. The Compensation and Human Resources Committee, assists the board in fulfilling its oversight responsibilities with respectand Nominating, Governance and Sustainability Committee to the management of risks arising from the company’s compensation policies and programs. The Nominating andbe independent. Our Corporate Governance Committee assistsGuidelines also require a majority of our directors to be independent. For a director to be considered independent under the board in fulfilling its oversight responsibilities with respect toNYSE listing standards, the management of risks associated with board organization, membership and structure, succession planning for directors, and corporate governance. The Finance Committee assistsBoard must affirmatively determine that the board in fulfilling its oversight responsibilities with respect to the management of risks associateddirector does not have any direct or indirect material relationship with the company’s power operations, capital projects, finance activities, creditCompany, including any of the relationships specifically proscribed by the NYSE independence standards.
To assist the Company in determining the independence of Board members and liquidity. SELECTION OF CANDIDATES FOR BOARD MEMBERSHIP
The Nominatingcandidates, the Board has adopted Director Independence Standards, which identify types of relationships that could exist between the Company and a director that would prevent the director from being independent. Our Director Independence Standards are contained in our Corporate Governance CommitteeGuidelines, published on our website at https://investors.portlandgeneral.com/corporate-governance. Our Board considers a director or director nominee independent if he or she meets the criteria for independence in both the NYSE listing standards and our Director Independence Standards. The Board considers all relevant information available to it in making its independence determinations.
During its annual review of director independence in 2021, the Board considered whether there were any transactions or relationships between the Company and any director or any member of his or her immediate family (or any entity of which a director or an immediate family member is responsiblean executive officer, general partner or significant equity holder) and whether there were charitable contributions to not-for-profit organizations for identifying, screeningwhich a director or an immediate family member of a director serves as a board member or executive officer. | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 11 |
As a result of this review, the Board affirmatively determined that other than Ms. Pope, all current members of the Board and recommendingits standing committees are independent under the NYSE listing standards and our Director Independence Standards. DIRECTOR REFRESHMENT Under our director retirement and tenure policy, which is contained in our Corporate Governance Guidelines, candidates to the boardwill not be nominated for election as directors. The committee seeksafter age 75, and candidates elected after July 25, 2018 will not be nominated to serve on the Board for more than 12 years, unless the Board determines that such director’s continued service would be in the best interests of the Company. Our retirement policy is anchored on the need for Board refreshment and balanced tenure at the Board. We have an active board refreshment program with 5 new directors since 2019 and an average tenure of 7.2 years, after the qualifications and areas of expertise that will enhance2022 Annual Meeting. In 2021, the Board voted to waive the age limit for Mr. Davis, the current Board Chair. In extending Mr. Davis' term, the Board, other than Mr. Davis, considered the composition of the board. The committee does not have a formal policy with respect toBoard, the consideration of diversity in identifying director nominees, but believes it is important that the board represent a diversity of backgrounds, experience, gender and race. The committee considers a number of criteria in selecting nominees, including: Demonstration of significant accomplishment in the nominee's field;
Ability to make a meaningful contribution to the board's oversight of the business and affairs of the company;
Reputation for honesty and ethical conduct in the nominee's personal and professional activities;
Relevant background and knowledge in the utility industry;
Experience and skills in areas important to the operation of the company; and
Business judgment, time availability, including the numbertenure of other boards of public companies on whichdirectors, Mr. Davis' leadership, skills and qualifications and contributions as a nominee serves,director and potential conflicts of interest.
his performance as the Board Chair. The energy industry, the Western energy markets and the Company are undergoing profound changes, and Mr. Davis' deep industry expertise and experience make him the best suited director to continue to lead the Board and oversee management during these transitions.
The Nominating, Governance and Sustainability Committee, comprised solely of independent directors under NYSE rules and our Corporate Governance Guidelines, recommends director candidates to the Board. The Nominating, Governance and Sustainability Committee will considercarries out this responsibility through a year-round process described below: | | | | | | | | | | | | | | | | | | | | | | 1 | ⇒ | 2 | ⇒ | 3 | ⇒ | 4 | | Evaluation of Board Composition | Candidate Recruitment | Candidate Evaluation | Recommendation to Board | | The Nominating, Governance and Sustainability Committee evaluates the Board's membership needs based on a variety of factors. | If the Nominating, Governance and Sustainability Committee determines that there is a need for new candidates, individuals are identified through a variety of methods, including shareholder recommendations. | Candidates are evaluated on whether they exhibit certain core attributes that our Nominating, Governance and Sustainability Committee looks for in all candidates, as well as particular needs of the Board at the time. | The Nominating, Governance and Sustainability Committee recommends selected candidates to the full Board for nomination or appointment to the Board. |
Evaluation of Board Composition. Each year the Nominating, Governance and Sustainability Committee evaluates the size and composition of the Board to assess whether they are appropriate in light of the Company’s evolving needs. In making this evaluation, the Nominating, Governance and Sustainability Committee considers the Company’s strategic direction, current director qualifications, the results of Board and committee self-assessments, and legal and regulatory requirements. The Nominating, Governance and Sustainability Committee also considers whether there may be a need to fill a future Board vacancy in light of our director retirement and tenure policy or anticipated dates of retirement. If the Nominating, Governance and Sustainability Committee identifies a need to fill a future Board vacancy or add to the mix of skills and qualifications represented on the Board, the Nominating, Governance and Sustainability Committee oversees the director recruitment process described below. Candidate Recruitment. The Nominating, Governance and Sustainability Committee identifies new Board candidates through a variety of methods, including the use of third-party search firms, suggestions from current directors, shareholders, or employees, and self-nominations. Our newest director, Dawn Farrell, was recommended by a third-party search firm prior to her nomination and election to the Board of Directors. The Nominating, Governance and Sustainability Committee considers candidates recommended by shareholders. In considering candidates recommendedsubmitted by shareholders, the committeeNominating, Governance and Sustainability Committee will take | | | | | | | | | | 12 | | Portland General Electric 2022 Proxy Statement |
into consideration the needs of the board andaccount the qualifications of the candidate. To have a candidate considered by the Nominating and Corporate Governance Committee, a shareholder must submit the recommendation in writing and must include the following information: The shareholder’s name and evidence of ownership of PGE common stock, including the number of shares owned and the length of time of ownership; and The candidate’s name, resume or listing of qualifications to be a director and consent to be named as a director nominee if selected by the Nominating and Corporate Governance Committee and nominated by the board.
The shareholder recommendation and information described above mustabout the recommended candidate should be sent to the ChairmanChair of the Nominating, Governance and Corporate GovernanceSustainability Committee, in care of our Corporate Secretary, at Portland General Electric Company, 121 SW Salmon Street, 1WTC1301, Portland, Oregon 97204.
The Nominating, Governance and CorporateSustainability Committee will use the same process to evaluate a candidate regardless of the source of the recommendation. Candidate Evaluation. In evaluating director candidates, the Nominating, Governance and Sustainability Committee may retain an outside search firmseeks to assistidentify individuals who, at a minimum, have the following characteristics: •A reputation for honesty, ethical conduct and sound business judgment •Demonstration of significant accomplishments in their field •Experience and skills in the utility industry or other areas important to the strategic direction and operation of the Company •Availability and willingness to be diligent in fulfilling the responsibilities of Board membership and •Freedom from conflicts of interest In addition to evaluating a candidate’s individual qualifications, the Board and the Nominating, Governance and Sustainability Committee consider how a candidate would contribute to the overall mix of experience, qualifications, skills and other attributes represented on our Board. The Company believes it is important that the Board exhibit diversity across a variety of parameters, including age, gender, and race, and our Board is diverse in each of these ways as well as others. The Board has, therefore, not felt the need to adopt a formal Board diversity policy to capture its current practices. Recommendation to the Board of Directors. Each year in advance of our Annual Meeting of Shareholders, the Nominating, Governance and Sustainability Committee recommends a group of nominees to be presented to the shareholders for election to the Board. As appropriate, the Nominating, Governance and Sustainability Committee also recommends candidates for appointment to the Board between annual meetings. Directors who are appointed by the Board between annual meetings stand for election at the next Annual Meeting of Shareholders. For our 2022 Annual Meeting of Shareholders, the Board selected our director nominees based on their demonstration of the core attributes described above, and the belief that each director can make substantial contributions to our Board and Company. See pages 31 to 39 for more information about the backgrounds and qualifications of our nominees. BOARD AND COMMITTEE EVALUATION PROCESS Each year the Board conducts a self-assessment of its performance and effectiveness as well as that of its committees. The Chair of the Nominating, Governance and Sustainability Committee leads the Board’s assessment process, which requires each director to complete a written evaluation of the performance of both the Board as a whole and the committees on which the director serves. These evaluations are anonymous, except to the extent a director elects otherwise. The results of our directors’ feedback are summarized and provided to all of the Board members. The Chair of the Nominating, Governance and Sustainability Committee leads a discussion regarding the results with the committee members as well as the entire Board. In 2021 the Board engaged Heidrick & Struggles to review our Board practices, processes and culture. The purpose of the review was to increase the effectiveness of the board and included director and management interviews, best practices benchmarking, identifying areas of strength on which to build and areas of opportunity. Among the improvements to board management, and in identifyingaddition to our current practice of having the Chair of the Nominating, Governance and evaluating potential nominees forSustainability Committee conduct confidential interviews with each of the board. TheBoard members to solicit feedback on Board and committee also identifies potential nominees by asking current directorsperformance, every two years the Nominating, Governance and executive officersSustainability Committee intends to notify the committee if they become aware of persons meeting the criteria described above who might be availableengage an independent third party to serveconduct director interviews and will include a formal check-in mid-year on the board, especially business and civic leaders in the communities in our service area. As described above, the committee will also consider candidates recommended by shareholders.effectiveness of implemented changes or adjustments to help ensure accountability for improvements. Once a person has been identified by the Nominating and Corporate Governance Committee as a potential candidate, the committee may collect and review publicly available information to assess whether the person should be considered further. If the committee determines that the person warrants further consideration, the committee chair or another member of the committee will contact the person. Generally, if the person expresses a willingness to be a candidate and to serve on the board, the Nominating and Corporate Governance Committee may request information from the candidate, review the candidate’s accomplishments and qualifications and compare them to the accomplishments and qualifications of any other candidates that the committee might be considering. The committee may also choose to conduct one or more interviews with the candidate. In certain instances, committee members may contact references provided by the candidate or may contact other members of the business community or other persons who may have greater first-hand knowledge of the candidate’s accomplishments. The committee’s evaluation process does not vary based on whether a candidate is recommended by a shareholder.Non-Employee Director Compensation
The following table describes the compensation earned by persons who served as non-employee directors during any part of 2017.
2017 DIRECTOR COMPENSATION | | | | | | | | | | | | | | | | | | Name | Fees Earned or Paid in Cash (1) | | Stock Awards (2) | | All Other Compensation (3) | | Total | | John W. Ballantine | $ | 92,250 |
| | $ | 89,310 |
| | $ | 1,650 |
| | $ | 183,210 |
| | Rodney L. Brown, Jr. | 84,750 |
| | 89,310 | | 1,650 |
| | 175,710 |
| | Jack E. Davis | 141,750 |
| | 89,310 | | 1,650 |
| | 232,710 |
| | David A. Dietzler | 84,750 |
| | 89,310 | | 1,650 |
| | 175,710 |
| | Kirby A. Dyess | 96,000 |
| | 89,310 | | 1,650 |
| | 186,960 |
| | Mark B. Ganz | 84,750 |
| | 89,310 | | 1,650 |
| | 175,710 |
| | Kathryn J. Jackson | 84,750 |
| | 89,310 | | 1,650 |
| | 175,710 |
| | Neil J. Nelson | 99,750 |
| | 89,310 | | 1,650 |
| | 190,710 |
| | M. Lee Pelton | 92,250 |
| | 89,310 | | 1,650 |
| | 183,210 |
| | Charles W. Shivery | 84,750 |
| | 89,310 | | 1,650 |
| | 175,710 |
|
| | | | | | | | | (1)Portland General Electric 2022 Proxy Statement | Amounts in this column include cash retainers, meeting fees and chair fees. | 13 |
| | | (2) | These amounts represent the grant date fair value of restricted stock unit grants made in 2017, the terms of which are discussed below in the section entitled “Restricted Stock Unit Grants.” The annual equity grants (with a grant date fair value of $89,310) were made on April 26, 2017 in respect of services to be performed during the ensuing 12-month period. In addition, in 2017, the grants made to non-employee directors on May 4, 2016 were rescinded and replaced with a grant of equal value made on June 7, 2017, but that award is not reflected in the table above, as it was made in respect of 2016.Corporate Governance |
| | (3) | This column represents amounts earned in respect of dividend equivalent rights under restricted stock unit awards. See the discussion below under “Restricted Stock Unit Grants.” The value of the dividend equivalent rights was not incorporated into the “Stock Awards” column. |
Current Compensation Arrangements for Non-Employee DirectorsDIRECTOR RESIGNATION POLICY
The Company has adopted a director resignation policy, which is contained in our Corporate Governance Guidelines. Under the policy, any incumbent director who fails to receive a majority vote in an uncontested election is expected to tender a resignation within five days following table describes the current compensation arrangements with our non-employee directors: | | | | | | Annual Cash Retainer Fees | | | Annual Cash Retainer Fee for Directors | $ | 50,000 |
| | Additional Annual Cash Retainer Fee for Chairman of the Board | 75,000 |
| | Additional Annual Cash Retainer Fee for Audit Committee Chair | 15,000 |
| | Additional Annual Cash Retainer Fee for Compensation and Human Resources Committee Chair | 11,250 |
| | Additional Annual Cash Retainer Fee for Other Committee Chairs | 7,500 |
| | Annual Committee Service Fee (per committee) | 18,000 |
| | Value of Annual Grant of Restricted Stock Units | 90,000 |
|
certification of election results. The annual cash retainersNominating, Governance and Sustainability Committee will consider the annual committee service fee are paid quarterly in arrears. We will also reimburse certain expenses related to the directors’ service on the board, including expenses in connection with attendance at boardoffer of resignation and, committee meetings. Restricted Stock Unit Grants
Each of our non-employee directors receives an annual grant of restricted stock units. The number of restricted stock units each director receives is determined by dividing $90,000 by the closing price of PGE common stock onwithin 45 days following the date of grant. These grants are typically madethe election of directors, recommend to the Board whether to accept or reject the offer of resignation. The Nominating, Governance and Sustainability Committee will base its decision on factors the committee deems relevant, including the stated reason or aroundreasons why shareholders voted against the director’s reelection and whether the director’s resignation from the Board would be in the best interests of the Company and its shareholders. The Board will act on the Nominating, Governance and Sustainability Committee's recommendation within 90 days after the date of our annualthe shareholders’ meeting at which the election of shareholders.
Each restricted stock unit generally representsdirectors occurred. A director who is required to tender a resignation may not participate in the right to receive one sharedeliberations or decision regarding the offer of common stock at a future date. For 2017, however, directors were given an election to haveresignation. Within four business days after the award settle either in cash (based on the original award amount) or in shares of common stock. All of the directors elected to have their 2017 awards settle in common stock. Provided that the director remains a member of the board, the restricted stock units will vest over a one-year vesting period in equal installments on the last day of each calendar quarter. Restricted stock units do not have voting rightsBoard’s decision with respect to an offer of resignation, the underlying common stock untilCompany will publicly disclose the units vestBoard’s decision and, if applicable, reasons for rejecting the common stock is issued.offer of resignation, in a Form 8-K filed with the SEC.
Each director also is granted one dividend equivalent right with respect to each restricted stock unit. Each dividend equivalent right represents the right to receive an amount equal to the dividends that are paid on one share of common stock and that have a record date between the grant date and vesting date of the related restricted stock unit. The dividend equivalent rights will be settled exclusively in cash, for awards made prior to February 13, 2018, on the date that the related dividends are paid to holders of common stock and, for later awards, on the vest date of the underlying shares.
The grants of restricted stock units and dividend equivalent rights are made pursuant to the terms of the Portland General Electric Company Stock Incentive Plan. The grants are subject to the terms and conditions of the plan and agreements between PGE and each director.
Stock Ownership Requirements for Non-Employee DirectorsSTOCK OWNERSHIP GUIDELINES FOR DIRECTORS
Our Corporate Governance Guidelines require each non-employee director to own shares of PGE common stock with a value equal to at least five times the value of the annual base cash retainer fee for non-employee directors. Non-employee directors must meet this requirement within five years following the first annual meeting at which they are elected. All of our directors either meet the stock ownership requirement or are on track to do so by the applicable target date. Our stock ownership policy for executive officers is described on page 4464 of this proxy statement.Proxy Statement. Outside Directors’ Deferred Compensation PlanSHAREHOLDER AND STAKEHOLDER ENGAGEMENT
The Board and the Company value our shareholder's views and are committed to ongoing constructive dialogue with shareholders to advance long-term value. In 2021, we engaged with shareholders by holding videoconference meetings to discuss corporate governance, board composition, executive compensation, business strategy and other ESG issues. Our Chair participated in all of these meetings. Executive management and members of our Investor Relations team engage regularly with our shareholders to seek their input on a variety of matters, including our strategy and value proposition, financial and operating performance, corporate governance, executive compensation, environmental sustainability and social policies and practices, and management's perspective on regulatory and legislative developments. We also communicate with shareholders through a number of routine forums, including quarterly earnings presentations and other significant events, and other direct communications. In addition, our management also regularly engages with our other stakeholders, including representatives of local communities and organizations, political bodies, and our regulators. We relay feedback we obtain through these conversations to our Board and its committees and work to ensure that we adequately address the concerns of our stakeholders. COMMITMENT FROM OUR BOARD The Board recognizes that its members benefit from service on the boards of other companies and it encourages such service. The Board also believes, however, that it is critical that directors dedicate sufficient time to their service on the Company’s Board. Directors must notify the Chair of the Nominating, Governance and Sustainability Committee and the Corporate Secretary before accepting an invitation to serve on the board of any other company maintainsor becoming an officer of a company. The Chair of the Nominating, Governance and Sustainability Committee reviews and determines whether the position would affect the director's ability to serve on the Board, and in making this determination, the Chair of the Nominating, Governance and Sustainability Committee considers the time commitment of the particular board, and any conflict or interlocking director or officer restrictions that may apply. Further, the Nominating, Governance and Sustainability Committee considers the number of boards a director is on in considering such director's renomination. | | | | | | | | | | 14 | | Portland General Electric 2022 Proxy Statement |
Directors are expected to attend all Board meetings and meetings of committees on which they serve, as well as the Company's Annual Meeting of Shareholders. While the Board understands that circumstances may arise from time to time that prevent a director from attending a meeting, directors are expected to make these meetings a priority. During 2021, each director attended at least 75% of the meetings of the Board and meetings held by all committees on which the director served, and the directors collectively attended 96.96% of all Board and Board committee meetings. All of the directors then in office also attended the Company's 2021 Annual Meeting of Shareholders. There were six meetings of the Board of Directors in 2021. Under our Corporate Governance Guidelines, the non-management directors must meet in executive session without management at least quarterly. The Chair of the Board presides over executive sessions of the non-management directors. In the event that the non-management directors include directors who are not independent under the NYSE listing standards, our Corporate Governance Guidelines require the independent directors to meet separately in executive session at least once a year. There were 6 executive sessions of the non-management directors in 2021. Throughout 2021, all of our non-management directors were independent under the NYSE listing standards and our Categorical Standards for Determination of Director Independence. Accordingly, the 6 meetings of our non-management directors in 2021 also constituted meetings of our independent directors. DIRECTOR ORIENTATION AND CONTINUING EDUCATION New directors receive information about our business, strategy and management team to familiarize them with the Company before their first Board meeting. We also arrange a series of orientation meetings between each new director and senior leaders throughout the organization to help new directors understand the operations of each organizational unit as it relates to their specific Board and committee duties. We typically provide continuing education to directors annually on specific topics that relate to our strategic priorities. These sessions are typically led by management. Directors are encouraged to do site visits to our facilities. Directors may also attend external education programs and are reimbursed by the Company for the cost of those programs. TRANSACTIONS WITH RELATED PERSONS Our Board recognizes that transactions between the Company and certain individuals and entities, including the Company’s directors and officers, may raise questions as to whether those transactions are consistent with the best interests of the Company and its shareholders. Accordingly, the Board has adopted a written Related Person Transactions Policy, which addresses the Company’s policies regarding the review, approval, or ratification of certain transactions between the Company and certain “related persons,” including our directors, executive officers, director nominees, and owners of more than 5% of any class of our voting securities. Under the policy, transactions between the Company and a related person involving more than $120,000 in which the related person has a direct or indirect material interest are not permitted unless the Nominating, Governance and Sustainability Committee determines that the transaction is not inconsistent with the best interests of the Company and its shareholders. Before entering into such a transaction with the Company, the related person or the business unit leader responsible for the potential transaction is required to provide notice to the General Counsel of the facts and circumstances of the proposed transaction. Certain types of transactions—including executive and director compensation that is required to be disclosed under SEC disclosure rules and the provision of tariff-based utility service—are exempt from the policy. Our Related Person Transactions Policy supplements and does not supersede other policies that apply to transactions with related persons, such as our Code of Business Ethics and Conduct. Under our Code of Business Ethics and Conduct, our directors, officers, and employees must report any violation of the code or any situation or matters that may be considered to be unethical or a conflict of interest. Any conflict of interest under the code involving a director, an executive officer, or our Controller is reviewed by the Audit and Risk Committee. Only the Audit and Risk Committee may waive such a conflict, which will be promptly disclosed to our shareholders as required by law. | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 15 |
COMMUNICATIONS WITH THE BOARD The Board and the Audit and Risk Committee have approved a process for handling communications to the Board and its committees. Shareholders and other interested parties may submit written communications to the Board (including the Chair), a Board committee, or the non-management directors as a group. Communications may include the reporting of concerns related to governance, corporate conduct, business ethics, financial practices, legal issues and accounting or audit matters. Communications should be in writing and addressed to the Board, or any individual director or group or committee of directors by either name or title, and should be sent in care of: Portland General Electric Company Attention: Corporate Secretary 121 SW Salmon Street, 1WTC1301 All appropriate communications received from shareholders and other interested parties will be forwarded to the Board, or the specified director, Board committee or group of directors, as appropriate. A full description of our process for handling communications with the Board is published on our website at https://investors.portlandgeneral.com/corporate-governance and is available in print to shareholders, without charge, upon request to Portland General Electric Company at its principal executive offices at 121 SW Salmon Street, 1WTC1301, Portland, Oregon 97204, Attention: Corporate Secretary. | | | | | | | | | | 16 | | Portland General Electric 2022 Proxy Statement |
Role of the Board of Directors Our Board is elected by our shareholders to oversee management in its operation of the Company. In exercising its fiduciary duties, the Board’s goal is to build long-term value for our shareholders and to ensure the vitality of the Company for our customers, employees and the other individuals and organizations who depend on us. Key responsibilities of our Board include: •Establishing a corporate governance framework; •Overseeing and advising management on Company strategy; •Overseeing the Company's risk management programs; •Overseeing the Company's ESG programs; •Overseeing the Company's human capital management and corporate culture; and •Conducting Board and executive succession planning. In the pages that follow we provide information about how our Board fulfills these responsibilities, as well as other important policies and practices of our Board.
Board Oversight of Strategy | | | | | | | | | | | | | | | | Strategy for Clean Energy Future | | | | | | | Strategic Goals | | | | | | | | | | | | Decarbonize Power | | Electrify the Economy | | Advance our Performance | | | | | | | Reduce greenhouse gas emissions by at least 80% by 2030 and 100% by 2040 | | Increase beneficial electricity use to capture the benefits of new technology while building an increasingly clean, flexible and reliable grid | | Performing as a business by improving work efficiency, the safety of our coworkers, and the reliability of our systems and equipment | | How we will achieve our goals | | | | | | | Accelerating the clean energy transformation | | Delivering cleaner, integrated customer solutions | | Increasing operational efficiency | | | | | |
One of the Board's primary functions is to assist management with the development of the Company's long-term business strategy. Our Board conducts annual offsite Board sessions focused solely on the Company's strategy. During these sessions, the Board and management discuss the competitive landscape in our industry, emerging technologies, significant business risks and opportunities, and strategic priorities of the Company. These sessions have generally included presentations provided by outside experts and business leaders on matters of strategic significance to the Company. Directors with particular expertise in a strategic area also confer with management outside of Board meetings. Throughout the year, our management team regularly reports to the Board on the execution of our long-term strategic plans, the status of important projects and initiatives, and the key opportunities and risks facing the Company. For more information on our long-term strategy, see page 3 of this Proxy Statement and our 2021 Annual Report. | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 17 |
Board Oversight of Risk Management The Board and its committees have broad responsibility for the oversight of significant strategic, operational, financial, reputational and ESG risk, and actively review our enterprise risk management process and monitor strategic and emerging risks. The Board of Directors is responsible for assessing whether management has put in place effective systems to identify, evaluate, and manage the material risks facing the Company. The Board satisfies its oversight function through regular reporting from management on areas of material risk, including strategic, operational, cybersecurity, environmental, financial, legal and regulatory risks. In addition, management reports each quarter to the Audit and Risk Committee on activities and findings of the Company’s risk management program. At least annually, the Board and the Finance Committee also review corporate goals and approve capital budgets to ensure they are aligned with the Company's strategy. While the full Board has ultimate responsibility for oversight of risk management, particularly with regard to strategic risks, each of the standing committees of the Board has been assigned a role in assisting the Board with its oversight responsibilities. Key risk areas overseen by the Board's committees are shown below: | | | | | | | Committee | Key Areas of Responsibility | | Audit and Risk | •Oversees the activities of Executive Risk Committee (described below) •Oversees the Company's guidelines, processes and systems to govern the process by which risk assessment and risk management is undertaken, and the steps taken to monitor and mitigate enterprise risks •Oversees financial reporting and internal controls, including the internal controls related to ESG disclosures and metrics •Oversees major financial risk exposures and the steps taken to monitor and mitigate these exposures •Receives regular reports on litigation, internal audit and compliance (including environmental), as well as deep dive reports on specific risk topics •Oversees cybersecurity and information technology risks and developments •Oversees enterprise wide environmental, climate change, social and other ESG related risks and developments | Compensation and
Human Resources | •Assesses and monitors the risks in the Company's compensation plans and programs. The Compensation and Human Resources Committee's risk assessment processes are discussed under Other Compensation Policies and Practices - Risk Management on page 63 •Reviews human capital management matters, including talent acquisition, management and retention strategies, programs and initiatives, including DEI programs and results, workforce health and safety and any required human capital disclosures including the DEI commitments •Reviews succession planning for senior leaders (other than the CEO) |
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| | | | | | | Finance | •Oversees risks in the level of capital spending relative to approved capital budgets and approves significant spending variances and projects not included in approved capital budgets •Oversees financial risks, including liquidity, credit, capital market, energy trading, capital projects and insurance | Nominating, Governance
and Sustainability | •Identifies director candidates with skills and experience valuable in oversight in the Company's key enterprise risks and strategic matters •Advises the Board regarding the Board's organization, membership and structure, selection of the independent chair of the Board, the Board and the committee self-evaluation process, and other corporate governance practices to help position the Board to effectively carry out its risks and oversight responsibility •Reviews succession planning for CEO •Reviews and monitors ESG trends and provides strategic oversight over the Company's sustainability and ESG strategy and policies •Reviews the Company's political engagement policy, and any political and charitable contributions annually |
Management is responsible for day-to-day identification and management of risk. To ensure consistency and comprehensiveness in its approach, the Company has established an Executive Risk Committee to oversee the Company's risk management programs. One core function of the Executive Risk Committee is to sponsor an annual enterprise-wide risk assessment, the results of which are used to inform the Company's goals and priorities for the next year. The Company has also established standing executive committees with responsibility for managing risks over defined areas and reporting as appropriate to the Executive Risk Committee or the Audit and Risk Committee. These include our Integrated Security, Operations, People, Strategy, and Customer Executive Committees. SELECTED AREA OF RISK OVERSIGHT | | | | | | | | | | | | | | | | Cybersecurity | The Company has identified cybersecurity as a key enterprise risk. The Board has assigned primary responsibility for cybersecurity oversight to the Audit and Risk Committee, which receives regular cybersecurity updates that focus on cybersecurity threats, defenses, and data analytics that impact our most critical assets as well as including cybersecurity risks in the key risk reports as discussed above. In addition, the Board has established a Cyber Incident Response Committee, which functions as a standby committee authorized to act on behalf of the Board in the event of a significant cybersecurity incident. This Cyber Incident Response Committee is composed of all the members of the Audit and Risk Committee and the Chair of the Board. The Chair of the Board serves as the Chair of that committee.
Management established an integrated security committee comprised of a multidisciplinary management team to provide governance and integrated strategic direction for the identification, protection and detection of cybersecurity and physical risks. This committee reports to the Integrated Security Executive Committee and the Executive Risk Committee, as discussed above. |
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Board Oversight of ESG The Board and its committees oversee safety, climate change, diversity, equity and inclusion (DEI) and other ESG risks and opportunities as an integral part of their oversight of our strategy. ESG issues are core to our strategy and therefore incorporated into topics reviewed at each Board meeting. Responsibility for ESG performance is integrated with the policies and principles that govern our Company. The Board regularly reviews and monitors risks arising from climate change related events that impact our business, such as ice storms and wildfires and oversees the mitigation efforts for such events. The Board oversees the impact of legislation and regulation on our clean and renewable energy and transportation electrification strategy and monitors progress towards alignment with local, state or federal goals. In addition, the Board approves capital budgets that reflect allocation decisions towards system-wide resilience and customer facing-programs, as well as financing arrangements that have key ESG metrics to determine success. The Board also reviews community engagement and DEI initiatives to ensure that they advance our strategic goals. Key risk areas overseen by the Board and the committees are shown below: SUSTAINABILITY AND ESG GOVERNANCE FRAMEWORK Management is responsible for day-to-day management of identifying and achieving sustainability and ESG related goals. To ensure consistency and comprehensiveness in its approach, the Company has established a Sustainability and Environmental, Social and Governance Steering Committee to oversee the execution of the goals. This committee reports to the Strategy Executive Steering Committee. Each business area is responsible for certain aspects of ESG and sustainability, and uses effective performance management techniques to align employees around the successful execution of our efforts to achieve our goals. SELECTED AREA OF ESG OVERSIGHT | | | | | | | | | | | | | | | | Diversity, Equity and Inclusion | The Board’s commitment to review and guide management on our corporate culture and DEI initiatives is also reflected in our Corporate Governance Guidelines. The Board reviews the Company’s DEI progress semi-annually, and monitors our commitments, metrics and trends related to workforce representation, pay equity, advancement opportunities and culture/employee sentiment. The Board will continue to monitor our DEI commitments to enhance transparency and accountability. |
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| | | | | | | | | | | | | | | Political Engagement
and Disclosure | Political developments can have a significant impact on the Company and our stakeholders. Therefore, we participate in the political process through regular engagement with public officials and policy makers, and by making contributions to candidates, parties and political action committees from across the political spectrum that support policies that help advance our business strategy, including clean and renewable energy and efficient electrification. We will only make political contributions that comply with the law and adhere to our Political Engagement Policy. All contributions are approved by the most senior officer responsible for government affairs or the President and CEO. Exceptions to the Political Engagement Policy must be approved by the Vice-President of Public Affairs and the General Counsel.
Management publishes an annual report disclosing contributions from corporate funds to campaign committees, political action committees and ballot measure committees. This annual report can be found at https://investors.portlandgeneral.com/corporate-governance. The Nominating, Governance and Sustainability Committee reviews the annual report and the Political Engagement Policy at least annually and receives a report on any significant exceptions or waivers to the Political Engagement Policy. The Nominating, Governance and Sustainability Committee also periodically reviews with management the strategic priorities for the Company’s political and policy lobbying and political contributions.
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Board Oversight of Senior Management Succession Planning, Human Capital Management and Culture Our Board understands that our people and our culture are vital to our continued success. We seek to attract and retain a talented, motivated, and diverse workforce and to maintain a culture that reflects our core values, our drive for performance, and our commitment to acting with the highest levels of honesty, integrity, and compliance. RELAUNCHING OUR GUIDING BEHAVIORS Our Guiding Behaviors have been foundational to how we do our work for over 25 years. We're simplifying our employee experience and improving the way we work together by renewing our shared commitment to intentionally demonstrating these behaviors every day. Our Guiding Behaviors – with some updates – were relaunched January 2022. | | | | | | | | | | | OUR GUIDING BEHAVIORS EMPOWER OUR EMPLOYEES TO LEAD THE ENERGY FUTURE BY: •Giving everyone a single set of standards to follow •Shaping our customer centric, purpose-driven and results-oriented culture •Enabling our workforce to achieve the Company's purpose •Recognizing and reinforcing our commitments through our performance management systems
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SENIOR MANAGEMENT SUCCESSION The Board believes CEO succession planning is one of its most important responsibilities. In accordance with our Corporate Governance Guidelines, the Board oversees CEO and senior management succession planning and talent development with the assistance of the Nominating, Governance and Sustainability Committee and the Compensation and Human Resources Committee in an effort to ensure there is a pool of internal candidates who can assume executive officer positions. At least annually, the Board reviews succession plans for senior management, which includes a review of the qualifications and development plans of potential internal candidates and diversity of the succession pipeline. Directors also regularly have an opportunity to meet and engage with potential internal senior management successors at Board, committee meetings and during visits to our infrastructure facilities. In addition, the Compensation and Human Resources Committee regularly conducts more in-depth reviews of development plans for promising management talent. HUMAN CAPITAL MANAGEMENT The Compensation and Human Resources Committee has primary responsibility for overseeing the Company's human capital management programs. In addition to providing input on leadership succession planning and talent development, the Compensation and Human Resources Committee regularly engages with management on a broad range of human capital management topics, including health and safety, diversity and inclusion, pay equity, strategic workforce planning, employee engagement, employee well-being programs, and performance management.
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ETHICS AND COMPLIANCE To establish the foundation of our ethics and compliance culture, the Board has adopted a Code of Business Ethics and Conduct, which all directors, officers, and employees are expected to adhere to and affirm. The code covers all areas of workplace conduct, including conflicts of interest, unfair or unethical use of corporate opportunities, protection of confidential information, and legal and regulatory compliance. In addition, our CEO, CFO, and Controller must abide by the Code of Ethics for Chief Executive and Senior Financial Officers. Employees are expected to report any violation of our ethics codes and may do so using a variety of methods, including an anonymous third-party hotline. In addition, the Audit and Risk Committee has also adopted procedures for receiving and addressing complaints regarding accounting, internal accounting controls, or auditing matters. The Audit and Risk Committee receives quarterly reports from our Ethics and Governance and Compliance departments on key compliance metrics and employee conduct matters. | | | Find Our Ethics Codes Online The Code of Business Ethics and Conduct and the Code of Ethics for Chief Executive and Senior Financial Officers are available on our website at https://investors.portlandgeneral.com/corporate-governance or in print to shareholders, without charge, upon request to Portland General Electric Company, 121 SW Salmon Street, 1WTC1301, Portland, Oregon 97204, Attention: Corporate Secretary. Any amendments to either of these codes, and any waiver of the Code of Ethics for Chief Executive and Senior Financial Officers, and of certain provisions of the Code of Business Ethics and Conduct for directors, executive officers or our Controller, will be disclosed to our shareholders to the extent required by law. |
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Board Committees The Board has established four standing committees: the Audit and Risk Committee, the Nominating, Governance and Sustainability Committee, the Compensation and Human Resources Committee, and the Finance Committee. Each standing committee has a Board-approved charter, which is reviewed annually by the respective committee and by our Nominating, Governance and Sustainability Committee. The Board may also establish temporary committees as needed to address specific issues that arise from time to time. Each year our Nominating, Governance and Sustainability Committee reviews the composition and mandates of our standing committees to ensure that they continue to support the effective execution of the Board's responsibilities. The Board approves committee and chair assignments at least annually. Each Board committee may retain and compensate consultants or other advisors as necessary for it to carry out its duties. To the extent permitted by law and the NYSE listing standards, Board committees may form subcommittees and delegate authority to the subcommittees, or to a committee chair individually. Below are brief descriptions of each standing Board committee. For more detailed descriptions, please refer to the committee charters available on our website at https://investors.portlandgeneral.com/corporate-governance. | | | | | | | | | | | | | AUDIT AND RISK COMMITTEE | | | | | Chair Kathryn Jackson Other Members Mark Ganz Michael Lewis Michael Millegan Neil Nelson Lee Pelton Meetings in 2021: 5 Independence/Qualifications: •All members are independent within the meaning of the NYSE listing standards and the Company's Categorical Standards. •All members are “financially literate” within the meaning of the NYSE listing standards. •Mr. Ganz is an “audit committee financial expert” within the meaning of applicable SEC rules. | | | Key Responsibilities | | | •Assists the Board in its oversight of our financial statements, independent auditors’ qualifications, independence and performance, and internal controls over financial reporting | | | •Appoints and oversees the work of our registered public accounting firm | | | •Reviews the annual audited financial statements and quarterly financial information with management and the independent registered public accounting firm | | | •Pre-approves all audit, audit-related, tax and other services, if any, provided by the registered independent public accounting firm | | | •Appoints and oversees the work of the Company's Director of Internal Audit Services and approves the Company's annual internal audit plan and budget | | | •Approves the Audit and Risk Committee Report for inclusion in the Company's proxy statement | | | •Oversees the development and implementation of the Company's ethics and compliance program | | | •Assists the Board with the oversight of the Company's risk management program | | •The Audit and Risk Committee's role in risk oversight and ESG are described above under Board Oversight of Risk and Board Oversight of ESG | | | | |
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| | | | | | | | | | | | | COMPENSATION AND HUMAN RESOURCES COMMITTEE | | | | | Chair: James Torgerson Other Members: Rodney Brown Kirby Dyess Mark Ganz Marie Oh Huber Meetings in 2021: 7 Independence/Qualifications: •All members are independent within the meaning of the NYSE listing standards and the Company's Categorical Standards. | | | Key Responsibilities | | | •Evaluates the performance of the CEO and determines her compensation together with the independent directors | | | •Approves the compensation of the executive officers other than the CEO | | | •Reviews the Company's non-management director compensation program and recommends appropriate levels of compensation for non-employee directors | | | •Advises on human capital management matters, including talent management strategies, programs and initiatives, including DEI programs and results, workforce health and safety and any required human capital disclosures including the DEI commitments | | | •Reviews the Compensation Discussion and Analysis contained in the Company's proxy statement and approves the Compensation and Human Resources Committee Report for inclusion in the proxy statement | | | •Together with the other independent directors, oversees the Company’s incentive compensation clawback policy and recovery of performance-based compensation awards | | | •Reviews successions plans and diversity pipeline for executive roles | | | •Oversees the Company's culture metrics and employee engagement | | | •Reviews and approves severance or termination payment arrangements for executive officers | | | •The Compensation and Human Resources Committee's role in ESG is described above under Board Oversight of ESG | | | | |
Compensation and Human Resources Committee Interlocks All directors who served as a member of the Compensation and Human Resources Committee during 2021 were independent directors and no member was an employee or former employee of the Company or any of its subsidiaries. During 2021, none of our executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on our Compensation and Human Resources Committee or Board or had any relationship with the Company requiring disclosure under SEC regulations. | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 25 |
| | | | | | | | | | | | | FINANCE COMMITTEE | | | | | Chair: Michael Lewis Other Members: Rodney Brown Dawn Farrell (1) Kathryn Jackson Michael Millegan James Torgerson Meetings in 2021: 4 Independence/Qualifications: •All members are independent within the meaning of the NYSE listing standards and the Company's Categorical Standards for Determination of Director Independence. | | | Key Responsibilities | | | •Reviews and recommends to the Board annual financing plans and capital and operating budgets | | | •Reviews and approves or recommends to the Board certain costs for projects, initiatives, transactions and other activities within the ordinary business of the Company | | | •Reviews our capital and debt structure, approves or recommends to the Board the issuance of debt, and recommends to the Board the issuance of equity | | | •Reviews and recommends to the Board dividends, dividend payout goals and objectives | | | •Reviews earnings forecasts | | | •Assists the Board in overseeing the management of results associated with the Company’s power operations, capital projects, finance activities, credit and liquidity | | | •Reviews and recommends to the Board investment policies and guidelines | | | •Oversees the management of benefit plan assets | | | •The Finance Committee's role in risk oversight and ESG is described above in Board Oversight of Risk and Board Oversight of ESG | | | | | (1)Ms. Farrell joined the committee January 1, 2022 | |
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| | | | | | | | | | | | | NOMINATING, GOVERNANCE AND SUSTAINABILITY COMMITTEE | | | | | Chair: Lee Pelton Other Members: Jack Davis Kirby Dyess Dawn Farrell (1) Marie Oh Huber Neil Nelson Meetings in 2021: 4 Independence/Qualifications: •All members are independent within the meaning of the NYSE listing standards and the Company's Categorical Standards.
| | | Key Responsibilities | | | •Reviews the size of the Board and recommends to the Board any appropriate changes | | | •Identifies and recommends to the Board individuals qualified to serve as directors and on committees of the Board | | | •Takes a leadership role in shaping our corporate governance, including the policies and practices described in our Corporate Governance Guidelines | | | •Reviews succession plans for the CEO, either as a committee or together with the full Board | | | •Oversees the self-assessment of the Board and its committees | | | •Reviews any Company transactions involving directors, nominees, executive officers and other “related persons” in accordance with the Company’s Related Person Transaction Policy | | | •Provides strategic oversight on the (i) formulation of sustainability and ESG strategy and policies, including the Company's engagement with stakeholders, and its ESG report and (ii) issues related to board leadership, ethics, and integrity | | | •Reviews and reports to the Board on environmental, climate change, sustainability, social and other related ESG matters affecting the Company | | | •Reviews and approves the Company's Political Engagement Policy and reviews the Company's strategic priorities on political and policy lobbying, political contributions and charitable contribution programs | | | •The Nominating, Governance and Sustainability Committee's role in risk oversight and ESG is described above in Board Oversight of Risk and Board Oversight of ESG | | | | | | (1) Ms. Farrell joined the committee January 1, 2022 | |
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Director Compensation The Company offers non-management directors both cash and equity compensation. Cash compensation is provided in the form of annual cash retainers for Board and committee service. Equity is provided in the form of an annual grant of restricted stock units with time-based vesting conditions (RSUs). Ms. Pope is not paid any additional compensation for her services as a director. The Company's 2021 compensation arrangements, are described below. | | | | | | | | | | Annual Cash Retainer and Equity Awards | Amount ($) | | Annual Cash Retainer for Board Service | 50,000 | | | Annual Cash Retainer for Board Chair | 100,000 | | | Annual Cash Retainer for Audit and Risk Committee Chair | 15,000 | | | Annual Cash Retainer for Other Active Standing Committee Chairs | 12,500 | | | Annual Cash Retainer for Committee Service (per committee) | 18,000 | | | Grant-Date Value of Annual RSU Award | 110,000 | |
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QUARTERLY CASH RETAINER Directors' cash retainers for Board and committee service are paid quarterly in arrears. We also reimburse certain expenses related to their Board service, including expenses related to attendance at Board and committee meetings. Directors are not paid meeting fees. ANNUAL EQUITY AWARDS Under our 2021 equity compensation arrangements, each non-management director receives an annual grant of a number of RSUs determined by dividing $110,000 by the closing price of the Company's common stock on the grant date, rounding to the nearest whole share. Each award is fully vested when granted. Directors who join the Board during the year are awarded a pro rata portion of the annual award, based on the number of calendar months during which the director served on the Board that year. DIRECTOR DEFERRED COMPENSATION PLAN Non-management directors first appointed or elected to the Board before April 23, 2019 are eligible to participate in the Company's 2006 Outside Directors’Directors' Deferred Compensation Plan to provide directors with the opportunityPlan. The plan allows participants to defer the payment of compensation for their board service. Directors may defer fees andBoard retainers as well as any other form of cash remuneration.compensation they may receive from the Company. Deferral elections must be made no later than December 15 of the taxable year preceding the year in which the compensation is earned. Deferrals accumulate in an account that earns interest at a rate that is one-half a percentage point higher than the annual yield on Moody’s Average Corporate Bond rate. BenefitIndex. Directors may elect to receive payments, which commence sixty-five (65) days after the end of the month in which the participant separates from board service, under the plan may be made in a lump sum or in monthly installments overfor a maximumperiod of up to 180 months. Death benefits, which consists of the balance of the participant’s account including interest, are payable to the beneficiary commencing 65 days after the end of the month in which the participant dies in the same form as elected for payments at separation from service. These benefits are unfunded and depend on the continued solvency of the Company. The following directors participate in the Company's 2006 Outside Directors' Deferred Compensation Plan: Rodney Brown, Jack Davis, Kirby Dyess, and Michael Millegan. DETERMINATION OF DIRECTOR COMPENSATION Director Independence
For a director to be considered independent under the New York Stock Exchange corporate governance listing standards,The compensation of our non-management directors is determined by the Board of Directors must affirmatively determine thatupon a recommendation from the director does not have any direct or indirect material relationship with the company, including any of the relationships specifically proscribed by the New York Stock Exchange independence standards.Compensation and Human Resources Committee. The board considers all relevant facts and circumstances in making its independence determinations. Only independent directors
may serve on our Audit Committee, Compensation and Human Resources Committee and Nominating and Corporate Governance Committee.
In addition to complying with New York Stock Exchange independence standards, our Board of Directors has adopted a formal set of categorical standards with respect to the determination of director independence. Under our Categorical Standards for Determination of Director Independence, a director must be determined to have no material relationship with the company other than as a director. These standards specify the criteria by which the independence of our directors will be determined, including guidelines for directors and their immediate families with respect to past employment or affiliation with the company,makes its customers orrecommendation after receiving input from its independent registered public accounting firm.compensation consultant and management. The standards also restrict commercialCompensation and not-for-profit relationships withHuman Resources Committee retained FW Cook to evaluate and make recommendations regarding director compensation for 2021. FW Cook's evaluation included identifying industry trends and market data for directors' compensation, reviewing and identifying peer group companies, and evaluating director compensation data for these companies. Management's input focuses on compliance, legal and administrative matters.
In October 2021, FW Cook identified both the company,Company's non-management director compensation annual cash retainer and prohibit Audit Committee members from having any accounting, consulting, legal, investment banking or financial advisory relationships with the company. Directors mayequity compensation, as below marketplace standards. In 2019 and in 2020 non-management director compensation was not be given personal loans or extensions of creditincreased as recommended by the company, and all directors are required to deal at arm’s length with the company and its subsidiaries, and to disclose any circumstance that may result in the director no longer being considered independent. The full text of our Categorical Standards for Determination of Director Independence is published as an addendum to our Corporate Governance Guidelines, which are available under the “Corporate Governance” section of our website at investors.portlandgeneral.com. During its review of director independence, the board considered whether there were any transactions or relationships between the company and any director or any member of his or her immediate family (or any entity of which a director or an immediate family member is an executive officer, general partner or significant equity holder). As part of its review of director independence, the board considered Mark B. Ganz’ position as President and Chief Executive Officer and a director of Cambia Health Solutions, Inc. (“CHS”) and CHS’ business relationship with the company during the last three fiscal years. PGE and Local Union No. 125 of the International Brotherhood of Electrical Workers have established a trust that is partly funded by PGE to provide health and welfare benefits to employees and retirees who are covered by one of the collective bargaining agreements between PGE and the union. By action of the Board of Trustees that administers the trust, the trust engaged Regence BlueCross BlueShield of Oregon, a subsidiary of CHS, to provide health products and services. The board also considered whether there were charitable contributions to not-for-profit organizations for which a director or an immediate family member of a director serves as a board member or executive officer. In addition, the board considered that in the ordinary course of our business we provide electricity to some directors and entities with which they are affiliated on the same terms and conditions as provided to other customers of the company.
As a result of this review, the board affirmatively determined that the following directors nominated for election at the annual meeting are independent under the New York Stock Exchange listing standards and our independence standards: John W. Ballantine, Rodney L. Brown, Jr., Jack E. Davis, David A. Dietzler, Kirby A. Dyess, Mark B. Ganz, Kathryn J. Jackson, Neil J. Nelson, M. Lee Pelton and Charles W. Shivery.
The board determined that Maria M. Pope is not independent because of her employment as the company’s President and Chief Executive Officer.
Board Committees
The Board of Directors has four standing committees: the Audit Committee, the Nominating and Corporate Governance Committee, the Compensation and Human Resources Committee, and the Finance Committee. Current copiesin light of the charters for each of these committees are available under the “Corporate Governance” section of our website at investors.portlandgeneral.com. The Board of Directors has determined that eachimpact of the Audit Committee, the Nominating and Corporate Governance Committee andpandemic on communities in our service area. After reviewing 2021 data the Compensation and Human Resources Committee is comprised solely of independent directors in accordancerecommended and the Board agreed to adjustments to non-management director compensation to bring them into reasonable alignment with the New York Stock Exchange listing standards.market and to increase service vesting requirements.
The table below provides membership information for each of these standing committees as of March 1, 2018. | | | | | | | | | | Name | | Audit
CommitteePortland General Electric 2022 Proxy Statement
| | Nominating and
Corporate
Governance
Committee
| | Compensation and
Human Resources
Committee
| | Finance
Committee
| John W. Ballantine | | | | | | ü | | Chair | Rodney L. Brown, Jr. | | | | ü | | | | ü | Jack E. Davis | | | | ü | | | | | David A. Dietzler | | ü | | ü | | | | | Kirby A. Dyess | | ü | | | | Chair | | | Mark B. Ganz | | ü | | | | ü | | | Kathryn J. Jackson | | | | | | ü | | ü | Neil J. Nelson | | Chair | | | | ü | | | M. Lee Pelton | | | | Chair | | | | ü | Charles W. Shivery | | ü | | | | | | ü29 |
The Audit Committee met four times in 2017. Under the terms of its charter, the Audit Committee must meet at least once each quarter. The committee regularly meets separately with management, our internal auditor and our independent registered public accounting firm. The responsibilities of the committee include:
Retaining our independent registered public accounting firm;
Evaluating the qualifications, independence and performance of our independent registered public accounting firm;
Overseeing matters involving accounting, auditing, financial reporting and internal control functions, including the integrity of our financial statements and internal controls;
Approving audit and permissible non-audit service engagements to be undertaken by our independent registered public accounting firm through the pre-approval policies and procedures adopted by the committee;
Reviewing the performance of our internal audit function;
Reviewing the company’s annual and quarterly financial statements and the company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our reports on Forms 10-K and 10-Q and recommending to the Board of Directors whether the financial statements should be included in the annual report on Form 10-K; and
Assisting the board in fulfilling its responsibility to oversee our risk management program.
The committee has the authority to secure independent expert advice to the extent the committee determines it to be appropriate, including retaining independent counsel, accountants, consultants or others, to assist the committee in fulfilling its duties and responsibilities.
The Board of Directors has determined that Mr. Dietzler, Mr. Nelson and Mr. Shivery are “audit committee financial experts” as that term is defined under rules of the Securities and Exchange Commission.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Nominating and Corporate Governance Committee met two times in 2017. Under the terms of its charter, the committee must meet at least two times annually. The responsibilities of the committee include:
Identifying and recommending to the board individuals qualified to serve as directors and on committees of the board;
Advising the board with respect to board and committee composition and procedures;
Developing and recommending to the board a set of corporate governance guidelines and reviewing such guidelines at least annually;
Reviewing the succession plans for the Chief Executive Officer and senior officers either as a committee, or together with the full board; and
Overseeing the self-evaluation of the board and coordinating the evaluations of the board committees.
The committee may retain search firms to identify director candidates, and has the sole authority to approve the search firm’s fees and other retention terms. The committee also may retain independent counsel or other consultants or advisers as it deems necessary to assist in its duties to the company.
COMPENSATION AND HUMAN RESOURCES COMMITTEE
The Compensation and Human Resources Committee met five times in 2017. Under the terms of its charter, the committee must meet at least two times annually. The responsibilities of the committee include:
Together with the other independent directors, evaluating annually the performance of the Chief Executive Officer in light of the goals and objectives of our executive compensation plans, both generally and with respect to approved performance goals;
Evaluating annually the performance of the other executive officers in light of the goals and objectives applicable to such executive officers, which may include requesting that the Chief Executive Officer provide performance evaluations for such executive officers and recommendations with respect to the compensation of such executive officers (including long-term incentive compensation);
Together with the other independent directors, determining and approving the compensation of the Chief Executive Officer in light of the evaluation of the Chief Executive Officer’s performance;
Determining and approving the compensation of the other executive officers in light of the evaluation of such officers’ performance;
Reviewing and approving, or recommending approval of, perquisites and other personal benefits to our executive officers;
Reviewing and recommending the appropriate level of compensation for board and committee service by non-employee members of the board;
Reviewing our executive compensation plans and programs annually and approving or recommending to the board new compensation plans and programs or amendments to existing plans and programs; and
Reviewing and approving any severance or termination arrangements to be made with any executive officer.
Under its charter, the committee has authority to retain compensation consultants to assist the committee in carrying out its responsibilities, including sole authority to approve the consultants’ fees and other retention terms. The committee has engaged Frederic W. Cook & Co., Inc. (“F.W. Cook”) to advise it on matters related to executive compensation.
The committee is supported in its work by members of our Compensation and Benefits Department. The formal role of our executive officers in determining executive compensation is limited to the responsibility of the Chief Executive Officer to provide the committee with a self-evaluation, as well as an evaluation of the performance of the other executive officers. The committee may also seek input from our executive officers in developing an overall compensation philosophy and in making decisions about specific pay components.
The committee has authority to conduct or authorize investigations or studies of matters within the committee’s scope of responsibilities, and to retain independent counsel or other consultants or advisers as it deems necessary to assist it in those matters. To the extent permitted by applicable law, regulation or the New York Stock Exchange listing standards, the committee may form subcommittees and delegate to the subcommittees, or to the committee chairperson individually, such power and authority as the committee deems appropriate.
FINANCE COMMITTEE
The Finance Committee met four times in 2017. Under the terms of its charter, the committee meets as often as it determines necessary to carry out its duties and responsibilities, but no less frequently than annually. The responsibilities of the committee include:
Reviewing and recommending to the board financing plans, and annual capital and operating budgets, proposed by management;
Reviewing, and approving or recommending, certain costs for projects, initiatives, transactions and other activities within the ordinary business of the company;
Reviewing our capital and debt structure, approving or recommending to the board the issuance of secured and unsecured debt, and recommending to the board the issuance of equity;
Reviewing and recommending to the board dividends, including changes in dividend amounts, dividend payout goals and objectives;
Reviewing earnings forecasts;
Assisting the board in fulfilling its oversight responsibilities with respect to the management of risks associated with the company’s power operations, capital projects, finance activities, credit and liquidity;
Reviewing and recommending to the board investment policies and guidelines and the use of derivative securities to mitigate financial and foreign currency exchange risk; and
Overseeing the control and management of benefit plan assets and investments.
Policies on Business Ethics and Conduct
All of our directors, officers and employees are required to abide by our Code of Business Ethics and Conduct. This code of ethics covers all areas of professional conduct, including conflicts of interest, unfair or unethical use of corporate opportunities, protection of confidential information, compliance with all applicable laws and regulations, and oversight and compliance. Our Chief Executive Officer, Chief Financial Officer and Controller are also required to abide by the Code of Ethics for Chief Executive and Senior Financial Officers. These ethics codes form the foundation of a comprehensive program of compliance with our Guiding Behaviors - Be Accountable, Earn Trust, Dignify People, Make the Right Thing Happen, Positive Attitude and Team Behavior - and all corporate policies and procedures to ensure that our business is conducted ethically and in strict adherence to all laws and regulations applicable to us. Employees are responsible for reporting any violation, including situations or matters that may be considered to be unethical or a conflict of interest under the ethics codes.
The full texts of both the Code of Business Ethics and Conduct and the Code of Ethics for Chief Executive and Senior Financial Officers are available under the “Corporate Governance” section of our website at investors.portlandgeneral.com or in print to shareholders, without charge, upon request to Portland General Electric Company, 121 SW Salmon Street, 1WTC1301, Portland, Oregon 97204, Attention: Corporate Secretary. Any future amendments to either of these codes, and any waiver of the Code of Ethics for Chief Executive and Senior Financial Officers, and of certain provisions of the Code of Business Ethics and Conduct for directors, executive officers or our Controller, will be disclosed to our shareholders to the extent required by law.
As required by New York Stock Exchange rules, our audit committee has procedures in place regarding the receipt, retention and treatment of complaints received regarding accounting, internal accounting controls or auditing matters and allowing for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters. In addition, we have a Policy Regarding Compliance with Securities and Exchange Commission Attorney Conduct Rules that requires all of our lawyers to report to the appropriate persons at the company evidence of any actual, potential or suspected material violation of state or federal law or breach of fiduciary duty by the company or any of its directors, officers, employees or agents.
Certain Relationships and Related Persons Transactions
We do not have a separate written policy or procedures for the review, approval or ratification of transactions with related persons. However, our Corporate Governance Guidelines, our Code of Business Ethics and Conduct and our Conflict of Interest Policy address conflicts of interest and relationships with PGE. In its consideration of nominees for the Board of Directors, the Nominating and Corporate Governance Committee examines possible related person transactions as part of its review. The Board of Directors annually reviews the relationship that each director has with PGE, which includes relationships with our officers and employees, our auditors and our customers. Our Code of Business Ethics and Conduct requires any person, including our directors and officers, to report any violation of the code or any situation or matters that may be considered to be unethical or a conflict of interest. Any potential conflict of interest under the code involving a director, an executive officer or our Controller is reviewed by the Audit Committee. Only the Audit Committee may waive a conflict of interest involving a director, an executive officer or our Controller, which will be promptly disclosed to our shareholders to the extent required by law.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation and Human Resources Committee during 2017 were John W. Ballantine, Kirby A. Dyess, Mark B. Ganz, Kathryn J. Jackson and Neil J. Nelson. All members of the committee during 2017 were independent directors and no member was an employee or former employee. During 2017, none of our executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on our Compensation and Human Resources Committee or Board of Directors.
EQUITY COMPENSATION PLANS
The following table provides information as of December 31, 2017 for the Portland General Electric Company Stock Incentive Plan and the Portland General Electric Company 2007 Employee Stock Purchase Plan. The Stock Incentive Plan was originally approved by our shareholders on May 7, 2008 at the company’s 2008 annual meeting of shareholders, was amended and restated as of February 13, 2018, and is being submitted to our shareholders for approval at the 2018 annual meeting. The 2007 Employee Stock Purchase Plan was approved by the shareholders on May 2, 2007 at the company’s 2007 annual meeting of shareholders.
| | | | | Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | | Equity Compensation Plans approved by security holders | 625,323(1) | N/A | 3,345,262(2)(3) | | Equity Compensation Plans not approved by security holders | N/A | N/A | N/A | | Total | 625,323(1) | N/A | 3,345,262(2)(3) |
| | | (1) | Represents outstanding restricted stock units and related dividend equivalent rights issued under the Stock Incentive Plan, and assumes maximum payout for restricted stock units with performance-based vesting conditions. The restricted stock units do not have an exercise price and are issued when award criteria are satisfied. See “Non-Employee Director Compensation - Restricted Stock Unit Grants” above and “Long-Term Equity Incentive Awards” below for further information regarding the Stock Incentive Plan.Corporate Governance |
| | (2) | Represents shares remaining available for issuance under the Stock Incentive Plan and the 2007 Employee Stock Purchase Plan. |
| | (3) | Includes approximately 18,000 shares available for future issuance under the 2007 Employee Stock Purchase Plan that are subject to purchase in the purchase period from January 1, 2018 to June 30, 2018. The number of shares subject to purchase during any purchase period depends on the number of current participants and the price of the common stock on the date of purchase.
|
AUDIT COMMITTEE REPORT2021 DIRECTOR COMPENSATION TABLE
The Audit Committee provides assistance totable below shows the Board of Directors in fulfilling its obligations with respect to matters involvingcompensation earned by each individual who served as a director during the accounting, auditing, financial reporting, internal control and legal compliance functions of the company and its subsidiaries. Management is responsible for the company’s internal controls and the financial reporting process, including the integrity and objectivity of the company’s financial statements. The company’s independent registered public accounting firm, Deloitte & Touche LLP (“Deloitte”), is responsible for performing an independent audit of the company’s financial statements, expressing an opinion as to the conformity of the annual financial statements with generally accepted accounting principles, expressing an opinion as to the effectiveness of the company’s internal control over financial reporting and reviewing the company’s quarterly financial statements. The committee has met and held discussions with management and Deloitte regarding the fair and complete presentation of the company’s financial results and the effectiveness of the company’s internal control over financial reporting. The committee has discussed with Deloitte significant accounting policies that the company applies in its financial statements, as well as alternative treatments. The committee also discussed with the company’s internal auditor and Deloitte the overall scope and plans for their respective audits.
Management represented to the committee that the company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the committee has reviewed and discussed the consolidated financial statements with management and Deloitte. The committee has discussed with Deloitte the matters required to be discussed under the applicable rules adopted by the Public Company Accounting Oversight Board.
The committee has reviewed and discussed with Deloitte all communications required by generally accepted auditing standards. In addition, the committee has received the written disclosures and the letter regarding independence from Deloitte, as required by applicable requirements of the Public Company Accounting Oversight Board, and has discussed such information with Deloitte.
Based upon the review, discussions and representations referenced above, the committee recommended to the Board of Directors that the audited consolidated financial statements be included in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 for filing2021, with the Securitiesexception of Ms. Pope, whose compensation is described in the Summary Compensation Table and Exchange Commission.related tables and disclosure beginning on page 67.
The | | | | | | | | | | | | | | | | | | | | | | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total
($) | John Ballantine(4) | 43,000 | — | 4,206 | 47,206 | | Rodney Brown | 86,000 | 109,957 | 4,206 | 200,163 | | Jack Davis | 168,000 | 109,957 | 4,206 | 282,163 | | Kirby Dyess | 95,375 | 109,957 | 4,206 | 209,538 | | Mark Ganz | 86,000 | 109,957 | 4,206 | 200,163 | | Marie Oh Huber | 86,000 | 109,957 | 4,206 | 200,163 | | Kathryn Jackson | 98,000 | 109,957 | 4,206 | 212,163 | Michael Lewis(5) | 92,250 | 141,809 | 237 | 234,296 | | Michael Millegan | 86,000 | 109,957 | 4,206 | 200,163 | | Neil Nelson | 93,500 | 109,957 | 4,206 | 207,663 | | Lee Pelton | 98,500 | 109,957 | 4,206 | 212,663 | Charles Shivery(4) | 49,250 | — | 4,206 | 53,456 | James Torgerson(5) | 89,125 | 141,809 | 237 | 231,171 |
(1) Amounts in this column include all fees earned for Board and committee has appointed Deloitteservice, regardless of whether such amounts were deferred under the Company's 2006 Outside Directors' Deferred Compensation Plan. (2) Amounts in this column represent the aggregate grant date fair value of RSU awards made in 2021, computed in accordance with FASB ASC Topic 718, Compensation - Stock Compensation, without taking into account estimated forfeitures, based on the NYSE closing price of our common stock on the grant date (April 27, 2021). (3) This column represents amounts earned in respect of dividend equivalent rights under the RSU awards that vested in 2021, except for Mr. Lewis and Mr. Torgerson. In the case of Mr. Lewis and Mr. Torgerson, the value of the dividend equivalent rights was reflected in the Stock Awards column for the year in which the related RSUs were awarded. (4) Mr. Ballantine and Mr. Shivery served as directors until their retirement from the company’s independent registered public accounting firm for fiscal year 2018.Board on April 26, 2021. Audit Committee(5) Mr. Lewis and Mr. Torgerson joined the Board on January 1, 2021. They received an award of RSUs with a grant date value of $27,486 with respect to their service during the first quarter of 2021 which vested on March 31, 2021, in addition to the annual grant of RSUs made to the non-management directors in April of 2021.
Neil J. Nelson, Chair
David A. Dietzler
Kirby A. Dyess
Mark B. Ganz
Charles W. Shivery
February 13, 2018
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates, for 2017 and 2016 were as follows:
| | | | | | | | | | 2017 | 2016 | | Audit Fees(1) | $ | 1,665,725 |
| $ | 1,625,000 |
| | Audit-Related Fees(2) | 99,000 |
| 79,564 |
| | Tax Fees(3) | — |
| — |
| | All Other Fees(4) | 3,790 |
| 5,700 |
| | Total | $ | 1,768,515 |
| $ | 1,710,264 |
|
| | | | | | | | | (1)30 | For professional services rendered for the audit of our consolidated financial statements for the fiscal years ended December 31, 2017 and 2016 and for the review of the interim consolidated financial statements included in quarterly reports on Form 10-Q. Audit Fees also include services normally provided in connection with statutory and regulatory filings or engagements, assistance with and review of documents filed with the Securities and Exchange Commission, the issuance of consents and comfort letters, as well as the independent auditor’s report on the effectiveness of internal control over financial reporting. | Portland General Electric 2022 Proxy Statement |
| | | (2) | For assurance and related services that are reasonably related to the performanceItem 1: Election of the audit or review of our consolidated financial statements not reported under “Audit Fees” above, including attest services that are not required by statute or regulation, consultations concerning financial accounting and reporting standards, and audits of the statements of activities of jointly owned facilities. Also includes amounts reimbursed to PGE in connection with cost sharing arrangements for certain services.
Directors |
Item 1: Election of Directors | | | | | | (3) | For professional tax services, including consulting and review of tax returns. |
| | (4) | For all other products and services not included in the above three categories, including reference products related to income taxes and financial accounting matters. |
PRE-APPROVAL POLICY FOR INDEPENDENT AUDITOR SERVICES
The Audit Committee must separately pre-approve the engagement of the independent registered public accounting firm to audit our consolidated financial statements. Prior to the engagement, the Audit Committee reviews and approves a list of services, including estimated fees, expected to be rendered during that year by the independent registered public accounting firm.
In addition, the Audit Committee requires pre-approval of all audit and permissible non-audit services provided by the company’s independent auditors, pursuant to a pre-approval policy adopted by the committee. The term of pre-approval is 12 months, unless the Audit Committee specifically provides for a different period. A detailed written description of the specific audit, audit-related, tax and other services that have been pre-approved, including specific monetary limits, is required. The Audit Committee may also pre-approve particular services and fees on a case-by-case basis. Management and the independent auditors are required to report at least quarterly to the Audit Committee regarding the actual services, and fees paid for such services, compared to the services and fees that were pre-approved in accordance with this policy.
All audit and permissible non-audit services provided by the independent auditors during 2017 and 2016 were pre-approved by the Audit Committee.
PROPOSAL 1: ELECTION OF DIRECTORS
Our Board of Directors The boardBoard, acting upon the recommendation of the Nominating, Governance and Sustainability Committee, has nominated all of the following 11 current directors for re-election as directors. Theto our Board. Our Board reflects the diversity of skills, attributes, experiences, backgrounds, gender, race and ethnicity valued by the Board and needed to provide effective oversight of the Company. Our nominees are: John W. Ballantine, Rodney L. Brown, Jr., Jack E. Davis, David A. Dietzler, Kirby A. Dyess, Mark B. Ganz, Kathryn J. Jackson, Neil J. Nelson, M. Lee Pelton, Maria M. Popehave held senior leadership roles at public companies or other large organizations and Charles W. Shivery. This slatehave extensive experience in a variety of nominees satisfies the New York Stock Exchange listing standards for board compositionfields, including utility operations and majority director independence. See the section above entitled “Corporate Governance - Director Independence” for further details regarding director independence. regulation, technology, health care, academia, finance and accounting, corporate governance, law, public policy, and consulting. All of our directors are elected annually by shareholders. Directors hold office until their successors are elected and qualified, or until their earlier death, resignation or removal. Our bylaws provide that the Board of Directors may determine the size of the board. Effective April 26, 2014, the board has set the size of the board at 11 directors. At the annual meeting, proxies cannot be voted for a greater number of individuals than the number of nominees named in this proxy statement. All of the nominees have agreed to serve if elected. If any director is unable to stand for election, the board may reduce the number of directors or designate a substitute. If the board designates a substitute, shares represented by proxies will be voted for the substitute director. We do not expect that any nominee will be unavailable or unwilling to serve.
Director Nominees
In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills that led our board to the conclusion that he or she should serve as a director, we also believe that all of our director nominees have a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstratedThe Board conducts an ability to exercise sound judgment, as well as a commitment of serviceannual skills assessment and board self-evaluation that are fundamental to the companyprocess the Board uses to help assemble a diverse board that can oversee the Company's strategy and its current and future operations.
We have a strong track record of board refreshment. Five of our independent directors have been added since the board.beginning of 2019: two in 2019, two in 2021 and one in 2022. This board refreshment reflects a range of tenure on our Board and brings a variety of perspectives to strategic, financial, operational and sustainability deliberations.
| | | | | | | | | | | | | | | | | | | | | | | | | Name | Age | Director Since | Industry/Experience | Diversity | Committee Membership | Other Public Boards | | Rodney Brown Independent | 65 | 2007 | Law/Environmental/Regulatory | White/Male | •Compensation •Finance | 0 | | Jack Davis Independent Chair | 75 | 2012 | Utilities/Regulatory | White/Male | •Governance | 0 | | Dawn Farrell Independent | 62 | 2022 | Utilities | White/Female | •Finance •Governance | 2 | | Mark Ganz Independent | 61 | 2006 | Healthcare/Law | White/Male | •Audit & Risk •Compensation | 0 | | Marie Oh Huber Independent | 60 | 2019 | Law/Technology | Asian/Female | •Compensation •Governance | 1 | | Kathryn Jackson Independent | 64 | 2014 | Technology/Environmental | White/Female | •Audit & Risk, Chair •Finance | 3 | | Michael Lewis Independent | 59 | 2021 | Utilities | African American/Male | •Audit & Risk •Finance, Chair | 1 | | Michael Millegan Independent | 63 | 2019 | Technology | African American/Male | •Audit & Risk •Finance | 1 | | Lee Pelton Independent | 71 | 2006 | Education/Non-Profit Foundations | African American/Male | •Audit & Risk •Governance, Chair | 0 | | Maria Pope President and CEO | 57 | 2018 | Utilities/Finance | White/Female | | 1 | | Jim Torgerson Independent | 69 | 2021 | Energy/Finance | White/Male | •Compensation, Chair •Finance | 1 |
Key to Committees Compensation: Compensation and Human Resources Committee Governance: Nominating, Governance and Sustainability Committee | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 31 |
| | | | Item 1: Election of Directors |
* One woman director is racially or ethnically diverse SKILLS, EXPERIENCE AND BACKGROUNDS Our Board of Directors brings diverse skills, experiences and backgrounds to inform and enrich their oversight functions and deliberations. The following skills matrix captures some of these characteristics. We considered these skills, experiences and backgrounds, together with the biographical information provided on pages 33 to 39, in determining the nominees to our Board.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Skill | | Number of Directors (Out of 11) | | | Finance and Accounting | | | | | | | | | | | | | | | | | | | | | | 7 | | | | | | | | | | | | | | | | | | | John W. Ballantine, age 72, director since February 2004; Chairman of the Finance Committee and member of the Compensation and Human Resources Committee.
Utility Operations | | | | | | | | | | | | | | | | | | | | | 6 | | | | | | | | | | | | | | | | | | | Mr. Ballantine has been an active, self-employed private investor since 1998, when he retired from First Chicago NBD Corporation where he had most recently served as Executive Vice President | Technology, Cybersecurity and Chief Information Security | | | | | | | | | | | | | | | | | | | | | 6 | | | | | | | | | | | | | | | | | | | | Transformation | | | | | | | | | | | | | | | | | | | | | | | | | | 11 | | | | | | | | | | | | | | | Environmental and Sustainability | | | | | | | | | | | | | | | | | | | | | | | 8 | | | | | | | | | | | | | | | | | | Government, Regulatory and Public Policy | | | | | | | | | | | | | | | | | | | | | | | | | | 11 | | | | | | | | | | | | | | | Human Capital Management | | | | | | | | | | | | | | | | | | | | | | | | | 10 | | | | | | | | | | | | | | | | Major Capital Projects Overview | | | | | | | | | | | | | | | | | | | | | | | 8 | | | | | | | | | | | | | | | | | | Risk Management Officer. During his 28-year career with First Chicago, Mr. Ballantine was responsible for international banking operations, New York operations, Latin American banking, corporate planning, U.S. financial institutions business and a variety of trust operations. Mr. Ballantine also serves as a director of Deutsche Funds, as a member of the audit committeeCompliance | | | | | | | | | | | | | | | | | | | | | | | | | 10 | | | | | | | | | | | | | | | | Strategic Planning | | | | | | | | | | | | | | | | | | | | | | | | | 10 | | | | | | | | | | | | | | | | Regional Business and the investment oversight committee of Deutsche Funds, and as chair of the contract committee of Deutsche Funds. We believe that Mr. Ballantine’s qualifications to serve on our board include his extensive experience in finance and risk management, his experience in various executive and leadership roles for First Chicago NBD Corporation, as well as his experience on the boards of other companies. Mr. Ballantine’s expertise in finance and risk management is of great value to the board, given the company’s significant ongoing and anticipated capital programs and the company’s focus on enterprise risk management.Community Ties | | | | | | | | | | | | | | | | | | | | | 6 | | | | | | | | | | | | | | | | | | | | Corporate Governance | | | | | | | | | | | | | | | | | | | | | | | | | | 11 | | | | | | | | | | | | | |
| | | | | | | | | | 32 | | Portland General Electric 2022 Proxy Statement |
| | | | Item 1: Election of Directors |
NOMINEES FOR ELECTION A biography of each director describing his or her age, current Board committee service, business experience and other relevant business experience is presented below. Each biography includes the experience, qualifications, attributes and skills that led the Board to conclude that the nominee should serve as a director. While each nominee’s entire range of experience and skills is important, particular experience that contributes to the diversity and effectiveness of the Board is identified below. The biographical information provided here is current as of March 1, 2022.
| | | | | | | | | | | | | | | | | Rodney L. Brown, Jr., age 62, director since February 2007; Compensation and Human Resources and Finance Committee Member | | INDEPENDENT DIRECTOR SINCE 2007 EDUCATION BA, Political Science, Baylor University JD, University of Texas School of Law SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board member, National Audubon Society SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Board of the Nominating and Corporate GovernanceTrustees chair, Bullitt Foundation Co-Chair, Governor's Carbon Emissions Task Force Member, Governor's Committee and the Finance Committee.on Transforming Washington's Budget
Board member, Sightline Institute
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| | | BACKGROUND AND QUALIFICATIONS Mr. Brown, 65, is a founding partner of Cascadia Law Group PLLC, a Seattle, Washington law firm that specializes in environmental law in the Pacific Northwest.law. Mr. Brown's practice focuses on environmental and land use issues relating to pollution control, project permitting and climate change. He is the principal author of Washington’sWashington's Superfund law, the Model Toxics Control Act, and has worked for yearsworks to reform and improve the environmental regulatory system.regulations. From 1992 to 1996, Mr. Brown was a Managing Partnermanaging partner at the Seattle office of Morrison & Foerster, LLP, a large international law firm. We believe that Mr. Brown’s qualifications to serve on our boardBoard include his experience as an environmental lawyer, his extensive knowledge of environmental laws and regulations, to which the company is subject, his general knowledge of government and public affairs, and his experience as a management consultant for organizations handling large infrastructure projects and projects with challenging environmental issues.
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| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 33 |
| | | | Item 1: Election of Directors |
| | | | | | | | | | | | | | | | | Jack E. Davis, age 71,director since June 2012; Chairman of the Board of Directors Nominating, Governance and Sustainability Committee Member | | INDEPENDENT DIRECTOR SINCE 2012. Board Chair since 2013 EDUCATION BS, Medical Technology, Electrical Engineering, New Mexico State University SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Board Member, Pinnacle West Capital Corporation Chair, Western Systems Coordinating Council Board member, of the Nominating and Corporate Governance Committee.Edison Electric Institute, National Electric Reliability Council, Arizona Community Foundation
| | | | | | | BACKGROUND AND QUALIFICATIONS Mr. Davis, 75, served as Chief Executive OfficerCEO of Arizona Public Service Company (“APS”)(APS), Arizona’sArizona's largest electricity provider, from September 2002 until his retirement in March 2008, and as Presidentpresident of APS from October 1998 to October 2007. Mr. Davis also served as President and Chief Operating Officer of Pinnacle West Capital Corporation (”Pinnacle West”) from September 2003 to March 2008 and as a director of Pinnacle West from January 2001 to March 2008 and a director of APS from October 1998 to May 2008. Pinnacle West is the parent company of APS. During his 35 years at APS, Mr. Davis held executive and management positions in various areas of the company, including commercial operations, generation and transmission, customer service and power operations. Mr. Davis has served on the boards of the Edison Electric Institute and the National Electric Reliability Council. He also served as Chairmanpresident and Chief Operating Officer of Pinnacle West Capital Corporation, the parent company of APS, from September 2003 to March 2008. Mr. Davis is a former chair of the Western Systems Coordinating Council in 2000. We believe thatEnergy Supply and Transmission Associates and the Western Governors’ Association task force on energy issues. Mr. Davis’ qualifications to serve on our boardBoard include his extensivein-depth knowledge of the utility industry, including utility regulation, line and generation operations, and safety and environmental matters, his extensive leadership experience as Chief Executive Officer,gained in senior executive and director of APSpositions at energy companies, and his knowledge and experience as President, Chief Operating Officer, senior executive and director of Pinnacle West.
from serving on other public company boards.
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| | | | | | | | David A. Dietzler, age 74, director since January 2006;Dawn Farrell
Finance and Nominating, Governance and Sustainability Committee Member | | INDEPENDENT DIRECTOR SINCE 2022 EDUCATION BC, MA, Economics, University of Calgary AMP, Harvard University SELECTED DIRECTORSHIPS AND MEMBERSHIPS Chairperson, The Chemours Company Board member, Canadian Natural Resources Limited Member, Trilateral Commission Chancellor, Mount Royal University SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Board member, Business Council of the Audit Committee and the Nominating and Corporate Governance Committee.
Canada, Alberta Business Council
| | | | Mr. Dietzler wasBACKGROUND AND QUALIFICATIONS
Ms. Farrell, 62, served from 2012 until her retirement in 2021 as President and CEO of TransAlta Corporation, one of Canada's largest producers of wind power and Alberta, Canada's largest producer of hydro-electric power. She has over 35 years of experience in the energy industry and prior to her role as President and CEO, she held a certified public accountant for over 40 yearsvariety of executive leadership positions in TransAlta and retired as a partner of KPMG LLP, a public accounting firm, in 2005. During his last 10 years with KPMG LLP he served in both administrativeBritish Columbia Hydro & Power Authority (BC Hydro) including leading the commercial operations and client service roles, which included serving on the firm’s board of directors, including the governance, nominating,development at TransAlta and board processgeneration and evaluation committee, and was the Pacific Northwest partner in charge of the Audit Practice for KPMG’s offices in Anchorage, Boise, Billings, Portland, Salt Lake City, and Seattle, as well as the Managing Partner of the Portland office. Mr. Dietzler has served on the boards of Columbia Banking System, Inc. and Columbia State Bank since April 2013 and also serves as chair on the audit committee of each of those boards. Mr. Dietzler served on the board of directors of West Coast Bancorp and as chair of the audit committee from January 2012 to April 2013 when West Coast Bancorp was acquired by Columbia Banking System, Inc. We believe that Mr. Dietzler’sengineering at BC Hydro. Ms. Farrell’s qualifications to serve on our boardBoard include his 37 yearsher in-depth knowledge of the western energy markets, generation operations, energy trading, her leadership in transforming a carbon- based company into a leading clean and renewable focused company, her extensive leadership experience auditing publicgained in senior executive positions at energy companies, and working with audit committees ofher knowledge and experience from serving on other public companies, his experience as a director of KPMG LLP, his knowledge of Securities and Exchange Commission filing requirements, financial reporting, internal control and compliance requirements, and the experience he acquired through his leadership roles for the Pacific Northwest offices of KPMG.company boards. | | | | | | |
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Portland General Electric 2022 Proxy Statement
|
| | | | Item 1: Election of Directors |
| | | | | | | | | | | | | | | | | Kirby A. Dyess, age 71, director since June 2009; Chair of theMark Ganz
Audit and Risk and Compensation and Human Resources Committee Member | | INDEPENDENT DIRECTOR SINCE 2006 EDUCATION BA, History/Theology, Georgetown University JD, Georgetown University SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board of Regents, University of Portland, Georgetown University Board member, Coalition to Transform Advanced Illness Care Chair, Cascade Pacific Council of the Boy Scouts of America SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Board member, Cambia Health Solutions, Inc. Board & Executive Committee, Oregon Business Council BlueCross Blue Shield Association Chair, America's Health Insurance Plans, Greater Portland Inc.
| | | | | BACKGROUND AND QUALIFICATIONS Mr. Ganz, 61, served from 2003 until his retirement in 2020 as President and CEO of Cambia Health Solutions, Inc. (Cambia), a parent corporation of several companies offering healthcare products and services. Previously, Mr. Ganz held a number of positions with Cambia, including president and CEO of Regence BlueCross of Oregon, chief legal officer, corporate secretary, and chief ethics and compliance officer; he also had responsibility for federal public policy. Mr. Ganz was a member of the Audit Committee.
| Ms. Dyess is a principal in Austin Capital Management LLC, where she evaluates, invests in, and assists early stage companies in the Pacific Northwest. In addition, she serves on the board of Itron, Inc. She has served on the audit committees of Itron, Inc. and Menasha Corporation, the governance committees of Merix Corporation, Itron, Inc., Viasystems Group, Inc. and Menasha Corporation, and as chair of the compensation committees of Viasystems Group, Inc. and Itron, Inc. She also serves as chair of theCambia’s board of directors of Prolifiq Software, a provider of sales content management and compliance software,until his retirement in 2020, as well as a board member of the board of Compli, a provider of workforce compliance management software,number regional and as a member of the board of the Oregon Community Foundation. Prior to forming Austin Capital Management LLC in 2003, Ms. Dyess spent 23 years in various executive and management positions at Intel Corporation, most recently serving as Corporate Vice President of Intel Corporation from 1994 to 2002. Her assignments included Director of Intel Capital Operations from June 2001 to December 2002, Director of Strategic Acquisitions/New Business Development from November 1996 to June 2001, and Director of Worldwide Human Resources from January 1993 to November 1996. We believe that Ms. Dyess’national organizations. Mr. Ganz’s qualifications to serve on our board include the experience she acquired during her career at Intel Corporation in the areas of risk management, human resources, operations, government relations, mergers and acquisitions, sales and marketing, information technology, and the initiation of start-up businesses, and her experience serving on boards of other companies.
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| | | | Mark B. Ganz, age 57, director since January 2006; member of the Audit Committee and the Compensation and Human Resources Committee.
| Mr. Ganz has served since 2003 as president and since 2004 as president and chief executive officer of Cambia Health Solutions, Inc., a parent corporation of 22 companies offering products and services across the U.S. in the health care sector - including BlueCross and BlueShield licensed health plans in four states - to individuals and families, health care providers and employers. Cambia Health Solutions, Inc.’s family of companies range from software and mobile applications, advanced data analytics, precision medicine, health care marketplaces, non-traditional health care delivery models, health insurance, life insurance, pharmacy benefit management, and wellness. The Cambia Foundation, of which Mr. Ganz is a founder and director, is a nationally recognized leader and innovator in the field of Palliative Care in the U.S. Mr. Ganz has been with Cambia Health Solutions, Inc. since 1992, holding various positions, including president and chief operating officer, chief legal officer and corporate secretary, and chief compliance officer. Mr. Ganz also serves on the board of directors of Cambia Health Solutions, Inc. and Echo Health Ventures, a joint venture between Cambia and BlueCross BlueShield of North Carolina. In addition, Mr. Ganz serves as council president of the Boy Scouts of America Cascade-Pacific Council and is past-chair of America’s Health Insurance Plans. He serves on the board and executive committee of Oregon Business Council and Greater Portland Inc., the regional economic development corporation. He also serves on the boards of the BlueCross and BlueShield Association and the Western Conference of Prepaid Health Plans, and on the Board of Regents of the University of Portland. He serves on the advisory board of the USC Schaeffer School of Public Policy and is a member of the National Academies of Science, Medicine and Engineering Roundtable on Quality Care for People with Serious Illness. We believe that Mr. Ganz’ qualifications to serve on our board include his experience overseeing multiple companies within a large diversified corporate group, his knowledge of health care as a regulated industry, his experience in various executive roles, his 29 years of experience in the practice of corporate and regulatory law, and his expertise in executive compensation and compensation structures, corporate governance, and ethics and compliance programs.
| | | | Marie Oh Huber Compensation and Human Resources and Nominating, Governance and Sustainability Committee Member | | INDEPENDENT DIRECTOR SINCE
2019
EDUCATION
BA, Economics, Yale University
JD, Northwestern Pritzker University School of Law
SELECTED DIRECTORSHIPS AND MEMBERSHIPS
Board member, Adevinta University Council, Yale University, Northwestern Pritzker School of Law SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Board member, Silicon Valley Community Foundation Board member, James Campbell Company LLC | | | | | BACKGROUND AND QUALIFICATIONS Ms. Huber, 60, has over 25 years of strategic business, legal and public policy experience in global Fortune 500 companies. She heads the global legal and government relations and public policy functions for eBay, Inc., where she serves as Senior Vice President, Chief Legal Officer, General Counsel and Secretary. Previously, Ms. Huber was responsible for communications, regulatory affairs and quality assurance, government affairs and philanthropy at Agilent Technologies. Ms. Huber joined eBay in 2015 from Agilent where she served as senior vice president, general counsel and secretary since 2009. For the previous ten years she also held positions of increasing responsibility at Agilent and prior to that at HP. She started her career at large firms in New York and San Francisco. Ms. Huber's qualifications to serve on our Board include her extensive track record as a business leader in advising boards of directors and executive leadership on business and operational matters, M&A, corporate governance, legal and compliance, IP, litigation, privacy and cybersecurity matters. | | | | | | |
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 35 |
| | | | Item 1: Election of Directors |
| | | | | | | | | | | | | | | | | Kathryn J. Jackson,, Ph.D., age 60, director since April 2014; member of the PhD Chair, Audit and Risk Committee and Finance Committee Member | | INDEPENDENT DIRECTOR SINCE 2014 EDUCATION BS, Physics, Grove City College MS, Industrial Engineering Management, University of Pittsburgh MS and CompensationPhD, Engineering and Human Resources Committee.Public Policy, Carnegie Mellon University
SELECTED DIRECTORSHIPS AND MEMBERSHIPS
Board member, Cameco Corporation, EQT Corporation, Archaea Energy Inc.
Advisory Board, Carnegie Mellon University Advisor Board, University of Pittsburgh Swanson School
Member, National Academy of Engineering
SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS
Board member, Duquesne Light Holdings, Inc., Duquesne Light Company, Inc. | | | | | BACKGROUND AND QUALIFICATIONS Dr. Jackson, has 64, is a senior advisor at Energy Impact Partners, and from 2016 to 2021 served since January 2016 as the Directordirector of Energy and Technology Consulting at KeySource, Inc., where she providesprovided strategic consulting services to clients in business growth, technology development and energy services. In addition, she has served since JulyFrom 2014 to 2015, as a director of Hydro One Inc., an electricity transmission and distribution company serving the Province of Ontario, Canada, and since January 1, 2017 as a director of Cameco Corporation - one of the world’s largest uranium producers, headquartered in Saskatchewan, Canada. From April 2017 to October 2017, Dr. Jackson served as a director of Rice Energy, Inc., a company engaged in the acquisition, explorationwas chief technology officer and development of natural gas and oil properties. Dr. Jackson previously served as Chief Technology Officer and Senior Vice Presidentsenior vice president at RTI International Metals, Inc. from June 2014 to July 2015, where she was responsible for global research and technology development, technology strategy, and development, a leading U.S. producer of alloys and manufacturing processes, including 3D printing and powder metallurgy. Prior to joining RTI International Metals, Inc., Dr. Jacksontitanium mill products. She served as the Chief Technology Officerchief technology officer and Senior Vice Presidentsenior vice president of Research &and Technology at Westinghouse Electric Company, LLC, a nuclear energy company, from 2009 to June 2014 and2014; she served as the Vice Presidentvice president of Strategy, Research &and Technology from 2008 to 2009. Prior to joining Westinghouse Electric Company, LLC, Dr. Jackson workedserved for 17 years at the Tennessee Valley Authority where she held various executive positions. From 2008 to Aprilpositions including executive vice president of 2014, Dr. Jackson served onRiver System Operations and Environment, and was the board of directors of the Independent System Operator of New England, the grid system operator for the six New England states, where she served as Chair of the board of directors, Chair of the compensation and human resources committee and a member of the system planning and reliability committee. Dr. Jackson serves on the Electricity Industry Center Advisory Board at Carnegie Mellon University, the Carnegie Mellon University Engineering School Dean’s Advisory Board, the Electricity Institute Advisory Board at the University of Pittsburgh, and the Industry Advisory Board at Oregon State University School of Mechanical, Industrial, and Manufacturing Engineering. Dr. Jackson holds a Ph.D. in Engineering and Public Policy from Carnegie Mellon University. We believe thatcorporate environmental officer. Dr. Jackson’s qualifications to serve on our boardBoard include her extensive background in engineering, her experience in senior executive roles at Westinghouse Electric Company, LLC and the Tennessee Valley Authority, her experience serving onas a member and chair of the board of the Independent System Operator of New England, and her knowledge and experience within the areas of technology, large capital projects, contracts and vendor negotiations, her experience with generation facilities and energy trading operations, her experience in research and development across a broad range ofon utility assets and systems, and her experience in the areas of environmental health and safety.
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| | | Michael Lewis Chair, Finance Committee Audit and Risk Committee Member | | INDEPENDENT DIRECTOR SINCE 2021 EDUCATION BS, Electrical Engineering, University of Florida MBA, Nova Southeastern University AMP, Duke University EMP, University of Pennsylvania Wharton School SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board member, Newpark Resources, Inc., Bay Area Chapter of the American Red Cross, Association of Edison Illuminating Companies Member, California Governor's Earthquake Advisory Commission SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Pacific Gas & Electric | | | | |  | Neil J. Nelson, ageMr. Lewis, 59, director since October 2006; Chairis a retired senior executive with more than 35 years of the Audit Committee and member of the Compensation and Human Resources Committee.
| Mr. Nelson hasexperience in electric utility operations. He served as Interim President of Siltronic Corporation, a global leader in the market for hyperpure silicon wafersPacific Gas and a partnerElectric Company (PG&E) from August to many top-tier chip manufacturers, since July 2003. He previouslyDecember 2020. During that time, he oversaw PG&E's gas and electric operations including wildfire prevention and response efforts, grid resiliency initiatives, vegetation management programs and emergency preparedness. Prior to that, Mr. Lewis served as VicePG&E's senior vice President of Electric Operations and vice president of SiltronicElectric Distribution. Before joining PG&E in 2018, Mr. Lewis held a number of senior executive positions at Duke Energy, including senior vice president and chief distribution officer from 20002016 to 2003. From 19872018, with responsibility for distribution operations across six states, and senior vice president and chief transmission officer from 2015 to 2000,2016. Before the Duke Energy and Progress Energy merger in 2012, he served in various positions with Mitsubishi Silicon America.was a senior vice president of energy delivery for Progress Energy Florida, where he was responsible for hurricane preparedness and grid hardening initiatives. Mr. Nelson also serves on the board of directors and the compensation committee of Siltronic Corporation. We believe that Mr. Nelson’sLewis’s qualifications to serve on our boardBoard include his executive leadership experience in overseeing company-wide and divisionalin-depth knowledge of utility operations, for Siltronic Corporationincluding electric transmission and divisional operations for Mitsubishi Silicon America, his experience in overseeing manufacturing operations at the department, divisiondistribution, wildfire prevention and company-wide levels, his experience inresponse, disaster preparedness, grid resiliency, large capital projects and risk oversightmanagement and environmental issues, his experience overseeing safety systems and the financial reporting process for Siltronic Corporation, and his experience in developing and overseeing compensation programs over the past 15 years for Siltronic Corporation and, prior to that, for Mitsubishi Silicon America.programs.
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| | | | | | | | | | 36 | |
Portland General Electric 2022 Proxy Statement
|
| | | | Item 1: Election of Directors |
| | | | | | | | | | | | | | | | | Michael Millegan Audit and Risk and Finance Committee Member | | INDEPENDENT DIRECTOR SINCE 2019 EDUCATION BA, MBA, Angelo State University SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board member, Axis Capital Holdings, Wireless Technology Group, Inc., Virginia Mason Foundation, Network Wireless Solutions Strategic advisor and investor, Windpact, Inc., Vettd, Inc. M. Lee PeltonSELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS , Board Member, CoreSite Realty Corp.Ph.D., age 67, director since January 2006; Chair of the Nominating and Corporate Governance Committee and member of the Finance Committee.
| | | | | BACKGROUND AND QUALIFICATIONS Mr. Millegan, 63, is the Founder and CEO of Millegan Advisory Group 3 LLC where he advises early-stage companies on strategy that drives technology innovation and shareholder value since 2018. Previously, he held a variety of executive leadership and management positions within Verizon, where he led large-scale and scope business units. As president of Verizon Global Wholesale Group, he was responsible for $11 billion in sales revenue, 13,000 employees and $1 billion in annual capital spending. Mr. Millegan’s qualifications to serve on our Board include his experience overseeing significant business units within a large corporate group, his experience in various executive and management roles, and his background in operations in a regulated industry, global sales and marketing, digital media platforms, network infrastructure deployment, cloud computing, cybersecurity,and supply chain management and operations. | | | | | | | | | Lee Pelton, PhD Chair, Nominating, Governance and Sustainability Committee and Audit and Risk Committee Member | | INDEPENDENT DIRECTOR SINCE 2006 EDUCATION BA, English/Psychology, Wichita State University PhD, English, Harvard University
SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board and executive committee, Boston Chamber of Commerce Board chair, Boston Arts Academy Foundation, Boston Racial Equity Fund Trustee, Barr Foundation Boston Municipal Research Bureau SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Chair, American Council on Education Board member, National Association of Independent Colleges and Universities, Association of American Colleges and Universities, Museum of African American History in Boston, Harvard University Board of Overseers | | | | | BACKGROUND AND QUALIFICATIONS Dr. Pelton, has71, is President and CEO of The Boston Foundation, a philanthropic organization with over $1 billion in assets. Before joining The Boston Foundation, he served as Presidentpresident of Emerson College in Boston, Massachusetts since July 2011. From July 1999from 2011 to July 2011, heMay 2021. Prior to that, Dr. Pelton served as President of Willamette University in Salem, Oregon. Fromfrom 1999 to 2011, dean and professor of English Literature at Dartmouth College from 1991 untilto 1998 and dean of students and later dean of Colgate University from 1986 to 1991. In 2020, he was Deanrecognized by the Boston Chamber of Dartmouth College. Prior to 1991, he held facultyCommerce as a 2020 Distinguished Bostonian and administrative posts at Colgate University and Harvard University. Dr. Pelton also served onincluded in the board of directors of PLATO Learning, Inc. from March 2007 to May 2010 and on the compensation and audit committees of PLATO Learning, Inc. We believe thatBoston Business Journal's 50 Most Powerful Leaders in Boston list. Dr. Pelton’s qualifications to serve on our boardBoard include his experience inexecutive leadership positions at several universities,academic institutions, his connections to the academic community, his knowledge in the area of university relations and collaborations,civic leadership, his experience serving on boards of other companies, and the unique perspective he brings to various issues considered by the board as a result of his academicprofessional background and accomplishments.
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| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 37 |
| | | | Item 1: Election of Directors |
| | | | | | | | | | | | | | | | | Maria M. Pope, age 53, director since January 1, 2018.
| Ms. Pope is President and Chief Executive Officer, Portland General Electric Company
| | DIRECTOR SINCE 2018 EDUCATION BA, College of Arts and Sciences, Georgetown University MBA, Stanford Graduate School of Business SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board member, Umpqua Holdings Corporation Vice chair, Electric Power Research Institute, Executive committee, Edison Electric Institute and Oregon Business Council Board member, Secretary of Energy Advisory Board, The Nature Conservancy of Oregon, Federal Reserve Bank of San Francisco Portland Branch SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Chair, OHSU Governing Board, Council of Forest Industries, Oregon Symphony Lead director, Premera BlueCross Board member, TimberWest Forest Corp., Sterling Financial Corp. | | | | | BACKGROUND AND QUALIFICATIONS Ms. Pope, 57, is President and CEO of Portland General Electric Company. She was appointed President on October 1, 2017 and Chief Executive Officer on January 1, 2018. She previously served from March 2013 to October 2017 as Senior Vice Presidentsenior vice president of Power Supply, Operations and Resource Strategy, overseeing PGE's generation plants, energy supply portfolio, and long-term resource strategy. Ms. Pope joined PGE in 2009 as senior vice president of finance, Chief Financial Officer and treasurer. She served on PGE's Board of Directors from 2006 to 2008. Prior to joining PGE, she served as Chief Financial Officer for Mentor Graphics Corporation and held senior operating and finance positions within the forest products and consumer products industries. She began her career in banking with Morgan Stanley. Ms. Pope’s qualifications to serve on our Board include her current role as President and CEO, her extensive knowledge of the Company and the utility industry, her experience as Chief Financial Officer of three publicly traded companies, her diverse leadership experience in business and financial roles, and her corporate and civic board experience. | |
| | | | | | | | | | 38 | | Portland General Electric 2022 Proxy Statement |
| | | | Item 1: Election of Directors |
| | | | | | | | | | | | | | | | | | | | | | James Torgerson Chair, Compensation and Human Resources Committee Finance Committee Member | | INDEPENDENT DIRECTOR SINCE 2021 EDUCATION BBA, Accounting, Cleveland State University SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board member, Archaea Energy Inc. Board of trustees, Yale-New Haven Hospital, Yale-New Haven Health System SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS AVANGRID, Inc. UIL Holdings Corporation Board and executive committee, Edison Electric Institute Co-Chair, EEI Committee on Reliability, Security and Business Continuity Member, Electricity Subsector Coordinating Council | | | | | BACKGROUND AND QUALIFICATIONS Mr. Torgerson, 69, served as CEO of AVANGRID, Inc., a sustainable energy company with approximately $30 billion in assets and operations in 24 states from 2015 until his retirement in 2020. Previously, he was president and CEO of UIL Holdings Corporation from 2006 to 2015, when it merged with Iberdrola USA to form AVANGRID. During his time at UIL Holdings, he oversaw its expansion from a regional electric utility to a diversified energy delivery company and one of the largest generators of wind electricity in the U.S., serving natural gas and electric utility customers across multiple states. Before joining UIL Holdings, he was president, CEO and director of the Midwest Independent Transmission System Operator, Inc. from 2000 to 2006. He also previously served as chief financial officer for several natural gas and electric utilities including Puget Sound Energy and Washington Energy Company. Before transitioning to the utility industry, he served as vice president of development for Diamond Shamrock Corporation, where he also held various finance and strategic planning positions. Mr. Torgerson’s qualifications to serve on our Board include his executive leadership experience and extensive knowledge of the utility industry, including clean energy development, finance and accounting, Northwest energy markets, regulation, risk management and strategic planning. | |
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 39 |
| | | | Item 1: Election of Directors |
Compensation and Human Resources Committee Report
The Compensation and Human Resources Committee has reviewed and discussed with management the following Compensation Discussion and Analysis and has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement. MEMBERS OF THE COMPENSATION AND HUMAN RESOURCES COMMITTEE •James Torgerson (Chair) •Rodney Brown •Kirby Dyess •Mark Ganz •Marie Oh Huber | | | | | | | | | | 40 | | Portland General Electric 2022 Proxy Statement |
| | | | Compensation Discussion and Analysis |
Compensation Discussion and Analysis
The 2021 compensation of our named executive officers appropriately reflects their significant contributions to the Company's strong performance in a year that continued to present unprecedented challenges for our executive team to lead through while attaining strong results. The Compensation Discussion and Analysis explains the guiding principles and practices upon which our compensation program is based, the elements of our executive compensation program, and the compensation paid to our named executive officers. | | | | | | | | | | | MS. POPE is President, Chief Executive Officer and a member of the Board of Directors of PGE. She was appointed President on October 1, 2017 and Chief Executive Officer on January 1, 2018. She served from 2013 to 2017 as senior vice president of Power Supply, Operations and Resource Strategy, overseeing PGE’s generation plants, energy supply portfolio, and long-term resource strategy. Ms. Pope joined PGE in 2009 as Senior Vice President of Finance, Chief Financial Officer and Treasurer. She served on PGE’s Board of Directors from 2006 to 2008. Ms. Pope also serves on the board of directors of Umpqua Holdings Corporation and Pope Resources, LP. Prior to joining PGE, she served as Chief Financial Officer for Mentor Graphics Corporation and served inheld senior operating and finance positions within the forest products and consumer products industries. She began her career in banking with Morgan Stanley. We believe that EDUCATION BA, College of Arts and Sciences, Georgetown University MBA, Stanford Graduate School of Business For more information, see Ms. Pope’s qualifications to serve on our board include her current role as President and Chief Executive Officerbio in Our Board of the company; her extensive knowledge of the company and the utility industry; her leadership and business management experience with the company; her experience in finance through her past roles as Chief Financial Officer of three publicly traded companies and past chair of the audit committees of TimberWest Forest Corp., Premera Blue Cross and the Oregon Health & Sciences University; her civic activities as the past chair of the Oregon Health & Sciences University governing board, the Oregon Symphony and the Council of Forest Industries; and her experience in governance through her service on public, private and advisory boards.
Directors page 38.
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| | | |  President and CEO | | |
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 41 |
| | | | Compensation Discussion and Analysis |
| | | | | | | | | | | Charles W. ShiveryMR. AJELLO, age 72, has served as the Chief Financial Officer and Senior Vice President of Finance and Treasurer at PGE since January 1, 2021. He joined PGE in November 2020 as a senior advisor prior to his transition to the CFO role, bringing an extensive background in both energy and finance, including serving as executive vice president and CFO for Hawaiian Electric Industries (HEI) from 2009 to 2017, where he helped lead its clean energy transformation. In 2020, he became an independent director since February 2014; member of HEI’s Hawaiian Electric Company, where he serves on the Audit Committee and from 2017 was an independent director of HEI’s American Savings Bank and a member of its Risk Committee and member of HEI’s compensation committee. Prior to joining HEI, Mr. Ajello served as senior vice president of Business Development at Reliant Energy and spent 15 years as managing director of the Finance Committee.Energy and Natural Resources Group of UBS Warburg/UBS Securities. He has also chaired the U.S. Department of Energy’s Environmental Management Advisory Board.
EDUCATION BA, State University of New York Oneonta MPA, Syracuse University Graduate, Advanced Management Program of the European Institute of Business Administration (INSEAD) | | | | | James Ajello Senior Vice President, Finance, Chief Financial Officer and Treasurer | | | | | Mr. ShiveryMS. KANER servedis responsible for all of PGE’s legal affairs. She coordinates the Company’s ethics and governance, corporate compliance and Federal Energy Regulatory Commission compliance activities. Before joining PGE in 2017, Ms. Kaner successfully handled contract, employment and other commercial litigation cases at the Portland office of Markowitz Herbold PC. In addition to being honored by the Portland Business Journal as Chairman, President and Chief Executive Officer of Northeast Utilities, New England’s largest utility system, from March 2004 until his retirement in April 2012 following the completionone of the merger between Northeast Utilities and NSTAR. Following his retirement, he served as Chairmanregion’s most influential businesswoman, Ms. Kaner has been recognized for her public service by the Oregon State Bar. She is an active member of the Board of Trustees of Northeast Utilities from April 2012 to October 2013,community and currently serves as a member of the Board of Trustees from October 2013Directors of Impact NW, whose mission is to May 2014. From 2007 to 2012, prevent homelessness.
EDUCATION BA, cum laude, University of Pennsylvania JD, magna cum laude, Villanova University School of Law | | | Lisa Kaner Vice President, General Counsel and Corporate Compliance Officer | | |
| | | | | | | | | | 42 | | Portland General Electric 2022 Proxy Statement |
| | | | Compensation Discussion and Analysis |
| | | | | | | | | | | MR. BEKKEDAHL oversees PGE operational areas and is responsible for advancing PGE’s integrated smart grid strategy since 2019. PGE's Utility Operations and Operations Services divisions. Mr. Shivery alsoBekkedahl joined PGE in 2014 and until 2019 served as Chairmanvice president of Transmission & Distribution, bringing more than three decades of leadership experience in the boardsenergy industry. Before joining PGE, he was senior vice president for transmission services at the Bonneville Power Administration and held leadership positions at Clark Public Utilities, PacifiCorp and Montana Power Company. Mr. Bekkedahl serves on the Electric Power Research Institute (EPRI), Research Advisory Committee, the Stanford University Bits and Watts Advisory Council, Common Ground Alliance (CGA - 811) Board, Grid Wise Board, and the All Hands Raised Council for student development. EDUCATION BS, Electrical Engineering, Montana State University | | | | | Larry Bekkedahl Senior Vice President, Advanced Energy Delivery | | | | | MR. KOCHAVATR is responsible for the infrastructure, operations and development of several wholly-owned subsidiaries of Northeast Utilities, including The Connecticut Light and Powerall information systems at PGE. He joined the Company Public Service Company of New Hampshire, Western Massachusetts Electric Company and Yankee Gas Services Company. Prior to joining Northeast Utilities in 2002, 2018. Mr. Shivery worked for 29 years at Constellation Energy Group, Inc. and its wholly-owned subsidiary, Baltimore Gas & Electric Company, where he served in various executive positions, including Co-President of Constellation Energy Group. Mr. Shivery is a director of Webster Financial Corporation and is chair of the compensation committee and a member of the executive committee. We believe that Mr. Shivery’s qualifications to serve on our board include his nearly 40Kochavatr has more than 20 years of experience in the utility industry, including policy-making level directorinformation technology industry. Before joining PGE, he was senior vice president and executiveCIO at SUEZ Water Technologies & Solutions (formerly General Electric Water and Process Technologies) from 2017-2018 and chief information officer and chief digital officer from 2012-2017 and served in several information technology leadership positions while employed at Constellation Energy Group, Inc.GE Power (formerly GE Energy) for 11 years. Mr. Kochavatr also currently serves as board chair of the Technology Association of Oregon. EDUCATION BA, University of California, Los Angeles MBA, University of Chicago’s Booth School of Business | | | | | John Kochavatr Vice President Information Technology and Northeast Utilities,Chief Information Officer | |
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 43 |
| | | Compensation Discussion and his senior management level experience in capitalAnalysis |
| | | | | | | | | | | | | COMPENSATION AND DISCUSSION ANALYSIS TABLE OF CONTENTS | | Setting Executive Compensation | 45 | | | PGE VS. 2021 PEER GROUP | 48 | | | 2021 Executive Compensation | 49 | | | COMPENSATION ELEMENTS | 49 | | | PERFORMANCE -CONDITIONED COMPENSATION | 49 | | | BASE SALARIES | 50 | | | ANNUAL CASH INCENTIVE AWARDS | 50 | | | 2021 ACI PROGRAM TARGET AWARDS | 51 | | | 2021 ACI PROGRAM RATIONALE FOR SELECTION OF PERFORMANCE METRICS | 52 | | | 2021 ACI PROGRAM GOAL WEIGHTINGS | 53 | | | 2021 ACI PROGRAM PERFORMANCE RESULTS | 53 | | | NAMED EXECUTIVE OFFICER ANNUAL INCENTIVE AWARD PAYOUTS | 55 | | | LONG-TERM INCENTIVE AWARDS | 56 | | | CALCULATION OF TOTAL LTI AWARD OPPORTUNITY | 56 | | | 2021 PSU AWARDS | 57 | | RATIONALE FOR LTI AWARDS DESIGN | 57 | | 2021 PSU AWARD METRICS AND PAYOUT CALCULATION | 58 | | | 2021 RSU AWARDS | 58 | | OTHER TERMS OF THE PSU AND RSU AWARDS | 58 | | 2021 PSU AWARD PAYOUT | 59 | | BENEFITS PLANS | 61 | Other Compensation Policies and financial markets and credit markets throughout his career at Constellation Energy and Northeast Utilities.Practices | 63 | | RISK MANAGEMENT | 63 | | ANNUAL INDEPENDENT COMPENSATION RISK ASSESSMENT | 63 | | ANTI-HEDGING AND PLEDGING POLICY | 64 | | STOCK OWNERSHIP POLICY | 64 | | EQUITY GRANT PRACTICES | 65 | | INCENTIVE COMPENSATION CLAWBACK AND CANCELLATION POLICY | 65 | | IMPACTS OF REGULATORY REQUIREMENTS | 66 |
| | | | | | | | | | 44 | | Portland General Electric 2022 Proxy Statement |
Directors are elected by a majority
| | | | Compensation Discussion and Analysis |
Setting Executive Compensation The Role of the votes cast atCompensation and Human Resources Committee. The Compensation and Human Resources Committee, consisting entirely of independent directors, establishes our compensation philosophy and practices and develops, reviews and approves the annual meeting. Electioncompensation of the Company’s executive officers. The Compensation and Human Resources Committee’s executive compensation determinations are the result of the Compensation and Human Resources Committee’s business judgment, which is informed by the experience of its members and input provided by its independent compensation consultant, our CEO (other than with respect to her own compensation), other members of management, and shareholders. Each year, the Compensation and Human Resources Committee conducts an evaluation of the Company's executive compensation program to determine any appropriate changes. In making this determination, the Compensation and Human Resources Committee may consult with its independent compensation consultant and management, as described below; however, the Compensation and Human Resources Committee makes final decisions regarding the compensation paid to our named executive officers based on its own judgment. In determining whether to make changes to our executive compensation program, the Compensation and Human Resources Committee may consider a majority means that a director nominee is elected if the number of votes cast “FOR” such director nominee exceedsfactors, including, but not limited to, the numbersize, scope, and performance of votes cast “AGAINST” such director nominee, provided that a majorityour business, evolving compensation trends, financial goals, shareholders’ interests and peer comparisons as described below. | | | | | | | | | | | | | | | | Key Actions of Compensation and Human Resources Committee | Annual review of executive officers' performance | | Establishes base salaries, annual cash awards and equity awards for all executive officers other than the CEO, unless approved by the independent directors acting as a committee | | Recommends base salary, annual cash awards and equity awards for the CEO |
| | | | | | | | | | | | | | | | Key Actions of Independent Directors | Annual review of CEO performance | | Considers recommendations of the Compensation and Human Resources Committee and approves base salary, annual cash awards and equity awards for the CEO |
The Role of the outstanding sharesCompensation Consultant.The Compensation and Human Resources Committee selects and retains the services of common stock entitled to vote atits own independent compensation consultant and annually reviews the annual meeting are present in person or represented by proxy at the annual meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH NOMINEE FOR ELECTION TO THE BOARD OF DIRECTORS.
PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm to audit the consolidated financial statements of PGE and its subsidiaries for the fiscal year ending December 31, 2018 and to audit the effectiveness of internal control over financial reporting as of December 31, 2018.
The Audit Committee carefully considered the firm’s qualifications as an independent registered public accounting firm. This included a reviewperformance of the qualificationsconsultant. As part of the engagement team,review process, the quality control procedures the firm has established, the issues raised by the most recent quality control review, the coordination of the firm’s efforts with our internal audit departmentCompensation and its reputation for integrity and competence in the fields of accounting and auditing. The Audit Committee’s review also included matters required to be considered under the Securities and Exchange Commission’s rules on auditor independence, including the nature and extent of non-audit services, to ensure that the provision of those services will not impairHuman Resources Committee considers the independence of the auditors. The Audit Committee expressed its satisfactionconsultant in accordance with Deloitte in all of these respects.SEC and NYSE rules.
Under New York Stock ExchangeDuring 2021, the Compensation and Securities and Exchange Commission rules, and the Audit Committee Charter, the Audit Committee is directly responsible for the selection, appointment,Human Resources Committee’s independent compensation and oversight of the company’s independent registered public accounting firm and is not required to submit this appointment to a vote of the shareholders. The Board of Directors, however, considers the appointment of the independent registered public accounting firm to be an important matter of shareholder concern and is submitting the appointment of Deloitte for ratification by the shareholders as a matter of good corporate practice. One or more representatives of Deloitte are expected to be present at the annual meeting and will have an opportunity to make a statement and respond to appropriate questions from shareholders. In the event that our shareholders fail to ratify the appointment, it will be considered as a directionconsultant, FW Cook, provided no services to the Audit Committee to considerCompany other than services for the appointment of a different firm. Even if the appointment is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the company and its shareholders.
Ratification of the appointment of Deloitte as the company’s independent registered public accounting firm will require that a majority of the outstanding shares of common stock entitled to vote at the annual meeting be present in person or represented by proxy at the annual meeting, and that the number of votes cast in favor of this proposal exceeds the number of votes cast against this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
PROPOSAL 3: NON-BINDING ADVISORY VOTE ON APPROVAL OF COMPENSATION OF NAMED EXECUTIVE OFFICERS
As described in detail in the Compensation Discussion and Analysis section of this proxy statement, our executive compensation programs are designed to attract and retain our named executive officers and to provide them with incentives to advance the interests of our key stakeholders, which include our customers, our shareholders, our employees, and the communities we serve. In designing these programs, we focus on the following principles:
PERFORMANCE BASED PAY
A significant portion of our executives’ pay should vary based on performance relative to key stakeholder interests;
Greater responsibility should be accompanied by a greater share of the risks and rewards of company performance; and
Executive pay should encourage financial and operational improvements, but not at the expense of the safety and reliability of our operations.
REASONABLE, COMPETITIVE PAY
Executive pay should be competitive, but other considerations, such as individual qualifications, corporate performance and internal pay equity should also play a role in determining executive compensation.
SOUND GOVERNANCE AND COMPENSATION PRACTICES
In the Compensation Discussion and Analysis, under the heading “Executive Summary” (which begins on page 30), we highlight features of our compensation program that we believe reflect sound governance and compensation practices. We urge shareholders, in considering their vote, to review these features and to read the entire Compensation Discussion and Analysis, appearing on pages 30 to 44 of this proxy statement, which describes in more detail how the company’s executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the 2017 Summary Compensation Table and other related compensation tables and narrative, appearing on pages 45 to 55 of this proxy statement, which provide detailed information on the compensation of our named executive officers. Our Compensation and Human Resources Committee, and our Board of Directors believe that the policies and procedures articulated inworked with Company’s management, as directed by the Compensation Discussion and Analysis are effective in achieving our compensation objectives.Human Resources Committee, only on matters for which the committee is responsible.
We are asking our shareholders to indicate their support for our named executive officer compensation as described in this proxy statement by voting to approve the resolution set forth below. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we will ask our shareholders to vote “FOR” the following resolution at the annual meeting:
“RESOLVED, that the shareholders of the Portland General Electric Company (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed inAt the Compensation Discussion and Analysis, the 2017 Summary Compensation Table and the other related tables and disclosure in the proxy statement for the Company’s 2018 Annual Meeting of Shareholders.”
Approval of this proposal will require that a majority of the outstanding shares of common stock entitled to vote at the annual meeting be present in person or represented by proxy at the annual meeting, and that the number of votes cast in favor of this proposal exceeds the number of votes cast against this proposal.
The vote on this proposal is advisory, and therefore not binding on the company,Human Resources Committee’s request, FW Cook regularly attends committee meetings. FW Cook also communicates with the Compensation and Human Resources Committee or the BoardChair of Directors. However, we value the opinions of our shareholders and to the extent there is a significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider our shareholders’ concerns and the Compensation and Human Resources Committee will evaluate whether any actions are necessary to address those concerns.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.
PROPOSAL 4: APPROVAL OF STOCK INCENTIVE PLAN
The Portland General Electric Company Stock Incentive Plan was adopted by the Board of Directors (the “Board”) effective March 31, 2006 and was most recently amended and restated by the Board’s Compensation and Human Resources Committee (the “Committee”) effective February 13, 2018 (the “Stock Incentive Plan”). The Stock Incentive Plan was most recently approved by our shareholders on May 22, 2013.
Under the Stock Incentive Plan, 4,687,500 shares of company common stock were originally approved for issuance and, as of March 1, 2018, 422,967 shares of company common stock were subject to outstanding unvested awards and 3,059,327 shares remained available for future issuance.
The Stock Incentive Plan, as originally drafted, provided that no awards could be granted after March 31, 2016. The Board and the Committee each approved an amendmentoutside committee meetings regarding matters related to the plan, effective as of March 31, 2016, to extend the term of the plan to March 31, 2024. On September 12, 2017, the Oregon Public Utility Commission approved the plan as amended to provide for such extension.
We are now submitting the Stock Incentive Plan for shareholder approval. We are not requesting additional shares for issuance under the Stock Incentive Plan at this time. Shareholder approval of the Stock Incentive Plan will have the effect of (and is required for):
authorizing the extension of the term of the Stock Incentive Plan through March 31, 2024 and the settlement in shares of any awards granted after the plan’s original expiration on March 31, 2016;
providing that grants of stock options covering up to 1,000,000 shares under the Stock Incentive Plan may qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), though the company has not previously granted any options under the Stock Incentive Plan and does not presently intend to do so in the future; and
providing that awards granted to employees under the Stock Incentive Plan after its original expiration on March 31, 2016 may be settled in stock to the extent that such awards vest in accordance with their existing terms.
Additional changes have been made to the Stock Incentive Plan that do not require shareholder approval, including:
the addition ofcommittee’s responsibilities. FW Cook prepares a prohibition whereby shares withheld from delivery or delivered by a participant to satisfy an exercise price, or withheld in satisfaction of withholding tax obligations, will no longer be available for issuance under the Stock Incentive Plan;
the addition of a prohibition on the payment of dividends on unvested shares;
the addition of language to make more express that the company will not reprice or cancel and regrant any award at a lower exercise price, or cancel such an “underwater” award in exchange for cash, property or other awards, without first obtaining the approval of the company’s shareholders;
the elimination of certain provisions that relate to now-repealed rules under Section 162(m) of the Code (but not the limits on the amounts participants may be granted under the Stock Incentive Plan);
the addition of the ability to settle stock options and stock appreciation rights through a “net settlement” procedure (although the company has not historically granted such awards and has no present intention of doing so);
providing that shares withheld from delivery to satisfy tax withholding obligations may be withheld at up to the maximum applicable rate and not just at the minimum rate; and
certain other immaterial or stylistic changes.
As previously disclosed, the company inadvertently authorized certain awards under the plan, as then in effect, after March 31, 2016 to its nonemployee directors and to certain of its employees. The nonemployee director awards (covering an aggregate of 39,970 shares of common stock) were made in May 2016 and April 2017 in the form of time-vested restricted stock units. The 2016 awards were subsequently rescinded, and directors were permitted to elect to receive the 2017 award, as well as a substitute 2016 award, in the form of cash or shares. Because of the cash election feature, no shareholder action is needed or contemplated in respect of those director awards.
Three categories of awards have been made to employees under the plan since March 31, 2016 (the “Contingent Employee Awards”): (i) 148,985 performance stock units granted to officers and other key employees in February 2017 that vest and settle in shares on a “cliff” basis following a three-year service and performance period; (ii) 5,670 restricted stock units granted to key employees at various times between November 2016 and April 2017 that vest and settle in shares on a “cliff” basis after three years, subject to continued service but providing for earlier pro-rata vesting upon an employee’s death or disability; (iii) 148,943
performance stock units granted to officers and other key employees in February 2018 that vest and settle in shares on a “cliff” basis following a three-year service and performance period; and (iv) 4,797 restricted stock units granted to a new employee, effective February 1, 2018, pursuant to the terms of the employee’s offer letter. None of the Contingent Employee Awards has vested or been settled, and none will vest or be settled before November 2019, other than in cases of death or disability. As noted above, the Contingent Employee Awards will be settled in stock in accordance with their existing terms, but only if shareholders approve the Stock Incentive Plan pursuant to this Proposal 4. If shareholders do not approve the Stock Incentive Plan, the company may take steps to compensate the Contingent Employee Award holders as the company deems appropriate, in cash or otherwise, on a basis not requiring shareholder approval.
Plan Benefits
The following table sets forth the number of units subject to Contingent Employee Awards. As explained above, those awards will not be settled in stock unless shareholders approve the Stock Incentive Plan pursuant to this Proposal 4. The following table also sets forth the dollar value of restricted stock units that the company expects to grant to its nonemployee directors on the date of the 2018 annual meeting. If shareholders do not vote to approve the Stock Incentive Plan pursuant to this Proposal 4, directors will be permitted to elect to have those awards settle in cash instead of shares.
As explained further below, awards under the Stock Incentive Plan in the future otherwise will be made in the discretion of the Committee and their ultimate value will depend on the future value of our common stock. Accordingly, those awards are not determinable at this time.
| | | | | | | | | | | | | | Number of Units Subject to Contingent Employee Awards | | | | Time Based Awards | Performance Based Awards | | Name and Position | Dollar Value | | Threshold | Maximum | James J. Piro Chief Executive Officer (1) | $ | 518,129 |
| — |
| 12,041 |
| 21,072 |
| James F. Lobdell Senior Vice President, Finance, Chief Financial Officer and Treasurer | $ | 1,053,823 |
| — |
| 25,451 |
| 44,539 |
| Maria M. Pope President and Chief Executive Officer (1) | $ | 2,045,400 |
| — |
| 50,230 |
| 87,903 |
| J. Jeffrey Dudley Vice President, General Counsel and Corporate Compliance Officer | $ | 58,892 |
| — |
| 1,369 |
| 2,395 |
| William O. Nicholson Senior Vice President, Customer Service, Transmission and Distribution | $ | 468,373 |
| — |
| 11,311 |
| 19,795 |
| W. David Robertson Vice President, Public Policy | $ | 444,380 |
| — |
| 10,732 |
| 18,781 |
| | All current executive officers (11 people) | $ | 7,734,657 |
| 4,797 |
| 181,753 |
| 318,068 |
| | All current non-employee directors | $ | 900,000 |
| 19,450 |
| — |
| — |
| | All other employees including current non-executive officers | $ | 4,000,283 |
| 9,949 |
| 86,610 |
| 151,568 |
|
| | (1)
| Mr. Piro resigned as President effective October 1, 2017 and as Chief Executive Officer effective January 1, 2018 in connection with his retirement from the company. Ms. Pope was appointed President effective October 1, 2017 and Chief Executive Officer effective January 1, 2018 and previously served as Senior Vice President, Power Supply, Operations and Resource Strategy. |
Summary of the Plan
The material features of the Stock Incentive Plan are summarized below. The following summary does not purport to be complete, and is subject to and qualified in its entirety by reference to the complete text of the Stock Incentive Plan, which is attached as Appendix A to this proxy statement.
General
The purpose of the Stock Incentive Plan is to attract, retain and motivate highly competent persons as officers, directors and key employees of the company and its subsidiaries and affiliates, by providing them with incentives and rewards in the form of rights to earn shares of the common stock of the company and cash equivalents. The Stock Incentive Plan authorizes the grant of
incentive stock options (options that qualify under Section 422 of the Code), nonstatutory stock options, stock appreciation rights (“SARs”), restricted stock awards and restricted stock units (“RSUs”) (each an “Award”).
Shares Available for Grant
The maximum aggregate number of shares of common stock of the company reserved and available for issuance pursuant to Awards under the Stock Incentive Plan is 4,687,500, subject to adjustment under certain circumstances as specified in the plan. As of March 1, 2018, 1,628,173 shares have either been issued under the Stock Incentive Plan or are subject to outstanding unvested Awards, and 3,059,327 shares remain available for issuance pursuant to future Award grants.
The maximum number of shares of common stock that may be the subject of an Award with respect to any individual participant during the term of the Stock Incentive Plan cannot exceed 2,000,000. The maximum number of shares of common stock that may be covered by Awards issued under the Stock Incentive Plan during a year is currently limited to 1% of the company’s outstanding common stock at the beginning of such year. The maximum number of shares of common stock that may be issued pursuant to incentive stock options awarded under the Stock Incentive Plan cannot exceed 1,000,000.
If shares subject to restricted stock awards or stock units are forfeited, then such shares of common stock again become available for future Awards under the Stock Incentive Plan. If a stock option or SAR is forfeited or terminated before being exercised, then the corresponding shares of common stock again become available for future Awards under the Stock Incentive Plan. Shares delivered to the company by a participant or withheld by the company from delivery upon exercise, as part or full payment for an Award, and shares withheld from delivery to satisfy a tax withholding obligation, shall not be available for future Awards under the Stock Incentive Plan.
The closing price of the common stock on March 1, 2018 was $39.92 per share. As noted above, we are not asking shareholders to approve additional shares for issuance under the Stock Incentive Plan.
Administration
The Stock Incentive Plan is administered by the Committee, which consists of two or more directors appointed by the board. All of the members of the Committee are “non-employee directors” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934.
Subject to the provisions of the Stock Incentive Plan, the Committee has the authority to determine: (i) which officers, directors, and key employees will receive Awards, (ii) the time or times when Awards will be granted, (iii) the types of Awards to be granted, (iv) the number of shares of common stock that may be issued under each Award, and (v) the terms, restrictions and provisions of each Award. The Committee has the authority to construe the Stock Incentive Plan and Award agreements, to prescribe rules and regulations relating to the Stock Incentive Plan and to make all other determinations necessary or advisable for administering the plan, subject to the provisions of the plan. The determinations made by the Committee are binding and conclusive.
Eligibility
Officers, directors and key employees of the company or its affiliates are generally eligible for Awards, but only employees may be granted incentive stock options. In addition, an employee who owns more than 10% of the total combined voting power of all classes of outstanding stock of the company or any of its parents or subsidiaries may not be granted an incentive stock option unless the requirements of Section 422(c)(5) of the Code are satisfied.
Grant Agreements
Each Award is evidenced by a grant agreement that contains terms and conditions as determined by the Committee in its discretion. The grant agreement will determine the effect on an Award of the participant’s disability, death, retirement, involuntary termination, termination for cause or other termination of employment or service, and the extent to which and period during which Awards may be exercised. If a grant agreement does not provide otherwise, vested options and SARs may be exercised for a period of 90 days following the date the participant ceases to be an employee or director of the company, its subsidiaries or affiliates, and unvested options, SARs, restricted stock awards and RSUs are forfeited on the date the participant ceases to be an employee or director of the company, its subsidiaries or affiliates. No dividends will be payable with respect to a share underlying an Award unless and until the Award vests in respect of such share, although dividend equivalents may be accrued pending vesting. In addition, all Awards will be subject to such conditions as are necessary to comply with federal and state securities laws and understandings or conditions as to the participant’s employment, in addition to conditions specifically provided for under the Stock Incentive Plan.
Options
Each stock option agreement will identify whether an option is an incentive stock option or nonstatutory option and will specify, among other terms, when the option becomes exercisable, the exercise price of the option (which may not be less than the fair
market value of the underlying shares on the grant date) and the term of the option (in the case of incentive stock options, not to exceed 10 years from the date of grant).
Stock Appreciation Rights
An SAR means a right to receive payment in cash or shares of common stock of an amount equal to the excess of the fair market value of a share of common stock on the date the right is granted, all as determined by the Committee. SARs may be awarded alone or in combination with options.
Restricted Stock Awards
Restricted stock awards may be subject to time based vesting and/or performance based vesting and such other terms and conditions as the Committee determines appropriate. Restricted stock awards may or may not require payment of a purchase price in respect of the shares of common stock subject to the Award, and will specify whether the participant will have all of the rights of a holder of shares of common stock of the company, including the right to receive dividends (subject to vesting of the underlying shares) and to vote the shares.
Restricted Stock Units
An RSU provides for payment in shares of common stock at such time as is specified in the RSU agreement. Each RSU agreement will contain terms and conditions of the RSUs that are not inconsistent with the Stock Incentive Plan including, but not limited to, the number of shares of common stock underlying the RSU and time based and/or performance based vesting terms. The Committee will determine whether a participant granted an RSU will be entitled to a dividend equivalent right, which entitles the holder to receive the amount of any dividend paid on the share of common stock underlying an RSU, and which may be paid in cash (subject to vesting of the underlying share) or in the form of additional RSUs, as determined by the Committee.
Performance-Based Awards
Any Award granted under the Stock Incentive Plan may be granted subject to the attainment of performance criteria as determined by the Committee in its sole discretion. Such performance criteria may include comparisons to the performance of other companies.
The Committee may reduce or eliminate the number of shares of common stock or cash granted or the number of shares of common stock vested upon the attainment of a performance goal, and the Committee may disregard or offset the effect of extraordinary, unusual or non-recurring items in determining the attainment of performance goals. Such Awards may accumulate dividend equivalents on the same basis as described above in respect of RSUs.
Although the exemption for performance-based compensation under Section 162(m) of the Code was recently repealed with respect to taxable years beginning after December 31, 2017, amounts payable pursuant to a binding written agreement in effect on November 2, 2017 may still qualify for the exemption. Accordingly, while it is not expected that future grants under the Stock Incentive Plan will qualify for the exemption, certain Awards previously granted under the plan may be eligible. To the extent they are eligible, the company intends to administer the Awards in a way that qualifies them for the exemption, but there can be no assurance that they will qualify.
Adjustments
In the event of any change in the common stock of the company through a merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, spin-off, combination of shares, exchange of shares, dividends or other changes in capital structure, the Committee will make such adjustments as it, in its sole discretion, deems appropriate, including, but not limited to, adjustments to (i) the number of options, SARs, restricted shares and stock units available for future Awards, (ii) the number of shares of common stock covered by each outstanding option and SAR, (iii) the exercise price under each outstanding option and SAR; and (iv) the number of stock units included in any prior Award that has not yet been settled.
Effect of Change in Control
In the event of a change in control of the company, as defined in the Stock Incentive Plan, or in the event of a fundamental change in the business condition or strategy of the company, the Committee, in its sole discretion, may, at the time an Award is made or at any time thereafter, take one or more of the following actions: (i) provide for the acceleration of any time period relating to the exercise or payment of the Award; (ii) provide for payment to the participant of cash or other property with a fair market value equal to the amount that would have been received upon the exercise or payment of the Award had the Award been exercised or paid upon such event; (iii) adjust the terms of the Award in a manner determined by the Committee to reflect such event, (iv) cause the Award to be assumed, or new rights substituted therefor, by another entity; or (v) make such other adjustments in the Award as the Committee may consider equitable to the participant and in the best interests of the company. Any Award will be subject to such conditions as are necessary to comply with federal and state securities laws and understandings or conditions as to the participant’s employment in addition to those specifically provided for under the Stock Incentive Plan.
Prohibition on Repricing
The Stock Incentive Plan provides that the Committee may not reprice or cancel and regrant any Award at a lower exercise, base or purchase price, or cancel any Award with an exercise, base or purchase price in excess of the fair market value of the underlying common stock in exchange for cash, property or other awards, without the approval of the company’s shareholders.
Term, Amendment and Termination
The effective date of the Stock Incentive Plan was March 31, 2006. The Stock Incentive Plan was most recently amended and restated by the Committee on February 13, 2018 and, as noted above, the term of the plan was extended effective March 31, 2016. The plan was last approved by shareholders in 2013. The Stock Incentive Plan will terminate, by its terms, on March 31, 2024, but all outstanding Awards as of the date of termination will remain in effect and the terms of the Stock Incentive Plan shall apply until each such Award terminates as provided in the applicable grant agreement.
The Committee may, at any time and for any reason, amend or terminate the Stock Incentive Plan. An amendment of the Stock Incentive Plan will be subject to the approval of the company’s shareholders to the extent required by applicable laws, regulations, rules or requirements of any applicable stock exchange. Any such termination or amendment of the Stock Incentive Plan will not affect any Award previously granted under the plan.
Subject to the otherwise applicable terms of the Stock Incentive Plan, the Committee may amend the terms of any Award previously granted (and the related Award agreement), prospectively or retroactively, but generally no such amendment may impair the rights of any participant without his or her consent. No amendment of any stock options or SARs may be made in a manner that will be treated as the grant of a new stock option or SAR under Section 409A of the Code.
Federal Income Tax Information
The following is a brief summary of the federal income tax consequences of certain transactions under the Stock Incentive Plan based on federal income tax laws in effect as of the date of this Proxy Statement. This summary is not intended to be exhaustive and does not describe state or local tax consequences. Additional or different federal income tax consequences to the Stock Incentive Plan participant or the company may result depending upon other considerations not described below. Awards under the Stock Incentive Plan are intended either not to be “deferred compensation” within the meaning of Section 409A of the Code or to comply with the requirements of Section 409A. The deductibility of Awards may be subject to limits imposed under Section 162(m) of the Code.
Incentive Stock Options
A participant will not recognize regular income upon grant or exercise of an incentive stock option. (The spread on exercise of an incentive stock option is taken into account for purposes of calculating the alternative minimum tax.) If a participant exercises an incentive stock option and disposes of the shares acquired more than two years after the date of grant and more than one year following the date of exercise, no income is recognized upon exercise and the sale of the shares will qualify for capital gains treatment. If a participant disposes of shares acquired upon exercise of an incentive stock option before either the one-year or the two-year holding period (a “disqualifying disposition”), the participant will recognize ordinary income in an amount equal to the lesser of (i) the excess of the fair market value of the shares on the date of exercise over the option price or (ii) the excess of the fair market value of the shares on the date of disposition over the option price. Any additional gain realized upon the disqualifying disposition will be eligible for capital gains treatment. The company generally will not be allowed any deduction for federal income tax purposes at either the time of grant or the time of exercise of an incentive stock option. However, upon any disqualifying disposition by an employee, the company will be entitled to a deduction to the extent the employee recognized compensation income.
Nonstatutory Stock Options and Stock Appreciation Rights
No income is recognized by a participant at the time a nonstatutory stock option or SAR is granted. At the time of exercise of a nonstatutory stock option or SAR, the participant will recognize ordinary income, and the company will be entitled to a deduction in the amount by which the fair market value of the shares acquired exceeds the exercise price at the time of exercise. Upon the sale of shares acquired upon exercise of a nonstatutory stock option or SAR, the participant will receive capital gains treatment on the difference between the amount realized from the sale and the fair market value of the shares on the date of exercise. Such capital gains treatment will be short-term or long-term, depending on the length of time the shares were held.
Restricted Stock
In general, a participant who receives a restricted stock award will recognize ordinary compensation income on the difference between the fair market value of the shares of common stock on the date when the shares are no longer subject to a substantial risk of forfeiture and any amount paid for the shares, and the company will be entitled to a deduction for tax purposes in the same amount. Any gain or loss on the participant’s subsequent sale of shares will receive short-term or long-term capital gains
treatment, depending on the length of time the shares were held. If a participant receiving a restricted stock award makes a timely election under Section 83(b) of the Code to have the tax liability determined at the date of grant rather than when the restrictions lapse, the participant will recognize ordinary compensation income on the difference between the fair market value of the shares of common stock on the date the stock is issued and any amount paid for the shares, and the company will be entitled to a deduction at the same time. If such an election is made, the participant recognizes no further amounts of compensation income when the restrictions lapse, and any gain or loss on the participant’s subsequent sale of the shares will receive short-term or long-term capital gains treatment, depending on the length of time the shares were held.
Restricted Stock Units
A participant who receives RSUs will recognize ordinary compensation income when the RSUs vest and are paid in shares of common stock or cash, in the amount of the fair market value of the shares of common stock on the date paid to the participant. Any gain or loss on the participant’s subsequent sale of shares will receive short-term or long-term capital gains treatment, depending on the length of time the shares were held.
Vote Required and Board of Directors Recommendation
Approval of the Stock Incentive Plan will require that a majority of the outstanding shares of common stock entitled to vote at the annual meeting be present in person or represented by proxy at the annual meeting, and that the number of votes cast in favor of this proposal exceeds the number of votes cast against this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF THE PORTLAND GENERAL ELECTRIC COMPANY STOCK INCENTIVE PLAN.
COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT
The Compensation and Human Resources Committee of the Board of Directors reviewed and discussed with the company’s management the following Compensation Discussion and Analysis. Based on that review and discussion, the Compensation and Human Resources Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
THE COMPENSATION AND HUMAN RESOURCES COMMITTEE
Kirby A. Dyess (Chair)
John W. Ballantine
Mark B. Ganz
Kathryn J. Jackson
Neil J. Nelson
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes our executive compensation program as it relates to the following individuals, who were our “named executive officers” for 2017:
| | • | James J. Piro, Chief Executive Officer;(1)
|
James F. Lobdell, Senior Vice President, Finance, Chief Financial Officer and Treasurer;
| | • | Maria M. Pope, President;(2)
|
| | • | J. Jeffrey Dudley, Vice President, General Counsel and Corporate Compliance Officer;(3)
|
William O. Nicholson, Senior Vice President, Customer Service, Transmission and Distribution; and
W. David Robertson, Vice President, Public Policy.
| | (1) | Mr. Piro resigned as President effective October 1, 2017, and as CEO effective January 1, 2018 in connection with his retirement from the company. |
| | (2) | Ms. Pope was appointed President effective October 1, 2017, and CEO effective January 1, 2018. Prior to October 1, 2017 she served as Senior Vice President, Power Supply, Operations and Resource Strategy. |
| | (3) | Mr. Dudley resigned effective June 29, 2017 in connection with his retirement from the company. |
Executive Summary
2017 BUSINESS HIGHLIGHTS
2017 was a year of solid performance for the company, both financially and operationally. Below we describe some of our achievements and significant developments for the year.
Leadership Transition and Strategic Focus
We executed on our established leadership succession plan and completed a smooth transition to our new CEO. Ms. Pope’s broad experience across multiple industries and deep understanding of our customers’ needs and the energy business promise to serve the company well during a time of significant evolution in the industry.
Our Board of Directors worked closely with management to review and update the company’s statement of strategic direction to ensure the company is prepared to face new challenges and take advantage of new opportunities. Our strategy aligns our team on four key priorities: delivering exceptional customer experiences; investing in a reliable and clean energy future; building a smarter, more resilient grid; and pursuing excellence in our work.
Financial Performance
After adjusting to exclude the financial impact of the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”), the federal tax legislation enacted on December 22, 2017, our net income for the year was $204 million, return on equity (“ROE”) was 8.54%, and diluted earnings per share (“EPS”) was $2.29.
We maintained a solid balance sheet, including strong liquidity and investment grade credit ratings. In July 2017, Standard & Poor’s revised the company’s outlook to positive from stable based on incremental improvements in our business risk profile.
Utility Operations
Our customer satisfaction rankings were top quartile nationally for residential, general business and key customers. We were ranked number one among large electric utilities as per the Western region in the JD Power 2017 Electric Utility Business Customer Satisfaction Study.
Our employees and systems performed exceptionally well during an August heatwave in the region, which resulted in a new summer peak-demand record of 3,976 megawatts. Overall, generation plant availability was excellent at 90.34% for the year.
On October 1, 2017 we joined the California Independent System Operator’s Western Energy Imbalance Market. Our participation allows us to manage our energy supply portfolio in five-minute intervals, rather than one-hour intervals, which helps us integrate more variable energy resources like wind and solar into our system and control costs for our customers.
Our transmission and distribution system reliability performance, which is measured by the frequency and duration of outages, was mixed. While we met some of our reliability goals, our results for average outage duration did not meet our expectations. We are committed to continuing our investment in replacements for aging infrastructure, improving operational resiliency, and adding technology to improve the reliability of our system.
Regulatory Progress
We achieved a positive outcome in our 2018 General Rate Case, reaching agreement on all issues in the rate case with the Oregon Public Utility Commission (“OPUC”) staff and participating stakeholder groups. In its final order, the OPUC approved new prices effective January 1, 2018, in support of our continued investment in the safety and reliability of our system. Other key terms of the settlement include a return on equity of 9.5%, a capital structure of 50% debt and 50% equity, and a rate base of $4.5 billion.
We engaged in a collaborative process with OPUC staff and other stakeholders on our 2016 Integrated Resource Plan, which outlines our 20-year plan for providing safe, reliable and affordable energy for our customers. Our plan puts us on track to meet Oregon’s renewable power goals with 20% qualifying renewables by 2020 and 50% by 2040, excluding existing hydroelectric resources. Under our current proposal, we would meet our capacity need of 350 to 450 megawatts through bilateral power purchase agreements with owners of existing regional resources. We are also proposing the addition of 100 average megawatts of renewable resources by 2020, and expect to launch a request for proposals for renewable resources during the first half of 2018.
We filed a proposal with the OPUC outlining the development of up to 39 megawatts of energy storage in our service area, in compliance with Oregon House Bill 2193, which requires large Oregon utilities to procure energy storage systems with the capacity to store at least 5 megawatt hours of energy by 2020. Our proposal calls for investing between $50 million and $100 million to deploy energy storage projects that will help integrate renewables on the grid, improve the region’s energy resilience, and inform future investment in energy storage.
Capital Investment
We made significant investments in our system in 2017. Our capital expenditures for the year were approximately $514 million, which included expenditures for upgrades and replacement of aging generation, transmission and distribution; strengthening the power grid for earthquakes, cyberattacks and other potential threats; and new customer information systems and technology tools.
ALIGNMENT OF EXECUTIVE PAY WITH PERFORMANCE
The payouts under our executive awards for the year reflect the alignment of our executive pay with company performance. Under our annual cash award program, we performed at or near maximum levels relative to two of the goals (customer satisfaction and generation plant availability), above target relative to our power cost management goal, but below threshold relative to our electric service power quality goal. Our results with respect to our EPS goal, adjusted to exclude the impact of the 2017 Tax Act, were slightly above target. These results yielded payouts between 106.5% and 122.6% of our executives’ target annual cash incentive awards. Under our 2015-2017 equity incentive awards, we achieved the maximum performance level relative to our regulated asset base goal, while our performance relative to total shareholder return and ROE, adjusted to exclude the impact of the 2017 Tax Act, were below target, resulting in payouts equal to 102.2% of target awards. For a detailed discussion of these awards, see pages 36 to 44.
How We Make Compensation Decisions
COMPENSATION PHILOSOPHY
The goals of our executive compensation program are to attract and retain highly qualified executives and to provide them with incentives to advance the interests of our stakeholders, which include our customers, our shareholders, our employees, and the communities we serve. To accomplish these goals, we are guided by the following principles:
Performance-Based Pay
| | ◦ | A significant portion of our executives’ pay should be based on company performance relative to key stakeholder interests. |
| | ◦ | Greater responsibility should be accompanied by a greater share of the risks and rewards of company performance. |
| | ◦ | Executive pay should encourage financial and operational improvements, but not at the expense of the safety and reliability of our operations. |
Reasonable, Competitive Pay
| | ◦ | Executive pay should be competitive, but other considerations, such as individual qualifications, company performance, and internal equity should also play a role in determining executive compensation. |
COMPENSATION PRACTICES
The Compensation and Human Resources Committee of the Board of Directors (which we sometimes refer to as our “Compensation Committee”) regularly reviews the company’s compensation practices and policies to ensure that they promote the interests of the company’s stakeholders. Listed below are some of the most important aspects of our program.
Significant pay at risk. In 2017, incentive awards with no guaranteed payouts constituted 52.4% to 74.0% of our named executive officers' target total direct compensation (base salary plus variable incentive awards, assuming target performance).
Rigorous performance metrics. We base incentive award payouts on company performance relative to quantifiable goals whose achievement requires a meaningful stretch.
Diversified incentive award program. Our incentive awards reflect a reasonable balance between short-term and long-term performance, and awards are based on both operational and financial results.
Reasonable stock award program.Our three-year average burn rate (the total number of equity award shares granted over a three-year period divided by the weighted average of the shares outstanding) was 0.22% for 2015 through 2017, which puts us near the median relative to our peers.
Meaningful stock ownership guidelines. Our stock ownership guidelines are three times base salary for our CEO and one times base salary for our other executive officers, targets that are significant but commensurate with the size of our executives’ stock awards.
Clawback of incentive pay. Our Compensation Committee is authorized to seek reimbursement of incentive compensation from each executive officer if the Board of Directors determines that the officer has engaged in misconduct that contributed to the need for a material restatement of our financial results.
No employment agreements. None of our current executive officers has an employment agreement that provides for a guaranteed level of compensation.
Double-trigger stock vesting and enhanced cash severance.Following a change in control, our executives are entitled to accelerated vesting of long-term incentive awards and enhanced cash severance payments only if their employment is terminated.
No hedging or pledging. Our insider trading policy prohibits directors, officers and employees from entering into hedging or pledging transactions or short sales of our company stock.
Reasonable use of compensation market data. We evaluate our executive pay by reference to the median of our compensation peer group, but we do not tie compensation to specific benchmarks.
No significant perquisites. Our executives participate in the company’s health and welfare benefit programs on the same basis as other full-time employees and enjoy only modest perquisites.
No guaranteed tax gross-ups. We have no arrangements that entitle our executives to tax gross-ups, although we may approve tax gross-ups on moving expenses on a case-by-case basis.
No current SERP program. None of the company’s current executives participates in a supplemental executive retirement program.
No dividends or dividend equivalents on unvested shares. Recipients of awards under our long-term incentive program earn dividend equivalent rights only on shares that vest.
Reasonable severance arrangements. The maximum amount payable under our severance plan is one year’s base salary absent a change in control, and one year’s base salary plus the target value of the executive’s annual incentive award in the case of a termination following a change in control.
ROLES AND RESPONSIBILITIES
Compensation Committee and Independent Directors
The Compensation Committee, which consists of five independent directors, is responsible for developing and overseeing the company’s executive compensation program. The committee reviews the performance of all of the executive officers and establishes base salaries and grants incentive awards to the executive officers other than the CEO. The committee makes recommendations to the independent directors of the Board of Directors regarding the CEO’s base salary and incentive awards, and the independent directors, acting together as a committee of the board, approve such compensation after considering the committee’s recommendations. The Compensation Committee also reviews the company’s executive compensation plans and makes or recommends plan amendments to the Board of Directors.
In carrying out its responsibilities, the Compensation Committee is assisted by the company’s management, Human Resources staff, and an independent compensation consultant.
Management
The company’s officers do not determine executive pay. Management provides information and recommendations on compensation matters to the Compensation Committee, particularly in areas requiring detailed knowledge of company operations and the utility industry. Our CEO evaluates the performance of the other officers and makes recommendations regarding their pay based on her assessment of a variety of factors, including their individual performance, experience, job scope, business unit or business function performance, competitive market conditions and retention risk. Our CEO does not make recommendations regarding her own compensation.
Compensation Consultant
The Compensation Committee retained F.W. Cook to serve as its executive compensation consultant in 2017. F.W. Cook’s assignments for 2017 included the following:
Recommendation of a group of peer companies used for purposes of market comparisons;
Review of the company’s executive compensation program, including compensation philosophy, compensation levels in relation to company performance, pay opportunities relative to those at comparable companies, short- and long-term mix and metric selection, executive benefits and perquisites, stock ownership levels and wealth potential, and stock ownership guidelines;
Review of the company’s director compensation program, including design considerations such as ownership guidelines and vesting terms;
Reporting on emerging trends, legislative developments and best practices in the area of executive and director compensation;
Review of the company’s annual proxy disclosure;
Preparation of acomprehensive compensation risk assessment study to evaluate whether the company’sCompany's compensation programs are likely to create a material risk for the company; andCompany.
Attendance at Compensation Committee meetings.
Before engaging F.W. Cook,In 2021, the Compensation and Human Resources Committee reviewedgenerally sought input from FW Cook on a range of external market factors related to the firm’s qualifications, as well asCompany's compensation programs, CEO pay, environmental, social, and governance performance metrics and other evolving compensation trends, including legislative development and best
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 45 |
| | | | Compensation Discussion and Analysis |
practices, appropriate market reference points, and market compensation data. FW Cook reported on and provided market compensation data and trends regarding director compensation programs, general observations about management’s recommendations regarding the amount and form of compensation for our named executive officers. | | | | | | | | | | | | | | | | Key Actions of Independent Consultant | Advises the Compensation and Human Resources Committee on compensation plan design | | Advises the Compensation and Human Resources Committee on appropriate compensation levels, trends and legislative developments | | Performs annual compensation risk assessment for consideration by the Compensation and Human Resources Committee |
In addition, management has engaged its independenceown compensation consultant, Willis Towers Watson, to assist with a variety of design compensation matters, including compensation benchmarking and the potentialdevelopment of recommendations on compensation program design. The Role of the Chief Executive Officer and Management. At the Compensation and Human Resources Committee's request, Ms. Pope provides input regarding the performance and compensation of the other named executive officers. The Compensation and Human Resources Committee considers Ms. Pope’s evaluation and her direct knowledge of each named executive officer’s performance and contributions when making compensation decisions. Ms. Pope is not present during the Compensation and Human Resources Committee's voting or deliberations regarding her own compensation. | | | | | | | | | | | | | | | | Key actions of CEO and Management | Provides input on executive officers' performance | | Makes recommendations on compensation plan design | | Provides information about Company's performance relative to incentive plan goals |
The Role of Shareholders. Shareholders are provided the opportunity to cast an annual advisory vote on the compensation of our named executive officers and have indicated their strong support for conflictsthe compensation of interest.our named executive officers in each of the past five years. Most recently, 98% of votes cast on the say-on-pay proposal at the 2021 Annual Meeting voted in favor of our executive compensation program and there were no significant changes to our executive compensation program for 2021. We have ongoing discussions with many of our shareholders regarding various corporate governance topics, including environmental, social, and governance, executive compensation, and related trends. The committee determined that F.W. Cook is independentCompensation and its servicesHuman Resources Committee considers these discussions while reviewing our executive compensation program and will continue to consider shareholder feedback and the committee do not create any conflictsresults of interest. say-on-pay votes when making future compensation decisions. The committee has the sole authority to approve F.W. Cook’s compensation, determine the natureRole of Market Data and scope of its services,Peer Companies. The Compensation and terminate the engagement. F.W. Cook does not perform other services for or receive other fees from the company. USE OF COMPENSATION MARKET DATA
We considerHuman Resources Committee considers compensation market comparisons to ensure the competitiveness of ourthe Company's executives’ pay. We evaluateThe Compensation and Human Resources Committee views the labor market for our most senior positions as nationwide, broad cross-section of companies in various industries, and the committee recognized that this labor market varies by position. The committee's use of both general industry and utility benchmarking data reflects the competitive labor market from which we recruit executives. For the 2021 executive compensation program, the Compensation and Human Resources Committee evaluated pay by reference to the median50th percentile of the relevant market, but we do not automatically adjustreviewing data in total and by comparison (base salaries, incentive awards and equity awards). Positions relative to the 50th percentile may vary based on factors such as time in position, experience, qualifications, performance, and considerations of internal equity.
Actual compensation to meet specific benchmarks.for named executives may be higher or lower than target compensation, as it reflects actual performance and payouts under our performance-based annual incentive award and our long-term equity based incentive awards. For its 2017 compensation decisions,When benchmarking executive pay, the Compensation and Human Resources Committee reliedrelies on benchmarking surveys, as well as publicly available information provided by F.W. Cook regarding the compensationpay practices of a group of utility industry peer companies selected by our Compensation and Human Resources Committee each year. Although in 2021 the
| | | | | | | | | | 46 | | Portland General Electric 2022 Proxy Statement |
| | | | Compensation Discussion and Analysis |
benchmarking data on which we relied was generally based on utility industry surveys and general industry for the chief information officer role, moving forward we may be using general industry survey data as appropriate to reflect the realities of the competitive marketplace for the Company’s talent needs. The Compensation and Human Resources Committee reviews and approves peer group composition each year. With the assistance of FW Cook, the Compensation and Human Resources Committee identified groups of companies together with broader utility industryto serve as market reference points for compensation comparison purposes for 2021. The table below shows the most relevant benchmarking survey data. The compensation peer group data were compiled from proxy statements and other public filings, as well as data derived from thefor each of our named executive officers: | | | | | | | | | | | | | Named Executive Officer | | Utility Industry(1) | General Industry(1) | | Maria Pope | President & CEO | ✓ | | | James Ajello | SVP, Finance, CFO & Treasurer | ✓ | | | Lisa Kaner | VP, General Counsel & Corporate Compliance Officer | ✓ | | | Larry Bekkedahl | SVP, Advanced Energy Delivery | ✓ | | | John Kochavatr | VP, Information Technology & Chief Information Officer | | ✓ |
(1) Data sources included Willis Towers Watson Comp Online database. Utility industry survey data were collected from the Willis Towers Watson2020 Energy Services Executive Database. Historical cash compensation data were updated at a 3% annual growth rate.Compensation Survey – U.S. | | | | | | | Looking Forward | For 2022, in keeping with our guiding principles of reasonable competitive pay, with the assistance of FW Cook, salaries for certain positions including named executive officers in the chief financial officer and chief legal officer positions will be benchmarked at a market reference point that weights equally the Utility Industry and General Industry benchmarking survey data. |
To select ourA peer group we look for 2021 compensation decisions was developed for reference consisting of companies that represent the best match with PGEthe Company based on the following criteria:
•Vertically Integrated Utility.Utility. Our peer companies should be vertically integrated utilities, with a business mix either focused on either regulated electric operations or a balance of regulated electric and regulated gas operations. •Minimal Non-Regulated Business ActivitiesActivities.. Non-regulated businesses should not be key drivers of the financial performance and strategy of our peer companies. Market Capitalization•.Comparable Size. Our peer companies should be in the smallwithin a reasonable range relative to mid-cap range ($1 to $10 billion inkey financial measures, including revenue, market capitalization), with adequate liquiditycapitalization, and size to attract key utility-focused institutional investors while also maintaining a retail investor base.enterprise value.
•Investment-Grade Credit RatingsRatings.. Our peer companies should have credit ratings that allow for financing at a reasonable cost in most market environments. •Balanced Customer Mix.Mix. Our peer companies should have a balanced retail, commercial and industrial mix and service territories not overly reliant on one key customer or industry sector. •Regulatory Environment. Our peer companies should have a comparable cost of service ratemaking process and allowed return on equity, as well as a history of allowed recovery on regulatory assets, fuel and power costs and legitimateprudently incurred deferred costs. •Capital StructureStructure.. Our peer companies should demonstrate moderate leverage (generally less than 60% debt to total capitalization ratio) and no significant liquidity concerns. •Growth OpportunitiesOpportunities. .The growth opportunities of our peer companies should be based primarily on regulated activities. We | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 47 |
| | | | Compensation Discussion and Analysis |
In the case of Northwest Natural Gas Company, we also seek to maintain a peer group in which we are positioned near the median relative to key financial measures, including company revenues, market capitalization and enterprise value. Finally, we considerconsidered geographic proximity, to the extent it could result in a company’sthe Company’s serving as a potential competitor for executive talent. After considering information regarding candidate peer companies provided by F.W. Cook,For 2021 the Compensation and Human Resources Committee selected the following companies to serve as our compensation peer group for 2017:
2017 PEER GROUP
| | | | | | | | | | | | | 2021 PEER GROUP | | | | | ALLETE, INC. | Evergy, Inc. | Northwest Natural Gas Company | PNM Resources, Inc. | | Alliant Energy Corporation | IDACORP, Inc.Hawaiian Electric | PNM Resources,NorthWestern Corporation | Puget Energy, Inc. | | Avista Corporation | Northwest Natural Gas Company | SCANA Corporation | Cleco Corporation | NorthWestern Corporation | UIL Holdings Corporation | El Paso Electric CompanyIDACORP, Inc. | OGE Energy Corp. | Vectren Corporation | Great Plains Energy IncorporatedBlack Hills Corporation | NiSource, Inc. | Pinnacle West Capital Corporation | Westar Energy, Inc. |
As shown below,Based on data compiled by Willis Towers Watson at the time of our 2021 peer group review, PGE iswas positioned near the median of its current compensationthe peer group in terms of revenue net income,and market capitalizationcapitalization:
PGE VS. 2021 PEER GROUP | | | | | | | | | | | | | | | | | | | | | | Revenue | | | | | | PGE 54th Percentile | | | | | | | | | 0 | 25 | | 50 | 75 | 100 | | | | | | | | | Market Capitalization | | | | | | PGE 32nd Percentile | | | | | | | | | 0 | 25 | | 50 | 75 | 100 |
The Role of Internal Equity. The Compensation and enterprise value.Human Resources Committee uses internal pay equity principles to determine the compensation for positions that are unique or difficult to benchmark against market and peer data. Internal equity is also considered in establishing compensation for positions considered to be equivalent in responsibilities and importance, especially where precise external data is not available.
| | | | | | | | | | | | | | | | Revenues (1) | Net Income (2) | Market Capitalization (as of 12/31/17) | Enterprise Value (as of 12/31/17) | | 75th Percentile |
| $2,636 |
|
| $361 |
|
| $7,266 |
|
| $11,224 |
| | Median | 1,700 |
| 199 |
| 4,979 |
| 6,628 |
| | 25th Percentile | 1,356 |
| 138 |
| 3,238 |
| 5,403 |
| | PGE | 1,987 |
| 200 |
| 4,423 |
| 6,711 |
| | PGE Percentile Rank | 53 |
| 50 |
| 45 |
| 51 |
|
| | | | | | | | | (1)48 | Based on revenues for PGE and the peer group companies as reported for the 12 months ending September 30, 2017. | Portland General Electric 2022 Proxy Statement |
| | | (2)Compensation Discussion and Analysis |
2021 Executive Compensation COMPENSATION ELEMENTS The three components of the total direct compensation delivered in our program are: 1) Base Salary; 2) Annual Cash Incentive Awards; and 3) Long-Term Equity-Based Incentives. The following table describes the principal elements of our 2021 compensation program. | | | | | | | | | | | | | | | | Element | Form | Key Objective and Characteristics | | Fixed | Base Salaries | Cash | Establish a market-competitive pay foundation that reflects each officer's experience, skills and performance and is intended to attract and retain executives | | | | | | | Performance Conditioned and Variable | Annual Cash
Incentive Awards | Cash | Focus executive's attention on achievement of relatively short-term financial, operating and strategic goals that we believe will increase long-term shareholder value and benefit our customers | Based on net income for PGEEarnings Per Share (weighted at 40%), Operational Measures (weighted at 30%) and the peer group companies as reportedStrategic Initiatives (weighted at 30%). No payment unless Company exceeds threshold performance level for the 12 months ending September 30, 2017.final metric and maximum payouts are capped | | Long-Term Equity-Based Incentive Awards | Equity | Directly aligns executives' pay with long-term value provided to shareholders, and benefits customers by enhancing executives' focus on the Company's long-term goals | Performance-Based Restricted Stock Units (weighted at 70% collectively)
ROE/Allowed ROE
EPS Growth
Clean Energy
TSR (used as a multiplier) | | Service Base Restricted Stock Units (weighted at 30% collectively). Vest ratably over three years |
PERFORMANCE-CONDITIONED COMPENSATION
TAX CONSIDERATIONS
Section 162(m)A significant portion of our executives' total direct compensation is tied to Company performance. The following charts show that incentive compensation represented 81% of the Code generally limits to $1 million annually the federal income tax deduction that a publicly held corporation may claim for compensation payable to certain of its respective current and former executive officers, but that deduction limitation historically did not apply to performance-based compensation that met certain requirements. As part of the 2017 Tax Act, Section 162(m) was amended, effective for taxable years beginning after December 31, 2017, to expand the scope of executive officers subject to the deduction limitation and also to eliminate the performance-based compensation exception, though the exception generally continues to be available on a “grandfathered” basis to compensation payable under a written binding contract in effect on November 2, 2017.
In determining2021 target total direct compensation for our executive officers, the Compensation Committee considers the extent to which the compensation is deductible, including the effect of Section 162(m). In prior years, the Compensation Committee generally sought to structure our executive incentive compensation awards so that they qualified as performance-based compensation exempt from the Section 162(m) deduction limitation where doing so was consistent with the company’s compensation objectives, but it reserved the right to award non-deductible compensation. The Compensation Committee continues to evaluate the changes to Section 162(m)CEO and their significance to the company’s compensation programs, but in any event its primary focus in its compensation decisions will remain on furthering the company’s business objectives and not on whether the compensation is deductible. The Compensation Committee did not make significant changes to the company’s executive compensation program for 2018 in response to the tax code changes.
CONSIDERATION OF “SAY-ON-PAY” VOTE
The Compensation Committee considers the results63% of the annual shareholder “Say-on-Pay” advisory vote on the2021 target total direct compensation of the company’sfor our other named executive officers in developing the company’s executive compensation program. At our 2017 annual meeting of shareholders, over 99% of the votes cast approved our compensation program as described in our 2017 proxy statement. We believe these results reflect broad shareholder support for our executive compensation program. Accordingly, while we made some modifications to our incentive award programs to ensure market competitiveness and alignment with stakeholder interests, we retained the core design of our compensation program for 2017. We will continue to consider the results of annual shareholder advisory votes on executive compensation, as well as any feedback we may receive from shareholders and other stakeholders during the course of the year.officers.
| | | | | | | | | | | | | 2021 Target Direct Compensation for Chief Executive Officer | | 19% | 20% | 43% | 18% | | | | | | 63% PERFORMANCE-CONDITIONED | | n Base Salary n Annual Cash Incentive n PSUs n RSUs |
At our 2017 annual meeting we also conducted a shareholder advisory vote to determine how often a Say-on-Pay vote should be conducted. Our shareholders recommended, in a non-binding vote, a frequency of one year for future shareholder Say-on-Pay voting. Our Board of Directors adopted this shareholder recommendation and approved a one-year frequency for shareholder advisory votes on our executive compensation program. We expect to conduct the next shareholder advisory vote on the frequency of our Say-on-Pay voting in 2023. | | | | | | | | | | | | | 2021 Target Direct Compensation for Other Named Executive Officers | | 38% | 23% | 27% | 12% | | | | | | 50% PERFORMANCE-CONDITIONED | | n Base Salary n Annual Cash Incentive n PSUs n RSUs |
Elements of Compensation | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 49 |
Our executive pay includes the following elements: | | | | Compensation Discussion and Analysis |
Base salaries;
Annual cash incentive awards;
Long-term equity incentive awards; and
Other standard benefits, including retirement benefits, health and welfare benefits and modest perquisites.
We discuss each of these elements in the following sections.
BASE SALARIES Overview
We pay base salaries to provide a fixed amount of compensation at levels needed to attract and retain qualified executives. The Compensation Committee considers the recommendations of our CEO beforeWhen setting theannual base salaries of our named executive officers, other than the CEO. Compensation and Human Resources Committee considers market data provided by its independent compensation consultant, internal pay equity, the Company's financial results and size relative to peer companies.
The independent directorsmembers of our Board approved theour CEO’s 2021 base salary after receiving a recommendation from the Compensation and Human Resources Committee. This determination was based on a comprehensive review of Ms. Pope's performance for 2020. 2017The Compensation and Human Resources Committee considered the recommendations of our CEO and market data before setting the 2021 salaries of our other executive officers. Base Salariessalary recommendations are based on a variety of considerations, including market competitiveness, individual performance and qualifications, internal pay equity and retention risk.
For 2017, annualThe table below shows the base salary increases forsalaries of our named executive officers averaged 3.0% (excludingfor 2020 and 2021.
| | | | | | | | | | | | | 2020 Salary ($) | 2021 Salary ($) | Annual Increase | | Maria Pope | 900,000 | | 970,000 | | 8% | James Ajello(1) | 550,000 | | 550,000 | | —% | | Lisa Kaner | 419,900 | | 461,890 | | 10% | | Larry Bekkedahl | 387,250 | | 406,613 | | 5% | | John Kochavatr | 357,000 | | 374,850 | | 5% |
(1) Mr. Ajello joined the increase in Ms. Pope’s salary when she assumed the role of President of the company).
Company on November 30, 2020.
2016 and 2017 BASE SALARIES
| | | | | | | | | | | | 2016 Salary (1) | 2017 Salary (2) | Annual Increase | | James J. Piro |
| $798,662 |
|
| $822,622 |
| 3.0 | % | | James F. Lobdell | 420,000 |
| 432,604 |
| 3.0 | % | | Maria M. Pope | 450,000 |
| 454,500 |
| 1.0 | % | | J. Jeffrey Dudley | 370,000 |
| 381,106 |
| 3.0 | % | | William O. Nicholson | 320,000 |
| 329,608 |
| 3.0 | % | | W. David Robertson | 295,000 |
| 312,723 |
| 6.0 | % |
| | (1) | Effective April 11, 2016. |
| | (2) | Effective March 27, 2017. Ms. Pope’s annual base salary was increased to $650,00 effective October 1, 2017, when she assumed the position of President of the company. |
ANNUAL CASH INCENTIVE AWARDS OverviewOVERVIEW
We grant annual cash incentive awards under our 2008 Annual Cash Incentive Master Plan for Executive Officers (“Annual Cash Incentive Plan”) to provide our executives with incentives to advance stakeholder interests by linking their pay to short-term company performance in important financial and operational areas.
TheOur Annual Cash Incentive Plan permits(ACI Plan) is a variable, at-risk component of our named executive officer's compensation and is aligned with the Company's financial, operational and strategic imperative goals, as established each year by the Compensation Committee to grant awards that are intended to qualify as performance-based compensation for purposes of Section 162(m) of the Code. (Although the exemption for performance-based compensation under Section 162(m) was recently repealed, awards made on or before November 2, 2017 may still qualify for the exemption.) Under the terms of the plan, in determining performance results for such awards, the Compensation Committee is required to exclude the impact of “Extraordinary Events.” These are defined in the plan as “non-recurring, unusual or extraordinary events,” and include the following types of occurrence: (i) regulatory disallowances, (ii) corporate restructuring, (iii) gains or losses on the disposition of a major asset, (iv) changes in regulatory, tax or accounting regulations or laws, (v) resolution or settlement of litigation and (vi) the effect of a merger. The committee has discretion to make downward adjustments to awards granted as “performance-based compensation” for purposes of Section 162(m), but does not have the ability to make discretionary upward adjustments. See page 35 under the heading “Tax Considerations” for a discussion of Internal Revenue Code Section 162(m).Human Resources Committee.
2017 Annual Cash Incentive Award Program
Under our 2017The annual cash incentive program provides payout opportunities based on the achievement of predetermined financial, operating and strategic goals that require our named executive officers to meet high standards of performance.
For 2021, the Compensation and Human Resources Committee selected key quantitative financial and operating performance metrics: EPS, Customer Satisfaction, Electric Service Power Quality and System Reliability and Generation Plant Availability. The Compensation and Human Resources Committee also selected three strategic imperative goals: Increased Operational Efficiency; Deliver Clean, Integrated Customer Solutions; and Public Support and Policy, as part of the 2021 ACI Plan. For each officer’s award was calculated by multiplyingcategory the Compensation and Human Resources Committee assigned a target award byscore and potential score range reflecting the sumrelative weight given the goal category. Specific quantitative scores were set for goals that comprised most of two percentages: a “financial performance percentage” and an “operating performance percentage,” each weighted equally:the target score. | | | | | | | | | | 50 | | Portland General Electric 2022 Proxy Statement |
| | | | Compensation Discussion and Analysis |
The formula for calculating awards under our 2021 ACI Program is shown below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AWARD | EARNED | = | | TARGET AWARD | | X | | | | FINANCIAL PERFORMANCE % X 50%40% | | + | | OPERATING PERFORMANCE % X 50%30% | + | STRATEGIC IMPERATIVE PERFORMANCE % X 30% | | | | | | | | | | | | | | | | | | |
Target Awards. Target awards were establishedUnder the formula above, award payouts are determined by multiplying base salary paid in 2017 by the applicable percentage shown in the table below. The target awards of all of our executives were close to the competitive reference point for their positions.
2017 ANNUAL CASH INCENTIVE AWARDS | | | | | | | | | | | Target Awards (Award at Target Performance) | Award at Maximum Performance | Target Award as Multiple of Base Salary | | James J. Piro |
| $805,422 |
|
| $1,208,132 |
| 95% | | James F. Lobdell | 236,066 |
| 354,100 |
| 55% | | Maria M. Pope | 272,056 |
| 408,083 |
| 55% | | J. Jeffrey Dudley* | 189,059 |
| 283,588 |
| 50% | | William O. Nicholson | 163,512 |
| 245,268 |
| 50% | | W. David Robertson | 123,183 |
| 184,774 |
| 40% |
*Mr. Dudley’seach officer’s target award assumes service for the entire year and does not reflect his retirement in June 2017.
Financial Performance Percentage. The financial performance percentage wasby a “performance percentage” based on the company’s 2017 diluted earnings per share, adjusted as necessary toachievement of financial, operating and strategic imperative goals during the year.
Unless the threshold goal is achieved for a performance measure, there is no payout for that performance measure. The Compensation and Human Resources Committee may, in its judgment, exclude the financial impact of extraordinary,unusual, non-recurring events relative to a target established bythat occur during the year. When setting the goals for 2021, the Compensation Committee. The table below showsand Human Resources Committee considered many factors, including the EPS required foralignment between appropriate payout opportunities and strong financial results at threshold, target, and maximum performance andgoal levels. The prolonging of the associatedCOVID-19 pandemic was not a consideration at the time the 2021 annual incentive plan goals were set. Each of the performance percentages can range from 0% to 200%, with financial performance percentages. Results between threshold,weighted 40%, operating performance weighted 30% and strategic initiatives weighted 30%. This results in a maximum ACI award opportunity equal to 200% of the target and maximum were interpolated to determineaward. Vesting of an award generally requires continued employment until the actual performance percentage. EPS of at least 70% of target EPS was required to achieve any payoutdate that payment is made under the awards.award, but if an officer’s employment is terminated before that date due to retirement, death, or disability, the officer is entitled to a portion of the award, prorated based on the number of days served during the award year.
2021 ACI PROGRAM TARGET AWARDS
FINANCIAL PERFORMANCE TARGETS AND ASSOCIATED PAYOUT PERCENTAGES | | | | | | | | | | | | | Threshold | Target |
| Maximum | | Percentage of Target | 85 | % | 100 | % | 115 | % | | Earnings Per Share |
| $1.91 |
|
| $2.25 |
|
| $2.59 |
| | Performance Percentage | 50.0 | % | 100.0 | % | 150.0 | % |
Operating Performance Percentage. The operating performance percentageTarget awards for eachthe named executive officer was based on results relative to three operating goals—generation plant availability, customer satisfaction,officers were established by multiplying their base salary paid in 2021 by an award multiple established by the Compensation and electric service power quality and system reliability—and, in the caseHuman Resources Committee. The target awards of Ms. Pope, a fourth operating goal of power cost management. To determine the overall operating performance percentage, a weighting for each goal was multiplied by a payout multiplier determined by results for that goal, and the resulting figures were summed. Performance results between threshold, target and maximum were interpolated to determine a specific payout multiplier.
To select the appropriate threshold, target and maximum levels of performance for the goals, we considered a variety of factors, including the probability of goal achievement, current performance relative to industry peers, and the need for further improvement. The following table describes the operating goals and shows the targets for threshold, target and maximum of performance. It also shows the payout multipliers associated with each of these performance levels.our named executive officers were close to the market median for their positions. (See page 46 for a discussion of how we evaluated the market-competitiveness of our executives’ compensation.)
For 2017, we increased the maximum payout percentage tied to operating performance from 133.33% to 150% to align to peer company practices. This change was coupled with our adoption of more stringent metrics for the customer satisfaction, generation availability and net variable power cost reduction goals:
The 2017 customer satisfaction metric was expressed as the percentage of customers giving the company a rating of 9 or 10, rather than the percentage of customers who rate the company between 6 and 10.
Generation availability performance was measured using NERC’s Generation Availability Data System (GADS) methodology.
The maximum performance level under the net variable power cost reduction goal was increased from $29.5 to $33 million. | | | | | | | | | | Name | Target Award
($)* | Target Award as % of 2021 Base Salary* Paid | | Maria Pope | 1,012,846 | | 105% | | James Ajello | 330,000 | | 60% | | Lisa Kaner | 275,196 | | 60% | | Larry Bekkedahl | 243,074 | | 60% | | John Kochavatr | 224,086 | | 60% |
* Includes the value of paid time off taken during the year.
OPERATING PERFORMANCE TARGETS AND ASSOCIATED PAYOUT PERCENTAGES | | | | | | | | | | GENERATION PLANT AVAILABILITY | | | | | | | | | Threshold | Target | Maximum | | | Performance Percentage | 50.0 | % | 100.0 | % | 150.0 | % | | | Performance Targets | 86.73 | % | 88.48 | % | 90.23 | % | | | Generation plant availability is measured by the amount of time that a generating plant is able to produce electricity over a certain period (determined by subtracting from total hours in the period all maintenance outage hours, planned outage hours and forced outage hours), divided by the number of hours in the period. To set the threshold, target and maximum performance levels for this goal, we established individual plant goals, which were then weighted to produce overall performance targets. To establish each individual plant goal, we used the following formulas: |
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 51 |
| | | | Compensation Discussion and Analysis |
2021 ACI PROGRAM RATIONALE FOR SELECTION OF PERFORMANCE METRICS
| | | | | | | | | | | | | Metric | Measurement | Why We Use this Metric | | Financial | EPS | Measured by the Company’s net income for the year divided by average shares outstanding during the year. | EPS is a driver of shareholder value creation in the regulated utility industry. | | | | | | Operating | Customer Satisfaction | Average of the Company’s residential, general business and key customer satisfaction scores on three independent utility industry surveys, where satisfaction is defined as a rating of 9 or higher on a 10-point scale.
These ratings are weighted according to the Company’s annual revenues from each customer group. Customer satisfaction goals are updated annually based on estimated ratings needed to achieve 50th, 65th and 90th percentile rankings of the surveyed companies. | Customer satisfaction is a measure of our ability to run our business in a way that meets the needs of our customers. | Electric Service
Power Quality and
System Reliability | SAIDI (a standard industry measure for outage duration), which is equal to the total number of minutes an average customer experiences service interruption during the year. | Delivering reliable electric service is our Company’s core business. Outage frequency and outage duration are fundamental measures of service reliability that our customers care about. | Generation Plant
Availability | Amount of time that a generating plant is able to produce electricity during the year (determined by subtracting from total hours in the period all maintenance outage hours, planned outage hours and forced outage hours), divided by the number of hours in the year. To set the maximum, target and threshold performance levels for this goal, we established individual plant goals, which were then weighted to produce overall performance targets. | Our ability to achieve our financial objectives and serve our customers depends in part on our generation plants’ delivery of reliable and affordable power. | | | | | | Strategic | Increase operational efficiency | Measured by progress in the following areas: • Streamline business with productivity improvements • Deploy capital and achieve compliance efficiently • Leadership diversity representation for women and black, indigenous and people of color • Supplier diversity | Our Company operates in an increasingly competitive business environment and we need to continue to earn our customers' business. DEI is part of the fabric on how we operate and serve our communities. | | Deliver clean, integrated solutions | Measured by progress in the following areas:
• Clean product solutions
• Transportation electrification
• Integrated grid platform
• Flexible load
• Seamless digital experiences
• Retain and grow customers | Building an integrated grid promotes reliability and enables the visible and interoperable connection of customer technologies, a key component of our decarbonization and electrification strategies. | Public Support
and Policy | Measured by policy and regulatory outcomes in the following areas:
• Retain and grow customers
• Secure reliability and resource adequacy
• Secure decarbonization ability | Achieving our strategic plans requires a policy framework that supports system reliability and fair allocation of costs to all customers. |
| | | | | | | | | | 52 | | Portland General Electric 2022 Proxy Statement |
| | | | Compensation Discussion and Analysis |
2021 ACI PROGRAM GOAL WEIGHTINGS The weightings assigned to the 2021 ACI Program goals for each of the named executive officers are shown below. | | | | | | | | | | | | | | | | 40% | 30% | 10% | 10% | 10% | | | | | | n EPS n Strategic Initiatives n Electric Service Power Quality n Generation Availability n Customer Satisfaction |
2021 ACI PROGRAM PERFORMANCE RESULTS In February 2022, our Compensation and Human Resources Committee met to review the following performance results for the awards: | | | | | | | | | | | | | | | | | | | | | Financial Performance. | | Operating Performance. | | Progress on Strategic Initiatives. | | | | | | | Our 2021 EPS was $2.72, or 103% of target which result in 118% performance percentage for the named executive officers. | | Operating performance resulted in a performance percentage of 81% for the named executive officers. Generation Plant Availability was above target level. Performance with respect to SAIDI, when adjusted for new wildfire protocols, and customer satisfaction which were below target. | | Results for our strategic goals were close to or above target, resulting in an overall performance percentage of 129%. Below are highlights of our progress toward our 2021 strategic goals: | | | | | | |
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 53 |
| | | | Compensation Discussion and Analysis |
| | | | | | | | | | | | | | | Increase Operational
Efficiency | | Deliver Clean, Integrated
Customer Solutions | | Public Support and Policy | | | | | | Max Availability Factor = •PH - (POH + MOH + MaxFOH) * 100%Achieved OSHA recordable rate decrease of 16.3% and DART (days away, restricted time) rate decrease of 27.4%.
PH
Target Availability Factor = •PH - (POH + MOH + MeanFOH) * 100%Installed system hardening improvements in High Fire Risk Areas including ductile iron poles, fiberglass cross-arms, distribution automation equipment and remote weather stations.
PH
Min Availability Factor = •PH - (POH + MOH + ThresholdFOH) * 100%Upgraded advanced metering infrastructure improving meter communication accuracy from 70% to over 90% resulting in enhanced outage information for customers and crews. On track to eliminate thousands of manual meter reads annually.
PH
•Deployed new outage map technology that incorporates an interactive wildfire risk map and released proactive outage and restoration alerts via text messaging.
•Increased estimated restoration time accuracy through algorithm enhancements to provide more precise information improving the outage response experience for customers.
•Launched a new supply chain procure-to-pay system doubling electronic invoices processed, centralizing procurement, increasing efficiencies and elevating transparency.
•Increased the participation of minority and disadvantaged businesses in supply chain. In 2021, the Company's supplier diversity accounted for approximately 10% or over $102 million of its procurement spend.
•Deployed new contract management and enterprise compliance systems to mitigate risks, centralize documentation and elevate accountability.
| | •Officially opened the new Integrated Operations Center and launched the Advanced Distribution Management System, the cornerstone of our strategy to modernize grid operations and establish new physical and cyber security capabilities to monitor and protect assets while also improving incident response times. •Secured major customer for Green Future Impact (GFI) program, catalyzing the building of a second renewable solar facility in Wasco County. Received commission approval for Phase 2 of GFI, expanding program by 200MW. Secured commitment from major customer for 250MW of the Customer Supply Option. •PGE’s Fleet Partner Program enrolled Titan Freight and received 16 applications from additional customers to build charging infrastructure at 28 sites that will deliver 268 EV charging ports and serve over 470 fleet EV vehicles. •Expanded payment options through PayPal, Amazon Pay and Auto Pay via voice.
| | •Partnered with legislators and stakeholders to pass clean electricity legislation, secured OPUC decarbonization authority, enabled a community-wide green tariff, modernize the SB 1149 competition statute, and prevented direct access expansion and community choice aggregation. •Filed a general rate case based on a 2022 test year, reaching settlement on key items including the Integrated Operations Center and a cost of capital outcome that maintains ROE at 9.5% and capital structure at 50/50, subject to OPUC approval. •Filed a transmission rate case and received interim FERC approval to begin new transmission rates effective January 1, 2022, subject to final approval. | | | | | |
| | | | | | | | | | 54 | | Portland General Electric 2022 Proxy Statement |
| | | | Compensation Discussion and Analysis |
| | | | | | | | | | | | | | | | | | | Performance Levels | | | | Metrics | Threshold
50% Payout | Target
100% Payout | Maximum
200% Payout | Actual | Calculated
Performance % | | Financial Goal | | | | | 117.61% | | EPS | $2.25 | $2.65 | $3.05 | $2.72 | | | Operating Goals | | | | | 81.43% | | Generation Plant Availability | 85.11% | 88.17% | 90.47% | 88.46% | | | Customer Satisfaction | 53.00% | 60.00% | 66.00% | 55.91% | | Electric Service Power Quality and System Reliability (1) | 122.00 | 95.00 | 75.00 | 116.12 | | Strategic Initiatives (2) | | | | 2.57 | 128.67% | | Increase Operational Efficiency | "1" rating | "2" rating | "4" rating | 2.12 | | | Deliver Clean, Integrated Solutions | "1" rating | "2" rating | "4" rating | 2.37 | | | Public Support and Policy | "1" rating | "2" rating | "4" rating | 3.23 | |
(1) After adjusting for the impact of wildfire protocols, results improve by 3 minutes. (2) Based on a qualitative assessment of progress on the specific projects identified for each Strategic Initiative. Performance results for each project were rated by the Compensation and Human Resources Committee on a 0 to 4 scale. These results were averaged, with each project weighted equally, to yield an overall score between 0 and 4 for each Strategic Initiative. Scores for the Strategic Initiatives were then averaged to yield an overall performance percentage for the Strategic Initiatives. A minimum rating of “1” was required to earn a 50% payout and a score of “4” would have yielded a payout of 200%. In light of these performance results, the Compensation and Human Resources Committee approved payouts for most ACI Program participants that were 110% of their target awards. The table below shows the ACI award payouts for our 2021 named executive officers. NAMED EXECUTIVE OFFICER ANNUAL INCENTIVE AWARD PAYOUTS | | | | | | | | | | | | | | | | | | | Name | Financial
Performance % | Operating
Performance % | Strategic Imperative Performance % | Award
Payout
($) | Award
Payout
(% of Target) | | Maria Pope | 117.61% | 81.43% | 128.67% | 1,114,840 | | 110.07% | | James Ajello | 117.61% | 81.43% | 128.67% | 363,232 | | 110.07% | | Lisa Kaner | 117.61% | 81.43% | 128.67% | 302,909 | | 110.07% | | Larry Bekkedahl | 117.61% | 81.43% | 128.67% | 267,552 | | 110.07% | | John Kochavatr | 117.61% | 81.43% | 128.67% | 246,652 | | 110.07% |
| | | | | | | Looking Forward | Beginning in 2022, a culture metric based on our Guiding Behaviors will be incorporated into our annual cash incentive plan. This change is intended to further motivate our executive team to meet high standards driven by our values in addition to strong financial, operations and strategic goals. The metric will focus on workforce engagement and diversity. The financial performance measures and the threshold, target and maximum payout opportunities under our ACI Plan will not change. |
| | | | | | | | | where:Portland General Electric 2022 Proxy Statement
PH = Period hours (8,760 hours)
POH = Planned outage hours, i.e. the sum of outage hours planned for annual maintenance, overhaul activities and engineering modifications
MOH = Industry mean maintenance hours based on the most recent (2014) NERC GADS data for similar design power plants
FOH = Forced outage hours relative to an industry mean based on the most recent (2014) NERC GADS data for similar design power plants, as follows:
MaxFOH = 50% of the industry mean forced outage hours
MeanFOH = Industry mean forced outage hours
ThresholdFOH = 150% of the industry mean forced outage hours
| | 55 |
| | | | | | | | | | | | CUSTOMER SATISFACTION | | | | | | | | | Threshold | Target | Maximum | | | Performance Percentage | 50.0 | % | 100.0 | % | 150.0 | % | | | Performance Targets | 39.80 | % | 44.10 | % | 54.70 | % | | | | | | | | | Customer satisfaction is measured by the average of the company’s residential, general business and key customer satisfaction scores, where satisfaction is defined as a rating of 9 or higher on a 10-point scale. Scores are determined by calculating the weighted average of the following: | | • Average of 4 quarterly ratings of the Market Strategies Study for Residential Customers. | | • Average of 2 semiannual ratings of the Market Strategies Study for Business Customers. | | • Annual rating results from the TQS Research, Inc. 2017 Annual Benchmark of Large Key Accounts. | | These ratings are weighted by the annual revenue from each customer group that produces the annual rating. |
| | | | | | | | | | ELECTRIC SERVICE POWER QUALITY & SYSTEM RELIABILITY | | | | | | | | | Threshold | Target | Maximum | | | Performance Percentage | 50.0 | % | 100.0% | 150.0% | | | Performance Targets | | | | | | SAIDI (weighted 70%) | 83.00 |
| 76.00 |
| 71.00 |
| | | SAIFI (weighted 15%) | 0.80 |
| 0.70 |
| 0.65 |
| | | MAIFI (weighted 15%) | 2.00 |
| 1.60 |
| 1.30 |
| | | | | | | | | • SAIDI is a service reliability index equal to the sum of customer outage durations (in minutes) divided by total number of customers served. | | • SAIFI is the total number of customer outages divided by total number of customers served. | | • MAIFI is the total number of customer momentary interruptions divided by total number of customers. |
| | | | | | | POWER COST MANAGEMENT | | | | | | | | | Threshold | Target | Maximum | | | Performance Percentage | 50.0% | 100.0% | 150.0% | | | Performance Targets | $11.0M | $22.0M | $33.0M | | | | | | | | | Power Cost Management is measured by net variable power cost reduction, which is equal to wholesale power and fuel sales less the sum of all variable power costs, including wholesale (physical and financial) power purchases, fuel costs, and other costs that change as power output changes. |
The weightings assigned to the goals that determine the operating performance percentage for the named executive officers were as follows:
James J. Piro, James F. Lobdell, J. Jeffrey Dudley and W. David Robertson: | | | | Generation Plant Availability
40%
| Customer Satisfaction
30%
| Electric Service Power Quality & System Reliability
30%
Compensation Discussion and Analysis |
Maria M. Pope:LONG-TERM INCENTIVE AWARDS
OVERVIEW We grant equity-based long-term incentive (LTI) awards to our executives and other key employees pursuant to our Stock Incentive Plan. The equity component of our named executive officers' compensation emphasizes long-term shareholder value creation through performance-based restricted stock units (PSU) and time-based restricted stock units (RSU) awards. PSU awards are a substantial, at-risk component of our named executive officers' compensation tied to the Company's long-term performance. RSU awards align the interests of executive officers with the interests of our shareholders by promoting stability and retention of a high-performing executive team over the long term. In 2021 we allocated 70% of our officers’ total LTI award opportunities to PSU and 30% to RSU. | | | | | | | | | | | | Generation Plant Availability
40%
Our 2021 LTI Award program is consistent with our compensation guiding principles | Power Cost Management
40%
Compensation Guiding Principle | Electric Service Power Quality & System Reliability
10%
PSUs | Customer Satisfaction
10%
|
| RSUs | | Retention | ✓ | ✓ | | Incentives to achieve specific Company objectives | ✓ | | Generation Plant Availability
20%
Alignment with shareholders | Electric Service Power Quality & System Reliability
40%
✓ | Customer Satisfaction
40%
✓ | | Market-competitive pay | ✓ | ✓ |
We increased the weighting assigned to the generation availability goal for the awardCALCULATION OF TOTAL LTI AWARD OPPORTUNITY
The aggregate number of PSUs and RSUs we granted to our officer of Power Supply, Operations and Resource Strategy, to better align the award with her areas of focus for the year. 2017 Annual Cash Incentive Award Results
Our 2017 earnings per diluted share, as reported in our financial statements, was $2.10. However, because our 2017 executive annual cash incentive awards were granted as performance-based compensation for purposes of Code Section 162(m), under
the terms of the Annual Cash Incentive Plan the impact of certain extraordinary, non-recurring events—so-called “Extraordinary Events”—were required to be excluded in calculating performance results for the awards. The Compensation Committee and other independent directors determined that the changes in tax law resulting from the passage of the 2017 Tax Act constituted an Extraordinary Event, as defined in the plan. The estimated net financial impact of the tax bill was an approximately $16.9 million decrease in net income, primarily due to adjustments in deferred tax balances resulting from a decrease in the corporate tax rate. Our 2017 EPS, adjusted to exclude the impact of the tax bill, was $2.29, above our target EPS of $2.25. This result yielded a financial performance percentage of 105.9%.
Mixed operating performance resulted in operating performance percentages between 107% and 139% for the officers, depending on the weighting assigned to the goals. Generation plant availability and customer satisfaction results were near maximum levels, and power cost management results were above target. Although our performance with respect to SAIFI and MAIFI were above target, overall results for the electric service power quality and system reliability goal were below threshold overall due to below-threshold performance on the SAIDI metric. These results are set forth in the table below.
ANNUAL CASH INCENTIVE PERFORMANCE RESULTS
| | | | | | | | | | | | | | | Annual Cash Incentive Metrics | Actual | Threshold | Target | Max | Performance % | | Financial Goal | | | | | | | EPS* | $2.29 | $1.91 |
| $2.25 |
|
| $2.59 |
| 105.9 | % | | Operating Goals | | | | | | | Generation Plant Availability | 90.34 | % | 86.73 | % | 88.48 | % | 90.23 | % | 150.0 | % | | Customer Satisfaction | 54.49 | % | 39.80 | % | 44.10 | % | 54.70 | % | 149.1 | % | | Electric Service Power Quality and System Reliability | | | | | | | SAIDI | 112.80 |
| 83.00 |
| 76.00 |
| 71.00 |
| 0.0 | % | | SAIFI | .62 |
| 0.80 |
| 0.70 |
| 0.65 |
| 150.0 | % | | MAIFI | 1.35 |
| 2.00 |
| 1.60 |
| 1.30 |
| 141.7 | % | | Power Cost Management | $37.1M | $11.0M | $22.0M | $33.0M | 150.0 | % |
*Excludes the impact on 2017 earnings of the 2017 Tax Act, as required under the terms of the Annual Cash Incentive Plan.
After considering these performance results, the Compensation Committee approved cash incentive awards for the named executive officers other than the CEO. The committee made a recommendation to the other independent directors regarding the CEO’s annual cash award, and the independent directors, acting as a committee of the Board of Directors, approved the final payout for our CEO’s award. The Compensation Committee and the independent directors did not exercise their discretion under the plan to adjust awards downward. The cash incentive award payouts of the named executive officers are shown in the table below.
NAMED EXECUTIVE OFFICER ANNUAL INCENTIVE AWARD PAYOUTS | | | | | | | | | Named Executive Officer | Financial Performance Percentage | Operating Performance Percentage | Final Award | Final Award as % of Target | | James J. Piro | 105.9% | 117.8% |
| $901,106 |
| 111.9% | | James F. Lobdell | 105.9% | 117.8% | 264,111 | 111.9% | | Maria M. Pope | 105.9% | 139.3% | 333,540 | 122.6% | | J. Jeffrey Dudley | 105.9% | 117.8% | 113,943 | 111.9% | | William O. Nicholson | 105.9% | 107.1% | 174,173 | 106.5% | | W. David Robertson | 105.9% | 117.8% | 137,817 | 111.9% |
OTHER BENEFITS
As employees of PGE, our named executive officers are eligible to participate in a number of broad-based company-sponsored benefits programs on the same basis as other full-time employees. These include the company’s health and welfare programs (including medical/dental/vision plans, disability insurance, and life insurance) and 401(k) plan. Employees hired before February 1, 2009 also accrue benefits under our defined benefit pension plan. In addition, our executive officers and other key employees are eligible to participate in a non-qualified deferred compensation plan, which allows participants to defer their compensation above the Internal Revenue Service limits imposed on 401(k) plans. The deferred compensation plan and 401(k) plan also contribute to the competitiveness of our pay by providing a modest matching contribution for salary deferrals and compensating participants for lower pension payments they may receive as a result of participating in the plans. See “Executive
Compensation Tables — Non-Qualified Deferred Compensation” below for more details. Finally, our executive officers are eligible for severance pay and outplacement assistance to help them with a transition to new employment in the event of a reorganization or similar business transaction resulting in an involuntary termination or a voluntary termination in response to a change in job duties. These benefits are described below under “Executive Compensation Tables — Termination and Change in Control Benefits.” We do not provide our executives with significant perquisites.
LONG-TERM EQUITY INCENTIVE AWARDS
Overview
We believe the interests of our management should be aligned with the long-term interests of our shareholders by ensuring that they share the risks and rewards of company stock ownership. We accomplish this goal by granting stock-based incentive awards under our Stock Incentive Plan.
In 2017 all of our stock-based awards to executives consisted of restricted stock units that vest over a three-year performance-period, based on the achievement of company performance goals (“performance RSUs”). We grant performance RSUs because we believe they are the best vehicle to advance several objectives of our executive compensation program:
Pay for Performance. Performance RSUs create incentives to achieve important company goals.
Retention. Performance RSUs further the goal of retention, because the receipt of an award requires continued employment by the company.
Cost-Effectiveness. Performance RSUs are relatively easy to administer and straightforward from an accounting standpoint.
Alignment with Shareholders. RSUs create a focus on shareholder return because the value of an award is based on the value of the underlying common stock, and awards can create an ongoing stake in the company through stock ownership once they vest.
2017-2019 Performance RSU Awards. In 2017, equity grants constituted approximately 33.3% to 49.4% of our named executive officers’ target total direct compensation (base salary, cash incentive and equity incentive award opportunities, assuming target levels of performance).
Number of Performance RSUs Granted. The number of RSUs granted was the product of each officer’s 2017their 2021 base salary and an award multiple, divided by the closing price of the company’sCompany’s common stock on the grant date:
| | | | | | | | | | | | | | | | # of PSUs and RSUs Granted | = | 20172021 Base Salary xX Award Multiple /
Grant Date Closing Common Stock Price | |
The table below shows the award multiples we used to calculate the awards for the named executive officers and the estimated value of the awards on the grant date (assumingawards. | | | | | | | | | | | | | | | | Name | Award Multiple | Target RSU
Value*
($) | Target PSU
Value*
($) | Total Target LTI Value*
($) | | Maria Pope | 3.15 | 916,650 | | 2,138,850 | | 3,055,500 | | | James Ajello | 1.20 | 198,000 | | 462,000 | | 660,000 | | | Lisa Kaner | 1.00 | 138,567 | | 323,323 | | 461,890 | | | Larry Bekkedahl | 1.00 | 121,984 | | 284,629 | | 406,613 | | | John Kochavatr | 1.00 | 112,455 | | 262,395 | | 374,850 | |
* Assumes that the companyCompany will perform at target levels over the PSU performance period and usingperiod. Values are based on the closing price of the company’sCompany’s common stock on the grant date).date. See “Grants of Plan-Based Awards” on page 69 for additional details. 2017-2019 PERFORMANCE RSU AWARDS
| | | | | | | | | | Name | Award Value at Target Performance | Award Value at Maximum Performance | Target Award as Multiple of Base Salary | | James J. Piro |
| $1,562,979 |
|
| $2,735,202 |
| 1.9 | | James F. Lobdell | 519,114 |
| 908,449 |
| 1.1 | | Maria M. Pope | 545,362 |
| 954,405 |
| 1.1 | | J. Jeffrey Dudley | 342,992 |
| 600,225 |
| 0.9 | | William O. Nicholson | 230,684 |
| 403,707 |
| 0.7 | | W. David Robertson | 218,894 |
| 383,053 |
| 0.7 |
Performance Measures. Forour 2017 awards, we retained two of the three measures we have used since 2013: total shareholder return (TSR), and ROE as a percentage of allowed ROE. We eliminated regulated asset base as a performance metric in our LTI program for 2017, since we determined that the other two goals create appropriate incentives to achieve the company’s investment goals. Below we describe in detail how we measure performance for our TSR- and ROE-based goals.
Total Shareholder Return
| | | | | | | | | ◦56 | | Measured by:Portland General Electric TSR over the three-year performance period relative to the TSR achieved by a comparison group of companies over the same three-year period. TSR measures the change in a company’s stock price for a given2022 Proxy Statement
|
period, plus its dividends (or other earnings paid to investors) over the same period, as a percentage of the stock price at the beginning of the period. To calculate the value of stock at the beginning and end of the period, we use the average daily closing price for the 20-trading day period ending on the measurement date. Relative TSR will be determined by ranking the company and the peer companies from highest to lowest according to their respective TSR. The percentile performance of the company relative to the peer companies will be determined based on this ranking. The comparison group consists of companies on the Edison Electric Institute regulated index on December 31, 2017, excluding those that have completed or announced a merger, acquisition, business combination, “going private” transaction or liquidation. Companies that are in bankruptcy will be assigned a negative one TSR.
| | | ◦ | Why we use this measure: TSR is a direct measure of value creation for shareholders. We use relative rather than absolute TSR to ensure that payouts reflect the company’s performance rather than general market conditions. To minimize the risk of a single day extreme impacting the measurement of long-term shareholder return, we calculate share value using the average daily closing price for the 20-trading day period ending on the measurement date.
Compensation Discussion and Analysis |
Return on Equity2021 PSU AWARDS
Our 2021 PSU Award Program incorporates the following financial, strategic and market-based performance measures. RATIONALE FOR LTI AWARDS DESIGN | | | | | | | | | ◦Metric | Measurement | Why We Use this Metric | | Return on Equity | Measured by:The average of each of three consecutive years’ Accounting ROE as a percentage of Allowed ROE. “Accounting
•“Accounting ROE” is defined as annual net income, as shown on the company’sCompany’s income statement, divided by the average of the current year’s and prior year’s shareholders’ equity, as shown on the balance sheet. “Allowed •“Allowed ROE” is the return on equity that the Oregon Public Utility CommissionOPUC permits the companyCompany to include in the rates it charges its customers. |
| | ◦ | Why we use this measure: This goal measuresReflects how successful the companyCompany is at generating a return on dollars invested by its shareholders. Because the company’sCompany’s return on its investment can fluctuate based on OPUC rate case orders, we believe the appropriate measure of our ability to generate earnings on shareholder investments is Accounting ROE as a percentage of Allowed ROE.
| | EPS Growth | 3-year average of the Company’s EPS growth rate, where EPS growth for a given fiscal year is defined as the percentage change in EPS over the previous fiscal year. | Provides a direct measure of the rate at which the Company has increased its profitability. EPS is a driver of shareholder value creation in the regulated electric utility industry. | | Clean Energy | Average megawatts of forecast energy from carbon-free resources, Oregon Renewable Portfolios Standard-qualifying resources, and low-carbon emitting (i.e., > 95% carbon-free) systems of resources added to the Company’s energy supply portfolio during the performance period. | Creates incentive to reduce carbon potential in the Company’s energy supply portfolio in support of Oregon’s greenhouse gas emission reduction goals. | | Relative TSR | TSR over the 3-year performance period relative to the TSR achieved by a comparison group of companies over the same period. • The comparison group consists of peer companies approved by the Compensation and Human Resources Committee (ALLETE, Alliant Energy, Avista, Black Hills, Evergy, Hawaiian Electric, IDACORP, NorthWestern, OGE Energy, Otter Tail, Pinnacle West Capital and PNM Resources) on December 31,2020, excluding those that have completed or announced a merger, acquisition, business combination, “going private” transaction or liquidation. Companies that are in bankruptcy will be assigned a negative one TSR. • TSR measures the change in a Company’s stock price for a given period, plus its dividends (or other earnings paid to investors) over the same period, as a percentage of the stock price at the beginning of the period. • To calculate the value of stock at the beginning and end of the period, we use the average daily closing price for the 20-trading day period ending on the measurement date. • Relative TSR is determined by ranking PGE and the comparison group companies from highest to lowest according to TSR. The percentile performance of PGE relative to the comparison group companies is determined based on this ranking. | TSR is used as a modifier and is a direct measure of value creation for shareholders.
Use of relative rather than absolute TSR helps ensure that payouts reflect the Company’s relative performance rather than general market conditions. |
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 57 |
| | | | Compensation Discussion and Analysis |
2021 PSU AWARD METRICS AND PAYOUT CALCULATION DeterminationIn the first quarter of Awards. 2024, the Compensation and Human Resources Committee will determine the performance results for the 2021 PSU awards in accordance with the metrics and formula described in the table below, subject to any adjustments approved by the Compensation and Human Resources Committee pursuant to its authority under the Stock Incentive Plan. | | | | | | | | | | | | | | | | | | Payout Metric (1) | Threshold
(50% Payout) | Target
(100% Payout) | Maximum
(167% Payout) | Metric
Weighting | Percentage of
Target Shares
Earned | | Return on Equity | 75%
of Allowed ROE | 90%
of Allowed ROE | 100%
of Allowed ROE | 33% | 0% to 55.67% | | EPS Growth | 2.0% | 2.5% | 3.0% | 33% | 0% to 55.67% | | Clean Energy | 70
(MWa) | 120
(MWa) | 145
(MWa) | 33% | 0% to 55.67% | | | | | Payout %
Subtotal | 0% to 167% | Payout Multiplier Metric (2) | (80% multiplier) | (100% multiplier) | (120% multiplier) | | | | Relative TSR | < 25th Percentile of Peer Companies | 50th Percentile of Peer Companies | > 75th Percentile of Peer Companies | Payout
Multiplier | 80% to 120% | | | Total Percentage of Target PSU Award Earned | 0 to 200% |
(1) Calculation of Payout Percentage Subtotal. At the end of the performance period, the Compensation Committee will determine theperformance results for the two performance goals. Performance results will beare interpolated between threshold, target and maximum payout levels to determine payout percentages for each goal based on the schedule below.above. Results below threshold for any goal will result in zero payouts for that goal. These results will then beare weighted equally and added to determine a payout percentage.percentage subtotal. In order to align better with market practice,(2) Application of Payout Multiplier Based on Relative TSR Results: Performance results for our 2017 awards, we increased the payout multiplier associated with ourRelative TSR metric from 150% to 200%, while raising the performance required for maximum payout from the 70th to the 90th percentile of the comparison group. The payout multiplier for the ROE metric remained at 150%, resulting in payouts ranging from 0 to 175% of the target number of shares. The following table presents theare interpolated between threshold, target and maximum levels forto determine a multiplier between 80% and 120%, which is applied to the two performance measures, aspayout percentage subtotal to determine a total percentage of the target awards.award earned. For our 2021 PSU awards, the peer group was utilized as the comparator group for the Relative TSR metric.
PERFORMANCE TARGETS
2021 RSU AWARDS Each of our executive officers was awarded RSUs representing 30% of their total LTI award opportunity. Each year one-third of the RSUs granted will vest, and vesting requires that the award recipient be employed by the Company at the vesting date. However, if the officer’s employment is terminated due to retirement (which requires five years of service with the Company or an affiliate and a minimum age of 55), death, or disability before the normal vesting date, a pro rata portion of the RSUs will vest. RSUs granted in 2021 also vest in accordance with the Rule of 75, which is described below. See the discussion of the RSUs on page 74 in the section below entitled “Potential Payments and Rights on Termination and Change in Control Benefits.” OTHER TERMS OF THE PSU AND PAYOUT PERCENTAGES | | | | | | | | | | | | Threshold* | Target | Maximum | | Weighting | | Percentage Earned | | (50% Payout) | (100% Payout) | (200% Payout for TSR
150% Payout for ROE) | | | | | Goals | | | | | | | | Total Shareholder Return | 30th Percentile
of EEI Regulated Index
| 50th Percentile
of EEI Regulated Index
| 90th Percentile
of EEI Regulated Index
| | 50% | | 0 to 100% | Return on Equity | 75%
of Allowed ROE
| 90%
of Allowed ROE
| 100%
of Allowed ROE
| | 50% | | 0 to 75% | | | | | | | | | | | | Total Percentage of Target Award Earned | 0 to 175% |
*Performance results below the threshold level for any goal will result in zero payouts with respect to that goal.RSU AWARDS
Dividend Equivalent Rights. EachUnder the 2021 PSU and RSU Awards, each named executive officer will receive a number of dividend equivalent rights (“DERs”)(DERs) equal to the number of vested performancePSUs and/or RSUs. A DER represents the right to receive an amount equal to dividends paid on the number of shares of common stock equal to the number of the vested performancePSUs and/or RSUs, which dividends have a record date between the date of the grant and the end of the performance period. DERs are subject to the same vesting conditions as the PSUs or RSUs and will be settled in shares of common stock after the related performancePSUs and/or RSUs vest. The number of shares payable on the DERs will be calculated using the fair market value of PGE common stock as of the date the committeeCompensation and Human Resources Committee determines the number of vested performancePSUs and/or RSUs. Service Requirement. VestingUnder our PSU and RSU awards, vesting of the performancePSUs and/or RSUs and their related DERs generally requires that the officeraward recipient continue to be employed by the companyCompany during the performance period. However, if the officer’s employment is terminatedconcludes due to retirement, death, or disability before the normal vesting under the termsend of the grant,three-year performance period, a ratable portion of the award will vest at the end of
the performance period.period based on actual performance. See the discussion of this issueon page 74 in the section below entitled “Termination“Potential Payments and Rights on Termination and Change in Control Benefits.” Beginning with PSU and RSU awards issued in 2020, recipients who satisfy the “Rule of 75” are eligible | | | | | | | | | | 58 | | Portland General Electric 2022 Proxy Statement |
| | | | Compensation Discussion and Analysis |
for vesting of Stock Incentive Plan, as Amended and Restated. As previously disclosed and as further discussed above in connection with Proposal 4, our Stock Incentive Plan, as originally drafted, provided that no(i) their outstanding PSU awards could be granted after March 31, 2016. Thebased on performance RSUs awarded in 2017 were inadvertently made afterresults, and/or (ii) their outstanding RSU will vest; without regard to their termination before the expirationend of the termperformance period or prior to the vesting period. An individual satisfies the Rule of 75 if, on the plan. The Boarddate of Directorshis or her termination of employment, (i) the individual is at least age 55 and has no less than five years of service with the Company or its affiliates, and (ii) the individual’s age plus years of service equals at least 75. However, the aforementioned service requirement combination of age plus years of service allowing full or pro rata payout of RSU and/or PSUs will be deemed met for each RSU and/or PSU award made or held by Mr. Ajello, and he will be eligible for payout of RSU and/or PSUs in the event his employment is concluded prior to normal vesting date. 2021 PSU AWARD PAYOUT In 2020, the Compensation and Human Resources Committee each subsequently approved an amended and restated plan, effective as of March 31, 2016, to extend the term of the plan to March 31, 2024, subject to shareholder approval. No awards made under the plan after March 31, 2016 will be settled in common stock unless and until this approval is obtained. Tax Treatment of 2017-2019 Performance RSUs. Because the 2017-2019 performance RSUs were granted after the expiration of the term of our Stock Incentive Plan, they do not comply with the requirements for the performance-based compensation exception to Section 162(m).
2015-2017 Long-Term Incentive Awards
On February 13, 2018, the Compensation Committee and the other independent directors met to determine the results for the performance goals and the number of shares that would vest under the performance RSUs granted in 2015. The maximum number of performance RSUs that could vest under the awards was a function of company performance relative to the two performance goals described above, as well as a third goal, regulated asset base. Performance results were interpolated between threshold, target and maximum payout levels to determine payout percentages.
The 2015-2017 long-term incentive awards were intended to qualify as performance-based compensation for purposes of Internal Revenue Code Section 162(m). Consequently, under the terms of the plan, the Compensation Committee was requireddecided to exclude the impact of unrecovered expenses related to the COVID-19 pandemic on performanceour financial results (an impact of any “Extraordinary Event,” as defined$0.16) in determining payout under the plan. As discussed above,2020 ACI Program and the 2018-2020 PSU awards. To maintain consistency in multi-year awards and to avoid a disproportionate increase of the EPS growth metric between years 2020 and 2021, for 2021 the Compensation and Human Resources Committee exercised its discretion and other independent directors determined that the passage of the 2017 Tax Act constituted such an Extraordinary Event, and financial results were therefore adjusteddecided to exclude the tax bill’ssame level of impact on our 2017 earnings. Thisfor unrecovered expenses in determining the payout for the 2019-2021 PSU awards, as the adjustment applies to 2020 EPS growth and ROE metrics. As a result of this application, there was an adjustment to the 2019-2021 PSU award; both ROE and EPS were adjusted upward. ROE was adjusted upward from 82.42% to 84.28% and the 2020 EPS growth metric was adjusted upward, which resulted in adjusteda decreased average EPS growth metric result for the 3-year period. The EPS adjustment had no effect on the payout result, as maximum payout had been reached under the program with or without the adjustment. Accordingly, the 2019-2021 PSU award payouts, when calculating performance relative to our ROE and EPS growth goals, resulted in a payout under the PSU awards granted to our executive officers in 2021 was 134% of 8.54% for 2017.
Thetarget, based on the following performance results, as adjusted:
| | | | | | | | | | | | | | | | | | | | | | Metric | Threshold
(50% Payout) | Target
(100% Payout) | Maximum
(167% Payout) | Metric Weight | Actual* | Percentage of Target Award Earned | | Return on Equity | 75%
of Allowed ROE | 90%
of Allowed ROE | 100%
of Allowed ROE | 33% | 84.28% | 26.98% | | EPS Growth | 3.5%
over prior year | 4.5%
over prior year | 5.5%
over prior year | 33% | 9.85% | 55.67% | | Power Supply Portfolio Carbon | 4.64 (MMTCO2e) | 4.42 (MMTCO2e) | 4.20 (MMTCO2e) | 33% | 3.69 | 55.67% | | | | | | Payout %
Subtotal | 138.31% | | Payout Multiplier Metric (2) | (80% multiplier) | (100% multiplier) | (120% multiplier) | | | | | Relative TSR | < 25th Percentile
of EEI Regulated Index | 50th Percentile
of EEI Regulated Index | > 75th Percentile
of EEI Regulated Index | Payout
Multiplier | 46th
Percentile | 96.92 | % | | | Total Percentage of Target PSU Award Earned | 134.05% |
* Reflects adjustment for the 2015-2017 awards are shown in the following tables: | | | | | | | | | | | | | | | | RETURN ON EQUITY RESULTS | | | REGULATED ASSET BASE RESULTS | | TSR RESULTS | | | 2015 | 2016 | 2017* | Average | | | As of 12/31/2017 (Thousands) | | | 2017 | | Allowed ROE | 9.68 | % | 9.60 | % | 9.60 | % | | | Target Asset Base | $5,318,992 | | Target | 50th Percentile | | Accounting ROE | 8.26 | % | 8.38 | % | 8.54 | % | | | Actual Asset Base | $5,557,663 | | Actual | 36th Percentile | | Accounting ROE as % of Allowed ROE | 85.3 | % | 87.3 | % | 89.0 | % | 87.2% | | Actual Amount as % of Target | 104.5% | | | | | Payout Percentage | | | 90.7% | | | 150.0% | | | 65.9% |
*Results adjusted to exclude impact of the 2017 Tax Act on earnings, as required under the terms of the Stock Incentive Plan.
Based on theseThese results 102.2% of the 2015-2017 performance RSUs vested, resulting inyielded the award values set forth below. These values reflectin the table below: | | | | | | | | | | Number of PSUs Vested(1) | Award Payout Value (2) ($) | | Maria Pope | 47,896 | 2,534,656 | | James Ajello(3) | — | — | | | Lisa Kaner | 8,565 | 453,260 | | | Larry Bekkedahl | 5,206 | 275,502 | | | John Kochavatr | 5,363 | 283,810 | |
(1) Includes dividend equivalent rights settled in shares per the terms of the awards. (2) Based on a $52.92 share price, which was the closing stock price of the company’sCompany’s common stock on December 31, 2021, the vesting date of February 13, 2018.for the awards. 2015-2017 LONG-TERM INCENTIVE AWARD PAYOUTS | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 59 |
| | | | | | | | RSUs Vested | Vesting Date Award Value * | | James J. Piro | 41,901 |
| $1,673,526 | | James F. Lobdell | 12,104 |
| 483,434 |
| | Maria M. Pope | 13,190 |
| 526,809 |
| | J. Jeffrey Dudley | 7,307 |
| 291,842 |
| | William O. Nicholson | 6,520 |
| 260,409 |
| | W. David Robertson | 6,020 |
| 240,439 |
|
| | | | Compensation Discussion and Analysis |
(3) Mr. Ajello joined the Company November 30, 2020 and was not a participant in the 2019-2021 performance awards. *Based on company stock price of $39.94 on the vesting date of February 14, 2018.
The terms of the 2015-2017 long-term incentiveour 2021 PSU awards are described more fully in the company’s 2016 proxy statementthis Proxy Statement under the heading “2015 Grants of Plan-Based“Long-Term Incentive Awards.” | | | | | | | | | | 60 | | Portland General Electric 2022 Proxy Statement |
| | | | Compensation Discussion and Analysis |
Benefits Plans Our named executive officers also participate in certain benefit plans including: (1) health and welfare benefits and (2) retirement and savings benefits. HEALTH AND WELFARE BENEFITS •Medical/Dental/Vision. Our executives are eligible to participate in our broad-based medical, dental and vision insurance programs. Non-union medical insurance is limited to high deductible health plans. For employees enrolled in our high deductible health plans, the Company also makes annual contributions to a health savings account. •Wellness Program. All employees are eligible to participate in the Company’s wellness program, which offers a variety of benefits, including mental health benefits, financial counseling and the opportunity to earn Company health savings account contributions. RETIREMENT AND SAVINGS BENEFITS •401(k) Plan. All of our employees are eligible to participate in the Company’s 401(k) Plan. •Pension Plan. One named executive officer (Ms. Pope) participates in the Portland General Electric Company Pension Plan (Pension Plan). The plan was closed to new participants before our other named executive officers joined the Company. See page 72 of this Proxy Statement for a description of the basic benefit available to non-union employees under the plan. •Deferred Compensation Benefits. Executives and other key employees are eligible to participate in our 2005 Management Deferred Compensation Plan, which permits participants to defer the payment of income as well as the value of a certain number of hours of paid time off, depending on the participants paid time off program, but in no event does it exceed 160 hours of paid time off. Participants also earn interest on their account balances. See page 73 for details. SEVERANCE AND CHANGE IN CONTROL BENEFITS Rationale for Providing Severance Pay Benefits. In 2021, the Compensation and Human Resources Committee approved the Company’s Amended and Restated Executive Severance Plan, effective July 27, 2021 (the “Severance Plan”) after reviewing information provided by the independent compensation consultant to better align the Company’s severance practice with current industry practice, including increasing the severance payments and benefits payable to eligible officers upon a qualifying termination. The Severance Plan supersedes the prior Severance Pay Plan for Executive Employees. Our policy regarding severance protection for named executive officers stems from its importance in retaining and recruiting executives and mitigating legal issues upon an employment separation. Executives have attractive opportunities with other companies or are recruited from well-compensated positions in other companies. To provide our officers with financial security to offset the risk of leaving another company, if the employment of an eligible officer with the Company is involuntarily terminated without cause or due to a constructive termination (or a resignation for “good reason,”) in either case absent a change in control, the Severance Plan provides for the following severance payments and benefits: •1.5 times the annual base salary for our CEO and 1.0 times the annual base salary for non-CEO executives; •a pro-rata portion of annual cash incentive award based on target performance and the period of the award year served; and •a lump sum equal to 18 months of continuation coverage under COBRA for our CEO and 12 months for all other eligible officers. | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 61 |
| | | | Compensation Discussion and Analysis |
For purposes of the Severance Plan, a constructive termination (or a resignation for “good reason”) includes occurrences such as a material diminution in duties or salary, or a substantial relocation. Given that none of the named executive officers has an employment agreement that provides for fixed positions or duties, or for a fixed base salary or annual incentive award, we believe a constructive termination severance trigger is needed to continue to retain and attract executives. We do not provide excise tax gross-ups on change-in-control severance benefits for any of our executives. We do not believe named executive officers should be entitled to receive their cash severance benefits merely because a change-in-control transaction occurs. Therefore, the payment of cash severance benefits is subject to a double-trigger where an actual or constructive termination of employment must also occur before payment. Severance is always subject to the execution of a release of claims and adherence to non-competition and non-solicitation covenants. Our Severance Plan also offers additional enhanced benefits if a change in control of the Company occurs and an eligible officer experiences a qualifying termination within 24 months following the change in control event. We believe the occurrence, or expected occurrence, of a change-in-control transaction would create uncertainty regarding continued employment for named executive officers. This uncertainty would result from the fact that many change-in-control transactions result in significant organizational changes, particularly at the senior executive level. To encourage the named executive officers to remain employed with the Company during a time when their prospects for continued employment following the change in control would be uncertain, and to permit them to remain focused on the Company’s interests, if the employment of an eligible officer with the Company is involuntarily terminated without cause by the Company or due to a constructive termination (or a resignation for “good reason”) in either case within a defined period of time after a change in control of the Company, the Severance Plan provides for the following severance payments and benefits: •2.5 times the sum of annual base salary plus the target value of the executive’s annual cash incentive award for our CEO, 2.0 times for senior officers and 1.5 times for all other eligible officers; •a pro-rata portion of annual cash incentive award based on target performance and the period of the award year served; and •a lump sum equal to 30 months of continuation coverage under COBRA for our CEO, 24 months of continuation coverage under COBRA for our senior officers and 18 months for all other eligible officers. For detailed information on the estimated potential payments and benefits payable to our named executive officers if they terminate employment, including following a change in control of the Company, see “Potential Payments and Rights on Termination and Change in Control Benefits” on page 74. Other changes to the Severance Plan include: (i) revisions to the definitions of “Cause,” “Good Reason” and “Change in Control”; (ii) the inclusion of a provision that requires that the Severance Plan be administered by a third party following a change in control; (iii) the addition of provisions with respect to advancement and reimbursement of legal fees; and (iv) modifications to the form of employee release officers must sign to be eligible for benefits under the Severance Plan, including the addition of non-competition and non-solicitation covenants. OFF-CYCLE COMPENSATION On July 29, 2020, the independent directors, acting as a committee, granted Mr. Kochavatr an award of performance-based restricted stock units in recognition of the expansion of his role to include responsibility for the Company's Simplification and Transformation Initiative, which aims to reshape operational processes and customer digital experiences through the rationalization of groups and systems to drive customer value. The award had a grant-date value of $100,000 and vesting over a two-year period. At the conclusion of each performance period ending on July 30, 2021 and July 29, 2022, half of the restricted stock units awarded will vest, provided the Compensation and Human Resources Committee determines that the Company has made satisfactory progress toward the performance goals. The Compensation and Human Resources Committee concluded that there was substantial progress on the Simplification and Transformation initiative as measured by the reduction of customer minutes interrupted, cost reductions through operational efficiencies, and the introduction of new customer features and digital experiences.
| | | | | | | | | | 62 | | Portland General Electric 2022 Proxy Statement |
| | | | Compensation Discussion and Analysis |
Other Compensation Policies and Practices The Compensation and Human Resources Committee seeks to mitigate risk in our executive programs through the following policies and practices. Our 2021 LTI plan includes the following risk mitigation features: •Using multiple types of awards and performance measures, consisting of a market-based performance measure (relative total shareholder return), a financial performance measure (EPS growth), a service-based measure (time-based restricted stock units) •Measuring our total shareholder return against peer groups selected by the Company •Using multi-year performance periods to promote a longer-term performance horizon •Limiting the maximum payout level for performance-based restricted stock unit awards to 200% of the target number of units (including reinvested dividend equivalents) Our 2021 ACI Plan includes the following risk mitigation features: •Limiting the payout at the maximum performance level to 200% of target •Using a corporate financial performance measure that is based on the earnings reported in our financial statements, with certain adjustments that are limited and predefined and the potential for others related to unplanned or unforeseen items, all of which are made only after thoughtful consideration by the Compensation and Human Resources Committee •Incorporating Operational and Strategic Metrics, which are performance measures important to our business operations, in addition to the corporate financial performance measure •Providing the Compensation and Human Resources Committee with discretion over certain incentive plan payouts ANNUAL INDEPENDENT COMPENSATION RISK ASSESSMENT In 2021, as in prior years, the Compensation and Human Resources Committee engaged FW Cook to perform a comprehensive risk assessment of our compensation policies and practices. The assessment covered executive and non-executive plan design and oversight as well as other aspects of our compensation practices, as summarized below: | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 63 |
| | | | Compensation Discussion and Analysis |
| | | | | | | | | | Equity Award Program | Cash Incentive Programs | Other Compensation Practices | | | | •Equity grants •Payment timing and adjustments •Grant policies •Stock ownership guidelines and trading policies | •Pay mix •Performance metrics •Performance goals and payout curves •Payment timing and adjustments | •Incentive mix •Succession planning •Severance •Role of the Board of Directors |
The finding of the report was that our programs do not encourage excessive risk taking and are not reasonably likely to have a material adverse effect on the Company. The report noted the following risk-mitigating features of our program, among others: •Independent Board Oversight. The Compensation and Human Resources Committee oversees incentive pay programs at all levels of the organization. The CEO’s pay is set by all of the independent directors, acting as a group. •Balanced Pay Elements. Our compensation program includes an appropriate balance in fixed and performance-conditioned pay, cash and equity, formulas and discretion, and short-term and long-term measurement periods. •Robust Governance Policies. Policies are in place to mitigate compensation risk such as ownership guidelines, insider-trading prohibitions, and compensation clawbacks. •Incentive Mix. Incentive awards cover multiple overlapping time frames, ranging from one-to-three years, dampening the impact of stock price and financial performance volatility in rewards. Multiple financial goals prevent an over-emphasis on any single metric. •Risk-Adjusted Incentive Targets. Incentive award targets encourage improvements but not at levels that would encourage imprudent risk-taking. ANTI-HEDGING AND PLEDGING POLICY Under our Insider Trading Policy, all of our officers, employees and directors are prohibited from trading in options, warrants, puts and calls, or similar instruments on Company securities, or selling Company securities “short.” In addition, employees and directors may not purchase any financial instrument, or enter into any transaction, that is designed to hedge or offset a decrease in the market value of Company stock (including prepaid variable forward contracts, equity swaps, collars or exchange funds). Directors, officers and employees are also prohibited from purchasing Company securities on margin or pledging or otherwise encumbering Company securities. These prohibitions apply to family members living in the same household as such officer, employee or director, as well as entities directly or indirectly controlled by the officer, employee or director. STOCK OWNERSHIP POLICY In 2011, weThe Company has adopted a stock ownership and holding policy for our executive officers. The primary objectives of the policy are to create financial incentives that align the interests of executive officers with strong operating and financial performance of the company,Company and encourage executive officers to operate the business of the companyCompany with a long-term perspective. UnderThe guidelines set minimum levels of stock ownership that our officers must achieve and maintain. For officers, the policy,guidelines are:
| | | | | | | | | | 64 | | Portland General Electric 2022 Proxy Statement |
| | | | Compensation Discussion and Analysis |
| | | | | | | Executive Level | Stock Ownership Guidelines | | Chief Executive Officer | 6x base salary | | Chief Financial Officer and Senior Vice Presidents | 3x base salary | | Vice Presidents | 2x base salary |
Based on FW Cook's review of competitive benchmark data, we believe our CEO is requiredstock ownership guidelines are aligned to hold company stock with a value equal to at least three times her annual base salary, while the other executive officers are required to hold company stock with a value equal to at least one times their annual base salary. prevalent market practices. The policy does not require executive officers to immediately acquire shares in an amount sufficient to meet the holding requirement. However, until the holding requirement is met, executive officers are subject to certain restrictions on their ability to dispose of shares of companyCompany stock. The CEO is required to retain 100% of the CEO’sher shares until the holding requirement is met.acquired prior to February 2011. All other executive officers are required to retain an amount of shares equal to 50% of their net after-tax performance-based equity awards until the holding requirement is met. The number of shares required to satisfy the stock ownership requirements is re-calculated annually, based on the closing price of the company’sCompany’s common stock on the date of the calculation. The Compensation and Human Resources Committee also reviews each officer’s holdings annually to ensure that appropriate progress toward the ownership goalsgoal is being made. All of our officers either meet the stock ownership requirement or are on track to do so as required under the policy. Our stock ownership policy for non-employee directors is described on page 1014 of this proxy statement.Proxy Statement. CURRENT EQUITY GRANT PRACTICES
Under the terms of our Stock Incentive Plan, the Compensation and Human Resources Committee is authorized to make grants of equity awards but may delegate this authority as it deems appropriate. The committeeCompensation and Human Resources Committee has delegated authority to our CEO to make annual discretionary grants of RSUs with performance-based or time-based vesting conditions to non-executive employees for the purposes of attracting and retaining qualified employees. TheFor 2021, the maximum RSU value that the CEO iswas authorized to award is $500,000was $1,250,000 in the aggregate and $50,000$100,000 per award. The Compensation and Human Resources Committee has not delegated the authority to make executive awards.awards to executives. We expect that we will continue to grant performance RSUsequity awards to the executive officers and other key employees, and to delegate authority to our CEO to make limited discretionary equity awards for attraction and retention purposes.purposes to non-executives. We also expect to continue to make annual grants of restricted stock units with time-based vesting conditions to the company’sCompany’s directors. The committeeCompensation and Human Resources Committee has not adopted a formal policy governing the timing of equity awards. However, we have generally made awards to officers in the first quarter of the fiscal year, and we expect to continue this practice. INCENTIVE COMPENSATION CLAWBACK AND CANCELLATION POLICY CLAWBACK POLICY
In February 2017, our Board of Directors adopted aThe Company maintains an incentive compensation clawback policy. Underand cancellation policy that allows the policy,Board or the Compensation and Human Resources Committee to recoup incentive compensation if our Board of Directors determines(1) the Company restates its financial statements or (2) if the independent directors determine that a current or former executive officeremployee has engaged in fraud, willfulegregious misconduct a knowing violationresulting in actual or potential reputational or financial harm to the Company. The policy applies to cash or equity-based incentive compensation to current and former named executive officers and other executive officers that has been paid, granted, vested or accrued in any fiscal year within the three-year period preceding the filing of lawthe restatement or one year preceding the date on which the Company discovers such conduct. The policy allows recoupment of our corporate policies,the difference between the incentive compensation paid, granted, vested or any act or omission not in good faith,accrued under the original results and the incentive compensation that caused or otherwise contributed to the need for a material restatement of our financial results, the Compensation Committee will review all performance-based compensation earned by that executive officer during fiscal periods materially affected by the restatement. If, in the Compensation Committee’s view, the performance-based compensation would have been materially lower if it had been based onpaid, granted, vested or accrued under the restated results,results. The policy can be enforced by reducing or cancelling outstanding and future incentive compensation, and by a claim for repayment. In determining the Compensation Committee will seek recovery from that executive officeramount of any portion of such performance-based compensation as it deems appropriateto cancel or recover under the circumstances after a review of all relevant facts and circumstances. The Board of Directors has sole discretion in determining whether an executive officer’s conduct has or has not met any particular standard of conduct. The clawback policy, applies to performance-based compensation awards made after the adoption of the policy.
EXECUTIVE COMPENSATION TABLES
Summary Compensation
The table below shows the compensation earned by the company’s named executive officers during the years ended December 31, 2015, 2016 and 2017.
SUMMARY COMPENSATION TABLE | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | Year | | Salary (2) | | Stock Awards (3) | | Non-Equity Incentive Plan Compensation (4) | | Change in Pension Value and Non-Qualified Deferred Compensation Earnings (5) | | All Other Compensation (6) | | Totals | James J. Piro Chief Executive Officer(1) | 2017 | |
| $858,671 |
| |
| $1,562,979 |
| |
| $901,106 |
| |
| $138,351 |
| |
| $324,146 |
| |
| $3,785,253 |
| | 2016 | | 836,431 |
| | 1,517,452 |
| | 680,574 |
| | 135,052 |
| | 148,124 |
| | 3,317,633 |
| | 2015 | | 805,549 |
| | 1,395,704 |
| | 688,826 |
| | 41,221 |
| | 138,451 |
| | 3,069,751 |
| James F. Lobdell Senior Vice President, Finance, Chief Financial Officer and Treasurer
| 2017 | | 457,362 |
| | 519,114 |
| | 264,111 |
| | 190,458 |
| | 63,100 |
| | 1,494,145 |
| | 2016 | | 449,074 |
| | 461,998 |
| | 206,396 |
| | 114,897 |
| | 45,824 |
| | 1,278,189 |
| | 2015 | | 413,356 |
| | 402,470 |
| | 201,648 |
| | 14,470 |
| | 44,943 |
| | 1,076,887 |
| Maria M. Pope President (1)
| 2017 | | 540,491 |
| | 545,362 |
| | 333,540 |
| | 88,124 |
| | 71,937 |
| | 1,579,454 |
| | 2016 | | 477,576 |
| | 494,985 |
| | 245,180 |
| | 55,384 |
| | 60,683 |
| | 1,333,808 |
| | 2015 | | 464,728 |
| | 438,582 |
| | 234,258 |
| | 25,302 |
| | 64,135 |
| | 1,227,005 |
| J. Jeffrey Dudley Vice President, General Counsel and Corporate Compliance Officer
| 2017 | | 203,768 |
| | 342,992 |
| | 113,943 |
| | 47,281 |
| | 117,238 |
| | 825,222 |
| | 2016 | | 398,086 |
| | 332,983 |
| | 166,364 |
| | 54,397 |
| | 48,352 |
| | 1,000,182 |
| | 2015 | | 385,729 |
| | 289,784 |
| | 169,364 |
| | (1,375 | ) | | 48,796 |
| | 892,298 |
| William O. Nicholson Senior Vice President, Customer Service, Transmission & Distribution
| 2017 | | 332,534 |
| | 230,684 |
| | 174,173 |
| | 198,538 |
| | 43,278 |
| | 979,207 |
| | 2016 | | 322,903 |
| | 223,992 |
| | 135,991 |
| | 120,053 |
| | 39,627 |
| | 842,566 |
| | 2015 | | 317,720 |
| | 216,781 |
| | 142,684 |
| | 46,614 |
| | 43,586 |
| | 767,385 |
| W. David Robertson Vice President, Public Policy
| 2017 | | 309,599 |
| | 218,894 |
| | 137,817 |
| | 111,974 |
| | 41,330 |
| | 819,614 |
| | | | | | | | | | | | | | |
| | (1) | Mr. Piro resigned as President effective October 1, 2017 and as CEO effective January 1, 2018 in connection with his retirement from the company. Ms. Pope was appointed President effective October 1, 2017 and previously served as Senior Vice President, Power Supply, Operations and Resource Strategy. |
| | (2) | Amounts in the Salary column include base salary earned and, where applicable, the value of paid time off deferred under the company's 2005 Management Deferred Compensation Plan (“2005 MDCP”). Ms. Pope’s salary for 2017 reflects an increase in annual salary from $454,500 to $650,000, effective October 1, 2017. |
| | (3) | Amounts in the Stock Awards column constitute the aggregate grant date fair value of awards of restricted stock units with performance-based vesting conditions (“performance RSUs”), computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) Topic 718, Compensation - Stock Compensation, excluding the effect of estimated forfeitures related to service-based vesting. These amounts reflect the grant date fair value, in each case valued using the closing market price of the company's common stock on the New York Stock Exchange on the grant date, and may not correspond to the actual value that will be realized. The grant date fair values of the performance RSUs assume performance at target levels, which would allow the vesting of 100% of the RSUs awarded. If the maximum number of shares issuable under the performance RSUs had been used in this calculation in lieu of the target number of shares, the amounts in the table for fiscal 2017 would have been as follows: |
independent
| | | | | Name | Maximum 2017 Performance RSU Value | James J. Piro |
| $2,735,202 |
| James F. Lobdell | 908,448 |
| Maria M. Pope | 954,405 |
| J. Jeffrey Dudley | 600,225 |
| William O. Nicholson | 403,707 |
| W. David Robertson | 383,053 |
|
| | (4) | Amounts in the Non-Equity Incentive Plan Compensation column represent cash payments under the company's 2008 Annual Cash Incentive Master Plan for Executive Officers (“Annual Cash Incentive Plan”). The terms of the 2017 awards are discussed below in the section entitled “Grants of Plan-Based Awards.” |
| | (5) | Amounts in this column include the increase or decrease in the actuarial present value of the named executive officers' accumulated benefits under the Portland General Electric Company Pension Plan (“Pension Plan”) and above-market interest in the 2005 MDCP. Also included are increases or decreases in deferred compensation account balances arising from the Pension Plan benefit restoration feature of the 2005 MDCP. This feature is explained below in the section entitled “Pension Benefits — MDCP Restoration of Pension Benefits.” These amounts for 2017 are shown below: |
| | | | | | | | NamePortland General Electric 2022 Proxy Statement | | Plan 65 |
| | Increase or Decrease in
Actuarial Present Value
| James J. Piro | | Pension Plan | |
| $138,351 |
| | | 2005 MDCP | | — |
| James F. Lobdell | | Pension Plan | | 190,458 |
| | | 2005 MDCP | | — |
| Maria M. Pope | | Pension Plan | | 88,124 |
| | | 2005 MDCP | | — |
| J. Jeffrey Dudley | | Pension Plan | | 40,906 |
| | | 2005 MDCP | | 6,375 |
| William O. Nicholson | | Pension Plan | | 198,538 |
| | | 2005 MDCP | | — |
| W. David Robertson | | Pension Plan | | 111,974 |
| | | 2005 MDCP | | — |
Compensation Discussion and Analysis |
directors may take into account any considerations they deem appropriate, including events that led to a financial restatement, the conduct of the individual, the impact of the misconduct, the cost of the recovery process and the likelihood of successful recovery under governing law. The balanceSEC has issued proposed rules requiring public companies to adopt clawback policies to recover incentive compensation overpayments from executive officers under certain conditions involving accounting restatements. The SEC has reopened the public comment period for its proposed rules. When the SEC rules become final, the Compensation and Human Resources Committee or the Board will review the existing clawback policy and determine whether changes to our incentive compensation clawback and cancellation policies are needed. IMPACTS OF REGULATORY REQUIREMENTS Tax Deductibility of Compensation Expense. Section 162(m) of the Internal Revenue Code generally places a $1 million limit on the amount of compensation a publicly held company can deduct in any tax year on compensation paid to “covered employees.” Prior to the passage of the 2017 Tax Cuts and Jobs Act, performance-based compensation paid to our “covered employees,” such as annual cash incentives and performance-based RSUs, was generally excluded from this $1 million deduction limit. As a result of changes in the tax law, this previously-available exclusion for performance-based compensation is generally no longer available after 2018. While the Compensation and Human Resources Committee considers tax deductibility as one of many factors in determining executive compensation, the Compensation and Human Resources Committee will award compensation that it determines to be consistent with the goals of our executive compensation program even if such compensation is not tax deductible by the Company and may modify compensation that was initially intended to be tax deductible if it determines that such modifications are consistent with the Company’s business needs. Thus, a majority of the amounts payable under our executive compensation arrangements will not be tax deductible or, if initially intended to be tax deductible, may not actually receive this treatment. Other Tax, Accounting and Regulatory Considerations. Many other Internal Revenue Code provisions, SEC regulations and accounting rules affect the design of executive pay. They are taken into consideration to create and maintain plans that are intended to comply with these requirements and that our Compensation and Human Resources Committee believes are effective and in the Changebest interests of our Company and our shareholders. | | | | | | | | | | 66 | | Portland General Electric 2022 Proxy Statement |
| | | | Executive Compensation Tables |
Executive Compensation Tables
Summary Compensation Table The table below summarizes the compensation for the last three years of our named executive officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | Year | Salary $(1) | Bonus $(2) | Stock Awards $(3) | Non-Equity Incentive Plan Compensation $(4) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings $(5) | All Other Compensation $(6) | Totals
$ | Maria Pope President and CEO | 2021 | 1,025,692 | | | 3,132,499 | | 1,114,840 | | 49,384 | | 85,940 | | 5,408,355 | | | 2020 | 971,710 | | — | | 2,249,979 | | — | | 167,195 | | 121,248 | | 3,510,132 | | 2019 | 876,077 | | — | | 2,124,935 | | 861,406 | | 134,472 | | 69,058 | | 4,065,948 | James Ajello Senior Vice President, Finance, CFO and Treasurer | 2021 | 542,445 | | | 676,632 | | 363,232 | | — | | 39,969 | | 1,622,278 | | | Lisa Kaner Vice President, General Counsel and Corporate Compliance Officer | 2021 | 453,469 | | | 473,530 | | 302,909 | | — | | 47,234 | | 1,277,142 | | | 2020 | 412,469 | | 225,165 | | 419,847 | | — | | — | | 76,568 | | 1,134,049 | | | 2019 | 377,596 | | — | | 379,957 | | 196,421 | | — | | 36,615 | | 990,589 | | Larry Bekkedahl Senior Vice President, Advanced Energy Delivery | 2021 | 420,106 | | | 416,860 | | 267,552 | | — | | 44,041 | | 1,148,559 | | | 2020 | 390,800 | | 202,552 | | 253,494 | | — | | — | | 92,829 | | 939,675 | | John Kochavatr Vice President Information Technology and Chief Information Officer | 2021 | 396,883 | | | 384,296 | | 246,652 | | — | | 45,179 | | 1,073,010 | | | 2020 | 377,601 | | 163,725 | | 349,815 | | — | | — | | 72,879 | | 964,020 | | | 2019 | 353,762 | | — | | 237,996 | | 175,887 | | — | | 100,134 | | 867,779 | |
(1) Amounts in Pension Valuethe Salary column include base salary earned and, Non-Qualified Deferred Compensation Earnings column reflects above-market interest (defined as above 120%where applicable, the value of the long-term Applicable Federal Rate) earned on balancespaid time off deferred under the 2005 MDCPMDCP. (2) Amounts shown in the Bonus column for 2020 represent the value of payouts under the 2020 ACI Program. As a result of 2020 financial results, as previously disclosed in the 2021 proxy statement, in alignment with our pay for performance principles, Ms. Pope and two other executives did not receive a bonus due to the poor financial performance in 2020. (3) Amounts shown in the Stock Awards column represent the aggregate grant date fair value of PSU and RSU awards, computed in accordance with FASB ASC Topic 718, Compensation Stock Compensation, excluding the effect of estimated forfeitures related to service-based vesting. The grant date fair values reported above will likely vary from the actual amount realized by the named executive officer based on a number of factors, including the number of RSUs and PSUs that ultimately vest and the Management Deferred Compensation Plan adopted in 1986 (”1986 MDCP”).closing market price of our common stock on the vesting date. For RSUs, we calculate grant date fair value by multiplying the number of shares underlying the award by the NYSE closing price per share of our common stock on the grant date. For PSUs, we calculate grant date fair value by assuming the satisfaction of performance-based goals at the “target” level for all metrics other than TSR and multiplying the corresponding number of shares earned by the NYSE closing price per share of our common stock on the grant date. For the TSR | | | | | | | | | (6)Portland General Electric 2022 Proxy Statement | The figures in this column for 2017 include contributions under the 2005 MDCP, the value of dividend equivalent rights earned under the Stock Incentive Plan, contributions to the 401(k) Plan and, in the case of Mr. Piro and Mr. Dudley, the value of accrued but unused vacation payable upon termination of employment. These amounts are set forth in the table below: | 67 |
| | | | | | | | | | | | | | | | | | Name | 2005 MDCP Contributions | Dividend Equivalent Rights* | 401(k) Contributions | Accrued Vacation | Total | | James J. Piro |
| $7,345 |
|
| $163,987 |
|
| $16,200 |
|
| $136,614 |
|
| $324,146 |
| | James F. Lobdell | 1,159 |
| 45,741 |
| 16,200 |
| — |
| 63,100 |
| | Maria M. Pope | — |
| 56,154 |
| 15,783 |
| — |
| 71,937 |
| | J. Jeffrey Dudley | 2,532 |
| 36,016 |
| 6,190 |
| 72,500 |
| 117,238 |
| | William O. Nicholson | 98 |
| 26,980 |
| 16,200 |
| — |
| 43,278 |
| | W. David Robertson | — |
| 25,130 |
| 16,200 |
| — |
| 41,330 |
|
| | | | Executive Compensation Tables |
*Theportion of the PSUs, fair value is determined using a Monte Carlo simulation. See Note 14 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021 for additional details regarding the assumptions made in the valuations reflected in this column.
If the maximum number of shares issuable under the PSUs had been used to calculate the grant date fair value of the PSUs, the value of the PSUs and the aggregate grant-date fair value of all stock awards for 2021 would have been as follows: | | | | | | | | | | Name | Maximum 2021 PSU Value ($) | Maximum Total 2021 Stock Award Value ($) | | Maria Pope | 4,277,690 | | 5,194,308 | | | James Ajello | 923,987 | | 1,121,949 | | | Lisa Kaner | 646,640 | | 785,188 | | | Larry Bekkedahl | 569,181 | | 691,148 | | | John Kochavatr | 524,715 | | 637,136 | |
(4) Amounts in the Non-Equity Incentive Plan Compensation column represent cash incentive awards earned under the Company's 2008 Annual Cash Incentive Master Plan for Executive Officers (ACI Plan). The terms of the 2021 awards are discussed on page 50 in the section entitled “Annual Cash Incentive Awards.” (5) Amounts in this column include the increase in the actuarial present value of the named executive officers' accumulated benefits under the Portland General Electric Company Pension Plan. (6) The amounts in the All Other Compensation table for 2021 are described in the table below: | | | | | | | | | | | | | | | | | | | | | | Name | Dividend Equivalent Rights ($)(1) | 401(k) Contributions ($)(2) | Contributions to 2005 MDCP ($)(3) | HSA Contributions ($)(4) | Long-Term Disability Insurance ($)(5) | Total ($)(6) | | Maria Pope | 58,911 | | 17,606 | | | 1,150 | | 8,273 | | 85,940 | | | James Ajello | 6,088 | | 29,151 | | | | 4,730 | | 39,969 | | | Lisa Kaner | 12,980 | | 29,173 | | 1,150 | | 3,931 | 47,234 | | | Larry Bekkedahl | 8,541 | | 29,049 | | 1,823 | | 1,150 | | 3,478 | | 44,041 | | | John Kochavatr | 11,140 | | 29,123 | 560 | 1,150 | 3,206 | 45,179 | |
(1) Represents the value of dividend equivalent rights wasearned under restricted stock unit awards, which is not included in the “Stock Awards”Stock Awards column in the Summary Compensation Table.
(2) Represents Company contributions to the named executive officers' accounts under the 401(k) Plan.
(3) Represents Company contributions to the named executive officers' accounts under the 2005 MDCP. See page 73 under the heading "Non-Qualified Deferred Compensation" for a discussion of the terms of the 2005 MDCP.
(4) Represents Company contributions to named executive officers' individual health savings accounts.
(5) Includes the value of wellness plan incentive rewards. In 2021 there were no tax gross-ups associated with Long-Term Disability Insurance.
(6) Includes the value of the preceding columns, for 2021 there was no paid time off (PTO) balance payouts.
| | | | | | | | | | 68 | | Portland General Electric 2022 Proxy Statement |
| | | | Executive Compensation Tables |
Grants of Plan-Based Awards Our named executive officers participated in incentive compensation plans that are designed to encourage high levels of performance on both a short-term and long-term basis. Performance-based annual cash bonuses were provided under the annual cash incentive award plan. Long-term equity incentives were provided under our 2021 Long-Term Incentive Award plan. The following table provides information aboutsummarizes grants of plan-based awards made to the named executive officers in 2021. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards (Number of Units)(3) | Grant Date Fair Value ($)(4) | | Name | Grant Date | Threshold
($) | Target ($) | Maximum
($) | Threshold (Number of Shares) | Target (Number of Shares) | Max (Number of Shares) | | Maria Pope | 2/17/2021 | 506,423 | | 1,012,846 | | 2,025,692 | | — | — | — | — | — | | | 2/17/2021 | — | | — | | — | | 20,433 | 51,083 | 102,166 | — | 2,138,845 | | | 2/17/2021 | — | | — | | — | | — | — | — | 21,892 | 916,618 | | | James Ajello | 2/17/2021 | 165,000 | | 330,000 | | 660,000 | | — | — | — | — | — | | | 2/17/2021 | — | | — | | — | | 4,414 | 11,034 | 22,068 | — | 461,994 | | | 2/17/2021 | — | | — | | — | | — | — | — | 4,728 | 197,961 | | | Lisa Kaner | 2/17/2021 | 137,598 | | 275,196 | | 550,392 | | — | — | — | — | — | | | 2/17/2021 | — | | — | | — | | 3,089 | 7,722 | 15,444 | — | 323,320 | | | 2/17/2021 | — | | — | | — | | — | — | — | 3,309 | 138,548 | | | Larry Bekkedahl | 2/17/2021 | 121,537 | | 243,074 | | 486,148 | | — | — | — | — | — | | | 2/17/2021 | — | | — | | — | | 2,719 | 6,797 | 13,594 | — | 284,590 | | | 2/17/2021 | — | | — | | — | | — | — | — | 2,913 | 121,967 | | | John Kochavatr | 2/17/2021 | 112,043 | | 224,086 | | 448,172 | | — | — | — | — | — | | | 2/17/2021 | — | | — | | — | | 3,133 | 6,266 | 12,532 | — | 262,357 | | | 2/17/2021 | — | | — | | — | | — | — | — | 2,685 | 112,421 | |
(1) These columns show the range of potential payouts for cash incentive awards granted in 2021 under our ACI Plan. The amounts shown in the Threshold column reflect payouts at threshold performance, which are 50% of target awards. The amounts in the Target column reflect payouts at target performance, which are 100% of the target awards. The amounts shown in the Maximum column reflect maximum payouts, which are 200% of the target awards. See the section of the Compensation Discussion and Analysis entitled “Annual Cash Incentive Awards” beginning on page 50 for a description of the awards. (2) These columns show the estimated range of potential payouts for awards of PSUs granted in 2021 under our Stock Incentive Plan. The amounts shown in the Threshold column reflect the minimum number of PSUs that could vest, which is 40%, after the relative total shareholder return modifier is applied, of the target amount shown in the Target column. The number of PSUs shown in the Maximum column is equal to 200% of the target amount. See the section of the Compensation Discussion and Analysis entitled “Long-Term Incentive Awards” beginning on page 56 for a description of the awards. (3) This column shows the number of RSUs granted to the named executive officers in 2017.2021. (4) The grant date fair values for the PSUs assume performance at target levels. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | | Name | Grant Date | | Threshold | | Target | | Maximum | | Threshold (Number of Shares) | | Target (Number of Shares) | | Maximum (Number of Shares) | | Grant Date Fair Value of Stock Awards (3) | | James J. Piro |
| |
| $402,711 |
| |
| $805,422 |
| |
| $1,208,132 |
| |
|
| |
|
| |
|
| |
|
| | | 2/15/2017 | | | |
|
| |
|
| | 18,162 |
| | 36,323 |
| | 63,565 |
| |
| $1,562,979 |
| | James F. Lobdell |
| | 118,033 |
| | 236,066 |
| | 354,100 |
| |
|
| |
|
| |
|
| |
|
| | | 2/15/2017 | |
|
| |
|
| |
|
| | 6,032 |
| | 12,064 |
| | 21,112 |
| | 519,114 |
| | Maria M. Pope |
| | 136,028 |
| | 272,056 |
| | 408,083 |
| |
|
| |
|
| |
|
| |
|
| | | 2/15/2017 | | | |
|
| |
|
| | 6,337 |
| | 12,674 |
| | 22,180 |
| | 545,362 |
| | J. Jeffrey Dudley |
| | 94,529 |
| | 189,059 |
| | 283,588 |
| |
|
| |
|
| |
|
| |
|
| | | 2/15/2017 | |
|
| |
|
| |
|
| | 3,986 |
| | 7,971 |
| | 13,949 |
| | 342,992 |
| | William O. Nicholson |
| | 81,756 |
| | 163,512 |
| | 245,268 |
| | | | | | | | | | 2/15/2017 | |
| |
| |
| | 2,681 |
| | 5,361 |
| | 9,382 |
| | 230,684 |
| | W. David Robertson |
| | 61,591 |
| | 123,183 |
| | 184,774 |
| | | | | | | | | | 2/15/2017 | | | | | | | | 2,544 |
| | 5,087 |
| | 8,902 |
| | 218,894 |
|
| | | | | | | | | (1)Portland General Electric 2022 Proxy Statement | These columns show the range of potential payouts for cash incentive awards granted in 2017 under the Annual Cash Incentive Plan. The amounts shown in the Threshold column are the payouts when threshold performance is achieved, which are 50% of target awards for each executive. The amounts in the Target column reflect payouts at target level of performance, which are 100% of the target awards. The amounts shown in the Maximum column reflect maximum payouts, which are 150% of the target awards. See the section of the Compensation Discussion and Analysis entitled “Annual Cash Incentive Awards” on pages 36 to 40 for a description of the terms of the awards. | 69 |
| | | (2) | These columns show the estimated range of potential payouts for awards of performance RSUs granted in 2017 under the Stock Incentive Plan. The amounts shown in the Threshold column reflect the minimum number of RSUs that could vest, which is 50% of the target amount shown in the Target column. The number of RSUs shown in the Maximum column is equal to 175% of the target amount. Settlement of the award in shares of the company’s common stock is contingent on the approval by the company’s shareholders of the amended and restated Stock Incentive Plan, as described in Proposal 4 of this proxy statement. See the section of theExecutive Compensation Discussion and Analysis entitled “Long-Term Equity Incentive Awards” on pages 41 to 44 for a description of the terms of the awards.Tables |
| | (3) | The grant date fair values for the performance RSUs assume performance at target levels and a stock price of $43.03 (the closing price of the company’s common stock on February 15, 2017, the date of the grant). The grant date fair values of the performance RSUs assume that the executive will continue to be employed by the company throughout the performance period. |
Outstanding Equity Awards at Fiscal Year-End The following table shows, for each named executive officer,summarizes the unvested performance RSUsgrants of equity awards that were outstanding at December 31, 2021, for our named executive officers. These awards consist of performance based and service based restricted stock units. | | | | | | | | | | | | | | | | | | | Name | Grant Date | Number of
Units of Stock That
Have Not Vested | Market Value of Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested ($) | Equity Incentive Plan Awards: Market Value of Unearned Units That Have Not Vested ($)(1) | | Maria Pope | 02/13/2019(2) | 10,919 | 577,833 | | — | | — | | 02/12/2020(3) | — | — | | 27,673 | | 1,464,455 | | 02/12/2020(4) | 9,224 | 488,134 | | — | | — | | 02/17/2021(5) | — | — | | 51,083 | | 2,703,312 | | 02/17/2021(6) | 21,892 | 1,158,525 | | — | | — | | | James Ajello | 02/17/2021(5) | — | — | | 11,034 | | 583,919 | | 02/17/2021(6) | 4,728 | 250,206 | | — | | — | | | Lisa Kaner | 02/13/2019(2) | 1,952 | 103,300 | | — | | — | | 02/12/2020(3) | — | — | | 5,164 | | 273,279 | | 02/12/2020(4) | 1,721 | 91,075 | | — | | — | | 02/17/2021(5) | — | — | | 7,722 | | 408,648 | | 02/17/2021(6) | 3,309 | 175,112 | | — | | — | | | Larry Bekkedahl | 02/13/2019(2) | 1,187 | 62,816 | | — | | — | | 02/12/2020(3) | — | — | | 3,118 | | 165,005 | | 02/12/2020(4) | 1,039 | 54,984 | | — | | — | | 02/17/2021(5) | — | — | | 6,797 | | 359,697 | | 02/17/2021(6) | 2,913 | 154,156 | | — | | — | | | John Kochavatr | 02/13/2019(2) | 1,223 | 64,721 | | — | | — | | 02/12/2020(3) | — | — | | 3,073 | | 162,623 | | 02/12/2020(4) | 1,024 | 54,190 | | — | | — | | 07/29/2020(7) | 1,140 | 60,329 | | — | | — | | 02/17/2021(5) | — | — | | 6,266 | | 331,597 | | 02/17/2021(6) | 2,685 | 142,090 | | — | | — | |
(1) Market value is based on the NYSE closing price of our common stock on December 31, 2017.2021, which was $52.92. (2) Amounts in these rows relate to the award of RSUs with a vesting date of February 13, 2022. (3) Amounts in these rows relate to awards of PSUs with a three-year performance period ending December 31, 2022 granted under the 2020 LTI Award Program. Pursuant to SEC rules, the PSUs are represented at the target amount of shares that may be earned under the awards. The actual number of shares that will vest under the PSUs (if any) will be determined based on the Company’s performance relative to the metrics for the awards (ROE as a percentage of allowed ROE, EPS growth, clean energy and relative TSR), subject to the approval of the Compensation and Human Resources Committee. The amount shown does not represent our estimate of the actual achievement to date under the awards. (4) Amounts in these rows relate to the award of RSUs with a vesting date of February 12, 2023. (5) Amounts in these rows relate to awards of PSUs with a three-year performance period ending December 31, 2023 granted under the 2021 LTI Award Program. Pursuant to SEC rules, the PSUs are represented at the target amount of shares that may be earned under the awards. The actual number of shares that will vest under the PSUs (if any) will be determined based on the Company’s performance relative to the metrics for the awards (ROE as a percentage of allowed ROE, EPS growth, clean energy and relative TSR), subject to the approval of the Compensation and Human Resources Committee. The amount shown does not represent our estimate of the actual achievement to date under the awards. (6) Amounts in these rows relate to the award of RSUs with a one-third vesting on each February 14 of 2022, 2023 and 2024. (7) Amounts in this row relate to the award of RSUs to Mr. Kochavatr in recognition of the expansion of his role, granted on July 29, 2020. The amount shown is the second half of the total award of 2,279 units which will vest on July 30, 2022, provided the Compensation and Human Resources Committee determines satisfactory progress described in the Off-Cycle Compensation section on page 62. | | | | | | | | | | | | | | Name | Grant Date | Number of Units of Stock That Have Not Vested | Market Value of Units of Stock That Have Not Vested (4) | Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (5) | Equity Incentive Plan Awards: Market Value of Unearned Units That Have Not Vested (6) | | James J. Piro | 02/15/2017 (1) | — |
| — |
| 63,565 |
|
| $2,897,293 |
| | | 02/17/2016 (2) | — |
| — |
| 60,585 |
| 2,761,464 |
| | | 02/18/2015 (3) | 38,347 |
|
| $1,747,856 |
| — |
| — |
| | James F. Lobdell | 02/15/2017 (1) | — |
| — |
| 21,112 |
| 962,285 |
| | | 02/17/2016 (2) | — |
| — |
| 18,446 |
| 840,769 |
| | | 02/18/2015 (3) | 11,058 |
| 504,024 |
| — |
| — |
| | Maria M. Pope | 02/15/2017 (1) | — |
| — |
| 22,180 |
| 1,010,964 |
| | | 02/17/2016 (2) | — |
| — |
| 19,763 |
| 900,798 |
| | | 02/18/2015 (3) | 12,050 |
| 549,239 |
| — |
| — |
| | J. Jeffrey Dudley | 02/15/2017 (1) | — |
| — |
| 13,949 |
| 635,795 |
| | | 02/17/2016 (2) | — |
| — |
| 13,295 |
| 605,986 |
| | | 02/18/2015 (3) | 7,962 |
| 362,908 |
| — |
| — |
| | William O. Nicholson | 02/15/2017 (1) | — |
| — |
| 9,382 |
| 427,632 |
| | | 02/17/2016 (2) | — |
| — |
| 8,943 |
| 407,622 |
| | | 02/18/2015 (3) | 5,956 |
| 271,474 |
| — |
| — |
| | W. David Robertson | 02/15/2017 (1) | — |
| — |
| 8,902 |
| 405,753 |
| | | 02/17/2016 (2) | — |
| — |
| 8,244 |
| 375,762 |
| | | 02/18/2015 (3) | 5,500 |
| 250,690 |
| — |
| — |
|
| | | | | | | | | (1)70 | Amounts in this row relate to performance RSUs with a three-year performance period ending December 31, 2019. The awards will vest in the first quarter of 2020, when the Compensation Committee, or in the case of Ms. Pope, the independent directors, determine the performance results and whether to make any adjustments to payouts under the awards. Settlement of the award in shares of the company’s common stock is contingent on the approval by the company’s shareholders of the Amended and Restated Stock Incentive Plan, as described in Proposal 4 of this proxy statement. | Portland General Electric 2022 Proxy Statement |
| | | (2) | Amounts in this row relate to performance RSUs with a three-year performance period ending December 31, 2018. The awards will vest in the first quarter of 2019, when theExecutive Compensation Committee, or in the case of Ms. Pope, the independent directors, determine the performance results and whether to make any downward adjustments to payouts under the awards.Tables |
| | (3) | Amounts in this row relate to performance RSUs with a three-year performance period ending December 31, 2017. The awards vested on February 14, 2018, when the Compensation Committee, or in the case of Mr. Piro and Ms. Pope, the independent directors, determined the performance results and whether to make any downward adjustments to payouts under the awards. Amounts in this row are based on a performance percentage of 102.2%. |
| | (4) | Amounts in this column reflect a value of $45.58 per unit (the closing price of the company's common stock on December 29, 2017) and performance percentage of 102.2%. |
| | (5) | Amounts in this column are the number of performance RSUs granted in 2016 and 2017, none of which had vested as of December 31, 2017. The amounts shown assume the maximum level of performance. |
| | (6) | Amounts in this column reflect the value of performance RSUs granted in 2016 and 2017, assuming a value of $45.58 per unit (the closing price of the company's common stock on December 29, 2017) and performance at maximum levels. |
Stock Units Vested The following table shows, for each of the named executive officers, the number and aggregate value of restricted stock units with performance-based vesting conditions and related dividend equivalent rights that vested during 2017.2021. | | | | | | | | | | Name | Number of Shares Acquired on Vesting of Restricted Stock Units(1) | Value Realized on Vesting ($)(2) | | Maria Pope | 14,409 | 603,305 | James Ajello(3) | 7,377 | 353,653 | | Lisa Kaner | 3,177 | 133,021 | | Larry Bekkedahl | 2,089 | 87,466 | John Kochavatr(4) | 3,400 | 150,660 |
(1) The amounts shown in this column constitute the aggregate number of PSUs and/or RSUs, together with related dividend equivalent rights, that vested in 2021. The amounts shown include shares that were withheld for applicable taxes. See page 58 under the heading “Service Requirement” and page 58 under the heading “2021 RSU Awards” for a discussion of the vesting conditions of the PSUs and RSUs, respectively. (2) Pursuant to SEC rules, the “value realized” on the vesting of PSUs and related dividend equivalents is equal to the number of shares that vested multiplied by the NYSE closing price of the Company’s common stock on the vesting date. (3) Mr. Ajello joined the Company in 2020 and did not receive the performance share award reflected in the Stock Units Vested table. Units vested reflect a one-time time-based RSU award which vested 50% upon hire, November 30, 2020 and the remaining 50% on May 30, 2021. (4) Mr. Kochavatr's vested units, together with related dividend equivalent rights, includes the vesting from the award discussed on page 62 under the heading "Off-Cycle Compensation". | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 71 |
| | | | | | | | | Name | Number of Shares Acquired on Vesting of Restricted Stock Units | | Value Realized on Vesting | | James J. Piro | 49,943 |
| |
| $2,149,047 |
| | James F. Lobdell | 13,923 |
| | 599,107 |
| | Maria M. Pope | 17,106 |
| | 736,071 |
| | J. Jeffrey Dudley | 10,978 |
| | 472,383 |
| | William O. Nicholson | 8,214 |
| | 353,448 |
| | W. David Robertson | 7,657 |
| | 329,481 |
|
| | | | Executive Compensation Tables |
Pension Benefits The following table shows for each of the named executive officers, the actuarial present value of (i) the officer’sMs. Pope’s accumulated benefit under the Pension Plan and (ii) the amounts accrued pursuant to the pension makeup feature of the deferred compensation plans for management (the “1986 MDCP” and the “2005 MDCP”) as of December 31, 2017.2021. The Pension Plan was closed to new participants before Mr. Ajello, Ms. Kaner, Mr. Bekkedahl and Mr. Kochavatr joined the Company. | | | | | | | | | | | Name | Plan Name | | Number of Years Credited Service | | Present Value of Accumulated Benefit | | James J. Piro | Pension Plan | | 37.6 |
| |
| $1,796,961 |
| | | 1986 MDCP��and 2005 MDCP | | 37.6 |
| | — |
| | James F. Lobdell | Pension Plan | | 33.2 |
| | 1,436,691 |
| | | 1986 MDCP and 2005 MDCP | | 33.2 |
| | — |
| | Maria M. Pope | Pension Plan | | 9.0 |
| | 354,834 |
| | | 2005 MDCP | | 9.0 |
| | — |
| | J. Jeffrey Dudley | Pension Plan | | 29.0 |
| | 1,231,348 |
| | | 1986 MDCP and 2005 MDCP | | 29.0 |
| | 191,908 |
| | William O. Nicholson | Pension Plan | | 37.5 |
| | 1,509,523 |
| | | 1986 MDCP and 2005 MDCP | | 37.5 |
| | — |
| | W. David Robertson | Pension Plan | | 13.6 |
| | 462,605 |
| | | 1986 MDCP and 2005 MDCP | | 13.6 |
| | — |
|
PENSION PLAN | | | | | | | | | | | | | Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit | | Maria Pope | Pension Plan | 13.00 | 715,917 | | James Ajello | Pension Plan | — | — | | Lisa Kaner | Pension Plan | — | — | | Larry Bekkedahl | Pension Plan | — | — | | John Kochavatr | Pension Plan | — | — |
Participants in the Pension Plan earn benefits under the Pension Planplan during each year of employment. Employees are vested in plan benefits after 5 years of service. Normal retirement age under the plan is 65. Early retirement income is available to participants after age 55, but benefits are reduced for each year prior to the normal retirement date. Each of the named executive officers, other than Ms. Pope, is currently eligible for early retirement under the Pension Plan. For non-union plan participants, the basic monthly pension benefit is based on Final Average Earnings (“FAE”), defined as the highest consecutive 60 months of earnings (base pay paid, excluding reductions due to income deferrals) during the last 120 months of employment. The basic pension benefit under the plan is calculated as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Monthly Benefit | | = | | 1.2% of FAE for first 30 years of service | | + | | 0.5% of FAE in excess of 35-Year Average of Social Security Taxable Wage Base | | + | | 0.5% of FAE for each year of service over 30 years |
The normal form of payment for a participant who does not have a spouse is a straight life annuity, which makes periodic payments to the participant until his or her death. The normal form of payment if the participant has a spouse is a contingent
annuity, which makes full payments for the life of the participant and thereafter 50% of the full payments until the death of the spouse if he or she survives the participant. Pension planPlan calculations are based on assumptions that are reviewed annually with the company’sCompany’s actuaries. The benefit calculation shown in the table above assumes retirement at age 65 (or current age if later), a discount rate of 4.84%2.92% and mortality assumptions based on the Generational Annuitant Mortality (RP 2000(PRI-2012 with Scale BB projections)MP2018 projection and 20-year convergence to SSA smoothed long-term rates). These assumptions are the same ones used for financial reporting purposes. MDCP RESTORATION OF PENSION BENEFITS
The 1986 MDCP and 2005 MDCP (“MDCP Plans”) provide a benefit to compensate participants for Pension Plan benefits that are lower due to salary deferrals under the MDCP Plans.2005 MDCP. These deferrals reduce a participant’s Final Average Earnings, on which Pension Plan benefits are based. The present value of the reduction in Pension Plan benefits due to salary deferrals is calculated as a lump sum upon termination of employment and added to the participant’s deferred compensation plan account balance. The aggregate present value of this benefit is reflected in the Pension Benefits table above. | | | | | | | | | | 72 | | Portland General Electric 2022 Proxy Statement |
| | | | Executive Compensation Tables |
Non-Qualified Deferred Compensation We offerOur 2005 Management Deferred Compensation Plan (2005 MDCP) allows executives and a select group of management and highly compensated employees an opportunityto elect on a year-by-year basis to defer compensation under the 2005 MDCP. Before January 1, 2005 (the effective datereceipt of the 2005 MDCP), eligible employees were eligible to defer compensation under the 1986 MDCP. The following table shows the named executive officers’ contributions and earnings in 2017 and balances as of December 31, 2017 under these plans. The accompanying narrative describes important provisions of the plans.
| | | | | | | | | | | | | | | | | | | | | Name | | Plan | | Executive Contributions in 2017 (1) | | Company Contributions in 2017 (2) | | Aggregate Earnings in 2017 (3) | | Aggregate Balance at 12/31/17 (4) | | James J. Piro | | 2005 MDCP | |
| $485,035 |
| |
| $7,345 |
| |
| $135,898 |
| |
| $3,272,922 |
| | | | 1986 MDCP | | — |
| | — |
| | 217,946 |
| | 3,286,195 |
| | James F. Lobdell | | 2005 MDCP | | 105,764 |
| | 1,159 |
| | 35,706 |
| | 852,497 |
| | | | 1986 MDCP | | — |
| | — |
| | 106,793 |
| | 1,610,234 |
| | Maria M. Pope | | 2005 MDCP | | 60,699 |
| | — |
| | 46,109 |
| | 1,071,950 |
| | | | 1986 MDCP | | — |
| | — |
| | — |
| | — |
| | J. Jeffrey Dudley | | 2005 MDCP | | 196,178 |
| | 2,532 |
| | 83,117 |
| | 2,037,666 |
| | | | 1986 MDCP | | — |
| | — |
| | 17,145 |
| | 243,547 |
| | William O. Nicholson | | 2005 MDCP | | 7,358 |
| | 98 |
| | 6,287 |
| | 146,662 |
| | | | 1986 MDCP | | — |
| | — |
| | 69,667 |
| | 1,050,448 |
| | W. David Robertson | | 2005 MDCP | | 11,365 |
| | — |
| | 6,227 |
| | 143,544 |
|
| | 1986 MDCP | | — |
| | — |
| | — |
| | — |
|
| | (1) | Amounts in this column include salary and paid-time-off deferrals that are reflected in the “Salary” column, and cash incentive award deferrals that are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. |
| | (2) | Amounts in this column include a company matching contribution of 3% of annual base salary deferred under the plans. These amounts are included in the Summary Compensation Table under “All Other Compensation.” |
| | (3) | Amounts in this column are included in the Summary Compensation Table under “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” to the extent that the earnings are above-market. |
| | (4) | Amounts in this column are reflected in the Summary Compensation Table under “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” only to the extent described in footnotes (1) to (3) above. |
Each calendar year participants may defer up to 80% of their base salary and 100% of their cash incentive compensation. Participantscompensation for payment in installments or in a lump sum future date in connection with a separation of employment. Additionally, a participant can elect to defer PTO. Beginning in 2021, the maximum number of hours of PTO that a participant may defer annually is the lesser of (i) 160 or (ii) total projected PTO hours for the year less 152. The following table shows the named executive officers’ contributions and earnings in 2021 and balances as of December 31, 2021 under the 2005 MDCP. The accompanying narrative describes key provisions of the plans.
| | | | | | | | | | | | | | | | | | | Name | Plan | Executive Contributions in 2021 ($)(1) | Company Contributions in 2021 ($)(2) | Aggregate Earnings in 2021 ($) | Aggregate Balance at 12/31/2021 ($)(3) | | Maria Pope | 2005 MDCP | 73,347 | | — | | 50,958 | | 1,538,650 | | | James Ajello | 2005 MDCP | — | | — | | — | | — | | | Lisa Kaner | 2005 MDCP | — | | — | | — | | — | | | Larry Bekkedahl | 2005 MDCP | 101,243 | | 1,823 | | 10,607 | | 359,704 | | | John Kochavatr | 2005 MDCP | 55,286 | | 560 | | 5,237 | | 180,742 | |
(1) Amounts in this column include salary and paid-time-off deferrals that are reflected in the Salary column of the Summary Compensation Table, as well as cash incentive award deferrals that are reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. (2) Amounts in this column include a Company matching contribution of 3% of annual base salary deferred under the applicable plan. These amounts are included in the Summary Compensation Table under “All Other Compensation.” (3) Amounts included in this column were reported as compensation to the named executive officer in the Company’s Summary Compensation Table for previous years, other than amounts earned before the officer first became a named executive officer. For 2021, participants could also contribute cash payments in lieu of up to 16080 hours of canceled paid time off (the excess, as of year-end, of their unused paid time off over 200 hours).off. The companyCompany provides a 3% matching contribution for base salary deferred. The 2005 MDCP and 1986 MDCP also provide for company contributions to compensate participants for lower Pension Plan payments they may receive as a resultDeferral elections must be made no later than December 31 of participatingthe taxable year preceding the year in which the plans. See the section above entitled “Pension Benefits — MDCP Restoration of Pension Benefits.”compensation is earned. Amounts deferred under the 2005 MDCP accrue interest that is .5%0.5% higher than the annual yield on Moody’s Average Corporate Bond Yield Index. The 1986 MDCP provides interest that is 3.0% higher than the same Moody’s index. Under the 2005 MDCP, participants begin receiving paymentsPayments are triggered by termination of employment, beginning six months after their separation from service. Aservice; a participant’s account balance during the six-month delay continues to accrue interest. Under both plans, benefits are paid in one of the
following forms, as elected by the participant in a payment election form filed each year:year for the following year’s deferrals: (i) a lump-sum payment; (ii) monthly installments in equal payments of principal and interest over a period of up to 180 months; or (iii) monthly installment payments over a period of up to 180 months, consisting of interest only payments for up to 120 months and principal and interest payments of the remaining account balance over the remaining period. If the participant is under 55 years of age upon termination of employment, the restoration of pension benefits payment is made in a lump sum with the first monthly payment. | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 73 |
| | | | Executive Compensation Tables |
Potential Payments and Rights on Termination and Change in Control Benefits The tables below showfollowing plans provide benefits that may become payable to named executive officers, depending on the estimated valuecircumstances surrounding their termination of employment with the Company. When listing the potential payments and other benefits to which the named executive officers would be entitledemployees under the company’s plans and programs upondescribed below, it is assumed that the applicable triggering event (retirement or other termination of employment in specified circumstancesemployment) occurred on December 31, 2021 and following a change in controlthe price per share of the company. The amounts shown assume thatCompany common stock is equal to the effective dateclosing price as of the terminationlast NYSE trading day in 2021. EXECUTIVE SEVERANCE PLAN The Company provides severance benefits and change-in-control benefits to executives, including all named executive officers, under its Severance Plan. In addition, severance benefits are provided through other plans or changeagreements included in control is December 31, 2017. Benefits that are generally available to salaried employees or disclosed above under “Pension Benefits”the following description of severance benefits. To receive any severance benefits, named executive officers must release the Company and “Non-Qualified Deferred Compensation” are not shown below. | | | | | | | | | | | | | | | | | | | | | | | James J. Piro | | | | | | | | | | | | Benefit Plan | |
Retirement | | Involuntary Not for Cause Termination | | Change in Control | | Termination Following Change in Control | |
Death or Disability | | Deferred Compensation Plans(1) | | — |
| | — |
| |
| $131,448 |
| | — |
| | — |
| | Severance Pay Plan(2) | | — |
| |
| $822,622 |
| | — |
| |
| $1,628,044 |
| | — |
| | Performance RSUs(3)(4) | |
| $3,835,192 |
| | — |
| | — |
| | 3,711,807 |
| |
| $3,835,192 |
| | Annual Cash Incentive Award(5) | | 901,106 |
| | — |
| | — |
| | — |
| | 901,106 |
| | Outplacement Assistance Plan(6) | | — |
| | 8,000 |
| | — |
| | — |
| | — |
| | Total | | 4,736,298 |
| | 830,622 |
| | 131,448 |
| | 5,339,851 |
| | 4,736,298 |
|
| | | | | | | | | | | | | | | | | | | | | | | James F Lobdell | | | | | | | | | | | | Benefit Plan | | Retirement | | Involuntary Not for Cause Termination | | Change in Control | | Termination Following Change in Control | | Death or Disability | | Deferred Compensation Plans(1) | | — |
| | — |
| |
| $64,409 |
| | — |
| | — |
| | Severance Pay Plan(2) | | — |
| |
| $432,604 |
| | — |
| |
| $668,671 |
| | — |
| | Performance RSUs(3)(4) | |
| $1,153,220 |
| | — |
| | — |
| | 1,114,522 |
| |
| $1,153,220 |
| | Annual Cash Incentive Award(5) | | 264,111 |
| | — |
| | — |
| | — |
| | 264,111 |
| | Outplacement Assistance Plan(6) | | — |
| | 8,000 |
| | — |
| | — |
| | — |
| | Total | | 1,417,331 |
| | 440,604 |
| | 64,409 |
| | 1,783,193 |
| | 1,417,331 |
| | | | | | | | | | | | | | | | | | | | | | Maria M. Pope | | | | | | | | | | | | Benefit Plan | | Retirement | | Involuntary Not for Cause Termination | | Change in Control | | Termination Following Change in Control | | Death or Disability | | Deferred Compensation Plans(1) | | — |
| | — |
| | — |
| | — |
| | — |
| | Severance Pay Plan(2) | | — |
| |
| $650,000 |
| | — |
| |
| $922,056 |
| | — |
| | Performance RSUs(3)(4) | |
| $1,241,599 |
| | — |
| | — |
| | 1,200,395 |
| |
| $1,241,599 |
| | Annual Cash Incentive Award(5) | | 333,540 |
| | — |
| | — |
| | — |
| | 333,540 |
| | Outplacement Assistance Plan(6) | | — |
| | 8,000 |
| | — |
| | — |
| | — |
| | Total | | 1,575,139 |
| | 658,000 |
| | — |
| | 2,122,451 |
| | 1,575,139 |
|
| | | | | | | | | | | | | | | | | | | | | | | J. Jeffrey Dudley | | | | | | | | | | | | Benefit Plan | | Retirement | | Involuntary Not for Cause Termination | | Change in Control | | Termination Following Change in Control | | Death or Disability | | Deferred Compensation Plans(1) | | — |
| | — |
| |
| $9,742 |
| | — |
| | — |
| | Severance Pay Plan(2) | | — |
| | — |
| | — |
| | — |
| | — |
| | Performance RSUs(3)(4) | |
| $819,255 |
| | — |
| | — |
| |
| $792,089 |
| |
| $819,255 |
| | Annual Cash Incentive Award(5) | | 113,943 |
| | — |
| | — |
| | — |
| | 113,943 |
| | Outplacement Assistance Plan(6) | | — |
| |
| $8,000 |
| | — |
| | — |
| | — |
| | Total | | 933,198 |
| | 8,000 |
| | 9,742 |
| | 792,089 |
| | 933,198 |
|
| | | | | | | | | | | | | | | | | | | | | | | William O. Nicholson | | | | | | | | | | | | Benefit Plan | | Retirement | | Involuntary Not for Cause Termination | | Change in Control | | Termination Following Change in Control | | Death or Disability | | Deferred Compensation Plans(1) | | — |
| | — |
| |
| $42,018 |
| | — |
| | — |
| | Severance Pay Plan(2) | | — |
| |
| $329,608 |
| | — |
| |
| $493,120 |
| | — |
| | Performance RSUs(3)(4) | |
| $580,689 |
| | — |
| | — |
| | 562,503 |
| |
| $580,689 |
| | Annual Cash Incentive Award(5) | | 174,173 |
| | — |
| | — |
| | — |
| | 174,173 |
| | Outplacement Assistance Plan(6) | | — |
| | 8,000 |
| | — |
| | — |
| | — |
| | Total | | 754,862 |
| | 337,608 |
| | 42,018 |
| | 1,055,623 |
| | 754,862 |
|
| | | | | | | | | | | | | | | | | | | | | | W. David Robertson | | | | | | | | | | | | Benefit Plan | | Retirement | | Involuntary Not for Cause Termination | | Change in Control | | Termination Following Change in Control | | Death or Disability | | Deferred Compensation Plans(1) | | — |
| | — |
| | — |
| | — |
| | — |
| | Severance Pay Plan(2) | | — |
| |
| $312,723 |
| | — |
| |
| $435,906 |
| | — |
| | Performance RSUs(3)(4) | |
| $538,072 |
| | — |
| | — |
| | 521,116 |
| |
| $538,072 |
| | Annual Cash Incentive Award(5) | | 137,817 |
| | — |
| | — |
| | — |
| | 137,817 |
| | Outplacement Assistance Plan(6) | | — |
| | 8,000 |
| | — |
| | — |
| | — |
| | Total | | 675,889 |
| | 320,723 |
| | — |
| | 957,022 |
| | 675,889 |
|
| | (1) | In the event of a Change of Control, as defined in the 1986 MDCP, participants are eligible to take an accelerated distribution of their account balances at a reduced forfeiture rate. See the section below entitled “Management Deferred Compensation Plan - Effect of Change in Control” for additional information. The amount shown in the Change in Control column is the amount by which the forfeiture would be reduced, assuming that a Change in Control occurred on December 31, 2017 and the officer elected to take an early distribution of his or her 1986 MDCP account balance as of that date. Ms. Pope and Mr. Robertson do not have an account balance under the 1986 MDCP. |
| | (2) | The amounts shown in the Involuntary Not for Cause Termination column assume 12 months of pay at 2017 salary levels for all named executive officers. The amounts shown in the Termination Following Change in Control column consist of 52 weeks of base salary plus the value of the target cash incentive award for the fiscal year in which the termination occurs and are based on 2017 base salaries and the cash incentive award payouts for 2017, which ranged from 106.52% to 122.60% of target. |
| | (3) | Amounts in this row under the headings “Retirement” and “Death or Disability” constitute the value of performance RSUs granted under the Stock Incentive Plan that would vest, assuming performance at 102.1% of target performance for the 2017 grants, 105.0% of target performance for the 2016 grants, and 102.2% of target performance for the 2015. The payout percentages for the 2017 and 2016 grants are based on forecasted results. The payout percentage for the 2015 grants is based on actual results. The values reflect the closing price of the company’s common stock as of December 31, 2017 ($45.58). |
| | (4) | The amount in this row under the heading “Termination Following Change in Control” shows the value of the performance RSUs granted under the Stock Incentive Plan in 2015, 2016 and 2017. These grants included provisions for accelerated vesting in the event of a termination following a Change in Control, as more fully described in the narrative below. The value shown reflects the closing price of the company's common stock as of December 31, 2017 ($45.58). |
| | (5) | Under the company's Annual Cash Incentive Plan, if a participant's employment terminates due to the participant’s death, disability or retirement prior to payment being made under an award, the company would pay an award to the participant or the participant's estate at the same time that awards are payable generally to other participants, pro-rated to reflect the number of full and partial months during the |
award year during which the participant was employed by the company. The amountits affiliates from all claims arising out of the payout would be based on actual performance results forofficer’s employment relationship and agree to certain confidentiality, non-competition, non-solicitation and non-disparagement restrictions in favor of the year.Company and its affiliates.
| | (6) | Amounts in this row are the estimated value of outplacement assistance consulting services received, assuming that the executive is granted six months of outplacement assistance, at a value of $5,000 for the first three months and $3,000 for an additional three months.
|
MANAGEMENT DEFERRED COMPENSATION PLANSEVERANCE BENEFITS - EFFECT OFNO CHANGE IN CONTROL
The 1986 MDCP allows participants to elect an accelerated distribution of all or a portion of their accounts, which results in a forfeiture of a portion of the distributed amounts. Following a Change of Control, as defined in the plan, only 6% of the distribution is forfeited, rather than the 10% forfeiture normally provided for under the plan. “Change of Control” is defined in the 1986 MDCP as an occurrence in which: (1) a person or entity becomes the beneficial owner of securities representing 30% or more of the voting power of the company’s outstanding voting securities, or (2) during any period of two consecutive years, individuals who at the beginning of the period constituted the board, and any new director whose election by the board or nomination for election by the company’s stockholders was approved by at least two-thirds of the directors in office who either were directors as of the beginning of the period or whose election or nomination was previously so approved, cease to constitute at least a majority of the board.
CASH SEVERANCE BENEFITS
Under the Company’s Severance Pay Plan, for Executive Employees, executives of the companyCompany are eligible for severance pay if they are terminated without cause, or voluntarily terminate employment for good reason and within 90 days offollowing the occurrenceevent that constitutes good reason. IfThose benefits include: •A cash lump sum payment equal to 1 time annual base salary, for non-CEO named executive officers, and 1.5 times annual base salary for the CEO; •An amount equal to a pro-rata portion of the annual cash incentive award in effect immediately prior to termination occursbased on the target level of performance and the period of the named executive officer's service during the award year (unless the named executive officer is retirement eligible); and •An amount equal to 12 months of continuation coverage under COBRA for non-CEO named executive officers and 18 months for CEO (if named executive employee is eligible for and timely elects COBRA coverage). SEVERANCE BENEFITS - CHANGE IN CONTROL Under the Company's Severance Plan, executives of the Company are eligible for severance payment if they are terminated within two years of24 months after a change in control the benefit isevent. Those benefits include: •A cash lump sum payment equal to 52 weeks1.5 times, for Ms. Kaner and Mr. Kochavatr, 2 times, in the case of base pay plusMr. Ajello and Mr. Bekkedahl, and 2.5 times, in the valuecase of Ms. Pope, of the executive’ssum total of (i) annual base salary at the highest rate in effect during the preceding 24 months, and (ii) the target annual cash incentive award. Ifaward in effect immediately prior to the termination is not within two yearsstart of a change of control, the severance benefit is24 month period; •An amount equal to 52 weeksa pro-rata portion of base pay.the annual cash incentive award in effect immediately prior to termination based on the target level of performance and the period of the named executive officer's service during the award year (unless the named executive officer is retirement eligible); and •An amount equal to 18 months of continuation coverage under COBRA for Ms. Kaner and Mr. Kochavatr, 24 months for Mr. Ajello and Mr. Bekkedahl, and 30 months for Ms. Pope (if the named executive employee is eligible for and timely elects COBRA coverage).
| | | | | | | | | | 74 | | Portland General Electric 2022 Proxy Statement |
| | | | Executive Compensation Tables |
For purposes of the plan, the terms “change in control,” “cause,” and “good reason” have the following meanings: “Change in controlcontrol”” means any of the following events:following: •A person or entity becomes the beneficial owner of Company securities representing more than 30% of the combined voting power of the Company’s then outstanding voting securities; | | ◦ | A person or entity becomes the beneficial owner of company securities representing more than 30% of the combined voting power of the company’s then outstanding voting securities; |
| | ◦ | During any period of two consecutive years, individuals who at the beginning of the period constitute the members of the Board of Directors and any new director whose election to the Board of Directors or nomination for election to the Board of Directors by the company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board of Directors; |
| | ◦ | The company merges with or consolidates into any other corporation or entity, other than a merger or consolidation which would result in the holders of the voting securities of the company outstanding immediately prior thereto holding immediately thereafter securities representing more than 50% of the combined voting power of the voting securities of the company or such surviving entity outstanding immediately after such merger or consolidation; or |
| | ◦ | The shareholders of the company approve a plan of complete liquidation of the company or an agreement for the sale or disposition by the company of all or substantially all of the company’s assets. |
•During any period of two consecutive years, individuals who at the beginning of the period (the Incumbent Board) cease to constitute at least a majority of the Board of Directors, provided, that any individual becoming a director subsequent to the beginning of such two year period, whose election to the Board of Directors or nomination for election to the Board of Directors by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board shall be considered as though such individual was a member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs in connection with or as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents; •There occurs a consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, other than a merger or consolidation which would result in the holders of the voting securities of the Company outstanding immediately prior thereto holding immediately thereafter securities representing, directly or indirectly, more than 50% of the combined voting power of the voting securities of the Company or other surviving entity outstanding immediately after such merger or consolidation; or •The shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets. A Change in Control shall not be deemed to have occurred if holders of common stock of the Company continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company as a result of a transaction or a series of integrated transactions. “Good reason” Good reason” means the occurrence of any of the following conditions: •A material adverse change in the nature of the executive’s duties or responsibilities (for avoidance of doubt ceasing to be the Chief Executive Officer, Chief Financial Officer, Chief Legal Officer or Chief Human Resources Officer of a public company shall constitute a material adverse change); | | ◦ | A material adverse change in the nature of the executive’s duties or responsibilities (provided that merely ceasing to be an officer of a public company does not itself constitute a material adverse change); |
| | ◦ | A material reduction in the executive’s base compensation or incentive compensation opportunities; or |
| | ◦ | A mandatory relocation of the executive’s principal place of work in excess of 50 miles. |
•A material reduction in the executive’s base compensation or short-term cash incentive compensation opportunities; or •A mandatory relocation of the executive’s principal place of work in excess of 50 miles. “Cause”Cause,” in the case of a termination that occurs within two years of a change of control, is defined as conduct involving any of the following: | | ◦ | The substantial and continuing failure of the executive to perform substantially all of his or her duties to the company (other than a failure resulting from incapacity due to physical or mental illness), after 30 days’ notice from the company; |
| | ◦ | The violation of a company policy, which could reasonably be expected to result in termination; |
| | ◦ | Dishonesty, gross negligence or breach of fiduciary duty; |
| | ◦ | The commission of an act of fraud or embezzlement, as found by a court of competent jurisdiction; |
| | ◦ | The conviction of a felony; or |
| | ◦ | A material breach of the terms of an agreement with the company, provided that the company provides the executive with adequate notice of the breach and the executive fails to cure the breach with 30 days after receipt of notice. |
“Cause,” in the case of a termination that does not occur within two years of a change in control is defined as:
•The substantial and continuing failure of the executive to perform substantially all of his or her duties to the Company (other than a failure resulting from incapacity due to physical or mental illness), after 30 days’ notice from the Company; •The material breach of law or written Company policy, applicable to the executive, including, but not limited to the Company's Code of Business Ethics and Conduct, that could result in significant reputation or financial harm to the Company; •Dishonesty, gross negligence or breach of fiduciary duty; •The commission of an act of fraud or embezzlement, as found by a violationcourt of company standardscompetent jurisdiction; | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 75 |
| | | | Executive Compensation Tables |
•The conviction of performance, conducta felony; •A material breach of the terms of an agreement with the Company, provided that the Company provides the executive with adequate notice of the breach and the executive fails to cure the breach within 30 days after receipt of notice; or attendance (as construed •any other misconduct by the company in its sole discretion).executive that would justify the recoupment or cancellation of compensation under the Company's Incentive Compensation Clawback and Cancellation Policy. EQUITY AND PAYMENT ACCELERATION IN CHANGE IN CONTROL, DEATH, DISABILITY OR RETIREMENT AND THE "RULE OF 75" VESTING IN EVENT OF CHANGE OF CONTROL
ANNUAL CASH INCENTIVE PLAN
Stock Incentive Plan.Under the terms of the Annual CashStock Incentive Plan, the Compensation and Human Resources Committee may accelerate distribution of stock awards, provide payment to the participant of cash or other property equal to the fair market value of the award, adjust the terms of the award, cause the award to be assumed, or make such other adjustments to awards as the Compensation and Human Resources Committee considers equitable to the participant and also in the best interest of the Company and its shareholders. PSU Awards. PSU awards for executives provide for accelerated vesting in the event of the executive’s termination following a change in control. Under the terms of the grant agreements, any PSUs that have not previously vested will vest automatically at the target level of performance as of the date of termination within two years following a change in control: (i) when the grantee’s employment is terminated by the Company without cause, or (ii) if the grantee voluntarily terminates employment for good reason within 90 days after the event constituting good reason. For purposes of the PSU awards, the terms “change in control,” “cause,” and “good reason” have the same definitions as those described above under the heading “Severance Plan.” The number of dividend equivalent rights would be determined in accordance with the terms of the awards, calculated as if the date of termination were the end of the performance period. Vesting of PSUs and RSUs and Payment of ACI in Event of Death, Disability or Retirement PSU and RSU Awards. Our PSU and RSU award agreements with the named executive officers provide for early vesting of the performance RSUs in the event an officer’s employment is terminated due to the officer’s death, disability or retirement (as defined under our Pension Plan, which requires five years of service and a minimum age of 55). In the case of PSUs, the number of units that vest is determined by multiplying the performance percentage by the number of PSUs originally granted and by the percentage of the performance period that the officer was actively employed. In the case of RSUs, the number of units that vest is determined by multiplying the number of RSUs originally granted by the percentage of the vesting period that the officer was employed. ACI Payments. Under the terms of the ACI Plan, if a participant’s employment terminates due to the participant’s death, disability or retirement, the companyCompany will pay an award to the participant or the participant’s estate, as applicable, if and when awards are payable generally to other participants under the plan. The amount of the award will be prorated to reflect the number of full and partial months during the year in which the participant was employed. For the purposes of this provision, “retirement” means a participant’s termination of employment after meeting the requirements for retirement under the company’s pension planPension Plan (currently age 55 with five years of service). Stock Incentive PlanVesting of PSUs and RSUs Based on “Rule of 75”
Compensation Committee Discretion in EventBeginning with our 2020 awards, our PSU and RSU grant agreements provide that, if a grantee satisfies the “rule of Change in Control
Under the terms75” upon termination of the Stock Incentive Plan,employment for reasons other than cause, then (i) in the eventcase of a Change in Control (defined below) or a significant changeRSU awards, all unvested RSUs under the award will vest, and (ii) in the business condition or strategycase of the company, the Compensation Committee may accelerate distribution of stockPSU awards, provide payment to the participant of cash or other property equal to the fair market value of the award, adjust the terms of the award, cause the award to be assumed, or make such other adjustments to awards as the committee considers equitable to the participant and also in the best interest of the company and its shareholders.
Change in Control Provisions in Performance RSU Awards
Our performance RSU awards for executives provide for accelerated vesting in the event of the executive’s termination following a change in control. Under the terms of the grant agreements, a number of such performance RSUs will vest automatically if, within two years following a change in control: (i) the grantee’s employment is terminated by the company without cause, or (ii) the grantee voluntarily terminates employmentwill be eligible for good reason within 90 days after the event constituting good reason.full vesting, based on performance results, notwithstanding early termination. For purposes of these provisions, a recipient satisfies the RSU awards, the terms “change in control,” “cause,” and “good reason” have the same definitions as those described above under the heading “Cash Severance Benefits.”
To determine the numberrule of performance RSUs that would vest in the event of a termination following a change in control, the Compensation Committee is required to use a performance percentage calculated in accordance with the terms of the awards, subject to the committee’s right to adjust awards downward, and to the following principles:
For the return on equity performance goal, Accounting ROE would be assumed to be actual accounting ROE for any fiscal years that ended prior to the termination of employment, and target ROE for any other fiscal years included in the performance period.
For the relative total shareholder return goal, target performance results would be assumed for the 3-year performance period.
For the asset base performance goal, regulated asset base for 3-year performance period would be assumed to be at target. (Note that this performance goal is not used in our 2017 performance RSUs.)
The number of dividend equivalent rights would be determined in accordance with the terms of the awards, calculated as75 if the daterecipient has no less than 5 years of termination wereservice and the endrecipient’s age plus years of the performance period.service is at least 75. See the Compensation"Compensation Discussion and Analysis, section entitled “Long-Term Equity Incentive Awards” for more information about the termsOther Terms of the 2017 performancePSU and RSU Awards," for the treatment of Mr. Ajello awards.
Vesting of Performance RSUs
The restricted stock unit award agreements with the named executive officers provide for early vesting of the performance RSUs in the event an officer’s employment is terminated due to the officer’s death, disability or retirement. The number of units that vest is determined by multiplying the performance percentage by the number of performance RSUs originally granted and by the percentage of the performance period that the officer was actively employed. The remaining performance RSUs are forfeited.
| | | | | | | | | | 76 | | Portland General Electric 2022 Proxy Statement |
| | | | Executive Compensation Tables |
OUTPLACEMENT ASSISTANCE PLAN The companyCompany maintains the Portland General Electric Company Outplacement Assistance Plan to cover the cost of outplacement assistance for certain employees who lose their jobs as a result of corporate, departmental or work group reorganization, including the elimination of a position or similar business circumstances. Eligible management employees, including officers, are offered the services of an outside outplacement consultant for three to sixtwelve months, with the exact length of the services determined by the Compensation and Human Resources Committee. The tables below show the estimated value of payments and other benefits to which the named executive officers would be entitled under the Company’s plans and programs upon termination of employment in specified circumstances and following a change in control of the Company. The amounts shown assume (only for purposes of illustration and not as an expectation or projection about the future) that the effective date of the termination or change in control was December 31, 2021. Benefits that (i) do not discriminate in favor of executive officers and are generally available to salaried employees or (ii) are disclosed above under “Pension Benefits” and “Non-Qualified Deferred Compensation” are not shown in the tables below. | | | | | | | | | | | | | | | | | | | Maria Pope | | | | | | | Benefit Plan or Award | Voluntary Termination
($) | Involuntary Not for Cause Termination
($) | Change in Control
($) | Termination Following Change in Control
($) | Death or Disability
($) | | Severance Pay Plan(1) | — | | 1,491,438 | | — | | 5,031,980 | | — | | | PSUs(2)(3) | 2,526,348 | | 2,526,348 | | — | | 4,631,188 | | 2,526,348 | | | RSUs(4) | 1,198,306 | | 1,198,306 | | — | | 2,201,316 | | 1,198,306 | | | Annual Cash Incentive Award(5) | 1,114,840 | | 1,114,840 | | — | | 1,114,840 | | 1,114,840 | | | Outplacement Assistance Plan(6) | — | | 25,000 | | — | | 25,000 | | — | | | Total | 4,839,494 | | 6,355,932 | | — | | 13,004,324 | | 4,839,494 | |
| | | | | | | | | | | | | | | | | | | James Ajello | | | | | | | Benefit Plan or Award | Voluntary Termination
($) | Involuntary Not for Cause Termination
($) | Change in Control
($) | Termination Following Change in Control
($) | Death or Disability
($) | Severance Pay Plan(1) | — | | 880,000 | | — | | 2,090,000 | | — | | PSUs(2)(3) | — | | — | | — | | 602,653 | | 748,130 | | RSUs(4) | — | | — | | — | | 250,206 | | 72,795 | | Annual Cash Incentive Award(5) | — | | — | | — | | — | | 363,232 | | Outplacement Assistance Plan(6) | — | | 25,000 | | — | | 25,000 | | — | | | Total | — | | 905,000 | | — | | 2,967,859 | | 1,184,157 | |
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 77 |
| | | | Executive Compensation Tables |
| | | | | | | | | | | | | | | | | | | Lisa Kaner | | | | | | | Benefit Plan or Award | Voluntary Termination
($) | Involuntary Not for Cause Termination
($) | Change in Control
($) | Termination Following Change in Control
($) | Death or Disability
($) | Severance Pay Plan(1) | — | | 755,903 | | — | | 1,410,989 | | — | | PSUs(2)(3) | — | | — | | — | | 711,986 | | 430,504 | | RSUs(4) | — | | — | | — | | 266,188 | | 207,306 | | Annual Cash Incentive Award(5) | — | | — | | — | | — | | 302,909 | | Outplacement Assistance Plan(6) | — | | 25,000 | | — | | 25,000 | | — | | | Total | — | | 780,903 | | — | | 2,414,163 | | 940,719 | |
| | | | | | | | | | | | | | | | | | | Larry Bekkedahl | | | | Benefit Plan or Award | Voluntary Termination ($) | Involuntary Not for Cause Termination
($) | Change in Control ($) | Termination Following Change in Control
($) | Death or Disability ($) | Severance Pay Plan(1) | — | | 425,217 | | — | | 1,338,370 | | — | | PSUs(2)(3) | 308,312 | | — | | — | | 546,452 | | 308,312 | | RSUs(4) | 139,681 | | — | | — | | 269,436 | | 139,681 | | Annual Cash Incentive Award(5) | 267,552 | | 267,552 | | — | | 267,552 | | 267,552 | | Outplacement Assistance Plan(6) | — | | 25,000 | | — | | 25,000 | | — | | | Total | 715,545 | | 717,769 | | — | | 2,446,810 | | 715,545 | |
| | | | | | | | | | | | | | | | | | | John Kochavatr | | | | | | | Benefit Plan or Award | Voluntary Termination ($) | Involuntary Not for Cause Termination
($) | Change in Control ($) | Termination Following Change in Control
($) | Death or Disability ($) | Severance Pay Plan(1) | — | | 624,052 | | — | | 1,160,988 | | — | | PSUs(2)(3) | — | | — | | — | | 514,965 | | 293,971 | | RSUs(4) | — | | — | | — | | 242,479 | | 175,629 | | Annual Cash Incentive Award(5) | — | | — | | — | | — | | 246,652 | | Outplacement Assistance Plan(6) | — | | 25,000 | | — | | 25,000 | | — | | | Total | — | | 649,052 | | — | | 1,943,432 | | 716,252 | |
(1) The amounts shown in the Involuntary Not for Cause Termination column consist of severance payments equal to 18 months of base salary and COBRA coverage for the CEO PAY RATIOand 12 months of base salary and COBRA coverage for all other executives at December 31, 2021 salary levels, retirement eligible executives receive a prorated annual cash incentive (ACI), per the ACI plan document; for those not retirement eligible the lump sum also includes target annual cash incentive prorated to termination. The amounts shown in the Termination Following Change in Control column consist of 30 months of base salary plus target ACI plus COBRA coverage for the CEO, 24 months of base salary plus target ACI plus COBRA coverage for the CFO and senior vice executives, and 18 months of base salary plus target ACI plus COBRA coverage for all other executives at December 31, 2021 salary levels, COBRA rates and target ACI award for 2021. | | | | | | | | | | 78 | | Portland General Electric 2022 Proxy Statement |
| | | | Executive Compensation Tables |
(2) Amounts in the Voluntary Termination, Involuntary Not for Cause Termination and Death or Disability columns reflect the value at December 31, 2021 of PSUs granted in 2020 and 2021, assuming performance at 132.2% and 124.1% of target, respectively. The payout percentages for the PSU awards are based on forecasted results. The values reflect the NYSE closing price of the Company’s common stock on December 31, 2021 ($52.92). No amounts are shown for Mr. Ajello, Ms. Kaner and Mr. Kochavatr in the Voluntary Termination or Involuntary Not for Cause columns because at December 31, 2021 these officers were not retirement-eligible, as defined in the Pension Plan. See below under the heading “Vesting of PSUs and RSUs in Event of Death, Disability or Retirement.” (3) Amounts in the Termination Following Change in Control column constitute the value at December 31, 2021 of PSUs granted in 2020 and 2021. These grants included provisions for accelerated vesting in the event of a termination following a Change in Control, as described in the narrative below. The value shown reflects the closing price of the Company’s common stock on December 31, 2021 ($52.92). (4) The amounts shown in the Voluntary Termination and Death or Disability columns reflect the value at December 31, 2021 of outstanding RSUs. No values are shown in the Voluntary Termination column for Mr. Ajello, Ms. Kaner and Mr. Kochavatr because they were not retirement-eligible, as defined under the Company’s Pension Plan, at December 31, 2021. See below under the heading “Vesting of PSUs and RSUs in Event of Death, Disability or Retirement.” (5) Amounts shown in this row consist of payouts under awards made pursuant to the ACI Plan. No amounts are shown in the Voluntary Termination column for Mr. Ajello, Ms. Kaner and Mr. Kochavatr because at December 31, 2021 these officers were not retirement eligible as defined in the Pension Plan, which is required for early vesting in the event of voluntary termination under the terms of the ACI Plan. See below under the heading “ACI Plan” for additional details. (6) Amounts in this row are the estimated value of outplacement assistance consulting services the named executive employee would receive, assuming that the executive is granted twelve months of outplacement assistance, at a value of $20,000 for the first nine months and $5,000 for an additional three months. See below under the heading “Outplacement Assistance Plan” for additional details. | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 79 |
In accordance with SEC rules, promulgated by the Securities and Exchange Commission (“SEC”) pursuant to provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are disclosing the ratio of the annual total compensation of our chief executive officerCEO to the annual total compensation of the individual we have identified as our median employee for this purpose. We identified theour median employee by examining 20172021 taxable earnings, as reported on W-2 forms (“W-2(W-2 taxable earnings”)earnings), for all individuals who were employed by the Company on December 31, 2017,2021, other than our chief executive officer.CEO. We believe that the use of W-2 taxable earnings, which is a broad and widely used measure of annual compensation, is an appropriate measure by which to determine the median employee. We included
all employees, whether employed on a full-time, part-time or seasonal basis, and we did not annualize the compensation of any full-time employee who was employed for less than the full 20172021 calendar year. We believe that the use of W-2 taxable earnings is an appropriate measure by which to determine the median employee. After identifying the median employee based on 20172021 W-2 taxable earnings, we calculated annual total compensation for suchthe median employee using the same methodology that we use for our named executive officers as set forth in the “Totals”Totals column in the 20172021 Summary Compensation Table. As measured using that methodology, our chief executive officer’sCEO’s annual total compensation for 20172021 was $3,785,253$5,408,355 and our median employee’s annual total compensation for 20172021 was $99,534.$118,857. As a result, our 2017 chief executive officer2021 CEO to median employee pay ratio was approximately 37:46:1. | | | | | | | | | | 80 | | Portland General Electric 2022 Proxy Statement |
| | | | Item 2: Advisory Vote on Executive Compensation |
ADDITIONAL INFORMATIONItem 2: Advisory Vote on Executive Compensation
In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, our shareholders have the opportunity to cast an advisory vote to approve the compensation of our named executive officers as disclosed pursuant to the SEC's compensation disclosure rules, which disclosure includes the Compensation Discussion and Analysis, the compensation tables, and the narrative disclosures that accompany the compensation tables (a "say-on-pay" vote). As described in detail in the Compensation Discussion and Analysis section of this Proxy Statement, our executive compensation programs are designed to attract and retain highly qualified executive officers and to provide them with incentives to advance the interests of our stakeholders, which include our shareholders, our customers, our employees and the communities we serve. We are asking our shareholders to indicate their support for the compensation of our named executive officers as described in this Proxy Statement by voting to approve the resolution set forth below. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we will ask our shareholders to vote “FOR” the following resolution at the Annual Meeting: | | | | | | | | | | “RESOLVED, that the shareholders of the Portland General Electric Company (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis, the 2021 Summary Compensation Table and the other related tables and disclosure in the Proxy Statement for the Company’s 2022 Annual Meeting of Shareholders.” | |
Approval of this proposal will require that the number of votes cast in favor of this proposal exceeds the number of votes cast against this proposal. As an advisory vote, this proposal is not binding on the Company or the Compensation and Human Resources Committee. However, the Compensation and Human Resources Committee and the Board value the opinions expressed by shareholders in their votes on this proposal and will consider the outcome of the vote when making future compensation decisions regarding named executive officers. It is expected that the next say-on-pay vote will occur at the 2023 annual meeting of shareholders. | | | | | | | | | | The Board of Directors unanimously recommends a vote "FOR" the approval of the compensation of our named executive officers, as disclosed in this Proxy Statement. | |
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 81 |
| | | | Audit and Risk Committee Matters |
Audit and Risk Committee Matters
Audit and Risk Committee Report The Audit and Risk Committee is comprised of the six directors named below, and operates under the charter adopted by the Board, which is posted on the Company's website at https://investors.portlandgeneral.com/corporate-governance. The Board has determined that each Audit and Risk Committee member is independent and financially literate, and that at least one member has accounting or other related financial management expertise, as such qualifications are defined in the NYSE rules, our Corporate Governance Guidelines, and/or the Audit and Risk Committee's charter. The Board has also determined that Mr. Ganz, member of the committee, qualifies as an "audit committee financial expert" as defined by SEC rules. The Audit and Risk Committee’s primary responsibilities are to assist the Board with oversight of the integrity of the Company’s financial statements and system of internal controls, the independent auditor’s qualifications and independence, the performance of the Company’s internal audit function and independent auditor, the effectiveness of the Company’s enterprise risk management program, and the Company’s compliance with legal and regulatory requirements. Management is responsible for the internal controls and the financial reporting processes, including the integrity and objectivity of the financial statements. Our independent registered public accounting firm is responsible for performing an independent audit of the Company’s financial statements and of its internal control over financial reporting under the standards of the Public Company Accounting Oversight Board (PCAOB) and expressing an opinion as to the conformity of the Company’s financial statements with generally accepted accounting principles and the effectiveness of its internal control over financial reporting. In performing its oversight role, the Audit and Risk Committee has considered and discussed the audited financial statements with each of management and the independent registered public accounting firm for 2021, Deloitte & Touche LLP (Deloitte). The Audit and Risk Committee has discussed with Deloitte significant accounting policies that the Company applies in its financial statements, as well as alternative treatments and critical audit matters addressed during the audit. We have further discussed with Deloitte the matters required to be discussed under applicable PCAOB standards. We have received from Deloitte the written disclosures and the letter required by applicable PCAOB rules regarding Deloitte’s independence, discussed with Deloitte its independence, and considered whether the non-audit services provided by Deloitte are compatible with maintaining its independence. The Audit and Risk Committee also has reviewed and discussed with the Company’s management the audited financial statements included in the Company’s 2021 Annual Report on Form 10-K for the year ended December 31, 2021, and management’s reports on the financial statements and internal control over financial reporting. Management has confirmed to the Committee that the financial statements have been prepared with integrity and objectivity and that management has maintained an effective system of internal control over financial reporting. Deloitte has expressed its professional opinions that the financial statements conform with accounting principles generally accepted and that management has maintained an effective system of internal control over financial reporting. In addition, the Company’s Chief Executive Officer and Chief Financial Officer have reviewed with the Audit and Risk Committee the certifications that each will file with the Securities and Exchange Commission pursuant to the requirements of the Sarbanes-Oxley Act of 2002 and the policies and procedures management has adopted to support the certifications. | | | | | | | | | | 82 | | Portland General Electric 2022 Proxy Statement |
| | | | Audit and Risk Committee Matters |
Based on these considerations, the Audit and Risk Committee has recommended to the Board that the Company’s audited financial statements be included in the Company’s 2021 Annual Report on Form 10-K for the year ended December 31, 2021, for filing with the Securities and Exchange Commission. AUDIT AND RISK COMMITTEE Kathryn Jackson (Chair) Mark Ganz Michael Lewis Michael Millegan Neil Nelson Principal Accountant Fees and Services The following table shows the fees paid to Deloitte for services provided to the Company in 2020 and 2021. | | | | | | | | | | 2020 | 2021 | Audit Fees(1) | $ | 1,808,603 | $ | 1,914,000 | Audit-Related Fees(2) | 27,000 | 38,470 | Tax Fees(3) | — | 16,630 | All Other Fees(4) | 1,895 | 63,895 | | Total | $ | 1,837,498 | $ | 2,032,995 |
(1) For professional services rendered for the audit of our consolidated financial statements for the fiscal years ended December 31, 2020 and 2021 and for the review of the interim condensed consolidated financial statements included in quarterly reports on Form 10-Q. Audit Fees also include services normally provided in connection with statutory and regulatory filings or engagements, assistance with and review of documents filed with the SEC, the issuance of consents and comfort letters, as well as the independent auditor’s report on the effectiveness of internal control over financial reporting. (2) For assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements not reported under “Audit Fees” above, including attest services that are not required by statute or regulation, consultations concerning financial accounting and reporting standards, and audits of the statements of activities of jointly owned facilities. Also includes amounts reimbursed to PGE in connection with cost sharing arrangements for certain services. (3) For professional tax services, including consulting and review of tax returns. (4) For all other products and services not included in the above three categories. Comprised of fees for an operational audit in 2021 and in both 2020 and 2021 includes Deloitte & Touche annual DART (Deloitte Accounting Research Tool site) subscription.
Pre-approval Policy for Independent Auditor Services The Board has adopted a policy for pre-approval of all audit and permissible non-audit services provided by the Company’s independent auditor. Each year, the Audit and Risk Committee approves the terms on which the independent auditor is engaged for the ensuing fiscal year. All requests for audit, audit-related and tax services that are not on the pre-approved list of specified services must be approved by the Audit and Risk Committee. Management and the independent auditors are required to report at least quarterly to the Audit and Risk Committee regarding the services provided, and fees paid for such services, compared to the services and fees that were pre-approved in accordance with the pre-approval policy. The Audit and Risk Committee is authorized under the pre-approval policy to delegate its pre-approval authority to a member of the committee. All audit and permissible non-audit services provided by the independent auditors during 2020 and 2021 were pre-approved by the Audit and Risk Committee. | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 83 |
| | | | Item 3: Ratification of the Appointment of Deloitte & Touche LLP |
Item 3: Ratification of the Appointment of Deloitte & Touche LLP Our Audit and Risk Committee is directly responsible for the selection, appointment, compensation, and oversight of the independent registered public accounting firm retained to audit the Company’s financial statements. The Audit and Risk Committee has appointed Deloitte & Touche LLP (Deloitte) as the Company’s independent registered public accounting firm to audit the Company’s consolidated financial statements for the year ending December 31, 2022. The Company is asking shareholders to ratify this appointment. Deloitte is an international accounting firm which provides leadership in public utility accounting matters. Deloitte has served as our independent registered public accounting firm since 2004. The Audit and Risk Committee annually considers whether Deloitte should be reappointed for another year. The lead engagement partner is required to rotate off the Company’s audit at least every five years. In connection with the mandated rotation of Deloitte’s lead engagement partner effective beginning with Deloitte’s audit of the Company’s consolidated financial statements for the year ending December 31, 2022, the Company and select members of the Audit and Risk Committee performed a rigorous interview process based on professional, industry and personal criteria. As a result of this process, the Audit and Risk Committee Chair then selected the lead engagement partner taking into account management’s recommendation. The Audit and Risk Committee considered several factors when determining whether to reappoint Deloitte as the Company's Independent auditor including: • Deloitte’s professional qualifications and reputation for integrity and competence in the fields of accounting and auditing; • Qualifications of the lead audit partner and other key audit engagement members; • Deloitte’s current and historical performance on the Company’s audits, including the extent and quality of its communications with the Audit and Risk Committee and the Company’s management and internal audit department; • Depth of Deloitte’s knowledge of the Company’s business, internal controls, and accounting practices; • The nature and extent of Deloitte’s non-audit services; • Analysis of Deloitte’s known legal risks and significant proceedings that could impair its ability to perform the Company’s annual audit; • Appropriateness of Deloitte’s audit fees; • Deloitte’s tenure as the Company’s independent auditor; and • The potential impact of seeking another accounting firm with comparable professional qualifications and industry expertise. The Committee and the Board believe that the retention of Deloitte to serve as the Company’s independent registered public accounting firm for 2022 is in the best interests of the Company and its shareholders. Although ratification is not required by law or under our bylaws or other corporate governance documents, the Board is submitting the appointment of Deloitte to our shareholders for ratification because we value our shareholders’ views on this matter and as a matter of good corporate governance. If our shareholders do not ratify the appointment, this will be | | | | | | | | | | 84 | | Portland General Electric 2022 Proxy Statement |
| | | | Item 3: Ratification of the Appointment of Deloitte & Touche LLP |
considered a recommendation to the Board and the Audit and Risk Committee to investigate the reasons for rejection by the shareholders and consider the selection of a different firm. Even if the appointment is ratified, the Audit and Risk Committee may, in its discretion, select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders. Representatives of Deloitte are expected to be present at our 2022 Annual Meeting of Shareholders and will have an opportunity to make a statement, if they so desire, and will be available to respond to appropriate questions. Ratification of the appointment of Deloitte as the Company’s independent registered public accounting firm will require that the number of votes cast in favor of this proposal exceeds the number of votes cast against this proposal.
| | | | The Board of Directors unanimously recommends a vote "FOR" the ratification of the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm. |
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 85 |
| | | | Security Ownership of Certain Beneficial Owners, Directors and Executive Officers |
Security Ownership of Certain Beneficial Owners, Directors
and Executive Officers On February 24, 2022 there were 89,573,371 shares of PGE common stock outstanding. The following table sets forth, as of that date unless otherwise specified, the beneficial ownership of PGE common stock of (1) known beneficial owners of more than 5% of the outstanding shares of PGE common stock, (2) each director or nominee for director, (3) each of our “named executive officers” listed in the Summary Compensation Table, and (4) our executive officers and directors as a group. Each of the persons named below has sole voting power and sole investment power with respect to the shares set forth opposite their name, except as otherwise noted. | | | | | | | | | | Name and Address of Beneficial Owner | Shares of Common Stock Beneficially Owned(1) | Percent of Class | | 5% or Greater Holders | | | The Vanguard Group(2) 100 Vanguard Blvd. Malvern, PA 19355 | 9,438,370 | | 10.6% | BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 | 8,842,378 | | 9.9% | Wellington Management Group LLP(4) 280 Congress Street Boston, MA 02210 | 4,979,965 | | 5.6% | | Non-Employee Directors and Director Nominees | | | | Rodney Brown | 28,929(5) | * | | Jack Davis | 21,094(5)(6) | * | | Kirby Dyess | 25,971(5) | * | | Dawn Farrell | 5,223(5) | | | Mark Ganz | 29,605(5)(7) | * | | Marie Oh Huber | 6,669(5) | * | | Kathryn Jackson | 12,782(5)(8) | * | | Michael Lewis | 2,900(5) | * | | Michael Millegan | 7,283(5) | * | | Neil Nelson | 29,205(5)(9) | * | | Lee Pelton | 5,105(5) | * | | James Torgerson | 7,900(5) | * | | Named Executive Officers | | | | Maria Pope | 129,268(10) | * | | James Ajello | 20,871(11) | * | | Lisa Kaner | 21,423(12) | * | | Larry Bekkedahl | 19,013(13) | * | | John Kochavatr | 13,488(14) | * | Executive officers and directors as a group (22 persons) (15) | 468,878(15) | * |
* Percentage is less than 1% of PGE common stock outstanding. | | | | | | | | | | 86 | | Portland General Electric 2022 Proxy Statement |
| | | | Security Ownership of Certain Beneficial Owners, Directors and Executive Officers |
(1) Beneficial ownership means the sole or shared power to vote, or to direct the voting of, a security, or investment power with respect to a security, or any combination thereof. Shares of our common stock that a person has the right to acquire within 60 days of March 1, 2022 are deemed outstanding for purposes of the beneficial ownership information set forth in this column. (2) As reported on Schedule 13G/A filed with the SEC on February 9, 2022, reporting information as of December 31, 2021. The Schedule 13G/A indicates that the shares are held by 1 separate entities and that none of these entities beneficially owns 5% or more of the outstanding PGE common stock. According to Schedule 13G/A, includes sole voting power with respect to 0 shares, shared voting power with respect to 110,914 shares, sole dispositive power with respect to 9,247,187 shares, and shared dispositive power with respect to 191,183 shares. (3) As reported on Schedule 13G/A filed with the SEC on February 1, 2022, reporting information as of December 31, 2021. The Schedule 13G/A indicates that the shares are held by 15 separate entities and that none of these entities beneficially owns 5% or more of the outstanding PGE common stock. According to Schedule 13G/A, includes sole voting power with respect to 8,056,725 shares, shared voting power with respect to 0 shares, sole dispositive power with respect to 8,842,378 shares, and shared dispositive power with respect to 0 shares. (4) As reported on Schedule 13G/A filed with the SEC on February 14, 2022, reporting information as of December 31, 2021. The Schedule 13G/A indicates that the shares are held by 4 separate entities and that none of these entities beneficially owns 5% or more of the outstanding PGE common stock. According to Schedule 13G/A, includes sole voting power with respect to 0 shares, shared voting power with respect to 4,174,812 shares, sole dispositive power with respect to 0 shares, and shared dispositive power with respect to 4,979,965 shares. (5) Includes shares of common stock units (and dividend equivalent rights accrued thereon) as of March 1, 2022. (6) Includes 21,094 shares of common stock held jointly with Mr. Davis’s spouse, who shares voting and investment power. (7) Includes 21,641 shares of common stock that are held jointly in the Mark B. Ganz Revocable Trust with Mr. Ganz’s spouse, who shares voting and investment power. (8) Includes 12,782 shares of common stock held that are held jointly with Ms. Jackson’s spouse, who shares voting and investment power. (9) Includes 29,205 shares of common stock held that are held jointly with Mr. Nelson’s spouse, who shares voting and investment power. (10) Includes 11,709 shares of common stock that would be issued upon the vesting of restricted stock units (and dividend equivalent rights accrued thereon) that would vest within 60 days of March 1, 2022 if Ms. Pope terminates employment due to (i) death, (ii) disability, or (iii) retirement after attaining age 55 with at least five years of service. Includes 83,631 shares jointly held with Ms. Pope’s spouse, who shares voting and investment power with respect to such shares. (11) Includes 8,825 shares of common stock that would be issued upon the vesting of restricted stock units (and dividend equivalent rights accrued thereon) that would vest within 60 days of March 1, 2022 if Mr. Ajello terminates employment due to retirement, death or disability. Includes 10,901 shares held in the Mary Susan Ajello 2020 Family Trust. (12) Includes 2,197 shares of common stock that would be issued upon the vesting of restricted stock units (and dividend equivalent rights accrued thereon) that would vest within 60 days of March 1, 2022 if Ms. Kaner terminates employment due to death or disability. (13) Includes 1,783 shares of common stock that would be issued upon the vesting of restricted stock units (and dividend equivalent rights accrued thereon) that would vest within 60 days of March 1, 2022 if Mr. Bekkedahl terminates employment due to retirement, death or disability. Includes 7,902 shares jointly held with Mr. Bekkedahl's spouse, who shares voting and investment power with respect to each share. (14) Includes 1,966 shares of common stock that would be issued upon the vesting of restricted stock units (and dividend equivalent rights accrued thereon) that would vest within 60 days of March 1, 2022 if Mr. Kochavatr terminates employment due to death or disability. (15) Total includes shares beneficially owned by all directors and named executive officers, as well as other executive officers listed in Item 1, “Business of this 2021 Annual Report on Form 10-K—Information about Our Executive Officers” in the Company’s 2021 Annual Report on Form 10-K filed on February 17, 2022.
| | | | | | | | | Portland General Electric 2022 Proxy Statement | | 87 |
Additional Information
Defined Terms and Acronyms | | | | | | | ACI | annual cash incentive | | ACI Plan | Portland General Electric Company Annual Cash Incentive Plan | | Annual Meeting | 2022 Annual Meeting of Shareholders to be held on April 22, 2022 | | Board | Portland General Electric Company Board of Directors | | CEO | Chief Executive Officer | | CFO | Chief Financial Officer | | Company or PGE | Portland General Electric Company | | Deloitte | Deloitte & Touche, LLP | | EPS | earnings per diluted share | | FASB ASC | Financial Accounting Standards Board Accounting Standards Codification | | FW Cook | Frederic W. Cook & Company, Inc. | | LTI | long-term incentive | | 2005 MDCP | Portland General Electric Company 2005 Management Deferred Compensation Plan | | MDCP | Management Deferred Compensation Plan | | named executive officers | the officers or former officers of the Company identified on pages 41-43 of this Proxy Statement | | NYSE | New York Stock Exchange | | OPUC | Oregon Public Utility Commission | | OSHA | Occupational Safety and Health Administration | | PCAOB | Public Company Accounting Oversight Board | | Pension Plan | Portland General Electric Company Pension Plan | | PGE | Portland General Electric Company | | PSU | performance-vested restricted stock unit | | ROE | return on equity | | RSU | time-vested restricted stock unit | | SEC | Securities and Exchange Commission | | SERP | supplemental executive retirement plan | | TSR | total shareholder return |
| | | | | | | | | | 88 | | Portland General Electric 2022 Proxy Statement |
Find Information Online | | | | | | | | | Corporate Governance https://investors.portlandgeneral.com/corporate-governance •Amended and Restated Certificate of Incorporation •Amended and Restated Bylaws •Board of Directors and Corporate Officers •Committee Charters •Code of Business Conduct and Ethics •Code of Ethics •Communications to the Board of Directors •Corporate Governance Guidelines •Related Persons Transactions Policy •Political Engagement Policy | | Sustainability, Environmental, Social and Governance https://investors.portlandgeneral.com/esg | | Diversity, Equity & Inclusion https://portlandgeneral.com/about/who-we-are/diversity-equity-and-inclusion | | Proxy Materials and Annual Reports https://investors.portlandgeneral.com/financial-information/annual-reports |
Please note that information on our website is not, and will not be deemed to be, a part of this Proxy Statement or incorporated into any of our other filings with the SEC.
Questions and Answers about the Annual Meeting Why did I receive a notice in the mail regarding the Internet availability ofthese proxy materials? We are providing these proxy materials this year insteadto you in connection with the solicitation of proxies by PGE’s Board of Directors for our 2022 Annual Meeting of Shareholders and for any adjournment or postponement of the meeting. This Notice of Annual Meeting and proxy statement and a full set of proxy materials?or voting instruction card are being mailed or made available to shareholders starting on or about March 8, 2022. Pursuant to rules adopted by the Securities and Exchange Commission, we have elected to provide access to our proxy materials on the Internet instead of mailing printed copies of those materials to each shareholder. By doing so, we hope to save costs and reduce the environmental impact of our annual meeting. Accordingly, we are sendingWhy did I receive a Notice of Internet Availability of Proxy Materials (the “Noticein the mail instead of printed copies of the proxy materials?
Making the proxy materials available to shareholders via the Internet saves us the cost of printing and mailing documents and will reduce the impact of the Annual Meeting on the environment. If you received only a Notice of Internet Availability”) to our shareholdersAvailability, you will not receive a printed copy of record and beneficial owners.the proxy materials unless you request it. All shareholders will have the ability to access the proxy materials on a website referred to in the Notice of Internet Availability or request to receive a printed set of the proxy materials at no charge. Instructions on how to access the proxy materials on the Internetinternet or to request a printed copy may be found in the Notice of Internet Availability. In addition, shareholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis by following the instructions on the website referred to in the Notice of Internet Availability. Why am I receiving thesedid some shareholders receive printed or email copies of the proxy materials? We are distributing printed copies of the proxy materials to shareholders who have previously requested printed copies. We are providing shareholders who have previously requested electronic delivery of proxy materials with an email containing a link to the website where the materials are available via the internet. What is “householding” and how does it affect me? The BoardCompany has adopted the “householding” procedure approved by the SEC, which allows us to deliver one set of Directors has made thesedocuments to a household of shareholders instead of delivering a set to each shareholder in a household, unless we have been instructed otherwise. This procedure is more environmentally friendly and cost-effective because it reduces the number of copies to be printed and mailed. Shareholders who receive proxy materials availablein paper form will continue to receive separate proxy cards to vote their shares. If you onwould like to change your householding election, request that a single copy of the Internet,proxy materials be sent to your address, or upon your request a separate copy of the proxy materials, please contact Broadridge Financial Solutions, Inc., by calling (866) 540-7095 or by writing to Broadridge Householding | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 89 |
Department, 51 Mercedes Way, Edgewood, New York 11717. We will promptly deliver printed versions of thesethe proxy materials to you by mail, in connection with the board’s solicitationupon receipt of proxies for use at our 2018 Annual Meeting of Shareholders. You are invited to attend the annual meeting and are requested to vote on the proposals described in this proxy statement. What is included in these materials?
These materials include:
Our proxy statement for the annual meeting; and
Our 2017 Annual Report to Shareholders, which includes our audited financial statements.
your request. If you hold your shares in street name, please contact your bank, broker, or other record holder to request printed versions of these materials by mail, these materials will also include the proxy card for the 2018 annual meeting.information about householding. How can I get electronic access to the proxy materials?materials online? TheThis Notice of Internet Availability provides you with instructions regarding how to:
ViewAnnual Meeting of Shareholders and Proxy Statement, as well as our proxy materials for the annual meeting2021 Annual Report, are available on the Internet; and
Instruct us to send our future proxy materials to you electronically by email.website at https://investors.portlandgeneral.com/financial-information/annual-reports.
Who is entitled to vote at the annual meeting?Annual Meeting? Holders of PGE common stock as of the close of business on the record date, March 1, 2018,February 22, 2022, may vote at the annual meeting, either in personAnnual Meeting or by proxy. As of the close of business on March 1, 2018,February 22, 2022, there were 89,207,82089,573,371 shares of PGE common stock outstanding and entitled to vote. The common stock is the only authorized voting security of the company,Company, and each share of common stock is entitled to one vote on each matter properly brought before the annual meeting.Annual Meeting. What matters will be voted on at the annual meeting?Annual Meeting? There are fourthree matters scheduled for a vote at the annual meeting:Annual Meeting: | | 1. | The election of directors; |
| | 2. | The ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for 2018;Item 1 Election of the 11 directors named in this Proxy Statement; Item 2 Advisory, non-binding vote to approve the compensation of the Company’s named executive officers; and Item 3 Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2022. |
| | 3. | An advisory, non-binding vote to approve the compensation of the company's named executive officers; and |
| | 4. | Approval of the Portland General Electric Company Stock Incentive Plan, as amended and restated. |
What are the board’sBoard’s voting recommendations? The boardBoard recommends that you vote your shares in the following manner:vote: “FOR” the election of each of the company’sCompany’s 11 nominees for director; “FOR” the approval of the compensation of the Company’s named executive officers; and “FOR” the ratification of the appointment of Deloitte & Touche LLP as the company'sCompany’s independent registered public accounting firm for 2018;
“FOR” the approval of the compensation of the company’s named executive officers; and
“FOR” the approval of the Portland General Electric Company Stock Incentive Plan, as amended and restated.2022.
What is the difference between holding shares as a shareholder of record and as a beneficial owner? If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, or AST, you are considered the “shareholder of record” with respect to those shares. If your shares are held in a stock brokerage account or by a bank or other nominee, those shares are held in “street name” and you are considered the “beneficial owner” of the shares. As the beneficial owner of those shares, you have the right to direct your broker, bank or other nominee how to vote your shares, and you will receive separate instructions from your broker, bank or other nominee describing how to vote your shares. You also are invited to attend the annual meeting.Annual Meeting. However, because a beneficial owner isyou are not the shareholder of record, you may not vote these shares in person at the meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares, giving you the right to vote the shares at the meeting. How can I vote my shares beforeattend the annual meeting?virtual Annual Meeting? IfTo participate in the Annual Meeting, visit virtualshareholdermeeting.com/POR2022 and enter the 16-digit control number included on your notice of Internet availability of the proxy materials, on your proxy card, or on the instructions that accompanied your proxy materials. You may begin to log into the meeting platform beginning at 7:45 a.m. Pacific Time on April 22, 2022.
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How can I vote? Even if you hold shares in your own name as a shareholder of record,plan to attend the Annual Meeting, we recommend that you may vote before the annual meeting onlineso that your vote will be counted should you later decide not to attend the meeting. You may vote in one of the following ways: • By Telephone. If you are located in the United States or Canada, you can vote your shares by calling 1-800-690-6903 and following the instructions contained inon the Notice of Internet Availability.proxy card or voting instruction form. • By Internet. Go to proxyvote.com and follow the online instructions. • By Mail. If you request printed copies of thereceived your proxy materials by mail, you may alsocan vote by completing,marking, signing and dating the enclosedyour proxy card and returning it in the enclosed postage-paid envelope. postage-page envelope provided. If you are athe beneficial owner of shares held in street name, your broker, bank or other nominee will provideplease complete and mail the voting instruction form as indicated on the form. • At the virtual Annual Meeting. If you with materialsare a shareholder of record on February 22, 2022 and instructions for voting your shares. Even if you plan to attend the annual meeting, we recommend thatvirtual Annual Meeting, you may vote beforeduring the Annual Meeting by following the instructions available on the meeting as described abovewebsite during the meeting.
Internet and telephone voting is available through 11:59 p.m. Eastern Time on April 19, 2022 for shares held in the Portland General Electric Company Employee Stock Purchase Plan and through 11:59 p.m. Eastern Time on April 21, 2022 for all other shares. To attend the virtual Annual Meeting and for telephone and Internet voting, you will need the 16-digit control number included on your notice or proxy card or in the voting instruction form that accompanied your proxy materials. How can I ask a question at the Annual Meeting? If you wish to ask a question during the virtual Annual Meeting, you may do so thatduring the meeting by logging into the virtual meeting platform at virtualshareholdermeeting.com/POR2022, typing your votequestion into the “Ask a Question” field, and clicking “Submit.” Questions pertinent to meeting matters will be countedanswered during the meeting, subject to time constraints. Substantially similar questions may be grouped and answered as one. Any questions pertinent to meeting matters that cannot be answered during the meeting may be raised after the Annual Meeting by contacting Investor Relations at 503-464-8586. What if I encounter technical difficulties during the Annual Meeting? If you later decide not to attendencounter any technical difficulties with the meeting. Submitting a proxyvirtual meeting platform on the day of the Annual Meeting, please call 800-586-1548 (US) or voting by telephone or through303-562-9288 (International). Technical support will be available beginning at 7:30 a.m. PDT on April 22, 2022 and will remain available until the Internet will not affect your right to attend the annual meeting and vote in person.has ended. How will my shares be voted if I give my proxy but do not specify how my shares should be voted? If your shares are held in your own name as a shareholder of record and you return your signed proxy card but do not indicate your voting preferences, your shares will be voted as follows: “FOR” the election of each of the company'sCompany’s 11 nominees for director; “FOR” the approval of the compensation of the Company’s named executive officers; and “FOR” the ratification of the appointment of Deloitte & Touche LLP as the company'sCompany’s independent registered public accounting firm for fiscal year 2018; “FOR” the approval of the compensation of the company's named executive officers; and
“FOR” the approval of the Portland General Electric Company Stock Incentive Plan, as amended and restated.2022.
If I am the beneficial owner of shares held in street name by my broker, will my broker automatically vote my shares for me? New York Stock ExchangeNYSE rules applicable to broker-dealers grant your broker discretionary authority to vote your shares without receiving your instructions on certain routine matters. Your broker has discretionary authority under the New York Stock ExchangeNYSE rules to vote your shares on the ratification of the appointment of the independent registered public accounting firm. However, unless you provide voting instructions to your broker, your broker does not have authority to vote your shares with respect to the
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election of directors and the approval of the compensation of the company’sCompany’s named executive officers and the approval of the Stock Incentive Plan, as amended and restated.officers. As a result, we strongly encourage you to submit your proxy and exercise your right to vote as a shareholder. Could other matters be decided at the annual meeting?Annual Meeting? As of the date of this proxy statement,Proxy Statement, we are unaware of any matters, other than those set forth in the Notice of Annual Meeting of Shareholders, that may properly be presented at the annual meeting.Annual Meeting. If any other matters are properly presented for consideration at the meeting, including, among other things, consideration of a motion to adjourn the meeting to another time or place, the persons named as proxies on the enclosed proxy card, or their duly constituted substitutes, will be deemed authorized to vote those shares for which proxies have been given or otherwise act on such matters in accordance with their judgment. Can I vote in person at the annual meeting?
Yes. If you hold shares in your own name as a shareholder of record, you may come to the annual meeting and cast your vote at the meeting by properly completing and submitting a ballot. If you are the beneficial owner of shares held in street name, you must first obtain a legal proxy from your broker, bank or other nominee giving you the right to vote those shares and submit that proxy along with a properly completed ballot at the meeting.
What do I need to bring to be admitted to the annual meeting?
All shareholders must present a form of personal photo identification in order to be admitted to the meeting. In addition, if your shares are held in the name of your broker, bank or other nominee and you wish to attend the annual meeting, you must bring an account statement or letter from the broker, bank or other nominee indicating that you were the owner of the shares on March 1, 2018.
How can I change or revoke my vote? If you hold shares in your own name as a shareholder of record, you may change your vote or revoke your proxy at any time before voting begins by: • Notifying our Corporate Secretary in writing that you are revoking your proxy; • Delivering another duly signed proxy that is dated after the proxy you wish to revoke;revoke, or delivering a later-dated vote by telephone or on the internet; or • Attending the annual meetingvirtual Annual Meeting and voting in person by properly completing and submitting a ballot.voting. (Attendance at the meeting, in and of itself, will not cause your previously granted proxy to be revoked unless you vote at the meeting.revoked.) Any written notice of revocation, or later dated proxy, should be delivered to: Portland General Electric Company Attention: Corporate Secretary 121 SW Salmon Street, 1WTC1301 Portland, Oregon 97204 Alternatively, you may hand-deliver a written revocation notice, or a later dated proxy, to the Corporate Secretary at the annual meeting before the voting begins.
If you are the beneficial owner of shares held in street name and wish to change your vote with respect to those shares, please check with your broker, bank or other nominee and follow the procedures your broker, bank or other nominee provides you. What are the voting requirements to elect directors and approve the other proposals described in the proxy statement? The vote required to approve each of the matters scheduled for a vote at the annual meetingAnnual Meeting is set forth below: | | | | | | | Proposal | Vote Required | Election to our Board of directorsDirectors of the 11 nominees named in this Proxy Statement | Votes in Favor Exceed Votes Against | | Advisory vote on the compensation of the Company's named executive officers | Votes in Favor Exceed Votes Against | | Ratification of appointment of Deloitte & Touche LLP | Votes in Favor Exceed Votes Against | Advisory vote on approval of the compensation of the company’s named executive officers | Votes in Favor Exceed Votes Against | Approval of the Portland General Electric Company Stock Incentive Plan | Votes in Favor Exceed Votes Against |
With respect to the advisory vote to approve the compensation of the company’s named executive officers, if there is any significant vote against this item, the Compensation and Human Resources Committee will consider the concerns of our shareholders and evaluate whether any actions are necessary to address those concerns.
What is the “quorum” for the annual meetingAnnual Meeting and what happens if a quorum is not present? The presence at the annual meeting,Annual Meeting, in person or by proxy, of a majority of the shares issued and outstanding andvotes entitled to votebe cast on a matter as of March 1, 2018February 22, 2022 is required to constitute a “quorum.”“quorum” for that matter. The existence of a quorum is necessary in order to take action on the matters scheduled for a vote at the annual meeting.Annual Meeting. If you vote online or by telephone, or submit a properly executed proxy card, your shares will be included for purposes of determining the existence of a quorum. Proxies marked “abstain” and “broker non-votes” (each of which are explained below) also will be counted in determining the presence of a quorum. If the shares present in person or represented by proxy at the annual meetingAnnual Meeting are not sufficient to constitute a quorum, the chairmanchair of the meeting, or the shareholders by a vote of the holders of a majority of shares present in person or represented by proxy, may, without further notice to any shareholder (unless a | | | | | | | | | | 92 | | Portland General Electric 2022 Proxy Statement |
new record date is set), adjourn the meeting to a different time and place to permit further solicitations of proxies sufficient to constitute a quorum. What is an “abstention” and how would it affect the vote? An “abstention” occurs when a shareholder sends in a proxy with explicit instructions to decline to vote regarding a particular matter. Abstentions are counted as present for purposes of determining a quorum. However, an abstention with respect to a matter submitted to a vote of shareholders will not be counted for or against the matter. Consequently, an abstention with respect to any of the proposals at the annual meetingAnnual Meeting will not affect the outcome of the vote.
What is a “broker non-vote” and how would it affect the vote? A broker non-vote occurs when a broker or other nominee who holds shares for another person does not vote on a particular proposal because that holder does not have discretionary voting power for the proposal and has not received voting instructions from the beneficial owner of the shares. Brokers will have discretionary voting power to vote shares for which no voting instructions have been provided by the beneficial owner with respect to the ratification of the appointment of the independent registered public accounting firm, but not with respect to the other proposals. Accordingly, there might be broker non-votes with respect to the election of directors and the advisory vote to approve the compensation of the company’sCompany’s named executive officers and the approval of the Stock Incentive Plan, as amended and restated.officers. A broker non-vote will havenot be counted for or against the same effect as an abstentionmatter and, therefore, will not affect the outcome of the vote with respect to any of the proposals at the annual meeting.Annual Meeting. Who will conduct the proxy solicitation and how much will it cost? The companyCompany is soliciting your proxy for the annual meetingAnnual Meeting and will pay all the costs of the proxy solicitation process. We have engaged Broadridge Financial Solutions, Inc. to assist in the distribution of proxy materials, and we will pay their reasonable out-of-pocket expenses for those services. Our directors, officers and employees may communicate with shareholders by telephone, facsimile, email or personal contact to solicit proxies. These individuals will not be specifically compensated for doing so. We will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding solicitation materials to the beneficial owners of PGE common stock. Who will count the votes? Broadridge Financial Solutions, Inc. will tabulate the votes cast by mail, Internet, or telephone. Nora E. Arkonovich, our Assistant Secretary, will tabulateinternet, and telephone as well as any votes cast at the annual meeting andAnnual Meeting. Nora Arkonovich, our Assistant General Counsel, will act as inspector of election to certify the results. If you have any questions about voting your shares or attending the annual meeting,Annual Meeting, please call our Investor Relations Department at (503) 464-8586. Shareholder Proposals for the 2019 | | | | | | | | | Portland General Electric 2022 Proxy Statement | | 93 |
2023 Annual Meeting of Shareholders We plan to hold our 2023 Annual Meeting of Shareholders on 2019April 21, 2023 annual meeting of shareholders on April 24, 2019. If you wish. Requirements for Shareholder Proposals to submit a proposalBe Considered for Inclusion in the Company’s Proxy Materials For shareholder proposals to be considered for inclusion in ourthe proxy materials forstatement and form of proxy relating to the 2019 annual meeting2023 Annual Meeting of shareholders, the proposalShareholders, they must be in proper form as requiredreceived by the Company’s Corporate Secretary at the address provided below no later than November 12, 2022 . All proposals must also comply with Rule 14a-8 under the Securities Exchange Act of 1934, which lists the requirements for the inclusion of shareholder proposals in Company proxy materials. Requirements for Shareholder Proposals to Be Brought Before the 2023 Annual Meeting of Shareholders and our Corporate Secretary must receive theDirector Nominations Notice of any proposal by November 14, 2018. In addition, under our bylaws, in order for a proposal outside of Rule 14a-8 to be considered “timely” within the meaning of Rule 14a-4(c) of the Securities Exchange Act of 1934, such proposal must be received at our principal executive offices by December 26, 2018. After November 14, 2018, and up to December 26, 2018,that a shareholder may submit a proposalintends to be presentedpresent at the 2019 annual meeting,2023 Annual Meeting of shareholders but it willdoes not beintend to have included in ourthe proxy statement orand form of proxy relating to the meeting.2023 Annual Meeting of Shareholders, as well as any director nominations, must be delivered to the Company’s Corporate Secretary not earlier than November 23, 2022 and no later than the close of business on December 23, 2022. In addition, the notice must set forth the information required by the Company’s bylaws with respect to the shareholder submitting the notice and each director nomination or other proposal that the shareholder intends to present at the Annual Meeting. Shareholder proposals and nominations should be addressed to Portland General Electric Company, Attention: Corporate Secretary, 121 SW Salmon Street, 1WTC1301, Portland, Oregon 97204. We recommend that shareholders submitting proposals or nominations use certified mail, return receipt requested, in order to provide proof of timely receipt. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal or nomination that does not comply with these and other applicable requirements, including the rules established by the Securities and Exchange Commission. Communications with the Board of Directors
Shareholders and other interested parties may submit written communications to members of the Board of Directors (including the Chairman), board committees, or the non-management directors as a group. Communications may include the reporting of concerns related to governance, corporate conduct, business ethics, financial practices, legal issues and accounting or audit matters. Communications should be in writing and addressed to the Board of Directors, or any individual director or group or committee of directors by either name or title, and should be sent in care of:
Portland General Electric Company
Attention: Corporate Secretary
121 SW Salmon Street, 1WTC1301
Portland, Oregon 97204
All appropriate communications received from shareholders and other interested parties will be forwarded to the Board of Directors, or the specified director, board committee or group of directors, as appropriate.
APPENDIX A
PORTLAND GENERAL ELECTRIC COMPANY
STOCK INCENTIVE PLAN
Originally Effective March 31, 2006
(As Amended and Restated Effective February 13, 2018)
1. Purpose. The Portland General Electric Company Stock Incentive Plan, as amended and restated (the “Plan”), is intended to provide incentives which will attract, retain and motivate highly competent persons as officers, directors and key employees of Portland General Electric Company (the “Company”) and its subsidiaries and Affiliates, by providing them with appropriate incentives and rewards in the form of rights to earn shares of the common stock of the Company (“Common Stock”) and cash equivalents.
2. Definitions. A listing of the defined terms utilized in the Plan is set forth in Appendix A.
3. Effective Date of Plan. The Plan was originally effective as of March 31, 2006, and was most recently amended and restated effective February 13, 2018.
4. Administration.
(a)Committee. The Plan will be administered by a committee (the “Committee”) appointed by the Board of Directors of the Company (the “Board of Directors”) from among its members (which may be the Compensation and Human Resources Committee) and shall be comprised, solely of not less than two (2) members who shall be (i) “non-employee directors” within the meaning of Rule 16b-3(b)(3) (or any successor rule) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) in respect of any “Grandfathered Awards” (as defined in Section 13), “outside directors” within the meaning of Treasury Regulation Section 1.162-27(e)(3) under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and (iii) to the extent the Board of Directors may direct in respect of Awards granted to the Chief Executive Officer and determining amounts payable under such Awards, non-employee directors who satisfy the standards of the New York Stock Exchange (the “NYSE”) and other applicable standards for an independent director.
(b)Authority. The Committee is authorized, subject to the provisions of the Plan, to establish such rules and regulations as it deems necessary for the proper administration of the Plan and, in its sole discretion, to make such determinations, valuations and interpretations and to take such action in connection with the Plan and any Awards (as hereinafter defined) granted hereunder as it deems necessary or advisable. All determinations and interpretations made by the Committee shall be binding and conclusive on all participants and their legal representatives.
(c)Indemnification. No member of the Committee and no employee of the Company shall be liable for any act or failure to act hereunder, or for any act or failure to act hereunder by any other member or employee or by any agent to whom duties in connection with the administration of this Plan have been delegated, except in circumstances involving his or her bad faith or willful misconduct. The Company
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shall indemnify members of the Committee and any agent of the Committee who is an employee of the Company, or of a subsidiary or an Affiliate against any and all liabilities or expenses to which they may be subjected by reason of any act or failure to act with respect to their duties on behalf of the Plan, except in circumstances involving such person’s bad faith or willful misconduct. For purposes of this Plan, “Affiliate(s)” means any entity that controls, is controlled by or is under common control with the Company.
(d)Delegation and Advisers. The Committee may delegate to one or more of its members, or to one or more employees or agents, such duties and authorities as it may deem advisable including the authority to make grants as permitted by applicable law, the rules of the Securities and Exchange Commission and any requirements of the NYSE, and the Committee, or any person to whom it has delegated duties or authorities as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan. The Committee may employ such legal or other counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion or computation received from any such counsel, consultant or agent. Expenses incurred by the Committee in the engagement of such counsel, consultant or agent shall be paid by the Company, or the subsidiary or Affiliate whose employees have benefited from the Plan, as determined by the Committee.
5. Type of Awards. Awards under the Plan may be granted in any one or a combination of (a) Stock Options, (b) Stock Appreciation Rights, (c) Restricted Stock Awards, and (d) Stock Units (each as described below, and collectively, the “Awards”). Grandfathered Awards may, as determined by the Committee in its discretion, constitute Performance-Based Awards, as described in Section 13 hereof.
6. Participants. Participants will consist of (i) such officers and key employees of the Company and its subsidiaries and Affiliates as the Committee in its sole discretion determines to be significantly responsible for the success and future growth and profitability of the Company and whom the Committee may designate from time to time to receive Awards under the Plan and (ii) each director of the Company who is not otherwise an employee of the Company or any of its subsidiaries and whom the Committee may designate from time to time to receive Awards under the Plan. Designation of a participant in any year shall not require the Committee to designate such person to receive an Award in any other year or, once designated, to receive the same type or amount of Award as granted to the participant in any other year. The Committee shall consider such factors as it deems pertinent in selecting participants and in determining the type and amount of their respective Awards.
7. Grant Agreements.
(a)Awards granted under the Plan shall be evidenced by an agreement (“Grant Agreement”) that shall provide such terms and conditions, as determined by the Committee in its sole discretion, provided, however, that in the event of any conflict between the provisions of the Plan and any such Grant Agreement, the provisions of the Plan shall prevail.
(b)The Grant Agreement will determine the effect on an Award of the disability, death, retirement, involuntary termination, termination for cause or other termination of employment or service of a participant and the extent to which, and the period during which, the participant’s legal representative, guardian or beneficiary may receive payment of an Award or exercise rights thereunder. If the relevant Grant Agreement does not provide otherwise, however, the following default rules shall apply:
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(i)vested Stock Option and Stock Appreciation Rights held by a participant shall be exercisable for a period of 90 days following the date the participant ceases to be an employee or director of the Company, its subsidiaries and Affiliates;
(ii)unvested Stock Option, Stock Appreciation Rights, Restricted Stock Awards and Stock Units held by a participant shall be forfeited on the date the participant ceases to be an employee or director of the Company, its subsidiaries and Affiliates.
(c)Subject to Section 13(e), the Committee, in its sole discretion, may modify a Grant Agreement, provided any such modification will not materially adversely affect the economic interests of the participant unless the Committee shall have obtained the written consent of the participant. Subject to Section 15, the Committee shall not have the authority to reprice or cancel and regrant any Award at a lower exercise, base or purchase price or cancel any Award with an exercise, base or purchase price of less than “Fair Market Value” (as defined in Section 8(g)) in exchange for cash, property or other Awards without first obtaining the approval of the Company’s shareholders.
(d)Notwithstanding any provision of the Plan or a Grant Agreement to the contrary, no dividends will be payable with respect to a share of Common Stock underlying an Award unless and until the Award vests in respect of such share of Common Stock.
(e)Grant Agreements under the Plan need not be identical.
8. Stock Options.
(a)Generally. At any time, the Committee may grant, in its discretion, awards of stock options that will enable the holder to purchase a number of shares of Common Stock from the Company, at set terms (a “Stock Option”). Stock Options may be incentive stock options (“Incentive Stock Options”), within the meaning of Section 422 of the Code, or Stock Options which do not constitute Incentive Stock Options (“Nonqualified Stock Options”). The Committee will have the authority to grant to any participant one or more Incentive Stock Options and/or Nonqualified Stock Options. Each Stock Option shall be subject to such terms and conditions, including vesting, consistent with the Plan as the Committee may provide in the Grant Agreement, subject to the following limitations:
(b)Exercise Price. Each Stock Option granted hereunder shall have such per-share exercise price as the Committee may determine in the Grant Agreement, but such exercise price may not be less than “Fair Market Value” on the date the Stock Option is granted, except as provided in Section 11(c).
(c)Payment of Exercise Price. The option exercise price may be paid in cash or, in the discretion of the Committee and in accordance with any requirements established by the Committee, by the delivery of shares of Common Stock of the Company then owned by the participant. In the discretion of the Committee and in accordance with any requirements established by the Committee, payment may also be made by (i) delivering a properly executed exercise notice to the Company together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the exercise price or (ii) by means of consideration received under any cashless exercise procedure approved by the Committee (including the withholding of shares of Common Stock otherwise issuable upon exercise).
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(d)Exercise Period. Stock Options granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions, including vesting, as shall be determined by the Committee in the Grant Agreement.
(e)Limitations on Incentive Stock Options. Incentive Stock Options may be granted only to participants who are employees of the Company or of a “Parent Corporation” or “Subsidiary Corporation” (as defined in Sections 424(e) and (f) of the Code, respectively) at the date of grant. The aggregate Fair Market Value (determined as of the time the Stock Option is granted in accordance with Section 8(g)) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under all option plans of the Company and of any Parent Corporation or Subsidiary Corporation) shall not exceed one hundred thousand dollars ($100,000). For purposes of the preceding sentence, Incentive Stock Options will be taken into account in the order in which they are granted. The per-share exercise price of an Incentive Stock Option shall not be less than one hundred percent (100%) of the Fair Market Value of the Common Stock on the date of grant, and no Incentive Stock Option may be exercised later than ten (10) years after the date it is granted.
(f)Additional Limitations on Incentive Stock Options for Ten Percent Shareholders. Incentive Stock Options may not be granted to any participant who, at the time of grant, owns stock possessing (after the application of the attribution rules of Section 424(d) of the Code) more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent Corporation or Subsidiary Corporation, unless the exercise price of the option is fixed at not less than one hundred ten percent (110%) of the Fair Market Value of the Common Stock on the date of grant and the exercise of such option is prohibited by its terms after the expiration of five (5) years from the date of grant of such option.
(g)Fair Market Value. For purposes of this Plan and any Awards granted hereunder, “Fair Market Value” shall be the closing price of the Common Stock on the relevant date (or on the last preceding trading date if Common Stock was not traded on such date) if the Common Stock is readily tradable on a national securities exchange or other market system, and if the Common Stock is not readily tradable, Fair Market Value shall mean the amount determined in good faith by the Committee as the fair market value of the Common Stock.
9. Stock Appreciation Rights.
(a)Generally. At any time, the Committee may, in its discretion, grant stock appreciation rights with respect to Common Stock (“Stock Appreciation Rights”), including a concurrent grant of Stock Appreciation Rights in tandem with any Stock Option grant. A Stock Appreciation Right means a right to receive a payment in cash or in Common Stock of an amount equal to the excess of (i) the Fair Market Value of a share of Common Stock on the date the right is exercised over (ii) the Fair Market Value of a share of Common Stock on the date the right is granted, all as determined by the Committee. Each Stock Appreciation Right shall be subject to such terms and conditions, including vesting, as the Committee shall impose in the Grant Agreement.
(b)Exercise Period. Stock Appreciation Rights granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions, including vesting, as shall be determined by the Committee in the Grant Agreement.
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10.Restricted Stock Awards.
(a)Generally. At any time, the Committee may, in its discretion, grant Awards of Common Stock, subject to restrictions determined by the Committee (a “Restricted Stock Award”). Such Awards may include mandatory payment of any bonus in stock consisting of Common Stock issued or transferred to participants with or without other payments therefor and may be made in consideration of services rendered to the Company or its subsidiaries or Affiliates. A Restricted Stock Award shall be construed as an offer by the Company to the participant to purchase the number of shares of Common Stock subject to the Restricted Stock Award at the purchase price, if any, established therefore.
(b)Payment of the Purchase Price. If the Restricted Stock Award requires payment therefor, the purchase price of any shares of Common Stock subject to a Restricted Stock Award may be paid in any manner authorized by the Committee, which may include any manner authorized under the Plan for the payment of the exercise price of a Stock Option.
(c)Restrictions. Restricted Stock Awards shall be subject to such terms and conditions, including without limitation time based vesting and/or performance based vesting, restrictions on the sale or other disposition of such shares, and/or the right of the Company to reacquire such shares for no consideration upon termination of the participant’s employment within specified periods, as the Committee determines appropriate. The Committee may require the participant to deliver a duly signed stock power, endorsed in blank, relating to the Common Stock covered by such an Award. The Committee may also require that the stock certificates evidencing such shares be held in custody or bear restrictive legends until the restrictions thereon shall have lapsed.
(d)Rights as a Shareholder. The Restricted Stock Award shall specify whether the participant shall have, with respect to the shares of Common Stock subject to a Restricted Stock Award, all of the rights of a holder of shares of Common Stock of the Company, including the right to accrue dividends and to vote the shares.
11.Common Stock Available Under the Plan.
(a)Basic Limitations. The aggregate number of shares of Common Stock that may be subject to Awards over the entire term of the Plan since its original effective date (subject to the remainder of this Section 11 and to Section 15) shall be 4,687,500, subject to any adjustments made in accordance with Section 15 hereof. The maximum number of shares of Common Stock that may be:
(i)the subject of an Award with respect to any individual participant under the Plan during the term of the Plan shall not exceed 2,000,000 (subject to adjustments made in accordance with Section 15 hereof);
(ii)covered by Awards issued under the Plan during a year shall be limited during the first calendar year of the Plan to 1,250,000 and during any year thereafter to 1% of the Company’s outstanding Common Stock at the beginning such year; and
(iii)issued pursuant to Incentive Stock Options awarded under the Plan shall be 1,000,000.
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Shares of Common Stock issued under the Plan may, in whole or in part, be authorized but unissued shares or shares held in treasury that shall have been or may be reacquired by the Company in the open market, in private transactions or otherwise.
(b)Additional Shares. Any shares of Common Stock subject to a Stock Option or Stock Appreciation Right which for any reason is cancelled or terminated without having been exercised and any shares of Common Stock subject to Restricted Stock Awards or Stock Units which are forfeited shall again be available for Awards under the Plan. The preceding sentence shall apply only for purposes of determining the aggregate number of shares of Common Stock subject to Awards but shall not apply for purposes of determining the maximum number of shares of Common Stock with respect to which Awards may be granted to any individual participant under the Plan. Notwithstanding any provision of the Plan or a Grant Agreement to the contrary, shares of Common Stock that are exchanged by a Participant or withheld by the Company as full or partial payment in connection with any Stock Option or Stock Appreciation Right under the Plan, as well as any shares of Common Stock exchanged by a Participant or withheld by the Company or any Subsidiary Corporation to satisfy the tax withholding obligations related to any Award, shall not be available for subsequent Awards under the Plan, and notwithstanding that a Stock Appreciation Right may be settled by the delivery of a net number of shares of Common Stock, the full number of shares of Common Stock underlying such Stock Appreciation Right shall not be available for subsequent Awards under the Plan.
(c)Acquisitions. In connection with the acquisition of any business by the Company or any of its subsidiaries or Affiliates, any outstanding grants or awards of options, restricted stock or other equity-based compensation pertaining to such business may be assumed or replaced by Awards under the Plan upon such terms and conditions as the Committee determines, including granting of Stock Options or Stock Appreciation Rights with an exercise price below Fair Market Value at the date of the replacement grant.
12.Stock Units.
(a)Generally. The Committee may, in its discretion, grant “Stock Units” (as defined in Section 12(c)) to participants hereunder. Stock Units may be subject to such terms and conditions, including time based vesting and/or performance based vesting, as the Committee determines appropriate. A Stock Unit granted by the Committee shall provide payment in shares of Common Stock at such time as the Grant Agreement shall specify. Shares of Common Stock issued pursuant to this Section 12 may be issued with or without other payments therefor as may be required by applicable law or such other consideration as may be determined by the Committee. The Committee shall determine whether a participant granted a Stock Unit shall be entitled to a Dividend Equivalent Right (as defined in Section 12(c)).
(b)Settlement of Stock Units. Shares of Common Stock representing the Stock Units shall be distributed to the participant upon settlement of the Award pursuant to the Grant Agreement.
(c)Definitions. A “Stock Unit” means a notional account representing one (1) share of Common Stock. A “Dividend Equivalent Right” means the right to receive the amount of any dividend paid on the share of Common Stock underlying a Stock Unit, which shall be payable in cash or in the form of additional Stock Units, in the discretion of the Committee.
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13.Performance-Based Awards.
(a)Generally. In the sole discretion of the Committee, any “Grandfathered Awards” granted under the Plan may be administered in a manner such that the Award qualifies for the performance-based compensation exemption of Section 162(m) of the Code (each, a “Performance-Based Award”). Notwithstanding any other provision of the Plan and except as determined by the Committee, any Grandfathered Award which is intended to qualify as a Performance-Based Award shall be subject to any additional limitations imposed under Section 162(m) of the Code that are requirements for qualification as a Grandfathered Award, and the Plan and Grant Agreement shall be deemed amended to the extent necessary to confirm to such requirements. A “Grandfathered Award” means an Award which is provided pursuant to a written binding contract in effect on November 2, 2017, and which was not modified in any material respect on or after November 2, 2017, within the meaning of Section 13601(e)(2) of P.L. 115.97, as may be amended from time to time (including any rules and regulations promulgated thereunder).
(b)Modification of Performance-Based Awards. Subject to Section 15(b), with respect to any Performance-Based Awards, the Committee shall not revise any performance goal thereunder or increase the amount of compensation payable thereunder upon the attainment of such performance goal (in accordance with the requirements of Section 162(m) of the Code and the regulations thereunder). Notwithstanding the preceding sentence, (i) the Committee may reduce or eliminate the number of shares of Common Stock or cash granted or the number of shares of Common Stock vested upon the attainment of such performance goal, and (ii) the Committee shall disregard or offset the effect of “Extraordinary Items” in determining the attainment of performance goals. For this purpose, “Extraordinary Items” means extraordinary, unusual and/or non-recurring items, including but not limited to, (i) regulatory disallowances or other adjustments, (ii) restructuring or restructuring-related charges, (iii) gains or losses on the disposition of a business or major asset, (iv) changes in regulatory, tax or accounting regulations or laws, (v) resolution and/or settlement of litigation and other legal proceedings or (vi) the effect of a merger or acquisition.
14.Foreign Laws. The Committee may grant Awards to individual participants who are subject to the tax laws of nations other than the United States, which Awards may have terms and conditions as determined by the Committee as necessary to comply with applicable foreign laws. The Committee may take any action which it deems advisable to obtain approval of such Awards by the appropriate foreign governmental entity; provided, however, that no such Awards may be granted pursuant to this Section 14 and no action may be taken which would result in a violation of the Exchange Act, the Code or any other applicable law.
15.Adjustment Provisions.
(a)Adjustment Generally. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spin-off, combination of shares, exchange of shares, dividends or other changes in capital structure, an adjustment shall be made as provided below in (b) to each outstanding Award.
(b)Modification of Awards. In the event of any change or distribution described in subsection (a) above, the Committee shall appropriately adjust the number of shares of Common Stock
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which may be issued pursuant to the Plan, the other limits on Common Stock issuable under the Plan under Section 11, and the number of shares covered by, and the exercise price of, each outstanding Award.
(c)Notwithstanding the above, no adjustment to a Stock Option or Stock Appreciation Right shall be made under this Section 15 in a manner that will be treated under Section 409A of the Code as the grant of a new Stock Option or Stock Appreciation Right.
16.Nontransferability, Title and Other Restrictions. Except as otherwise specifically provided by the Committee in a Grant Agreement or modification of a Grant Agreement that provides for transfer, each Award granted under the Plan to a participant shall not be transferable otherwise than by will or the laws of descent and distribution, and shall be exercisable, during the participant’s lifetime, only by the participant. In the event of the death of a participant, each Award granted to him or her shall be exercisable during such period after his or her death as the Committee shall in its discretion set forth in the Grant Agreement at the date of grant and then only by the executor or administrator of the estate of the deceased participant or the person or persons to whom the deceased participant’s rights under the Stock Option or Stock Appreciation Right shall pass by will or the laws of descent and distribution.
17.Acceleration of Awards.
(a)In order to preserve a participant’s rights under an Award in the event of a Change in Control of the Company or in the event of a fundamental change in the business condition or strategy of the Company, the Committee, in its sole discretion, may, at the time an Award is made or at any time thereafter, take one or more of the following actions: (i) provide for the acceleration of any time period relating to the exercise or payment of the Award, (ii) provide for payment to the participant of cash or other property with a fair market value equal to the amount that would have been received upon the exercise or payment of the Award had the Award been exercised or paid upon such event, (iii) adjust the terms of the Award in a manner determined by the Committee to reflect such event, (iv) cause the Award to be assumed, or new rights substituted therefor, by another entity, or (v) make such other adjustments in the Award as the Committee may consider equitable to the participant and in the best interests of the Company. Further, any Award shall be subject to such conditions as necessary to comply with federal and state securities laws, the performance based exception of Section 162(m) of the Code, or understandings or conditions as to the participant’s employment in addition to those specifically provided for under the Plan.
(b)A “Change in Control” shall mean any of the following events:
(i)Any person (as such term is used in Section 14(d) of the Exchange Act) becomes the “beneficial owner” (as determined pursuant to Rule 14d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than thirty percent (30%) of the combined voting power of the Company’s then outstanding voting securities; or
(ii)During any period of two (2) consecutive years (not including any period prior to the execution of this Plan), individuals who at the beginning of such period constitute the members of the Board of Directors and any new director whose election to the Board of Directors or nomination for election to the Board of Directors by the Company’s stockholders was approved
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by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board of Directors; or
(iii)The Company shall merge with or consolidate into any other corporation or entity, other than a merger or consolidation which would result in the holders of the voting securities of the Company outstanding immediately prior thereto holding immediately thereafter securities representing more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or
(iv)The stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the holders of Common Stock immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.
(c)If all or a portion of an Award constitutes deferred compensation under Section 409A of the Code and such Award (or portion thereof) is to be settled, distributed or paid on an accelerated basis due to a Change in Control event that is not a "change in control event" described in Treasury Regulation Section 1.409A-3(i)(5) or successor guidance, if such settlement, distribution or payment would result in additional tax under Section 409A of the Code, such Award (or the portion thereof) shall vest at the time of the Change in Control (provided such accelerated vesting will not result in additional tax under Section 409A of the Code), but settlement, distribution or payment, as the case may be, shall not be accelerated.
18.Withholding. All payments or distributions of Awards made pursuant to the Plan shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. If the Company proposes or is required to distribute Common Stock pursuant to the Plan, it may require the recipient to remit to it or to the corporation or entity that employs such recipient an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company or the employing corporation or entity shall have the right to withhold the amount of such taxes from any other sums due or to become due from such corporation to the recipient as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit an optionee or award or right holder to pay all or a portion of the federal, state and local withholding taxes arising in connection with any Award consisting of shares of Common Stock by electing to have the Company withhold shares of Common Stock having a Fair Market Value equal to the applicable amount of tax to be withheld.
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19.Employment. A participant’s right, if any, to continue to serve the Company or any of its subsidiaries or Affiliates as a director, officer, employee, or otherwise, shall not be enlarged or otherwise affected by his or her designation as a participant under the Plan.
20.Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or to any investments which the Company may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any participant, beneficiary, legal representative or any other person. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.
21.No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, or Awards, or other property shall be issued or paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
22.Duration, Amendment and Termination. The Plan shall terminate on March 31, 2024, but all outstanding Awards as of the date of termination shall remain in effect and the terms of the Plan shall apply until each such Award terminates as provided in the applicable Grant Agreement. The Committee may amend the Plan from time to time or suspend or terminate the Plan at any time. No amendment of the Plan may be made without approval of the stockholders of the Company if such approval is required under the Code, the rules of a stock exchange, or any other applicable laws or regulations.
23.Award Deferrals. Participants may elect to defer receipt of shares of Common Stock or amounts payable under an Award in accordance with procedures established by the Committee.
24.Section 409A of the Code. The Plan as well as payments and benefits under the Plan are intended to be exempt from or, to the extent subject thereto, to comply with, Section 409A of the Code, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted in accordance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, a Participant shall not be considered to have terminated employment or service with the Company for purposes of the Plan and no payment shall be due to the Participant under the Plan or any Award until the Participant would be considered to have incurred a “separation from service” from the Company and its Affiliates within the meaning of Section 409A of the Code. Any payments described in the Plan that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. Notwithstanding anything to the contrary in the Plan, to the extent that any Awards (or any other amounts payable under any plan, program or arrangement of the Company or any of its Affiliates) are payable upon a separation from service and such payment would result in the imposition of any individual tax and penalty interest charges imposed under Section 409A of the Code, the settlement and payment of such awards (or other amounts) shall instead be made on the first business day after the date that is six (6) months following such separation from service (or death, if
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earlier). Each amount to be paid or benefit to be provided under this Plan shall be construed as a separate identified payment for purposes of Section 409A of the Code. The Company makes no representation that any or all of the payments or benefits described in this Plan will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment. Each Participant shall be solely responsible for the payment of any taxes and penalties incurred under Section 409A of the Code.
25.Compliance with Securities Laws. Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity.
26.Certain Additional Considerations.
(a)In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a participant may be permitted through the use of such an automated system.
(b)If any provision of the Plan is held to be invalid or unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if the invalid or unenforceable provision had not been included in the Plan.
(c)Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any law, government regulation, stock exchange listing requirement or Grant Agreement or Company policy, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any Grant Agreement or policy adopted by the Company pursuant to any such law, government regulation, stock exchange listing requirement or otherwise).
27.Governing Law. This Plan, Awards granted hereunder and actions taken in connection herewith shall be governed and construed in accordance with the laws of the state of Oregon.
Executed as of the 13th day of February, 2018.
PORTLAND GENERAL ELECTRIC COMPANY
By:/s/ Anne F. Mersereau
Name:Anne F. Mersereau
Title: Vice President, Human Resources, Diversity
and Inclusion
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Appendix A
Index of Defined TermsSEC.
| | | Term | Section
Where Defined
| Affiliate(s) | 4(c) | Awards | 5 | Board of Directors | 4(a) | Change in Control | 17(b) | Code | 4(a) | Committee | 4(a) | Common Stock | 1 | Company | 1 | Dividend Equivalent Right | 12(c) | Exchange Act | 4(a) | Fair Market Value | 8(g) | Grandfathered Award | 13(a) | Grant Agreement | 7(a) | Incentive Stock Options | 8(a) | Nonqualified Stock Options | 8(a) | Parent Corporation | 8(e) | Performance-Based Award | 13 | Plan | 1 | Restricted Stock Award | 10(a) | Stock Appreciation Rights | 9(a) | Stock Option | 8(a) | Stock Unit | 12(c) | Subsidiary Corporation | 8(e) |
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| | | | VOTE BY INTERNET - www.proxyvote.com
| PORTLAND GENERAL ELECTRIC COMPANY
ATTN: CHRISTOPHER A. LIDDLE
121 SW SALMON STREET 1WTC0509
PORTLAND, OR 97204
| Use the Internet to transmit your voting instructions and for electronic delivery of information until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.
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| | VOTE BY PHONE - 1-800-690-6903 | | Use any touch-tone telephone to transmit your voting instructions until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions.
| | VOTE BY MAIL | | Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
| | | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M31772-P05687
| KEEP THIS PORTION FOR YOUR RECORDS | DETACH AND RETURN THIS PORTION ONLY | THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
| | | | | | | | | | | | | | | | | PORTLAND GENERAL ELECTRIC COMPANY94 | | | | | | | | | Vote on Directors | | | | | | | | | | | | | | | | | | The Board of Directors recommends a vote “FOR” each director nominee: | | | | | | | | | 1 | Election of Directors | | | | | | | | | | Nominees: | For | | Against | | Abstain | Vote On Proposals
| For | Against | Abstain | | | | 1a. | John W. Ballantine | o | | o | | o | | | | | | | | 1b. | Rodney L. Brown, Jr. | o | | o | | o | The Board of Directors recommends a vote “FOR” the following proposals: | | | | 1c. | Jack E. Davis | o | | o | | o | | | | | | | | | 1d. | David A. Dietzler | o | | o | | o | 2 |
| To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for fiscal year 2018. | o | o | o | | | | 1e. | Kirby A. Dyess | o | | o | | o | | | | | | | | 1f. | Mark B. Ganz | o | | o | | o | | | | | | | | 1g. | Kathryn J. Jackson | o | | o | | o | 3 |
| To approve, by a non-binding vote, the compensation of the Company’s named executive officers. | o | o | o | | | | 1h. | Neil J. Nelson | o | | o | | o | | | | | | | | 1i. | M. Lee Pelton | o | | o | | o | | | | | | | | 1j. | Maria M. Pope | o | | o | | o | 4 |
| To approve the Portland General Electric Company Stock Incentive Plan, as amended and restated. | o | o | o | | | | 1k. | Charles W. Shivery | o | | o | | o | | | | | | | | For address changes and/or comments, please check this box and write them on the back where indicated.2022 Proxy Statement
| o | | | | | | | | | | | | | | | | | | | | | | | Please indicate if you plan to attend this meeting. | o | | | | o | | | | | | | | | Yes | | | | No | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
| | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | | Signature (Joint Owners) | | Date | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice & Proxy Statement and Annual Report are available at www.proxyvote.com or
investors.portlandgeneral.com.
| | | | | | | | | | | | | | | | PORTLAND GENERAL ELECTRIC COMPANY
Annual Meeting of Shareholders
April 25, 2018, 10:00 a.m. local time
This proxy is solicited on behalf of the Board of Directors
The Portland General Electric Company 2018 Annual Meeting of Shareholders will be held on Wednesday, April 25, 2018, at 10:00 a.m. local time, at the Conference Center Auditorium located at Two World Trade Center, 25 SW Salmon Street, Portland, OR 97204.
The undersigned, having received the Notice and accompanying Proxy Statement for said meeting, hereby constitutes and appoints Jack E. Davis, Maria M. Pope, James F. Lobdell, and Lisa A. Kaner, or any of them, his/her true and lawful agents and proxies, with power of substitution and resubstitution in each, to represent and vote all the shares of Common Stock of Portland General Electric Company held of record by the undersigned on March 1, 2018 at the Annual Meeting of Shareholders scheduled to be held on April 25, 2018, or at any adjournment or postponement thereof, on all matters coming before said meeting. The above proxies are hereby instructed to vote as shown on the reverse side of this card.
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted “FOR” each director nominee, “FOR” ratification of the appointment of Deloitte & Touche LLP as Portland General Electric Company’s independent registered public accounting firm for fiscal year 2018, “FOR” approval of the compensation of named executive officers, “FOR” approval of the Portland General Electric Company Stock Incentive Plan, as amended and restated, and in the discretion of the proxies with respect to such other business as may properly come before the meeting and at any adjournment or postponement thereof.
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Continued and to be signed on reverse side
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