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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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HAWAIIAN ELECTRIC INDUSTRIES, INC.    •    PO BOX 730    •    HONOLULU, HI 96808-0730

Constance H. Lau
President and
Chief Executive Officer

March 21, 201122, 2012

Dear Fellow Shareholder:

         On behalf of the Board of Directors, it is my pleasure to invite you to attend the Annual Meeting of Shareholders of Hawaiian Electric Industries, Inc. (HEI). The meeting will be held on HEI's premises in Room 805 on the eighth floor of the American Savings Bank Tower, located at 1001 Bishop Street, Honolulu, Hawaii, on Wednesday, May 10, 2011,9, 2012, at 9:30 a.m., localHonolulu time. A map showing the location of the meeting site appears on page 8575 of the Proxy Statement.

         The accompanying Notice of Annual Meeting of Shareholders and Proxy Statement describe the items of business to be conducted during the meeting. In addition, we will review certain significant events of 2010that took place in 2011 and their impact on you as a shareholder of HEI. HEI officers and Board members will be available before and after the meeting to talk with you and answer questions.

         Of particular importance, for your attention, this is the firstas we did last year, in which we will be asking our shareholdersyou to submitcast an advisory vote on the Company'sto approve HEI's executive compensation. A description of the Company'sHEI's executive compensation programs, as well as details of the compensation for the Company'sHEI's named executive officers, is providedare described in the Proxy Statement.

         As a shareholder of HEI, it is important that your views be represented.Please help us obtain the quorum needed to conduct business at the meeting by promptly voting your shares.

         The Board and management team of HEI would like to express theirour appreciation to you for your confidence and support. I look forward to seeing you at the Annual Meeting in Honolulu.

Sincerely,

		Recycled

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Hawaiian Electric Industries, Inc. 900 Richards Street Honolulu, Hawaii 96813

NOTICE OF ANNUAL MEETING

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        The following charts, which compare HEI's total shareholder return (TSR) to the total direct compensation (TDC) of HEI's CEO, show a clear correlation between pay and performance. From 2007 to 2010, CEO TDC generally parallels HEI's TSR under both annual and three-year TSR measures. For 2011, the CEO TDC line slopes downward while HEI TSR continues to rise. This further illustrates pay for performance, since the CEO's compensation for the three-year period ending on December 31, 2011 was based on two performance metrics—TSR and HEI 3-year return on average common equity (ROACE)—and the Company arrived short of its performance expectations for HEI 3-year ROACE.

HEI Annual Total Shareholder Return vs HEI CEO Total Direct Compensation*		HEI 3-year Total Shareholder Return vs HEI CEO Total Direct Compensation*

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*

In these charts, TDC is comprised of base salary for the year, annual incentive compensation received for the year, long-term incentive compensation received for the three-year performance period ending that year and restricted stock units granted in the year.

        Like CEO TDC, which decreased in 2011 compared to 2010 as illustrated in the charts above, the CEO's total compensation (shown in the Summary Compensation Table on page 51 of the Proxy Statement) was lower in 2011 than in 2010. Total compensation in the Summary Compensation Table differs from TDC in the charts above because it includes the change in pension value, which is affected by interest rates and other actuarial assumptions, and the potential value of long-term incentive awards that may be received in the future but not in the year shown in the Summary Compensation Table.

AUDITORS

        We are asking that our shareholders ratify the selection of PricewaterhouseCoopers LLP (PwC) as our independent auditor for fiscal year 2012. Below is a summary of PwC's fees for services provided in 2011 and 2010.

		Amount of Fees
Type of Fees		2011			2010
Audit Fees		$	1,995,000		$	1,750,000
Audit-Related Fees			135,000			110,000
Tax Fees			166,000			298,000
All Other Fees		—			—
Total		$	2,296,000		$	2,158,000

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Proxy Statement

        HEI is soliciting proxies for the Annual Meeting of Shareholders scheduled for Wednesday, May 10, 2011,9, 2012, at 9:30 a.m., localHonolulu time, at the American Savings Bank Tower, 1001 Bishop Street, 8th floor, Room 805, Honolulu, Hawaii. The mailing address of the principal executive offices of HEI is P.O. Box 730, Honolulu, Hawaii 96808-0730.

        The approximate mailing date for this Proxy Statement, form of proxy and Annual Report to Shareholders is March 21, 2011.22, 2012. The 20102011 Annual Report to Shareholders accompanying this Proxy Statement is not considered proxy soliciting material.

Who can attend the meeting?attend?

        Attendance will be limited to:

•

shareholders of record (i.e., shareholders who own shares registered in their own name on the books of HEI); on the record date;



•

beneficial owners of HEI Common Stock having evidence of ownership as of the record date and entitledentitlement to vote at the meeting;



•

authorized representatives of absent shareholders; and



•

invited guests of management.

        If you own shares of HEI Common Stock in the name of a bank, brokerage firm or other holder of record, you must show proof of ownership. This may be in the form of a letter from the holder of record or a recent statement from the bank or broker showing ownership of HEI Common Stock.

        Any person claiming to be an authorized representative of a shareholder must produce written evidence of the authorization.

What are shareholders being asked to vote on?

•

Proposal No 1:  Election of three Class IIII directors forto serve a three-year term expiring at the 20142015 Annual Meeting of Shareholders.



•

Proposal No 2:  Approval of the 2011 Nonemployee Director Stock Plan (attached as Appendix A).



•

Proposal No 3:  Advisory vote on the frequency of future advisory votes on HEI's executive compensation.



•

Proposal No 4:  Advisory vote on a resolution approving HEI's executive compensation.



•

Proposal No 5:3:  Ratification of the appointment of PricewaterhouseCoopers LLP (PwC) as HEI's independent registered public accounting firm for 2011.2012.

Electronic Access to Proxy Materials

        HEI provides shareholders the option to access its proxy materials via the Internet. In keeping with our efforts to conserve natural resources, this method of delivery reduces the amount of paper necessary to produce these materials and reduces the costs associated with the printing and mailing of these materials to shareholders. On March 21, 2011,22, 2012, a Notice of Internet Availability of Proxy Materials

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(Notice) will be mailed to certain shareholders and our proxy materials will be posted on the website referenced in the Notice (www.ViewMaterial.com/HEI). As more fully described in the Notice, shareholders may choose to access our proxy materials on the website referred to in the Notice or may request to receive a printed set of our proxy materials. The Notice and website will provide information

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regarding how to request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis.

        If you currently receive our proxy materials in printed form and would like to receive them electronically in the future, please so indicate on the enclosed proxy, if voting by mail, or by following the instructions provided when using the telephone or Internet voting options described under "How domay shareholders vote?" below.

Who is eligible to vote?

        Only persons who own shares of HEI Common Stock as of the close of business on March 2, 20111, 2012 (the proxy record date) are entitled to vote.

How many shares are outstanding and entitled to vote?

        On March 2, 2011, 94,915,8831, 2012, 96,222,725 shares of HEI Common Stock were outstanding. Each shareholder is entitled to one vote for each share held.held on the record date. Under the Bylaws of HEI, shareholders do not have cumulative voting rights in the election of directors.

What constitutes a quorum?

        A quorum is needed to conduct business at the Annual Meeting. A majority of the shares of HEI Common Stock outstanding on March 2, 20111, 2012 and entitled to vote, and present in person or by proxy at the Annual Meeting, constitutes a quorum. Abstentions and broker votes of uninstructed shares on routine matters (such as ratification of the appointment of the independent registered public accounting firm) will be counted in the number of shares present in person or by proxy for purposes of determining a quorum. A quorum established for one purpose will apply for all purposes at the Annual Meeting.

How domay shareholders vote?

        Whether or not you plan to attend the Annual Meeting, please take the time to vote. You may vote via the Internet, by touchtone telephone or by mail before the Annual Meeting, or in person at the Annual Meeting. The Internet and telephone procedures are designed to authenticate your vote and confirm that your voting instructions are followed. If you vote via the Internet or by telephone, follow the instructions on the Notice or voting instruction card you received by mail. If you vote by telephone, you will receive additional recorded instructions, and if you vote via the Internet, you will receive additional instructions at the Internet website. You will need to have available the control number on your Notice or proxy/voting instruction card, as applicable, available.applicable.

        Shareholders who vote via the Internet or by telephone shouldnot mail the proxy/voting instruction card.

1.

BY INTERNET: You may vote on-line by following the instructions in the Notice or by accessing the Internet at www.cesvote.com. Specific instructions regarding how to record and confirm your vote will be available on the website.



2.

BY TELEPHONE: You may vote by touchtone telephone by following the instructions in the Notice or by calling 1-888-693-8683. Once connected, you will be prompted to record and confirm your vote.

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BY MAIL: Please mark your vote and sign, date and promptly return the proxy card in the postage-paid envelope provided. If you return the signed proxy card but do not mark the boxes showing how you wish to vote, your votes will be cast following the recommendations of management on all proposals. If you wish to have someone other than the individuals listed

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on the enclosed proxy card vote your shares at the meeting, cross out all three names and insert the name of anotherthe person you designate to vote your shares at the meeting.



4.

IN PERSON: You may vote your shares by attending the Annual Meeting and voting in person.

How do shareholders vote if their shares are held in street name?

        If your shares are held in "street name" (that is, through a broker, trustee or other holder of record), you will receive a voting instruction card or other information from your broker or other holder of record seeking instruction from you as to how your shares should be voted.If you do not provide such instruction, your broker or nominee may vote your shares at its discretion on your behalf on routine matters, but not on nonroutine matters. The ratification of the appointment of HEI's independent registered public accounting firm is considered a routine matter. The election of directors the approval of the 2011 Nonemployee Director Stock Plan, the advisory vote on the frequency of advisory votes on executive compensation and the advisory vote on executive compensation are considered nonroutine matters.Please provide instructions to your broker on how to vote your shares on all fivethree proposals to ensure that your shares will be voted on all proposals at the Annual Meeting.

        You may not vote shares held in "street name" at the Annual Meeting unless you obtain a legal proxy from your broker or holder of record.

How do shareholders vote if their shares are held in the Dividend Reinvestment and Stock Purchase Plan, the HEI Retirement Savings Plan or the American Savings Bank 401(k) Plan?

        If you own shares held in the Dividend Reinvestment and Stock Purchase Plan, the HEI Retirement Savings Plan (including shares previously received under the Tax Reduction Act Stock Ownership Plan) or the American Savings Bank 401(k) Plan, the respective plan trusteesyou will vote thosereceive instructions explaining how to direct your vote. Your shares will be voted according to your directions. For all of these plans, the respective trustees will vote all the shares of HEI Common Stock for which they receive no voting instructions are given will be voted in the same proportion as they votethe shares for which they receive instruction.voting instructions were given.

Can shareholders change their vote?

        If you vote by any of the methods described above, you may revoke your proxy card or vote at any time before the Annual Meeting in one of three ways:

•

submit a properly signed proxy card with a later date or vote again at a later time by telephone or Internet;



•

notify the Corporate Secretary of HEI in writing; or



•

vote in person at the Annual Meeting (if your shares are registered in your name on HEI's books or if your shares are held in "street name" and you have a legal proxy from your broker or other holder of record).

How many votes are required?

        If a quorum is present at the Annual Meeting, then:

•

Directors will be elected by a plurality of the votes cast. Plurality means that the persons receiving the highest number of votes are elected. There will be no abstentions for this matter

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since yourYour options are to vote either "FOR" or to "WITHHOLD" your vote for a nominee. Although the election of directors is considered a nonroutine matter, broker nonvotes (i.e., when your broker or other holder of record does not vote your shares on a nonroutine matter because you have not provided instructions regarding how to vote on that matter) will not affect the outcome of this matter.

•




The 2011 Nonemployee Director Stock Plan will be approved if the majorityTable of votes cast are in favor of such approval, so long as the total votes cast represent more than 50% of all shares entitled to vote. Abstentions will be considered votes cast and will have the same effect as voting against approval of the 2011 Nonemployee Director Stock Plan. Broker nonvotes will have no effect on the outcome of the vote on the 2011 Nonemployee Director Stock Plan, except that they will not count as votes cast for purposes of determining whether the total votes cast represent more than 50% of the shares entitled to vote.Contents



•

Since the votes on executive compensation and frequency of votes on executive compensation are advisory only, no minimum numberthe result will not be binding on the Board. However, the Board and the HEI Compensation Committee value input from shareholders and will consider the outcome of votes cast is required.the vote when making future executive compensation decisions. Brokers may not vote on these proposalsthis proposal without your instructions because these proposals arethis proposal is considered a nonroutine matters.matter. For thethis proposal, concerning how frequently shareholders wish to have advisory votes on HEI's executive compensation, your options are to vote for a frequency of every "1 YEAR," "2 YEARS," "3 YEARS" or "ABSTAIN." For the proposal to adopt a resolution approving HEI's executive compensation, your options are to vote "FOR," "AGAINST" or "ABSTAIN."



•

The appointment of HEI's independent registered public accounting firm will be ratified if more votes are cast in favor than against such ratification. Abstentions and broker nonvotes will not affect the outcome of this matter.


Who will count the votes and are the votes confidential?


        Corporate Election Services will act as tabulator for broker and bank proxies as well as for proxies of the other shareholders of record. Your identity and vote will not be disclosed to persons other than those acting as tabulators except:

•

as required by law;



•

to verify the validity of proxies and the voting results in the case of a contested proxy solicitation; or



•

when you write a comment on the proxy form.card.


Could other matters be decided at the Annual Meeting?


        HEI knows of no business to be presented at the 20112012 Annual Meeting other than the items set forth in this Proxy Statement. If other business is properly brought before the Annual Meeting, or any adjournment or postponement thereof, the persons named on the enclosed proxy card will vote your stock in accordance with their best judgment, unless authority to do so is withheld by you in your proxy.proxy card.


What happens if the Annual Meeting is postponed or adjourned?


        If the Annual Meeting is postponed or adjourned, your proxy card will remain valid and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy card until it is voted at the Annual Meeting.




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Proposal No. 1: Election of Class I Directors

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        In accordance with HEI's Bylaws, the Board has fixed the size of the Board at nine directors, divided equally into three classes with staggered terms. The Board proposes that the following three nominees be elected at the 2012 Annual Meeting as Class I directors to serve until the 2015 Annual Meeting, or until his or her respective successor shall be duly elected and qualified:

•

Constance H. Lau



•

A. Maurice Myers



•

James K. Scott, Ed.D.

        Ms. Lau, Mr. Myers and Dr. Scott are all currently incumbent Class I directors of HEI. The Board has determined that Mr. Myers and Dr. Scott are independent under the applicable standards for director independence, as discussed below under "Board of Directors—Who are the independent directors of the Board?". Ms. Lau currently serves as the President and Chief Executive Officer of HEI and is therefore not independent. Each nominee has consented to serve for the new term expiring at the 2015 Annual Meeting if elected. If a nominee is unable to stand for election at the time of the 2012 Annual Meeting, the proxy holders listed in the proxy card may vote in their discretion for a suitable substitute.

        Information regarding the business experience and certain other directorships for each Class I director nominee and for each continuing Class II and III director is provided on pages 6-12 below together with a description of the experience, qualifications, attributes and skills that led to the Board's conclusion at the time of this Proxy Statement that each of the nominees and directors should serve on the Board in light of HEI's current business and structure.

        YOUR BOARD RECOMMENDS THAT YOU VOTE"FOR" EACH OF THE NOMINEES FOR CLASS I DIRECTOR LISTED ABOVE.




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Director Nominees for Election

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Nominees for Class I Directors Whose Terms Expire at the 2015 Annual Meeting


		Constance H. Lau, age 60, director 2001-2004 and since 2006 and nominee for election as a Class I director at the 2012 Annual Meeting Executive Committee Member As HEI's President and Chief Executive Officer since 2006, Ms. Lau has extensive senior management experience and thorough knowledge of the Company's operations. Prior to becoming CEO, Ms. Lau served in various leadership capacities that have spanned several functions across HEI and its subsidiaries, including the legal, financial and executive management functions. During her 28 years of service to HEI and its subsidiaries, Ms. Lau acquired significant experience and expertise with respect to the utility and banking industries. Further, having been exposed to virtually all aspects of HEI's operations at both the holding company level and the subsidiary operating company level, Ms. Lau brings a unique and comprehensive perspective to the Board. Ms. Lau's intelligence and leadership stature has been recognized nationally, leading her to having been named to the National Infrastructure Advisory Council (NIAC) by President Obama and the Community Depository Institutions Advisory Council of the Federal Reserve Bank of San Francisco. As a result, Ms. Lau brings to the Board a national perspective, as well as valuable insights regarding physical and cyber infrastructure security and monetary policy, which is critical in today's environment. Current and prior positions with the Company • President and Chief Executive Officer and Director, HEI, since 2006 • Chairman of the Board, Hawaiian Electric Company, Inc. (HEI subsidiary), since 2006 • Chairman of the Board, American Savings Bank, F.S.B. (HEI subsidiary), since 2006 • Chairman of the Board and Chief Executive Officer, American Savings Bank, F.S.B., 2008-2010 • Chairman of the Board, President and Chief Executive Officer, American Savings Bank, F.S.B., 2006-2008 • President and Chief Executive Officer and Director, American Savings Bank, F.S.B., 2001-2006 • Senior Executive Vice President and Chief Operating Officer and Director, American Savings Bank, F.S.B., 1999-2001 • Treasurer, HEI, 1989-1999 • Financial Vice President and Treasurer, HEI Power Corp. (former HEI subsidiary), 1997-1999 • Treasurer, Hawaiian Electric Company, Inc., and Assistant Treasurer, HEI, 1987-1989 • Assistant Corporate Counsel, Hawaiian Electric Company, Inc., 1984-1987
		Other public company directorships since 2007 • Director since 2004 and Audit Committee Member, Alexander & Baldwin, Inc.
		Skills and qualifications for HEI Board service • Intimate understanding of the Company from serving in various chief executive, chief operating and other executive, finance and legal positions at HEI and its subsidiaries over the last 28 years. • Familiarity with current management and corporate governance practices from her current service as a director and Audit Committee member for Alexander & Baldwin, Inc. and as a director of the Associated Electric & Gas Insurance Services, Inc. • Experience with financial oversight and expansive knowledge of the Hawaii business community and the local communities that compose the Company's customer bases from serving as a director for various local industry, business development, educational and nonprofit organizations. • Utility and banking industry knowledge from serving as a director or task force member of the Hawaii Bankers Association, the American Bankers Association, the Edison Electric Institute and the Electric Power Research Institute.




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		A. Maurice Myers, age 71, director since 1991 and nominee for election as a Class I director at the 2012 Annual Meeting Compensation Committee Member Mr. Myers brings a wealth of knowledge and leadership skills to the HEI Board. His extensive experience leading successful companies as chief executive officer, both in Hawaii and on the mainland, including several large public companies, provides the Board with significant management expertise. Having served on the Board for twenty years, Mr. Myers has gained in-depth knowledge of HEI and its operations. With this breadth and depth of experience, Mr. Myers is a valuable resource to management and other Board members and contributes substantially to the Board's capabilities in overseeing HEI's operations. Business experience and other public company and HEI affiliate directorships since 2007 • Chief Executive Officer and Owner, Myers Equipment Leasing LLC (equipment leasing company), since 2010 • Chief Executive Officer and Director, POS Hawaii LLC (provider of point-of-sale business systems for restaurants and retailers), since 2009 • Chief Executive Officer and Director, Wine Country Kitchens LLC (manufacturer of gourmet food products), since 2007 • Chairman, Chief Executive Officer and President, Waste Management, Inc. (waste and environmental services provider), 1999-2004 • Director, Hawaiian Electric Company, Inc. (HEI subsidiary), 2004-2006 and 2009-2011 • Director, American Savings Bank, F.S.B. (HEI subsidiary), since 2011
		Skills and qualifications for HEI Board service • 20 years of public company executive and board leadership experience as Chairman, Chief Executive Officer and President of Waste Management, Inc., Chairman, Chief Executive Officer and President of Yellow Corporation, President of America West Airlines and Chief Executive Officer and President of Aloha Airgroup, Inc. • Practiced skills in risk assessment, strategic planning, financial oversight, customer and public relations and marketing exercised in leading successful restructuring efforts at Waste Management, Yellow Corporation and America West Airlines. • Diverse business experience and public and private company board experience, including from his prior service as a director and Compensation Committee chair for Tesoro Corporation and as a director for BIS Industries Limited and Cheap Tickets.




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		James K. Scott, Ed.D., age 60, director since 1995 and nominee for election as a Class I director at the 2012 Annual Meeting Nominating and Corporate Governance Committee Member Dr. Scott has considerable management experience as an executive leader in Hawaii. While Dr. Scott has earned the reputation of being one of the nation's leading education administrators, his unique value to the Company derives from his extensive knowledge, contacts and relationships within Hawaii's business community, non-profit community and local governmental agencies. Dr. Scott's long participation on the Board has contributed significantly to the Board's understanding of Hawaii's unique cultural and business environment. With the success under his leadership of one of the country's most prominent college preparatory schools for nearly two decades, and because of his commitment to a wide array of charitable and civic causes, Dr. Scott is a well-respected leader in the state of Hawaii. Business experience and other public company and HEI affiliate directorships since 2007 • President, Punahou School (K-12 independent school), since 1994 • Director, American Savings Bank, F.S.B. (HEI subsidiary), since 2008
		Skills and qualifications for HEI Board service • Recognized leadership and executive management skills as President of Punahou School for 18 years. • 27 years of experience developing and executing strategic plans as the chief executive at two independent schools, including overseeing fundraising programs and admissions/marketing and finance functions. • Governance and board leadership experience from his current positions as Chair of the Secondary School Admission Test Board, director and former Chair of the Hawaii Association of Independent Schools, and member of the Advisory Board of the Klingenstein Center of Teachers College at Columbia University.




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Continuing Directors

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Continuing Class II Directors Whose Terms Expire at the 2013 Annual Meeting


		Thomas B. Fargo, age 63, director since 2005 Compensation Committee Chair Nominating and Corporate Governance Committee Member Business experience and other public company and HEI affiliate directorships since 2007 • Operating Executive Board Member, J.F. Lehman & Company (private equity firm), since 2008 • Owner, Fargo Associates, LLC (defense and homeland/national security consultancy), since 2005 • Chief Executive Officer, Hawaii Superferry, Inc. (interisland ferry), 2008-2009 • President, Trex Enterprises Corporation (defense research and development firm), 2005-2008 • Commander, U.S. Pacific Command, 2002-2005 • Chairman of the Board and Compensation and Governance Committee Member, Huntington Ingalls Industries, Inc., since 2011 • Director, Alexander & Baldwin, Inc., since 2011 • Director, Northrop Grumman Corporation, 2008-2011 • Director, Hawaiian Holdings, Inc., 2005-2008 • Director, Hawaiian Electric Company, Inc. (HEI subsidiary), since 2005
		Skills and qualifications for HEI Board service • Extensive knowledge of the U.S. military, a major customer of HEI's electric utility subsidiary. • Leadership, strategic planning and financial and nonfinancial risk assessment skills developed over 39 years of leading 9 organizations ranging in size from 130 to 300,000 people and managing budgets up to $8 billion. • Experience with corporate governance, including audit, compensation and governance committees, from service on several public and private company boards.




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		Kelvin H. Taketa, age 57, director since 1993 Nominating and Corporate Governance Committee Chair Business experience and other public company and HEI affiliate directorships since 2007 • President and Chief Executive Officer, Hawaii Community Foundation (statewide charitable foundation), since 1998 • Director, Hawaiian Electric Company, Inc. (HEI subsidiary), since 2004 Skills and qualifications for HEI Board service • Executive management experience with responsibility for overseeing more than $500 million in charitable assets as President and Chief Executive Officer of the Hawaii Community Foundation. • Proficiency in risk assessment, strategic planning and organizational leadership as well as marketing and public relations obtained from his current position at the Hawaii Community Foundation and his prior experience as Vice President and Executive Director of the Asia/Pacific Region for The Nature Conservancy and as Founder, Managing Partner and Director of Sunrise Capital Inc. • Knowledge of corporate and nonprofit governance issues gained from his prior service as a director for Grove Farm Company, Inc., his current service as Vice Chair of the Independent Sector and Director of the Stupski Foundation and through publishing articles and lecturing on governance of tax-exempt organizations.




		Jeffrey N. Watanabe, age 69, director since 1987 Chairman of the Board since 2006 Executive Committee Chair Compensation Committee Member Business experience and other public company and HEI affiliate directorships since 2007 • Managing Partner, Watanabe Ing & Komeiji LLP, 1972-2007 (now retired) • Director since 2003 and Compensation and Corporate Governance Committee Member, Alexander & Baldwin, Inc. • Director since 1988 and Executive Committee Member, American Savings Bank, F.S.B. (HEI subsidiary) • Director, Hawaiian Electric Company, Inc. (HEI subsidiary), from 1999-2006 and 2008-2011
		Skills and qualifications for HEI Board service • Broad business, legal, corporate governance and leadership experience from serving as Managing Partner of the law firm he founded, advising clients on a variety of business and legal matters for 35 years and from serving on more than a dozen public and private company and nonprofit boards and committees, including his current service on the Compensation and Corporate Governance Committees for Alexander & Baldwin, Inc. • Specific experience with strategic planning from providing strategic counsel to local business clients and prospective investors from the continental United States and the Asia Pacific region for 25 years of his law practice.




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Continuing Class III Directors Whose Terms Expire at the 2014 Annual Meeting


		Peggy Y. Fowler, age 59,60, director nominee forsince 2011 Annual Meeting Ms. Fowler brings a wealth of knowledge and experience to HEI. Her prior positions in managing utility operations and leading a large public company as its chief executive officer impart significant expertise to the Board. Her recent experience serving on the board of a mainland bank holding company will strengthen the Board's capabilities in overseeing the subsidiary bank operations. Audit Committee Member Business experience and other public company and HEI affiliate directorships since 20062007 •       Director and Audit Committee Member, Hawaiian Electric Company,  Inc., since 2009 •       Co-Chief Executive Officer, Portland General Electric Company (PGE), 2009 • •       President and Chief Executive Officer, PGE, 2000-2008 • •       Director, PGE, since 1998 • Director, Umpqua Holdings Corporation, since 2009, and Chair of Budget and Compensation Committees, since April 2010
•		Director and Audit Committee Member, Hawaiian Electric Company, Inc., since 2009 Skills and qualifications for HEI Board service     • •       35 years of executive leadership, financial oversight and utility operations experience from serving at PGE in senior officer positions, including Chief Operating Officer, President and Chief Executive Officer.CEO. • •       BreadthEnvironmental and renewable energy expertise from managing PGE's environmental department, overseeing initiatives that improved fish passage on multiple Oregon rivers, supervising the construction and integration into PGE's grid of provenwind and solar projects, and leading PGE to be ranked #1 by the National Renewable Energy Laboratory for selling more renewable power to residential customers than any other utility in the U.S. for several years during her tenure as PGE's CEO. • Proven management, leadership analytical and technicalanalytical skills, including crisis management, risk assessment, strategic planning and public relations skills, demonstrated especially by her leadership of PGE after the 2001 bankruptcy of its parent company, Enron Corp., through its independence from Enron in 2006 and by her recognition as Oregon's Most Admired CEO in a 2005Portland Business Journal survey and as Portland's First Citizen in 2007 by the Portland Metropolitan Association of Realtors, an annual award honoring civic achievement and business leadership.2006. • Expertise in financial oversight, regulatory compliance and corporate governance matters gained from her experienceserving as President (1997-2000), CEO (2000-2008) and Chair (2001-2004) of PGE, her service as a director for PGE and the Portland Branch of the Federal Reserve Bank of San Francisco and as a director and committee member of the Nominatingfor several private and Corporate Governance Committee for The Regence Group (BlueCross BlueShield health insurance provider in Idaho, Oregon, Utah and Washington), and a director and chair of the Budget and Compensation Committees and member of the Loan and Investment Committee forpublic companies, including Umpqua Holdings Corporation (publicly traded bank holding company based in Portland, Oregon)company).
		Involvement in certain legal proceedings     • PGE was owned by Enron Corp. from 1997 to 2006. Enron also owned Portland General Holdings, Inc., previously a holding company for the nonregulated business of PGE that became a subsidiary of Enron, holding Enron's nonregulated businesses in Portland. Enron Corp. filed for bankruptcy in 2001. Ms. Fowler was President of Portland General Holdings from 1999 to 2003, when it also filed for bankruptcy protection. The case was procedurally consolidated with the Enron bankruptcy, but Enron's bankruptcy reorganization plan did not expressly pertain to Portland General Holdings. The Portland General Holdings bankruptcy case was dismissed in October 2005, after substantially all of its assets were distributed or placed in segregated accounts.




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		Keith P. Russell, age 65,66, director nominee forsince 2011 Annual Meeting Mr. Russell has extensive senior management experience in the banking industry. His prior service as chief risk officer of a large financial institution significantly strengthens the Board's capabilities in overseeing risk within the organization. In addition, Mr. Russell's many years of experience in managing and overseeing bank operations will contribute important expertise to the Board. Mr. Russell also has extensive knowledge and experience from his prior service as an officer of a lender to the electric utility industry. Audit Committee Member Business experience and other public company and HEI affiliate directorships since 20062007 •       Director and Audit Committee Member, American Savings Bank, F.S.B. (HEI subsidiary), since 2010 •       President, Russell Financial,  Inc. (strategic and financial consulting firm servicing business and high net worth families and individuals), since 2001 • •       Vice Chair/Chief Risk Officer, Mellon Financial Corp., then Chairman, Mellon West, 1991-2001 • •       Senior Executive Vice President, then Director, President and Chief Operating Officer, GLENFED/Glendale Federal Bank, 1983-1991 • Director and Audit Committee Member, American Savings Bank, F.S.B. (HEI subsidiary), since 2010 • Director, Nationwide Health Properties, since 20022002-2011 • •       Director, Sunstone Hotel Investors, since 2003 • Director, Countrywide Financial, 2003-2008
		Skills and qualifications for HEI Board service     • •       10 years of executive leadership, financial oversight, risk management and strategic planning experience from serving as Vice Chairman/Chief Risk Officer for Mellon Financial Corporation and Chairman of Mellon's West Coast operations. Mellon was also a major lender and capital provider to the electric utility industry. • •       8 years of executive and corporate governance experience from serving as Director, President and Chief Operating Officer of GLENFED/Glendale Federal Bank. • 9 years of banking industry experience from serving as Senior Vice President and Deputy Administrator for Security Pacific National Bank, with direct responsibility for a wide breadth of operations including leasing, consumer and commercial finance, mortgage banking, venture capital, cash management and trust business.




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		Barry K. Taniguchi, age 63,64, director since 2004 and nominee for 2011 Annual Meeting Audit Committee Chair Executive Committee Member Mr. Taniguchi brings to the Board considerable experience as a business leader in Hawaii, with extensive knowledge of the business climate and significant contacts and relationships within the business community and local governmental agencies. With the successes of his own businesses, and because of his commitment to a wide array of charitable causes, Mr. Taniguchi is one of the most well-respected businesspersons in the state of Hawaii. Business experience and other public company and HEI affiliate directorships since 20062007 • •       President and Chief Executive Officer, KTA Super Stores (grocery store chain), since 1989 • •       President, K. Taniguchi Ltd. (real estate lessor), since 1989 • •       Director, American Savings Bank, F.S.B. (HEI subsidiary), since 2002 • •       Director since 20012001-2011 and Audit Committee Chair, Hawaiian Electric Company, Inc. (HEI subsidiary) • •       Director, Hawaii Electric Light Company, Inc. (HEI subsidiary), 1997-2009 • Director, Maui Electric Company, Limited (HEI subsidiary), 2006-2009
		Skills and qualifications for HEI Board service • •       Current knowledge of and experience with the business community on the island of Hawaii, which is served by one of HEI's utility subsidiaries, Hawaii Electric Light Company, Inc., from serving in his current chief executive officer positions for the last 2223 years. • •       Accounting and auditing knowledge and experience gained from obtaining a public accounting certification and working as an auditor and as a controller. • Extensive corporate and nonprofit board and leadership experience, including from his current service on the boards of Hawaii Employers Mutual Insurance Company and Hawaii Community Foundation and from his role as a director and former Chair of the Hawaii Island Economic Development Board.




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Continuing Class I Directors Whose Terms Expire at the 2012 Annual Meeting


		Constance H. Lau, age 59, director 2001-2004 and since 2006 Executive Committee Member Current and prior positions with the Company •       President and Chief Executive Officer and Director, HEI, since 2006 •       Chairman of the Board, Hawaiian Electric Company, Inc. (HEI subsidiary), since 2006 •       Chairman of the Board, American Savings Bank, F.S.B. (HEI subsidiary), since 2006 •       Chairman of the Board and Chief Executive Officer, American Savings Bank, F.S.B., 2008-2010 •       Chairman of the Board, President and Chief Executive Officer, American Savings Bank, F.S.B., 2006-2008 •       President and Chief Executive Officer and Director, American Savings Bank, F.S.B., 2001-2006 •       Senior Executive Vice President and Chief Operating Officer and Director, American Savings Bank, F.S.B., 1999-2001 •       Treasurer, HEI, 1989-1999 •       Financial Vice President and Treasurer, HEI Power Corp. (former HEI subsidiary), 1997-1999 •       Treasurer, Hawaiian Electric Company,  Inc., and Assistant Treasurer, HEI, 1987-1989 •       Assistant Corporate Counsel, Hawaiian Electric Company, Inc., 1984-1987
		Other public company directorships since 2006 •       Director since 2004 and Audit Committee Member, Alexander & Baldwin, Inc.
		Skills and qualifications for HEI Board service •       Intimate understanding of the Company from serving in various chief executive, chief operating and other executive, finance and legal positions at HEI and its subsidiaries over the last 26 years. •       Familiarity with current management and corporate governance practices from her current service as a director and Audit Committee member for Alexander & Baldwin,  Inc. and as a director of AEGIS Insurance Services, Inc. •       Experience with financial oversight and expansive knowledge of the Hawaii business community and the local communities that compose the Company's customer bases from serving as a director for various local industry, business development, educational and nonprofit organizations. •       Utility and banking industry knowledge from serving as a director or task force member of the Hawaii Bankers Association, the American Bankers Association and the Edison Electric Institute.




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		A. Maurice Myers, age 70, director since 1991 Compensation Committee Member Business experience and other public company and HEI affiliate directorships since 2006 •       Chief Executive Officer and Owner, Myers Equipment Leasing LLC (equipment leasing company), since 2010 •       Chief Executive Officer and Director, POS Hawaii LLC (provider of point-of-sale business systems for restaurants and retailers), since 2009 •       Chief Executive Officer and Director, Wine Country Kitchens LLC (manufacturer of gourmet food products), since 2007 •       Chairman, Chief Executive Officer and President, Waste Management, Inc. (waste and environmental services provider), 1999-2004 •       Director, Hawaiian Electric Company,  Inc. (HEI subsidiary), 2004-2006 and since 2009
		Skills and qualifications for HEI Board service •       20 years of public company executive and board leadership experience as Chairman, Chief Executive Officer and President of Waste Management, Inc., Chairman, Chief Executive Officer and President of Yellow Corporation, President of America West Airlines and Chief Executive Officer and President of Aloha Airgroup, Inc. •       Practiced skills in risk assessment, strategic planning, financial oversight, customer and public relations and marketing exercised in leading successful restructuring efforts at Waste Management, Yellow Corporation and America West Airlines. •       Diverse business experience and public and private company board experience, including from his prior service as a director and Compensation Committee chair for Tesoro Corporation and as a director for BIS Industries Limited and Cheap Tickets.




		James K. Scott, Ed.D., age 59, director since 1995 Audit Committee Member Nominating and Corporate Governance Committee Member Business experience and other public company and HEI affiliate directorships since 2006 •       President, Punahou School (K-12 independent school), since 1994 •       Director, American Savings Bank, F.S.B. (HEI subsidiary), since 2008 Skills and qualifications for HEI Board service •       Recognized leadership and executive management skills as President of Punahou School for 17 years. •       26 years of experience developing and executing strategic plans as the chief executive at two independent schools, including overseeing fundraising programs and admissions/marketing functions. •       Governance and board leadership experience from his current positions as Chair of the Secondary School Admission Test Board, director and former Chair of the Hawaii Association of Independent Schools, member of the Board of Governors of the Pacific and Asian Affairs Council and member of the Advisory Board of the Klingenstein Center of Teachers College at Columbia University.




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Continuing Class II Directors Whose Terms Expire at the 2013 Annual Meeting


		Thomas B. Fargo, age 62, director since 2005 Compensation Committee Chair Nominating and Corporate Governance Committee Member Business experience and other public company and HEI affiliate directorships since 2006 •       Operating Executive Board Member, J.F. Lehman & Company (private equity firm), since 2008 •       Owner, Fargo Associates,  LLC (defense and homeland/national security consultancy), since 2005 •       Chief Executive Officer, Hawaii Superferry, Inc. (interisland ferry), 2008-2009 •       President, Trex Enterprises Corporation (defense research and development firm), 2005-2008 •       Commander, U.S. Pacific Command, 2002-2005 •       Director since 2008 and Audit Committee Member, Northrop Grumman Corporation •       Director, Hawaiian Holdings, Inc., 2005-2008 •       Director since 2005, Hawaiian Electric Company, Inc. (HEI subsidiary)
		Skills and qualifications for HEI Board service •       Extensive knowledge of the U.S. military, a major customer of HEI's electric utility subsidiary. •       Leadership, strategic planning and financial and nonfinancial risk assessment skills developed over 39 years of leading 9 organizations ranging in size from 130 to 300,000 people and managing budgets up to $8 billion. •       Experience with corporate governance, including audit, compensation and governance committees, from service on several public and private company boards.




		Kelvin H. Taketa, age 56, director since 1993 Nominating and Corporate Governance Committee Chair Business experience and other public company and HEI affiliate directorships since 2006 •       President and Chief Executive Officer, Hawaii Community Foundation (statewide charitable foundation), since 1998 •       Director, Hawaiian Electric Company, Inc. (HEI subsidiary), since 2004 Skills and qualifications for HEI Board service •       Executive management experience with responsibility for overseeing more than $405 million in charitable assets as President and Chief Executive Officer of the Hawaii Community Foundation. •       Proficiency in risk assessment, strategic planning and organizational leadership as well as marketing and public relations obtained from his current position at the Hawaii Community Foundation and his prior experience as Vice President and Executive Director of the Asia/Pacific Region for The Nature Conservancy and as Founder, Managing Partner and Director of Sunrise Capital Inc. •       Knowledge of corporate and nonprofit governance issues gained from his prior service as a director for Grove Farm Company, Inc., his current service as Vice Chair of the Independent Sector and Director of the Stupski Foundation and through publishing articles and lecturing on governance of tax-exempt organizations.




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		Jeffrey N. Watanabe, age 68, director since 1987 Chairman of the Board since 2006 Executive Committee Chair Business experience and other public company and HEI affiliate directorships since 2006 •       Managing Partner, Watanabe Ing & Komeiji LLP, 1972-2007 (now retired) •       Director since 2003 and Compensation and Corporate Governance Committee Member, Alexander & Baldwin, Inc. •       Director since 1988 and Executive Committee Member, American Savings Bank, F.S.B. (HEI subsidiary) •       Director, Hawaiian Electric Company, Inc. (HEI subsidiary), from 1999-2006 and since 2008 Skills and qualifications for HEI Board service •       Broad business, legal, corporate governance and leadership experience from serving as Managing Partner of the law firm he founded, advising clients on a variety of business and legal matters for 35 years and from serving on more than a dozen public and private company and nonprofit boards and committees, including his current service on the Compensation and Corporate Governance Committees for Alexander & Baldwin, Inc. •       Specific experience with strategic planning from providing strategic counsel to local business clients and prospective investors from the continental United States and the Asia Pacific region for 25 years of his law practice.


Class I Director Who Intends to Resign at the 2011 Annual Meeting


		Shirley J. Daniel, Ph.D., C.P.A., age 57, director since 2002 Audit Committee Member Business experience and other public company and HEI affiliate directorships since 2006 •       Professor of Accountancy, Shidler College of Business, University of Hawaii at Manoa, since 1995 •       Director, American Savings Bank, F.S.B. (HEI subsidiary), since 2004 Skills and qualifications for HEI Board service •       Current expertise in accounting, auditing and corporate governance from teaching courses on these subjects at the Shidler College of Business. •       Business and leadership experience from her current service as Director for the Pacific Asian Management Institute and Center for International Business Education and Research and from her prior service as Managing Director for the Pacific Asian Center for Entrepreneurship and E-Business. •       Prior experience in accounting and auditing from being a licensed certified public accountant and from working as an auditor and audit manager with the international accounting firm Arthur Young & Company (currently Ernst & Young LLP).




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Class III Directors Who Are Not Continuing After the Expiration of Their Terms at the 2011
Annual Meeting


		Don E. Carroll, age 69, director since 1996 Compensation Committee Member Business experience and other public company and HEI affiliate directorships since 2006 •       Retired Chairman, Oceanic Time Warner Cable Advisory Board, since 2004 •       Director since 2004 and Audit Committee Member, American Savings Bank, F.S.B. (HEI subsidiary) Skills and qualifications for HEI Board service •       38 years of executive and finance management experience as President and Vice President, Finance of Oceanic Cable. •       Experience with financial institutions and executive compensation and compensation program oversight from serving as Chair of the Compensation Committee for Island Insurance Company, Ltd. and as a member of the Compensation Committee for Pacific Guardian Life. •       In-depth knowledge and familiarity with issues facing HEI and its banking subsidiary gained from 15 years of service as a director for HEI and 7 years of service as a director for American Savings Bank, F.S.B.




		Victor H. Li, S.J.D., age 69, director since 1988 Compensation Committee Member Business experience and other public company and HEI affiliate directorships since 2006 •       Co-Chairman, Asia Pacific Consulting Group (Pacific region trade consultancy), since 1992 •       Director, American Savings Bank, F.S.B. (HEI subsidiary), since 2004 Skills and qualifications for HEI Board service •       Thoughtful leadership and consensus-building skills and marketing and strategic planning experience acquired through his current position for the last 19 years as Co-Chairman of the Asia Pacific Consulting Group, and his former position for 10 years as chief executive for the East-West Center. •       Long-term knowledge and understanding of HEI's operations and strategic goals after 21 years on the Board. •       Prior energy and public company board experience from serving as a director at Grumman Corporation and AES China Generating Co. Ltd.




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Proposal No. 1: Election of Class III Directors

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        In accordance with the Bylaws of the Company, the Board has fixed the size of the Board to serve from and after the 2011 Annual Meeting at nine directors, divided into three classes with staggered terms. The Board proposes that the following three nominees be elected at the 2011 Annual Meeting as Class III directors to serve until the 2014 Annual Meeting, or until their successors shall be duly elected and qualified:

        The Board proposes three Class III nominees for election at the Annual Meeting:

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Peggy Y. Fowler



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Keith P. Russell



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Barry K. Taniguchi

        Mr. Taniguchi is currently an incumbent Class III director of HEI. Ms. Fowler and Mr. Russell are new nominees, but they are not new to the HEI family of companies, as they are directors of HEI's principal subsidiaries. Ms. Fowler is a director of Hawaiian Electric Company and Mr. Russell is a director of American Savings Bank, and each has substantial experience in the electric power and banking industries, respectively. Ms. Fowler and Mr. Russell are nominated to fill the positions held by current Class III directors Don E. Carroll and Victor H. Li, who have served several terms on the HEI Board but are not seeking reelection. Mr. Carroll will continue serving the Company as a member of the board of directors for HEI subsidiary Hawaiian Electric Company. The Board has determined that all three nominees are independent under the applicable standards for director independence, as discussed below under "Board of Directors—Who are the independent directors of the Board?". Each nominee has consented to serve for the new term expiring at the 2014 Annual Meeting if elected. If a nominee is unable to stand for election at the time of the 2011 Annual Meeting, the proxy holders listed in the proxy may vote in their discretion for a suitable substitute.

        At the 2010 Annual Meeting, the Board was fixed at 11. However, Mr. Richard W. Gushman, II resigned from his position as a Class III director effective September 30, 2010. In addition, Dr. Shirley J. Daniel, a Class I director with a term expiring in 2012, intends to resign from the Board effective at the Annual Meeting (but she will continue to serve the Company as a member of the board of directors of HEI subsidiary American Savings Bank). Following the Annual Meeting, there will thus be a total of nine directors on the HEI Board with three directors in each of the three Board classes of directors.

        Information regarding the business experience and certain other directorships for each Class III director nominee and for each continuing Class I and II director is provided on pages 5-12 above together with a description of the experience, qualifications, attributes and skills that led to the Board's conclusion at the time of this Proxy Statement that each of the nominees and directors should serve on the Board in light of HEI's current business and structure.

        YOUR BOARD RECOMMENDS THAT YOU VOTE"FOR" EACH OF THE NOMINEES FOR CLASS III DIRECTOR LISTED ABOVE.




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Corporate Governance

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What are HEI's governance policies and guidelines?


        In 2010, the2011, HEI's Board and management continued to review and monitor corporate governance trends and best practices to comply with the corporate governance requirements of the New York Stock Exchange, regulations of the Securities and Exchange Commission and rules and regulations of the Board of Governors of the Federal Reserve Federal Deposit Insurance Corporation(Federal Reserve) and Office of Thrift Supervision (OTS) applicable to HEI as a bankthrift holding company. On July 21, 2011, supervision and regulation of HEI, as a thrift holding company, moved from the OTS to the Federal Reserve. As part of an annual review, the HEI Categorical Standards of Director Independence (see Appendix B),HEI's bylaws, Corporate Governance Guidelines Corporate Code of Conduct and charters for the Audit, Compensation, Executive and Nominating and Corporate Governance Committees were reviewed and revised as deemed appropriate by the Board. These documents, as most recently revised, are available on HEI's website at www.hei.com.


What is the Board's leadership structure?


        Since 2006, Mr. Watanabe has served as the nonexecutive Chairman of the Board and Ms. Lau has served as HEI's President and Chief Executive Officer. Since that time, Ms. Lau has also been the only employee director on the Board. Prior to 2006, the Company's Chief Executive Officer had also served as Chairman of the Board. During that time, the Board had an independent Lead Director.

        Mr. Watanabe has served on the Board since 1987, but has never been employed by HEI or any HEI subsidiary. The Board has determined that he is independent. Among the many skills and qualifications that Mr. Watanabe brings to the Board, the Board considered: (i) his extensive experience in corporate and nonprofit governance from serving on other public company, private company and nonprofit boards; (ii) his reputation for effective consensus and relationship building and business and community leadership, including leadership of his former law firm; (iii) his willingness to spend time advising and mentoring members of HEI's senior management; and (iv) his dedication to committing the hard work and time necessary to successfully lead the Board.

        As HEI's Chairman, Mr. Watanabe's key responsibilities are to:

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lead Board and shareholder meetings and executive sessions of the independent directors, including executive sessions at which the performance of the Chief Executive Officer is evaluated by the Board;



•

attend all meetings of the Audit, Compensation and Nominating and Corporate Governance Committees of the Board as an observer and chair the Executive Committee of the Board;Board as its chair. Since May 2011, Mr. Watanabe attends meetings of the Compensation Committee as a member;



•

serve on and/or advise the boards of HEI's primary operating subsidiaries, Hawaiian Electric Company and American Savings Bank, and chair joint executive sessions of the independent directors of HEI and these subsidiary boards;



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work closely with management to develop meeting agendas and materials for the Board and subsidiary boards;



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be available to other Board and subsidiary board members and management for questions and consultation; and



•

ensure and assistfacilitate communications among Board members and Board committees and between the Board and management.

        The Board's Corporate Governance Guidelines provide that if the Chairman and Chief Executive Officer positions are held by the same individual,person, as was the case prior to 2006, or if the Board determines that the Chairman is not independent, the independent directors should designate an independent director to serve as Lead Director."Lead Director". If a Lead Director is designated, the Lead Director's responsibilities would be to: (i) preside




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responsibilities are to: (i) preside at Board and shareholder meetings when the Chairman is not present, (ii) preside at executive sessions of the independent directors, (iii) facilitate communication between the independent directors and the Chairman or the Board as a whole, (iv) call meetings of the nonmanagement or independent directors in executive session, (v) participate in approving meeting agendas, schedules and materials for the Board and (vi) perform other functions described in the Corporate Governance Guidelines or as determined by the Board from time to time.

        The Board believes that its current leadership structure, which provides for an independent nonemployee Chairman, or an independent Lead Director if the Chairman is not independent, is appropriate and effective in light of HEI's current operations, strategic plans and overall corporate governance structure. Several reasons support this conclusion. First, the Board believes that having an independent Chairman or Lead Director has been important in establishing a tone at the top for both the Board and the Company that encourages constructive expression of views that may differ from those of senior management. Second, the Board believes that the presence of an independent Chairman or Lead Director, particularly at this time of growing government and investor scrutiny of public and financial company boards, demonstrates to the Company's regulators and shareholders that the Board is committed to serving the best interests of the Company and its shareholders and not the best interests of management. Third, the Board recognizes that the CompanyHEI has an uncommon corporate governance structure in that the boards of its two primary operating subsidiaries are also composed mostly of nonemployee directors and that the HEI Chairman plays an important leadership role at these subsidiary boards. For instance, in addition to chairing executive sessions of the nonemployee directors and attending meetings of the audit committees of these subsidiary boards, the Chairman leads each subsidiary board in conducting its annual performance evaluationself-evaluation and assistsfacilitates communications between each of these boards and management of the respective subsidiary company andas well as among members of each subsidiary board.


What is the Board's role in risk oversight?


        HEI is a holding company that operates principally through its operating electric public utility and bank subsidiaries. At the holding company and subsidiary levels, the Company faces a variety of risks, including operational risks, regulatory and legal compliance risks, credit and interest rate risks, competitive risks, liquidity risks and liquiditystrategic and reputational risks. Developing and implementing strategies to manage these risks is the responsibility of management, and that responsibility is carried out by assignments of responsibility to various officers and other employees of the Company under the direction of HEI's Chief Financial Officer, who also serves as HEI's chief risk officer. The role of the Board is to oversee the management of these risks.

        The Board's specific risk oversight functions are as follows:

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The Board has approved a consolidated enterprise risk management (ERM) system recommended by management. The system is designed to identify and assess risks atacross the holding company and subsidiary levelsHEI enterprise so that information regarding the Company's risks can be reported to the Board, along with proposed strategies for mitigating these risks. The structure of the ERM system is decentralized, with separate chief risk officers at each of Hawaiian Electric Company and American Savings Bank. The chief risk officer of Hawaiian Electric Company is also responsible for identifying, assessing and reporting risks at the Company'sHEI's other electric utility subsidiaries that operate on the neighbor islands of Hawaii, Maui, Molokai and Lanai. Each subsidiary chief risk officer reports directly to the respective subsidiary President and functionally to HEI's chief risk officer.officer, who reviews such risks on a consolidated basis. The Board believes that this decentralized risk management structure is appropriate and effective for the Company's diverse operations and holding company structure, because it allows for industry-specific risk identification and management at the subsidiary levels while also ensuring an integrated and consolidated view of risk at the holding company level by HEI's chief risk officer. In connection with approving this ERM system, the Board reviewed a catalog of




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with approving this ERM system, the Board reviewed a catalog of risks and management's assessment of those risks reported by HEI's chief risk officer. As part of the Board's ongoing risk oversight, HEI's chief risk officer is responsible for providing regular reports to the Board and Audit Committee on the status of those risks, any changes to the risk catalog or management's assessment of those risks, and any other risk management matters that the Board may request from time to time. The Board and Audit Committee also receive reports from HEI's internal auditor evaluating the effectiveness of management's implementation of the approved ERM system.

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The Board has assigned to the Compensation Committee the specific risk oversight responsibility of reviewing whether the Company's compensation policies or practices are reasonably likely to have a material adverse effect on the Company and of recommending new or revised policies and practices to address any such risks identified. Included in this oversight responsibility is the Compensation Committee's review and evaluation of American Savings Bank's compensation practices for compliance under newwith regulatory guidance on sound incentive compensation plans. The Compensation Committee reports the results of its review and any recommendations to the Board. The results of the Compensation Committee's review are also communicated to the Audit Committee through HEI's chief risk officer. Both the Audit and Compensation Committees are composed entirely of independent directors.



•

The Board has assigned to the Audit Committee the specific risk oversight responsibilities of (i) reviewing the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, (ii) overseeing HEI's Code of Conduct compliance program and (iii) establishing procedures for direct reporting of potential accounting and auditing issues to the Audit Committee. The Audit Committee reports to the Board each quarter regarding these matters.



•

The Board has also assigned to the Audit Committee the responsibility of assisting the Board in overseeing the overall risk management strategy of the Company. In order to assist the Board with overall risk oversight, the Audit Committee is specifically required to discuss policies with respect to risk assessment and risk management, including the guidelines and policies governing the process by which risk assessment and risk management are undertaken at the Company, and to report to the Board the committee's discussion and findings so that the entire Board can respond toconsider changes in the Company's risk profile.



•

In addition to overall risk oversight by the HEI Board, the boards of HEI's primary operating subsidiaries, Hawaiian Electric Company and American Savings Bank, are specifically responsible for overseeing risks at their respective companies and may assign certain risk-related responsibilities to their respective audit or other committees. In particular, the subsidiary bank boardcompanies. The Hawaiian Electric Company Board has retained overallassigned responsibility for ongoing oversight of risk management responsibility for bank risksto its Audit Committee and the board functions as a risk committee of the whole.American Savings Bank Board has assigned such responsibility to its new Risk Committee effective January 1, 2012. Under the decentralized ERM structure discussed above, risk management activities at the subsidiary levelslevel are reported to these committees and to the subsidiary boards through the subsidiary chief risk officers. The HEI Board and/or Audit Committee may also be invited to participate in risk oversight discussions by these subsidiary boards and/or audit committees. The information from these subsidiary board or auditand committee sessions are also reported, on at least a quarterly basis, to the HEI Board by the subsidiary chief risk officers (or their representatives), who functionally report to HEI's chief risk officer on risk management matters. These subsidiary boards are composed mostly of nonemployee directors. The subsidiary audit committees are composed entirely of nonemployee directors who meet the independence requirements for audit committee members of companies listed on the New York Stock Exchange.




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•

At least annually, the Board conducts a strategic planning and risk review. As part of this review, the Board reviews fundamental financial and business strategies and assesses the major




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risks facing the Company and options to mitigate those risks. To facilitate strategic planning through constructive dialogue among management and Board members, members of management who are not directors may be invited to participate in the review. Based on the review, the Board and senior management, including the HEI chief risk officer, identify key issues to be addressed during the course of the next calendar year.

        The Board believes that risk oversight is one of the areas in which having an independent Chairman or Lead Director is especially important in order to ensure that views that may differ from those of management are expressed. Since the HEI Chairman attends the meetings of the Board, the subsidiary boards and their respective committees, the HEI Chairman is also in a unique position to assist with communications regarding risk oversight and risk management among the Board and its committees, between the subsidiary boards and their respective committees and between directors and management.

How does the Board select nominees for the Board?

        The Board believes that there are skill sets and qualities and attributes that should be represented on the Board as a whole but do not necessarily need to be possessed by each director. The Nominating and Corporate Governance Committee and the Board, thus, considerconsiders the qualifications and attributes of directors and director candidates not only individually but also in the aggregate and in light of the current and future needs of HEI and its subsidiaries.

        The Nominating and Corporate Governance Committee of the Board assists the Board in identifying and evaluating persons for nomination or renomination for Board service. To identify qualified candidates for HEI Board membership, the committee may consider persons who are serving on its subsidiary boards as well as persons suggested by Board members, management and shareholders or may retain a third-party search firm to help identify potentially qualified candidates. The committee's evaluation process does not vary based on whether or not a candidate is recommended by a shareholder.

        Once a person is identified as a potential director candidate, the committee may review publicly available information to assess whether the candidate should be further considered. If so, a committee member or designated representative for the committee will contact the person. If the person is willing to be considered for nomination, the person is asked to provide additional information regarding his or her background, his or her specific skills, experience and qualifications for Board service, and any direct or indirect relationships with the Company. In addition, one or more interviews may be conducted with committee and Board members and committee members may contact one or more references provided by the candidate or others who would have first-hand knowledge of the candidate's qualifications.qualifications and attributes.

        In evaluating the qualifications and attributes of each potential candidate (including incumbent directors) for nomination or renomination,re-nomination, the committee considers:

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the candidate's qualifications, consisting of his/her knowledge (including relevant industry knowledge), understanding of the Company's businesses, experience, skills, substantive areas of expertise, financial literacy, innovative thinking, business judgment, achievements and other factors required to be considered under applicable laws, rules or regulations;



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the candidate's attributes, comprising independence, personal and professional integrity, character, reputation, ability to represent the interests of all shareholders, time availability in light of other commitments, dedication, absence of conflicts of interest, diversity, appreciation of multiple cultures, commitment to deal responsibly with social issues and other stakeholder

concerns and other factors that the committee considers appropriate in the context of the needs of the Board;




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familiarity with and respect for corporate governance requirements and practices;



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with respect to incumbent directors, the annual self-evaluation of the individual director, his or her current qualifications and his or her contributions to the Board;



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the current composition of the Board and its committees; and



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intangible qualities of the candidate including the ability to ask difficult questions and, simultaneously, to work collegially with members of the Board, as well as to work effectively with management.

        The Board considers the recommendations of the Nominating and Corporate Governance Committee and then makes the final decision whether to re-nominate incumbent directors and whether to approve and extend an invitation to a candidate to join the Board upon appointment or election, subject to any approvals required by law, rule or regulation.

        Ms. Fowler and Mr. Russell, both of whom are new nominees for election as HEI directors but are currently directors of Hawaiian Electric Company and American Savings Bank, respectively, were highly recommended by the Nominating and Corporate Governance Committee based on its observations of the performance of these individuals as directors of these HEI subsidiaries and taking into account their strong experience in the electric power and financial services industries, respectively. Ms. Fowler was recruited to the board of directors of Hawaiian Electric Company in 2009 and Mr. Russell to the American Savings Bank board in 2010, in each instance with the assistance of an international executive search firm.


Does the Board consider diversity in identifying nominees for the Board?


        In assisting the Board to identify qualified director candidates, the Nominating and Corporate Governance Committee considers whether the candidate would contribute to the expertise, skills and professional experience, as well as to the diversity of the Board in terms of race, ethnicity, gender, age and cultural background and professional experience of the candidate.background. The Board believes it functions most effectively with members who collectively possess a range of substantive expertise, skills and experience in areas that are relevant to leading the CompanyHEI in accordance with the Board's fiduciary responsibilities. The Board also believes that having a board composed of members who can collectively contribute a range of perspectives, including perspectives that may arise from being femalea person's gender or a racial minority,ethnicity, improves the quality of the Board's deliberations and decisions because it enables the Board to view issues from a variety of angles and, thus, more thoroughly and completely. As the Company's operations and strategic plans and the Board's composition may evolve over time, the Nominating and Corporate Governance Committee is charged with identifying and assessing the appropriate mix of knowledge areas, qualifications and personal attributes contributed by Board members that will bring the most strategic and decision-making advantageadvantages to the Company.HEI.

        With operations almost exclusively in the state of Hawaii, it is natural and advantageous that our Board be composed largely of members who live and work in the state and have firsthand knowledge of and experience with our customer base and political and regulatory environment. Since a large pool of potential candidates for Board membership come from this state, the Board benefits from the unique racial diversity that exists in Hawaii. If the shareholders vote to elect the three director nominees proposed by the Board for election at the Annual Meeting, the resulting composition of the Board would be as follows: four directors (or 44.4%) who are Caucasian, four directors (or 44.4%) who are Asian American and one director (or 11.1%) who is Caucasian, Asian American and native Hawaiian. Two (or 22.2%) of such nine directors, including a current nominees,nominee, are female.

        The Board also recognizes that, due to Hawaii's geographic isolation from the continental United States and the comparatively small number of publicpublicly-traded companies, banks and regulated utilities based in Hawaii, the Board also benefits from having among its members directors who have gained business experience at companies located in other states because those Board members can and have contributedcontribute valuable information about experiences they have had working at or serving on the boards of other public




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companies and companies in similar industries, which also contributes to the breadth of perspectives on the Board.




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How can shareholders communicate with the directors?


        Interested parties, including shareholders, desiring to communicate with the Board, any individual director or the independent directors as a group regarding matters pertaining to the business or operations of HEI may address their correspondence in care of the Corporate Secretary, Hawaiian Electric Industries, Inc., P.O. Box 730, Honolulu, HI 96808-0730. The HEI Corporate Secretary may review, sort and summarize all such correspondence in order to facilitate communications to the Board. In addition, the HEI Corporate Secretary has the authority and discretion to handle any director communication that is an ordinary course of business matter—including routine questions, complaints, comments and related communications that can appropriately be handled by management. Directors may at any time request copies of all correspondence addressed to them. The charter of the HEI Audit Committee, which is available for review at www.hei.com, sets forth procedures for submitting complaints or concerns regarding financial statement disclosures, accounting, internal accounting controls or auditing matters on a confidential, anonymous basis.





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Board of Directors

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Who are the independent directors of the Board?


        Under HEI's Corporate Governance Guidelines, a majority of Board members must qualify as independent under the listing standards of the New York Stock Exchange (NYSE) and any additional requirements as determined by the Board from time to time.

•

For a director to be considered independent under NYSE listing standards, the Board must determine that the director does not have any direct or indirect material relationship with HEI or its subsidiaries apart from his or her service as a director. The NYSE listing standards also specify circumstances under which a director may not be considered independent, such as when the director has been an employee of the Company within the last three fiscal years, if the director has had certain relationships with the Company's external or internal auditor within the last three fiscal years or when the Company has made or received payments for goods or services to entities with which the director or an immediate family member (as defined by NYSE) of the director has specified affiliations and the aggregate amount of such payments in any year within the last three fiscal years exceeds the greater of $1 million or 2% of such entity's consolidated gross revenues for the last fiscal year.



•

The Board has also adopted Categorical Standards for Director Independence (HEI Categorical Standards), which are attached as Appendix B and available for review on HEI's website at www.hei.com. The HEI Categorical Standards specify circumstances under which a director may not be considered independent. In addition to the specific circumstances that would preclude an independence finding under the NYSE listing standards, the HEI Categorical Standards provide that a director is not independent whereif HEI and its subsidiaries have made charitable contributions to a nonprofit organization for which the director serves as an executive officer and the aggregate amount of such contributions in any single completed fiscal year of the nonprofit organization within the last three fiscal years exceeds the greater of $1 million or 2% of such organization's consolidated gross revenues for the last fiscal year.

        The Nominating and Corporate Governance Committee and the Board considered the information below, which was provided by the directors and director nominees and/or by HEI or its subsidiaries, concerning relationships between (i) HEI or its subsidiaries and (ii) the director, director nominee, the director's or director nominee's immediate family members (as defined by NYSE) or entities with




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which any of the directors, director nominees or immediate family members have certain affiliations. Based on its consideration of the relationships described below and the recommendations of the Nominating and Corporate Governance Committee, the Board determined at its meeting on February 8, 2011 that all of the nonemployee




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directors and director nominees of HEI (Messrs. Carroll, Fargo, Li, Myers, Russell, Scott, Taketa, Taniguchi and Watanabe and Mses. Daniel andMs. Fowler) are independent. The remaining director, Ms. Lau, is the only employee director of HEI.HEI and therefore is not independent. In addition, the Board had previously determined that Richard W. Gushman, II,Messrs. Carroll and Li, whose service on the Board ended when their terms expired at the 2011 Annual Meeting of Shareholders, and Dr. Daniel, who resigned from the Board effective September 30, 2010, and Diane J. Plotts, who retired from the Board at the 20102011 Annual Meeting of Shareholders, were independent during their service on the Board in 2010.independent.

•

With respect to Messrs. Li, Scott and Taniguchi, and Dr. Daniel, the Board considered the amounts paid during the last three fiscal years to purchase electricity from HEI subsidiaries, Hawaiian Electric Company or Hawaii Electric Light Company (the sole public utilities providing electricity to the islands of Oahu and Hawaii, respectively), by entities employing these directors or in which these directors have ownership interests or other affiliations.directors. None of the amounts paid by any of these entities for electricity (excluding pass-through surcharges for fuel and for Hawaii state revenue taxes) within the last three fiscal years exceeded the thresholds in the NYSE listing standards or HEI Categorical Standards that would automatically result in a director not being independent (i.e., the greater of $1 million or 2% of such entity's consolidated gross revenues for the last fiscal year). The Board also considered that Hawaiian Electric Company and Hawaii Electric Light Company are the sole source of electric power on the islands of Oahu and Hawaii, respectively, and that the rates charged by these public utilities for electricity are fixed by state regulatory authority. Since purchasers of electricity from Hawaiian Electric Company and Hawaii Electric Light Company have no choice as to supplier and no ability to negotiate rates or other terms, the Board determined that these relationships do not impair the independence of these directors.



•

With respect to Messrs. Scott and Taketa, and Dr. Daniel, the Board considered the amount of charitable contributions during the last three fiscal years from HEI and its subsidiaries to nonprofit organizations where these directors serve as employees or executive officers. None of the contributions made to such nonprofit organizations within the last three fiscal years exceeded the threshold in the HEI Categorical Standards that would automatically result in a director not being independent (i.e., the greater of $1 million or 2% of such organization's consolidated gross revenues for the last fiscal year). In addition, no donation made byThe Board also considered the Company exceeded $200,000 per entity in any single fiscal year during the last three fiscal years. In determining that none of these relationships affected director independence, the Board consideredfact that Company policy requires that charitable contributions from HEI or its subsidiaries to entities where an HEI director serves as an executive officer, and where the director has a direct or indirect material interest, and the aggregate amount donated by HEI and its subsidiaries to such organization would exceed $120,000 in any single fiscal year, be preapproved by the Nominating and Corporate Governance Committee and ratified by the Board.



•

With respect to Messrs. Carroll andMr. Watanabe, and Dr. Daniel, the Board considered a preferential rate mortgage loansloan in effect prior to January 2011 made to themhim by HEI's subsidiary, American Savings Bank, including the preferential rate mortgage loanswhich loan was described under "Other Relationships and Related Person Transactions—Are there any related person transactions with HEI or its subsidiaries?" belowin the proxy statement for the 2011 Annual Meeting of Shareholders, and determined that these relationshipsthis loan did not affect theirhis independence. As of June 30, 2006, American Savings Bank no longer extends preferential rate loans to directors and, effective as ofsince January 2011, no HEI nonemployee director continues to havehas had a preferential rate mortgage loan from American Savings Bank.



•

With respect to Messrs. Fargo, Myers, Scott, Taketa, Taniguchi and Watanabe, the Board considered other director or officer positions held by those directors at entities for which anotheran HEI director or




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officer serves as a director or trustee and determined that none of these relationships affected the independence of these directors. None of these relationships resulted in a compensation committee interlock or would automatically preclude an independence finding under the NYSE listing standards or HEI Categorical Standards.

•

With respect to Mr. Carroll, the Board considered that his son was employed in a nonofficer position by HEI subsidiary American Savings Bank until early 2010 and determined that this relationship did not affect Mr. Carroll's independence as a director.




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How often did the Board meet in 2010?2011?


        In 2010,2011, there were nineseven regular meetings and noone special meetingsmeeting of the Board. All directors attended at least 75% of the combined total number of meetings of the Board and Board committees on which they served.


Does the Board meet in executive session without management present?


        The nonemployee directors meet regularly in executive sessions without management present. In 2010,2011, these sessions were chaired by Mr. Watanabe, who is the Chairman of the Board and an independent nonemployee director. Mr. Watanabe may request from time to time that other nonemployee directors chair the executive sessions.


Did all directors attend last year's Annual Meeting?


        TenEight of HEI's twelvenine directors attended the 20102011 Annual Meeting of Shareholders. HEI encourages all directors to attend each year's Annual Meeting of Shareholders.


Does the Board evaluate itself?


        The Board conducts annual evaluations to determine whether it and its committees are functioning effectively. In addition, each director annually evaluates his or her performance as a director andAs part of the evaluation process, each member of the Audit, Compensation and Nominating and Corporate Governance Committees annually evaluates the performance of each committee on which he or she serves. Each director up for reelection also evaluates his or her own performance. Beginning with evaluations conducted in early 2012, each nonemployee director completes a peer evaluation of each of the other nonemployee directors. The evaluation process is overseen by the Nominating and Corporate Governance Committee, in consultation with the Chairman. The chairperson ofChairman meets with each director individually to provide feedback from the Nominating and Corporate Governance Committee or the Chairman may meet with individual directors to discuss their performance, as he or she deems appropriate.peer evaluations.




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Committees of the Board

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What committees has the Board established and how often did they meet?


        The Board has four standing committees: Audit, Compensation, Executive and Nominating and Corporate Governance. Members of these committees are appointed annually by the Board, taking into consideration the recommendations of the Nominating and Corporate Governance Committee. The table below shows committee members during 20102011 and the number of meetings of each committee held in 2010.2011.

Name		Audit		Compensation		Executive		Nominating and Corporate Governance			Audit		Compensation		Executive		Nominating and Corporate Governance
Don E. Carroll(1)				X									X
Shirley J. Daniel(2)		X									X
Thomas B. Fargo (1)		X		X	(2)			X					X(3)				X
Richard W. Gushman, II (3)								X
Peggy Y. Fowler (4)											X
Constance H. Lau (4)(5)						X									X
Victor H. Li(1)				X									X
A. Maurice Myers				X									X
Diane J. Plotts (5)		X	(2)	X		X
Keith P. Russell (4)											X
James K. Scott(6)		X						X			X						X
Kelvin H. Taketa								X	(2)								X(3)
Barry K. Taniguchi (6)		X	(2)			X					X(3)				X
Jeffrey N. Watanabe(7)						X	(2)						X		X(3)
Number of Meetings in 2010		5		8		0		3
Number of Meetings in 2011											4		5		0		3

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(1)

Mr. Fargo became a memberThe service of Messrs. Carroll and Li on the NominatingBoard and Corporate GovernanceCompensation Committee ended upon expiration of their terms as directors of HEI on October 1, 2010 and resigned from the Audit Committee on October 15, 2010.May 10, 2011.



(2)

Committee Chairperson.



(3)

Mr. GushmanDr. Daniel resigned from the Board and the Nominating and Corporate GovernanceAudit Committee effective September 30, 2010.May 10, 2011.



(3)

Committee Chairperson.



(4)

Ms. Fowler and Mr. Russell joined the Audit Committee on May 10, 2011.



(5)

Ms. Lau is an employee director. All other directors have been determined to be independent. See "Board of Directors—Who are the independent directors of the Board?" above.



(5)

Ms. Plotts retired from the Board and the committees on which she served, effective at the 2010 Annual Meeting of Shareholders.



(6)

Mr. Taniguchi replaced Ms. Plotts as a member of the Executive Committee and became chairperson ofDr. Scott ended his service on the Audit Committee upon her retirement fromon May 10, 2011.



(7)

Mr. Watanabe was appointed to the Board at the 2010 Annual MeetingCompensation Committee in May of Shareholders.2011.




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What are the primary functions of each of the four committees?


        The primary functions of HEI's standing committees are described below. Each committee operates and acts under written charters that are approved by the Board and available for review on HEI's website at www.hei.com. Each of the Audit, Compensation and Nominating and Corporate




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Governance Committees may form subcommittees of its members and delegate authority to its subcommittees.

Audit Committee

        The Audit Committee is responsible for overseeing (i) HEI's financial reporting processes and internal controls, (ii) the performance of HEI's internal auditor, (iii) risk assessment and risk management policies set by management and (iv) the Corporate Code of Conduct compliance program for HEI and its subsidiaries. In addition, this committee is directly responsible for the appointment, compensation and oversight of the independent registered public accounting firm that audits HEI's consolidated financial statements and maintains procedures for receiving and reviewing confidential reports to the committee of potential accounting and auditing concerns. See "Audit Committee Report" below for additional information about the Audit Committee.

        All Audit Committee members are independent and qualified to serve on this committee pursuant to NYSE and SEC requirements and the Audit Committee meets the other applicable requirements of the Securities Exchange Act of 1934. None of the Audit Committee members serve on the audit committees of more than two other public companies.

Compensation Committee

        The responsibilities of the Compensation Committee include (i) overseeing the compensation plans and programs for employees, executives and nonemployee directors of HEI and its subsidiaries, including equity and incentive plans; (ii) reviewing the extent to which risks that may arise from the Company's compensation policies and practices, if any, may have a material adverse effect on the Company and recommending changes to address any such risks; (iii) evaluating the compliance of American Savings Bank's incentive compensation practices under the principles for sound incentive compensation plans for banking organizations and (iv) assessing the independence of any compensation consultant involved in determining or recommending director or executive compensation. See "Compensation Discussion and Analysis—Compensation Process" and "Other Relationships and Related Person Transactions—Compensation Committee Interlocks and Insider Participation" below for additional information about the Compensation Committee.

        All Compensation Committee members are independent and qualified to serve on this committee pursuant to NYSE requirements and also qualify as "outside directors" within the meaning of Section 162(m) of the Internal Revenue Code. At least a majorityAll of the members of the Compensation Committee qualifiesqualify as "nonemployee directors" as defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934. During 2010, a Nonemployee Director Subcommittee made equity grants on behalf of the Compensation Committee; however, the Compensation Committee as a whole has been, and will be, performing this function in 2011. A member of the board of directors of each of Hawaiian Electric Company and American Savings Bank attends meetings of the Compensation Committee as a nonvoting representative of such director's subsidiary board.

Executive Committee

        The Executive Committee may exercise the power and authority of the Board when it appears to its members that action is necessary and a meeting of the full Board is impractical. It may also consider other matters concerning HEI that may arise from time to time between Board meetings. The




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committee is currently composed of the Chairman of the Board, who chairs the committee, the Audit Committee Chairperson and the HEI President and Chief Executive Officer.

Nominating and Corporate Governance Committee

        The functions of the Nominating and Corporate Governance Committee include (i) evaluating the background and qualifications of potential nominees for the Board and for the boards of HEI's subsidiaries, (ii) recommending to the Board the director nominees to be submitted to shareholders for




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election at the next Annual Meeting, (iii) assessing the independence of directors and nominees, (iv) recommending the slate of executive officers to be appointed by the Board and subsidiary boards, (v) advising the Board with respect to matters of Board and committee composition and procedures, (vi) overseeing the annual evaluation of the Board and individual directors, (vii) overseeing talent development and succession planning for senior executive positions and (viii) making recommendations to the Board and the boards of HEI's subsidiaries regarding corporate governance and board succession planning matters. See "Corporate Governance" above for additional information regarding the activities of the Nominating and Corporate Governance Committee.





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Director Compensation

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How is director compensation determined?


        The Board believes that a competitive compensation package is necessary to attract and retain individuals with the experience, skills and qualifications needed for the challenging role of serving as a director of a publicly traded company with a unique blend of highly regulated industries. The Board chooses to compensate nonemployee directors using a mix of cash and HEI Common Stock to allow for an appropriate level of compensation for services, including stock awards that willdesigned to align the interests of directors with those of HEI shareholders. Only nonemployee directors are compensated for their service as directors. Ms. Lau, who is the only employee director of HEI, does not receive separate or additional compensation for serving as a director.

        The Compensation Committee recommends nonemployee director compensation to the Board. In 2010, the committee asked its independent compensation consultant, Frederic W. Cook & Co. Inc. (Fred Cook & Co.), to conduct an evaluation of HEI's nonemployee director compensation practices. Fred Cook & Co. assessed the structure of HEI's nonemployee director compensation program and its value compared to competitive market practices of financial services and utility peer companies, similar to the assessments used in its executive compensation review, which is described under "Compensation Discussion and Analysis—Compensation Program—Elements—How does HEI determine the amount for each element?" below. The 2010 analysis took into consideration the duties and scope of responsibilities of directors, especially in light of HEI's unique business and regulatory structure. The Compensation Committee reviewed the analysis in determining its recommendations to the Board concerning the appropriate nonemployee director compensation, including cash retainers, stock awards and meeting fees. In its meeting on August 9, 2010,fees, and the Board approved the Compensation Committee's recommendations on changes to nonemployee director compensation to be effective on January 1, 2011. Although Ms. Lau is a member of the HEI Board, neither she nor any other executive officer of the Company participated in the determination of nonemployee director compensation. There were no increases to the standard director retainer or meeting fees paid to directors in 2010.




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        Retainer.    The following is the annual2011 cash retainer schedule for nonemployee directors of HEI, including those who also serve as directors of certain HEI subsidiaries,subsidiaries. Cash retainers were paid in quarterly installments in 2010, as well as the new schedule for 2011.installments. Nonemployee directors of HEI who also serve on HEI Board committees, or as directors on subsidiary company boards and committees received fees for service on such boards or committees in 20102011 as indicated below. However, starting in 2011, no additionalNo separate fees are paid to HEI directors for service on subsidiary company boards.boards, although the subsidiary companies pay an allocable portion of the overall fee for an HEI director who serves on the applicable subsidiary board. HEI directors who serve on committees of subsidiary boards will continue to receivereceived fees in 2011 for such committee service, as shown below.

		2010			2011
HEI Nonexecutive Chairman of the Board		$	250,000		$	250,000
HEI Director			40,000			65,000
HEI Audit Committee Chair			15,000			15,000
HEI Compensation Committee Chair			10,000			15,000
HEI Nominating and Corporate Governance Committee Chair			5,000			10,000
HEI Audit Committee Member			6,000			6,000
HEI Compensation Committee Member			4,000			6,000
HEI Nominating and Corporate Governance Committee Member			4,000			4,000
American Savings Bank Director (who is also an HEI Director)			25,000			—
Hawaiian Electric Company Director (who is also an HEI Director)			25,000			—
American Savings Bank Audit Committee Chair			12,500			12,500
Hawaiian Electric Company Audit Committee Chair			10,000			10,000
American Savings Bank Audit Committee Member			5,000			5,000
Hawaiian Electric Company Audit Committee Member			4,000			4,000

		2011
HEI Nonexecutive Chairman of the Board			$250,000
HEI Director			65,000
HEI Audit Committee Chair			15,000
HEI Compensation Committee Chair			15,000
HEI Nominating and Corporate Governance Committee Chair			10,000
HEI Audit Committee Member			6,000
HEI Compensation Committee Member			6,000
HEI Nominating and Corporate Governance Committee Member			4,000
American Savings Bank Audit Committee Chair			12,500
Hawaiian Electric Company Audit Committee Chair			10,000
American Savings Bank Audit Committee Member			5,000
Hawaiian Electric Company Audit Committee Member			4,000

        An American Savings Bank Risk Committee was established effective January 1, 2012. The chair of the American Savings Bank Risk Committee will receive an annual cash retainer of $10,000 and other nonemployee members of the committee will receive an annual cash retainer of $4,000. In order to bring the American Savings Bank Audit Committee fees into alignment with those of the American Savings Bank Risk Committee and Hawaiian Electric Company Audit Committee, the annual cash retainers for the American Savings Bank Audit Committee Chair and members were reduced to $10,000 and $4,000, respectively, effective January 1, 2012.

        Meeting Fees.    Nonemployee directors of HEI and its subsidiary company boards are also entitled to meeting fees for each committee meeting attended (as member or chair) after the minimum number of meetings specified below.

		2010			2011
HEI Audit Committee Member		$	1,250 per meeting after 8 meetings		$	1,500 per meeting after 6 meetings
American Savings Bank Audit Committee Member		$	1,000 per meeting after 8 meetings		$	1,000 per meeting after 8 meetings
Hawaiian Electric Company Audit Committee Member		$	750 per meeting after 8 meetings		$	750 per meeting after 8 meetings
HEI Nominating and Corporate Governance Committee Member		$	500 per meeting after 6 meetings		$	1,500 per meeting after 6 meetings
HEI Compensation Committee Member		$	500 per meeting after 6 meetings		$	1,500 per meeting after 6 meetings

        Stock Awards.    On June 30, 2010,2011, each HEI nonemployee director received 1,800 shares of HEI Common Stock with a value equal to $75,000 as an annual grant under HEI's 19902011 Nonemployee Director Stock Plan as last amended and restated(2011 Director Plan), which was approved by HEI shareholders on May 6, 2008 (1990 Director Plan)10, 2011, for the purpose of further aligning directors' and shareholders' interests. Stock grants to nonemployee directors under the 1990 Director Plan are made annually on the last business day in June.

        As part of the Compensation Committee's 2010 reevaluation of nonemployee director compensation, the committee recommended and the Board approved an increase in the annual stock grants and initially fixed the amount of the grants to a specified dollar value rather than a specifiedThe number of shares. If shareholders approve the HEI 2011 Nonemployee Director Stock Plan at the




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Annual Meeting (see description below under "Proposal No. 2: Approval of 2011 Nonemployee Director Stock Plan"), HEI nonemployee directors on June 30, 2011 will receive shares of HEI Common Stock equal in value to $75,000, with the number of shares to be issued to each HEI nonemployee director to bewas determined based on the closing sales price of HEI Common Stock on the New York Stock Exchange on such date.June 30, 2011. Stock grants to nonemployee directors under the 2011 Director Plan are made annually on the last business day in June.

        Retirement Benefit.    Pursuant to the termination of the HEI Nonemployee Director Plan on December 17, 1996, previously retired directors continue to receive benefits in accordance with the terms of the plan. Upon theirhis retirement from service as a director, Mr. Myers and Ms. Plotts (who retired from the Board in May 2010) areis eligible to receive benefits from the plan in an annual amount of $15,000, paid quarterly, for a period equal to the




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number of years of theirhis active service through December 31, 1996 (7 years for Mr. Myers and 10 years for Ms. Plotts)(6 years). All benefits payable under the plan, whether commenced or not, cease upon the death of the nonemployee director.

        Deferred Compensation.    Nonemployee directors may elect to participate in the HEI Nonemployee Directors' Deferred Compensation Plan, as amended January 1, 2009, which allows any nonemployee director to defer compensation from HEI for service as a director. The plan allows for either lump sum or installment distributions upon the retirement of the director. Upon the death of the director, the balance of the deferred account will be distributed in a lump sum to a designated beneficiary. DirectorsNonemployee directors are also eligible to participate in the new 2011HEI Deferred Compensation Plan for HEIimplemented in 2011 and Hawaiian Electric Company described under "Compensation Discussion and Analysis—Compensation Elements—CanMay named executive officers participate in nonqualified deferred compensation plans?" below.

        Preferential Rate Loans.    Under a program for American Savings Bank directors that has been discontinued since June 30, 2006, certain HEI directors were eligible to receive preferential rate mortgage loans because they were American Savings Bank directors at the time. When this program was discontinued, existing loans were grandfathered. Information regarding the grandfathered loans that nonemployee directors Messrs. Gushman and Watanabe and Mses. Daniel and Plotts had in 2010 is included under "Other Relationships and Related Person Transactions—Are there any related person transactions with HEI or its subsidiaries?" below. All preferential rate mortgage loans to nonemployee directors were either paid off or refinanced at market rates by January 2011.

        Health Benefits.    Directors, at their election and at their cost, may participate in the group employee medical, vision and dental plans generally made available to HEI, Hawaiian Electric Company or American Savings Bank employees.




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Director Compensation Table


        The table below shows compensation paid to the HEI nonemployee directors in 2010.2011.


20102011 DIRECTOR COMPENSATION TABLE


Name		Fees Earned or Paid in Cash ($) (3)			Stock Awards ($) (4)			Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (5)			All Other Compensation ($) (6)			Total ($)				Fees Earned or Paid in Cash ($) (5)		Stock Awards ($) (6)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (7)		Total ($)
Don E. Carroll(1)			75,000			41,301			—			—			116,301			56,991		40,000		—		96,991
Shirley J. Daniel(2)			71,000			41,301			—			25,560			137,861			54,480		40,000		—		94,480
Thomas B. Fargo			84,880			41,301			—			—			126,181			84,000		75,000		—		159,000
Richard W. Gushman, II (1)			55,500			41,301			—			44,513			141,314
Peggy Y. Fowler (3)																		64,038		75,000		—		139,038
Victor H. Li(1)			69,000			41,301			—			—			110,301			25,552		—		—		25,552
A. Maurice Myers			70,000			41,301			6,024			—			117,325			71,000		75,000		5,373		151,373
Diane J. Plotts (2)			34,965			—			—			9,200			44,165
Keith P. Russell (3)																		65,038		75,000		—		140,038
James K. Scott			75,000			41,301			—			—			116,301			71,159		75,000		—		146,159
Kelvin H. Taketa			70,000			41,301			—			—			111,301			75,000		75,000		—		150,000
Barry K. Taniguchi			114,221			41,301			—			—			155,522			93,940		75,000		—		168,940
Jeffrey N. Watanabe			341,812			41,301			—			16,630			399,743
Jeffrey N. Watanabe, Chairman (4)																		318,857		75,000		—		393,857

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(1)

The service of Messrs. Carroll and Li on the HEI Board ended upon expiration of their terms as HEI directors on May 10, 2011. The fees shown above for Mr. GushmanCarroll include his 2011 service on the Hawaiian Electric Company Board and Audit Committee, which began in May 2011, and as the Hawaiian Electric Company Board's non-voting representative to the HEI Compensation Committee, which began in October 2011.



(2)

Dr. Daniel resigned from the HEI Board effective September 30, 2010.



(2)

Ms. Plotts retired fromMay 10, 2011 but continued to serve on the American Savings Bank Board effective atafter that date. The fees shown for Dr. Daniel above include fees for her 2011 service on the 2010 Annual Meeting of Shareholders.American Savings Bank Board after her service on the HEI Board ended and for her 2011 service on the American Savings Bank Audit Committee.



(3)

Ms. Fowler and Mr. Russell were elected to the HEI Board on May 10, 2011. The fees shown for Ms. Fowler and Mr. Russell above include fees for their 2011 service prior to May 10, 2011 on the boards of Hawaiian Electric Company and American Savings Bank, respectively, and for their 2011 service on the audit committees of Hawaiian Electric Company and American Savings Bank, respectively.



(4)

Mr. Watanabe's fees were for service as director and Chairman of the HEI Board and, beginning in May 2011, as a member of the Compensation Committee. He also served on the American Savings Bank board, the HEI Executive Committee and the American Savings Bank Executive Committee throughout the year, and on the board of Hawaiian Electric Company through May 10, 2011. As explained above, HEI directors do not receive additional compensation for service on the boards of HEI's subsidiaries. His responsibilities are described above under the heading "Corporate Governance—What is the Board's leadership structure?"



(5)

See detail of cash retainers for boardBoard and committee service below.



(4)(6)

Represents the value of unrestrictedAs discussed above under "Director Compensation—How is director compensation determined?", HEI Common Stock determined by reference to the average of the high and low sales prices of $22.945 per share on the New York Stock Exchange on June 30, 2010 of 1,800nonemployee directors received shares of HEI Common Stock valued at $75,000 as the annual grant to HEI directors under the HEI 2011 Nonemployee Director Stock Plan. As indicated in notes (1) and (2) above, Mr. Carroll and Dr. Daniel served on the Hawaiian Electric Company and American Savings Bank Boards, respectively, after the end of their service on the HEI Board in May 2011. On June 30, 2011, each of Mr. Carroll and Dr. Daniel received shares of HEI Common Stock valued at $40,000 as the annual grant under the 1990HEI 2011 Nonemployee Director Plan. NonemployeeStock Plan for directors of HEI subsidiaries who do not receive any restricted stock, restricted stock units or stock option awards.also serve on the HEI Board.





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(5)(7)

Pension benefits for Mr. Myers and Ms. Plotts were frozen in 1996, when the HEI Nonemployee Director Retirement Plan was terminated. Accordingly, theyhe no longer receivereceives credit for their activehis service after 1996. For both Mr. Myers and Ms. Plotts, the1996 under that Plan. The change in pension value reflects only their respective agesthe change in his age and changeschange in actuarial factors, such as discount rate and mortality assumptions. Ms. Plotts had a negative change in pension value from December 31, 2009 to the date of her retirement in May 2010.



(6)

Represents the difference between the market interest rate at the time of the original loan and the preferential interest rate on loans by American Savings Bank to Messrs. Gushman and Watanabe and Mses. Daniel and Plotts. Each of these loans was made prior to 2006, when American Savings Bank established a policy to not extend preferential rate loans to directors. Preferential rate loans to directors that existed at the time this policy was established in 2006 were grandfathered. All such preferential rate loans made to nonemployee directors were either paid off or refinanced at market rates by January 2011.




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        The table below shows cash retainers paid to HEI nonemployee directors in 2010 for each board and committee service (including subsidiary boards and committees) on which each director served in 2010 and for service as nonexecutive HEI Chairman in 2010.2011.

Detail of Cash Retainers for Board and Committee Service																										Detail of Cash Retainers for Board and Committee Service
Name		HEI Board Retainer ($)			HEI Comm. Retainer ($)			HEI Chairman of the Board Retainer ($)			HECO Board Retainer ($)			HECO Audit Comm. Retainer ($)			ASB Board Retainer ($)			ASB Audit Comm. Retainer ($)			Total (1) ($)				HEI Board Retainer ($)			HEI Comm. Retainer ($)			HEI Chairman of the Board Retainer ($)			HECO Board Retainer ($)			HECO Audit Comm. Retainer ($)			HECO Rep to Comp Comm. Retainer ($)			ASB Board Retainer ($)			ASB Audit Comm. Retainer ($)			Total ($)
Don E. Carroll			40,000			5,000			—			—			—			25,000			5,000			75,000				23,393			2,159			—			25,714			2,572			1,353			—			1,800			56,991
Shirley J. Daniel			40,000			6,000			—			—			—			25,000			—			71,000				23,393			2,159			—			—			—			—			25,714			3,214			54,480
Thomas B. Fargo			40,000			16,728			—			25,000			3,152			—			—			84,880				65,000			19,000			—			—			—			—			—			—			84,000
Richard W. Gushman (2)			30,000			3,000			—			—			—			18,750			3,750			55,500
Peggy Y. Fowler																												41,786			3,857			—			14,395			4,000			—			—			—			64,038
Victor H. Li			40,000			4,000			—			—			—			25,000			—			69,000				23,393			2,159			—			—			—			—			—			—			25,552
A. Maurice Myers			40,000			5,000			—			25,000			—			—			—			70,000				65,000			6,000			—			—			—			—			—			—			71,000
Diane J. Plotts (3)			14,493			6,885			—			—			—			9,058			4,529			34,965
Keith P. Russell																												41,786			3,857			—			—			—			—			14,395			5,000			65,038
James K. Scott			40,000			10,000			—			—			—			25,000			—			75,000				65,000			6,159			—			—			—			—			—			—			71,159
Kelvin H. Taketa			40,000			5,000			—			25,000			—			—			—			70,000				65,000			10,000			—			—			—			—			—			—			75,000
Barry K. Taniguchi			40,000			11,753			—			25,000			4,471			25,000			7,997			114,221				65,000			15,000			—			—			1,440			—			—			12,500			93,940
Jeffrey N. Watanabe			40,000			—			250,000			25,000			—			25,000			1,812			341,812
Jeffrey N. Watanabe, HEI Chairman																												65,000			3,857			250,000			—			—			—			—			—			318,857

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(1)

Additional committee meeting fees paid in 2010 were $1,000 to each of Messrs. Carroll, Fargo and Myers for attending two Compensation Committee meetings in excess of six meetings at $500 per meeting.



(2)

Mr. Gushman resigned from the Board effective September 30, 2010.



(3)

Ms. Plotts retired from the Board effective at the 2010 Annual Meeting of Shareholders.





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Proposal No. 2: Approval of 2011 Nonemployee Director Stock Plan

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        HEI's Compensation Committee and Board believe that the use of stock grants as a major part of the compensation to the nonemployee directors of HEI and its operating subsidiaries, whose oversight contributions are essential to the growth and success of HEI's business, best strengthens the commitment of these individuals to HEI and its subsidiaries, motivates such persons to faithfully and diligently perform their oversight responsibilities and attracts and retains competent and experienced persons whose efforts will contribute to the growth and success of HEI. To that end, on February 8, 2011, the Board approved the Hawaiian Electric Industries, Inc. 2011 Nonemployee Director Stock Plan (2011 Director Plan), subject to the approval of HEI's shareholders. The purpose of the 2011 Director Plan is to motivate nonemployee directors of HEI and its operating subsidiaries to continue as directors, to align their interests with those of HEI's shareholders, and to increase their efforts to promote HEI's business. Subject to shareholder approval of the 2011 Director Plan, no new awards will be made under HEI's 1990 Nonemployee Director Stock Plan, as last amended and restated on May 6, 2008 (1990 Director Plan). If shareholders do not approve the 2011 Director Plan, it will have no effect and awards may continue to be granted under the 1990 Director Plan. There currently are 46,678 shares of HEI Common Stock reserved for issuance and unissued under the 1990 Director Plan.

        The 2011 Director Plan is being submitted to HEI's shareholders in order to ensure compliance with the New York Stock Exchange (NYSE) listing standards concerning shareholder approval of equity compensation plans. The NYSE listing standards provide that shareholders must be given the opportunity to vote on all equity compensation plans and material revisions to such plans. The 2011 Director Plan is an equity compensation plan (i.e., a plan that provides for the delivery of HEI Common Stock to our nonemployee directors as compensation for their services) and we are asking for your approval of the 2011 Director Plan in compliance with the NYSE listing standards. The purposes,




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terms and benefits under the 2011 Director Plan are summarized below and the full text of the plan is attached to this Proxy Statement as Appendix A.

        Under the NYSE listing standards, the 2011 Director Plan will be approved if a majority of the votes cast are in favor of such approval, so long as the total votes cast represent more than 50% of all shares entitled to vote. Abstentions will be considered votes cast and will have the same effect as voting against the proposal. Broker nonvotes will have no effect on the outcome of the vote on the 2011 Director Plan.

        YOUR BOARD RECOMMENDS THAT YOU VOTE"FOR" APPROVAL OF THE 2011 NONEMPLOYEE DIRECTOR STOCK PLAN.


What are the purposes and terms of the 2011 Director Plan?


        The following is a summary of the material terms of the 2011 Director Plan and is qualified in its entirety by the full text of the 2011 Director Plan, which is attached as Appendix A to this Proxy Statement.

        Purposes.    The 2011 Director Plan, if approved by shareholders, will replace the 1990 Director Plan. The purposes of the 2011 Director Plan are to:

•

align the personal interests of nonemployee directors of HEI and its operating subsidiaries with the interests of HEI and its shareholders in enhancing shareholder value;



•

provide nonemployee directors of HEI and its operating subsidiaries with incentives to maintain their status as directors and to improve HEI's performance by increasing the level of stock owned by nonemployee directors;



•

encourage and assist nonemployee directors to meet HEI's share ownership guidelines; and



•

provide an additional means of attracting and retaining nonemployee directors.

        Administration of the 2011 Director Plan.    The 2011 Director Plan will be administered in the discretion of a committee which may be the Compensation Committee, a subcommittee of the Compensation Committee or such other committee as may be appointed as administrator from time to time by the Board. The initial administrator of the 2011 Director Plan will be the Compensation Committee.

        Eligibility to Participate.    The 2011 Director Plan provides benefits to individuals who, on the grant date, are nonemployee directors of HEI and nonemployee directors of HEI operating subsidiaries approved as participating companies by the Board (initially Hawaiian Electric Company and American Savings Bank). If the 2011 Director Plan is approved at the Annual Meeting, we expect that eight HEI nonemployee directors, two American Savings Bank nonemployee directors (who are not also HEI directors) and four Hawaiian Electric Company nonemployee directors (who are not also HEI directors) will be eligible to participate in the Plan in 2011.

        Shares Reserved for Issuance under the Plan.    The number of shares of HEI Common Stock reserved for issuance under the 2011 Director Plan is 300,000, subject to adjustment for certain changes in capitalization. The shares to be issued under the Plan may, in whole or in part, be authorized but unissued shares of HEI Common Stock or shares that may be reacquired by HEI in the open markets in private transactions or otherwise. The closing price per share of HEI Common Stock on March 2, 2011 was $24.63.

        Benefits Under the Plan.    The 2011 Director Plan provides for the grant of shares of HEI Common Stock (Stock Payments) to eligible nonemployee directors annually on the Grant Date, which will be each June 30 (or on the next preceding business day if June 30 is not a business day) or, in the case of




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a person who is elected or appointed to serve as a new director after June 30, on the date that such person first becomes a director. The amount of HEI Common Stock to be issued to nonemployee directors under the Plan may be expressed either as a specified number of shares or as a specified dollar value. If the Stock Payment is expressed as a dollar value, then the number of shares to be issued on the Grant Date is determined by dividing the specified dollar value by the Fair Market Value (as defined in the Plan) of a share of HEI Common Stock on the Grant Date, with any resulting fractional share to be paid in cash.

        Under the 2011 Director Plan, individuals who are serving as nonemployee directors of HEI, Hawaiian Electric Company or American Savings Bank on June 30, 2011 (the 2011 Grant Date) will be entitled to the following Stock Payments:

•

The nonemployee directors of HEI on the 2011 Grant Date will be entitled to a Stock Payment valued at $75,000. No additional Stock Payment will be payable to an HEI nonemployee director who also serves as a director of a subsidiary.



•

Each nonemployee director of Hawaiian Electric Company and each nonemployee director of American Savings Bank who is not also a director of HEI on the 2011 Grant Date will be entitled to a Stock Payment valued at $40,000. Only one Stock Payment will be payable to any such director even if he or she serves as a director of both Hawaiian Electric Company and American Savings Bank.

        The amount of the Stock Payment to which participating nonemployee directors may be entitled, and whether the Stock Payment is expressed as a dollar value or in number of shares, may be changed in the discretion of the committee, subject to Board approval and without shareholder approval, but may not be changed more than once between annual meetings of shareholders.

        Shareholder Rights.    No participant in the 2011 Director Plan shall have any rights as an HEI shareholder with respect to any shares of HEI Common Stock except if and when such shares are issued. Recipients of Stock Payments shall have all the rights of a shareholder from and after the Grant Date with respect to the issued shares of HEI Common Stock granted. Once issued as a Stock Payment, the shares of HEI Common Stock thus granted are not subject to forfeiture.

        Transferability of Rights.    No participant in the 2011 Director Plan may assign the right to receive any Stock Payment or any other right or interest under the Plan, contingent or otherwise, or cause or permit any encumbrance, pledge or charge of any nature to be imposed on any such right to receive a Stock Payment. Each participant is responsible for complying with all applicable federal and state securities and other applicable laws relating to participation in the Plan or the shares received as a Stock Payment.

        Amendment or Termination of the Plan.    The Board in its discretion may amend, suspend or terminate the 2011 Director Plan at any time. However, no such amendment will, without approval of the shareholders of HEI, change the class of persons eligible to receive Stock Payments under the Plan (except for changing the subsidiaries whose nonemployee directors are eligible to participate in the Plan) or otherwise modify the requirements as to eligibility for participation in the Plan, or increase the total number of shares of HEI Common Stock which may be issued under the Plan (except for adjustment in the event of certain changes in capitalization). Moreover, no amendment, suspension or termination of the 2011 Director Plan will impair or adversely affect any right or obligation under any Stock Payment previously granted under the Plan. Notwithstanding the foregoing, the Board may, without further action by the shareholders of HEI, amend the 2011 Director Plan or modify the grants of stock under the Plan as described above under "Benefits Under the Plan" or in response to changes in securities or other laws, or rules, regulations or regulatory interpretations thereof, applicable to the Plan, or to comply with stock exchange rules or requirements.




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        Term of the Plan.    The 2011 Director Plan will become effective if it is approved by shareholders at the Annual Meeting and, unless terminated earlier by the Board, will terminate on April 30, 2021.


New 2011 Director Plan Benefits


        The number of shares to be received by nonemployee directors under the 2011 Director Plan cannot be determined since the ultimate value of grants under the Plan depends on several factors, including the market value of HEI Common Stock, whether awards are denominated in dollar value or number of shares, the number of directors and the boards on which they serve and the level of future grants under the Plan. The following table shows the number of shares of HEI Common Stock which current nonemployee directors would have been entitled to receive if the 2011 Director Plan had been in effect in 2010, based on the Fair Market Value of HEI Common Stock on June 30, 2010. The table also shows the estimated number of shares that current nonemployee directors and director nominees who are expected to be serving as such on June 30, 2011 will receive assuming that the Fair Market Value of HEI Common Stock on that date is the Fair Market Value of HEI Common Stock on the record date (March 2, 2011).


NEW PLAN BENEFITS


Nonemployee Director		Number of Shares of HEI Common Stock if 2011 Director Plan had been in effect on 6/30/10 (2)			Number of Shares of HEI Common Stock Estimated to be granted on 6/30/11 (3)
Don E. Carroll (1)			3,342			1,624
Shirley J. Daniel (1)			3,342			1,624
Thomas B. Fargo			3,342			3,045
Victor H. Li			3,342			3,045
A. Maurice Myers			3,342			3,045
James K. Scott			3,342			3,045
Kelvin H. Taketa			3,342			3,045
Barry K. Taniguchi			3,342			3,045
Jeffrey N. Watanabe			3,342			3,045
Nonemployee Director Nominee
Peggy Y. Fowler			—			3,045
Keith P. Russell			—			3,045

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(1)

Mr. Carroll and Ms. Daniel will not be directors of HEI on June 30, 2011, but are expected to be nonemployee directors of Hawaiian Electric Company and American Savings Bank, respectively, and hence eligible to receive Stock Payments in those capacities.



(2)

Based on the closing price on June 30, 2010 of HEI Common Stock on the New York Stock Exchange of $22.44 per share. Each director would also have received a cash payment of $4.49 in lieu of a fractional share had the 2011 Director Plan been in place in 2010.



(3)

Based on the closing price on March 2, 2011 (the record date) of HEI Common Stock on the New York Stock Exchange of $24.63 per share. HEI directors and directors of subsidiary boards who are not also directors of HEI would also receive a cash payment of $1.65 and $0.88, respectively, in lieu of a fractional share based on this assumed stock price.




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Equity Compensation Plan Information


        Information as of December 31, 2010 about HEI Common Stock that may be issued under all of the Company's equity compensation plans was as follows:

Plan category		(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights (1)			(b) Weighted-average exercise price of outstanding options, warrants and rights (2)			(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (3)
Equity compensation plans approved by shareholders			1,131,174		$	20.76			3,953,169
Equity compensation plans not approved by shareholders			—			—			—
Total			1,131,174		$	20.76			3,953,169

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(1)

This column includes the number of shares of HEI Common Stock which may be issued under the HEI 2010 Equity Incentive Plan (EIP) and the 1987 Stock Option and Incentive Plan (SOIP) on account of awards outstanding as of December 31, 2010, including: (a) 77,500 shares that may be issued with respect to restricted stock units granted in 2010 under the EIP assuming that all service conditions are met; (b) 215,500 shares that may be issued under the SOIP upon exercise of outstanding nonqualified stock options and 26,240 of dividend equivalent shares accrued as of December 31, 2010 for such options; (c) 573,244 shares that may be issued under the SOIP with respect to awards made under the 2009-2011 Long-Term Incentive Plan (LTIP) and the 2010-2012 LTIP, assuming that the performance goals for these awards are met at the maximum levels; (d) 69,000 shares issuable with respect to restricted stock units which were granted in 2009 assuming that all service conditions are met and (e) 169,690 shares that could have been issued under performance awards granted in 2008 under the 2008-2010 LTIP and the 2008-2010 supplemental LTIP assuming achievement of all goals at the maximum level and calculated using the closing price of HEI Common Stock on December 31, 2010. The number of shares that may be issued under the LTIP awards is included at the maximum level to show the maximum dilution that may result from these awards; however, shares will only be issued under these awards based upon achievement of the performance goals, and it is expected that a lesser number of shares will ultimately be awarded because it is unlikely that all performance goals will be achieved at maximum levels. For example, the actual number of shares issued under the 2008-2010 LTIP and supplemental LTIP awards was 119,045 shares. The number of shares that may be issued upon the exercise of 450,000 stock appreciation rights (SARs) is not included in this column because the number of shares issued upon the exercise of the SARs is based upon the appreciation in stock price from the date of grant to the date of exercise, converted into shares. As of December 31, 2010, the closing price of HEI Common Stock was $22.79, which was less than the weighted-average exercise price of the shares of $26.13, and accordingly such rights had no intrinsic value and no shares may be issued upon their exercise.



(2)

The weighted average exercise price in this column relates only to the 215,000 shares of HEI Common Stock that may be issued upon exercise of outstanding options. Excluded from the weighted average exercise price calculation are shares that may be issued without the payment of additional consideration (including the LTIP and restricted stock unit awards) and the SARS (which had no intrinsic value at December 31, 2010).



(3)

This represents the number of shares available as of December 31, 2010 for future awards, including 3,904,491 shares available for future awards under the EIP and 46,678 shares available for future awards under the 1990 Director Plan. As of May 11, 2010, no new awards may be granted under the SOIP. The shares remaining available for issuance under the 1990 Director Plan may be issued in the form of unrestricted HEI Common Stock, but such shares will no longer be available for issuance if the 2011 Director Plan is approved by shareholders at the Annual Meeting.




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Proposal No. 3:2: Advisory Vote on the Frequency of Future Advisory Votes onto Approve HEI'S Executive Compensation

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        HEI's        Consistent with the advisory vote of our shareholders are being askedat the 2011 Annual Meeting of Shareholders, the Board has determined to casthold an advisory vote on a resolution approvingto approve HEI's executive compensation. The advisory vote on executive compensation described in Proposal No. 4 below, is(commonly referred to as a "say-on-pay" vote. This Proposal No. 3 affords shareholdersvote) each year until the opportunity to cast annext shareholder advisory vote onhow often HEI should include the frequency of say-on-pay votes. Under the Dodd-Frank Act, a say-on-paycompany must hold such a frequency vote in its proxy materials for future annual shareholder meetings. Under this Proposal No. 3, shareholders may vote to have the say-on-pay vote every year, every two years or every three years, or they may abstain from voting on this proposal.

        HEI believes that, at least over theonce every six years. HEI will hold its next several years, say-on-pay advisory votes should be conducted every year so that shareholders may annually express their viewsvote on the Company's executive compensation. Accordingly, unless shareholders express a strong preference thatfrequency of say-on-pay advisory votes be conducted less frequently, the Board anticipates that it will conduct ano later than 2017.

        Like last year, this year's say-on-pay vote again next year. The Compensation Committee, which administers the Company's executive compensation programs, and the Board will value the opinions expressed by shareholders in these votes and will consider the outcome of these votes in making decisions on executive compensation.

        YOUR BOARD RECOMMENDS THAT YOU VOTE FOR A FREQUENCY OF EVERY1 YEAR FOR THE ADVISORY VOTE ON EXECUTIVE COMPENSATION (AS OPPOSED TO EVERY 2 YEARS OR EVERY 3 YEARS OR ABSTAINING).





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Proposal No. 4: Advisory Vote on Resolution Approving HEI'S Executive Compensation

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        In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, HEI is submitting for shareholder advisory vote a proposal on executive compensation, commonly known as a "say-on-pay" proposal. The Board is aware of the significant interest in executive compensation matters on the part of investors and the general public, and recognizes that shareholders should have the ability to voice their views on the Company's compensation policies and practices for executives.

        The "say-on-pay" proposal gives HEI's shareholders the opportunity to endorse or not endorse the Company's executive compensation program through their vote on the following resolution:

        Resolved: that shareholders approve HEI's executive compensation, including its executive compensation policies and practices and the compensation for the named executive officers, as set forth under "Compensation Discussion and Analysis" and "Executive Compensation" in the Proxy Statement for the 20112012 Annual Meeting of Shareholders.

        We urge you to read the "Compensation Discussion and Analysis" and "Executive Compensation" portions of this Proxy Statement that follow this proposal. These sections provide detailed information on the Company's executive compensation policies and practices and the compensation of our named executive officers. The Compensation Committee and Board believe that HEI's primary goals for its executive compensation program areis properly designed to incentincentivize a high level of business performance that creates value for its shareholders and to attract, motivate and retain talented executives who will provide leadership for the Company's success. The Compensation Committee, which is composed entirely of independent directors, seeks to accomplish these goals in a manner that aligns the interests of its executives with the long-term interests of its shareholders and rewards achievement of the Company's financial, operational and strategic goals.

The Compensation Committee and Board believe that these are the appropriate goals for HEI's executive compensation program and that HEI's compensation is properly designed to achieve these goals. Accordingly, the Compensation Committee and Board recommend that you vote in favor of the shareholder resolution approving HEI's executive compensation.




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Compensation Program Design Summary


        In making its compensation decisions, the Compensation Committee considered the following primary components of HEI's 2010 executive compensation program, which are described in greater detail below under "Compensation Discussion and Analysis" and "Executive Compensation," and how these components support HEI's compensation goals. Given the complicated nature of the Company's heavily-regulated subsidiaries, the Compensation Committee believes it is imperative to provide, and believes it has provided, an appropriate mix of compensation components at competitive levels relative to the Company's peers in order to attract and retain the highly qualified executives necessary to manage the Company's operationsgenerate and motivate executives to achieve a high level of performance that generates shareholdersustain such value.

Compensation Element/Eligibility		Description		Linkage to Compensation Objectives
CURRENT YEAR PERFORMANCE
Base Salary All HEI and subsidiary executives, including named executive officers		Salary is a market-competitive, fixed level of compensation.		Attract and retain qualified leaders capable of a high level of performance that builds shareholder value.
Annual Incentive All HEI and subsidiary executives, including named executive officers		Cash award based on achievement of Company goals during the year. Combined with salary, target level of annual incentive provides a market-competitive total cash opportunity. Actual annual incentive payout depends on Company performance. Poor performance yields no incentive payment.		Motivate high business performance in furtherance of creating value for shareholders. Attract and retain qualified leaders capable of a high level of performance that builds shareholder value. Vary compensation based on individual and business unit performance.
LONG-TERM INCENTIVE PLAN
Long-term Performance-based Awards Approximately 25 HEI and subsidiary executives based on job responsibilities, including named executive officers		Long-term incentive award opportunities based on performance and retention objectives for each executive. 2010-2012 long-term incentive plan awards are payable 100% in shares of HEI Common Stock. Award value at different performance levels (minimum, target and maximum) is converted to the number of shares by dividing the planned value by the closing sale price on date of establishing the award opportunity. Level of award is determined at the end of the three-year performance period based on achieving set goals. Payment in HEI shares upon completion of three-year performance period links the compensation value to the long-term performance of HEI. Poor performance yields no incentive payment.		Align executive and shareholder interests and create long-term value. Attract and retain qualified leaders capable of a high level of performance that builds shareholder value. Motivate high business performance in furtherance of creating value for shareholders. Encourage sustained, long-term growth by linking portion of compensation to Company performance over three years.




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Compensation Element/Eligibility		Description		Linkage to Compensation Objectives
Annual Stock-Based Grant Approximately 15 HEI and subsidiary executives, including named executive officers		Annual equity grants made in the form of restricted stock units (RSUs). The amount of an annual equity grant is a percentage of long-term compensation at market-competitive levels. Awards vest over 4 years.		Align executive and shareholder interests and create long-term value. Attract and retain qualified leaders capable of a high level of performance that builds shareholder value. Motivate high business performance in furtherance of creating value for shareholders.
RETIREMENT, PENSION & SAVINGS
HEI Retirement Plans All HEI and subsidiary executives, including named executive officers, except for American Savings Bank executives		Executives participate in the defined benefit pension plans and savings plans under the same terms and conditions as all HEI employees.		Attract and retain qualified leaders capable of a high level of performance that creates shareholder value. Enhance long-term employee well-being.
American Savings Bank 401(k) Plan Select American Savings Bank executives, including its president and CEO (who is a named executive officer)		Separate 401(k) plan established to encourage full-career retention of key American Savings Bank executives.		Attract and retain qualified leaders capable of a high level of performance that creates shareholder value. Enhance long-term employee well-being.
HEI Excess Pay Plan HEI and subsidiary executives (other than American Savings Bank) with compensation expected to exceed applicable IRS limits, including named executive officers		Established in accordance with U.S. Department of Labor and Internal Revenue Service guidelines to provide employees with the ability to earn retirement benefits correlated to salary compensation in excess of limits applicable to defined benefit pension plans.		Attract and retain qualified leaders capable of a high level of performance that creates shareholder value. Enhance long-term employee well-being.
HEI Deferred Compensation Plan All HEI and subsidiary executives, including named executive officers, except for American Savings Bank executives		Nonqualified plan for executives and directors of HEI and Hawaiian Electric Company to defer portions of cash compensation, with certain limitations.		Attract and retain qualified leaders capable of a high level of performance that creates shareholder value. Enhance long-term employee well-being.
OTHER BENEFITS
Change-in-Control Agreements Named executive officers and select HEI and subsidiary executives (7 participants total)		Double-trigger agreements, with 1 times to 3 times payment multiples. (Double-trigger = change in control followed by qualifying loss of employment.)		Attract and retain qualified leaders capable of a high level of performance that creates shareholder value. Encourage focused attention of executives on performance in furtherance of the best interests of shareholders.
HEI Executive Death Benefit Plan Named executive officers employed prior to September 9, 2009		Form of insurance that provides death benefits to executive's beneficiaries in event of executive's death; plan frozen to those participants who were employees as of September 9, 2009.		Enhance long-term employee well-being.


Pay-for-Performance


        The Compensation Committee's allocation of the executive compensation components demonstrates its commitment to pay the Company's executives based on the Company's business performance.




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•

On average, 39% of the targeted cash compensation (base salary plus annual incentive) for 2010 for the named executive officers was based on business results and performance, with the remainder coming from base salary.



•

In addition, 52% of the Chief Executive Officer's total direct compensation (base salary, annual incentives, long-term incentive plan awards for the three-year performance period ended and restricted stock units granted during the year) and 45% (on average) of the total direct compensation of the other named executive officers was in long-term compensation elements (restricted stock units and long-term incentive awards). This emphasis on long-term compensation ensures that the interests of the named executive officers are aligned with the long-term interests of shareholders.

        The following chart demonstrates the relative mix of compensation elements that made up total direct compensation for the named executive officers in 2010:



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*

Percentages for annual and long-term incentives are based on target levels; actual award amounts will be determined at the end of the applicable performance period. Information is not provided in the above table for Mr. Wacker because he did not commence his employment with American Savings Bank until November 15, 2010.

        The financial and strategic objectives HEI executives must achieve to receive awards under HEI's annual and long-term incentive plans are set at challenging levels to motivate a high degree of performance, with an emphasis on longer-term financial success and prudent risk management. Certain performance metrics under the annual incentive plan (net income and return on average common equity) and the long-term incentive plan (net income, total return to shareholders and performance relative to the Edison Electric Institute Index) focus executives on building the value of the HEI enterprise and sustaining that value over time. By tying incentives to sustained value creation, HEI's incentive plans align each executive's interests with the interest of shareholders in long-term growth in the value of their ownership stake in HEI.

        As a result of the Compensation Committee's approach to executive compensation, the annual total direct compensation received by HEI's Chief Executive Officer over the past five years shows a consistent correlation to the performance of the Company. The graph below compares the Chief Executive Officer's annual total direct compensation to HEI's consolidated net income. The dotted line shows adjusted (or non-GAAP) net income, which adjusts GAAP net income to exclude the effects of certain actions taken by American Savings Bank in furtherance of its balance sheet restructure and its multi-year performance improvement initiative (as detailed in the notes to the table).




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Correlation of CEO Annual Total Direct Compensation and HEI Consolidated Net Income




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(1)

Adjustments were made to arrive at the non-GAAP measurement of HEI Consolidated Net Income for long-term incentive plan award purposes for 2008 (excluded from expenses a $35.6 million charge related to American Savings Bank's balance sheet restructuring) and 2009 (excluded from expenses $9.3 million in other than temporary impairment charges, $1.1 million in severance payments, $2.2 million in lease buyout charges and $19.3 million for losses in the sale of American Saving Bank's private-issue mortgage-related securities portfolio).



(2)

HEI's CEO voluntarily waived a $753,999 bonus that she earned for 2009. As a result, her 2009 total direct compensation was lower, and the difference between her 2009 total direct compensation and 2010 total direct compensation was correspondingly greater, than it otherwise would have been. For further detail on 2010 compensation elements, see "Executive Compensation—Summary Compensation Table".


Alignment with Shareholder Interests


        A significant portion of the named executive officers' 2010 total direct compensation took the form of equity awards (restricted stock units and awards under the long-term incentive plan) and HEI's share ownership guidelines require the named executive officers to hold a significant amount of HEI Common Stock to further align their interests with those of shareholders over the long term. In 2010 the Compensation Committee increased the portion of total direct compensation for the named executive officers that will be in the form of equity in the future by designing the 2010-2012 long-term incentive plan awards to be 100% in the form of equity, rather than a portion in cash and a portion in equity as in previous long-term incentive plans.


Effect of Advisory Vote


        While the advisorysay-on-pay vote on executive compensation is nonbinding, the Board understands that it is useful and appropriate to seek the views of shareholders when considering the design and initiation of executive compensation programs. Accordingly, the Board and the Compensation Committee will reviewconsider the votingvote results and seek to determine the cause or causes of any significant negative vote. Voting results provide little detail by themselves, and the Company may consult directly with shareholders to better understand issues and concerns not previously presented.when evaluating HEI's executive compensation program. HEI expects towill continue to engage regularly with shareholders concerned with executive compensation or any other legitimate matter. Shareholders who wantwishing to communicate with HEI'sthe Board or management should visit the Company'sour website at www.hei.com and view "Contact Information."

        YOUR BOARD RECOMMENDSAND COMPENSATION COMMITTEE RECOMMEND THAT YOU VOTE"FOR" APPROVAL OF THE SHAREHOLDER RESOLUTION APPROVING HEI'S EXECUTIVE COMPENSATION.




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Compensation Committee Report

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        The Compensation Committee, which is composed solely of independent directors of the Board, assists the Board in fulfilling its responsibilities with regard to compensation matters, and is responsible under its charter for determining the compensation of HEI's executive officers. The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis that follows. Based on thatsuch review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and that it be incorporated by reference into HEI's 20102011 Annual Report on Form 10-K.

SUBMITTED BY THE COMPENSATION COMMITTEE OF THE
HEI BOARD OF DIRECTORS
Thomas B. Fargo, Chairperson
Don E. Carroll
Victor H. Li
A. Maurice Myers
Jeffrey N. Watanabe




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Compensation Discussion and Analysis

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Who wereExecutive Summary


Objectives and Compensation Components

        Our executive compensation program is designed to: (i) pay for performance, (ii) align the interests of executives with those of our shareholders, (iii) attract, motivate and retain talented executives who can drive the Company's success and (iv) ensure that the cost of executive compensation is reasonable.

        The primary components of executive compensation are base salary, annual incentives (based on achieving performance goals over a one-year period), long-term incentives (contingent on meeting performance goals over rolling three-year periods) and service-based grants of restricted stock units (RSUs) vesting over four years. Other named executive officer benefits include double-trigger change-in-control agreements, eligibility to participate in retirement and nonqualified deferred compensation plans, and limited perquisites. Named executive officer compensation is described in greater detail in the remainder of this Compensation Discussion and Analysis and in the "Executive Compensation" section of this Proxy Statement.

Executive Compensation Practices

        The table below highlights our current executive compensation practices—both what we do (to drive performance) and what we don't do (in order to protect our shareholders' long-term interests):

Our Executive Compensation Practices (What We Do)		See Page
• Tie pay to performance		31
• Balance short-term and long-term compensation to promote sustained performance over time		42
• Review tally sheets when making compensation decisions		36
• Mitigate risk through clawback policy, retention requirements and multiple performance metrics		34
• Double-trigger change-in-control agreements		48
• Peer benchmarking		38
• Stringent stock ownership and retention requirements throughout employment with the Company		35, 67
• Compensation Committee use of an independent compensation consultant		34
• Prohibit employees from speculating in Company stock		67




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Practices We Do Not Employ (What We Don't Do)		See Page
• No employment contracts		*
• No tax gross ups, except under the Executive Death Benefit Plan, which was frozen in 2009		49
• No significant perquisites		49
• No compensation programs that are reasonably likely to create material risk to the Company		34
• No repricing of underwater stock options		*

*

No separate page reference.

2011 Program Changes

        The Compensation Committee and Board made the following changes in 2011 to further strengthen our executive compensation program:

•

For employees (including executive officers) who join HEI or its utility subsidiary at any time after May 1, 2011, retirement benefits have been restructured to reduce costs over the long term. The changes include decreasing the benefit under the defined benefit pension plan and providing for limited matching contributions under HEI's 401(k) Plan. This change did not, however, affect any of the named executive officers, all of whom were employed prior to May 1, 2011.



•

Operations and Maintenance Expense Management was added as a metric for HEI in 2010?
evaluating annual performance of utility executives. This metric is part of the utility's balanced scorecard of performance metrics and incentivizes utility executives to seek better methods to perform operations and maintenance projects. This new metric was used for purposes of the compensation of Mr. Rosenblum, who is the only named executive officer who is a utility employee.

2011 Performance

        For 2010, the named executive officers2011 was a year of HEI were:

1.

Constance H. Lau, Presidentsignificant progress and Chief Executive Officer of HEI; Chairman of the Board of Hawaiian Electric Company (HEI subsidiary); and Chairman of the Board of American Savings Bank (HEI subsidiary).



2.

James A. Ajello, HEI Senior Financial Vice President, Treasurer and Chief Financial Officer.



3.

Chester A. Richardson, HEI Senior Vice President, General Counsel, Secretary and Chief Administrative Officer.



4.

Richard M. Rosenblum, Hawaiian Electric Company President and Chief Executive Officer.



5.

Richard F. Wacker, American Savings Bank President and Chief Executive Officer since November 15, 2010.



6.

Timothy K. Schools, former American Savings Bank President, who resigned on September 10, 2010.


Summary of Results


        Beginning in 2008, HEI initiated strategies to set both of the operating companies on a new course. Hawaiian Electric Company entered into an agreement with the state of Hawaii to help create a clean energy futureaccomplishment for Hawaii, and American Savings Bank set new performance standards while continuing its commitment to help Hawaii's communities grow and prosper. The year 2010 saw major progress on these initiatives and HEI's unique business model continues to provide the Company with a strong balance sheet and the financial resources to invest in the strategic growth of HEI and its operating subsidiaries while providing an attractive dividend to HEI's shareholders.utility and bank subsidiaries. Highlights of our 2011 performance include the following:

        In

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Our 2011 total shareholder return (TSR) of 22.1% exceeded our 2010 HEITSR of 15.3% and its subsidiaries continued to pursue initiatives to improve fundamental operatingoutperformed the 2011 TSR of the S&P 500 Index and financial performance in order to improve profitabilityof our utility and capital efficiency, grow earnings, reduce riskbanking industry peers, which had TSRs of 2.1%, 20.0% and be positioned to benefit as economic conditions improve.-5.2%, respectively.






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We grew HEI's consolidated net income by 21%, earning net income of $138 million, up from $114 million in 2010 and resulting in 2011 diluted earnings per share (EPS) of $1.44 compared to $1.21 diluted EPS in 2010.

The

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HEI also achieved gains in consolidated return on average common equity (ROACE), growing consolidated ROACE from 7.8% in 2010 to 9.2% in 2011.



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In 2011, Hawaiian Electric Company (HEI's electric utility subsidiaries focusedsubsidiary) continued to focus on theirits critical role in achieving the state's clean energy goals, among the most aggressive in the nation. The utilities invested in reliability and clean energy initiatives and sought to recover their costs and earn a return on their investments in a more timely manner. The utilities made progress on their clean energy efforts on numerous fronts in 2010, including the implementation of feed-in tariffs and electric vehicle pilot charging rates, the completion of purchase power agreements with renewable developers and implementation of their biofuels strategies. The utilities received a number of rate case decisions in 2010. In February, Hawaiian Electric Company received interim rate relief for its biofueled peaking unitsuccessfully implemented a new regulatory model (called "decoupling") on Oahu. This new model delinks revenues from kilowatt-hour sales and in August, Mauisupports the utility's efforts to achieve Hawaii's clean energy goals. In July 2011, Hawaiian Electric Company received interim rate relief in its 2010 test year rate case. In November, Hawaii Electric Light Company receivedobtained an interim decision in its 2010 test year rate case. The utilities also received a number of final2011 rate case, decisionsresulting in 2010, including a final rate decision in December 2010 for Hawaiian Electric Company's 2009 test year rate case. A new regulatory model, generally referredan annualized revenue increase of $53.2 million, largely to as "decoupling," was approved byhelp recover costs and investments to increase the Hawaii Public Utilities Commission in August 2010 with implementation approved for Hawaiian Electric Company in December 2010 in connection withuse of clean energy sources and maintain and improve reliable service to its 2009 test year rate case. This "decoupling" business model of delinking revenues from kilowatthour sales in setting electric rates is designed to support Hawaii's efforts to reduce its dependence on oil by aligningcustomers. In addition, the utility with the state's public policyand its subsidiaries completed additional power purchase agreements for energy produced from solar, wind and geothermal sources and fuel contracts for renewable biofuels to promotereplace fossil fuel in its generating units to help Hawaii achieve its goal of 40% of energy efficiency and conservation. This new method of ratemaking will allow the utility to recover its investments and costs in a much more timely manner, and will strengthen the utility's financial viability so that it may attract the capital needed to support reliability and clean energy investments.produced from renewable sources by 2030.



•

In 2010,2011, American Savings Bank successfully completed the(HEI's bank subsidiary) continued its solid performance improvement project that it started in 2008, achieving significant improvements in profitability and cost structure while enhancing its product and service offerings for customers.a challenging business environment. The bank reported higher earnings,recorded strong profitability metrics that compare favorably to its high performing peers, including $59.8 million in net income, a strong 1.2%1.23% return on assets, a 4.12% net interest margin and a 56%57% efficiency ratio for the year. Withyear, as well as grew its loan portfolio by 4.2%. The bank achieved these results while prudently managing risks and maintaining a lagging economic recoveryquality balance sheet, as reflected by its low net charge-off ratio of 0.49%.

        Please see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Hawaii, the bank continuedour Annual Report on Form 10-K for a more detailed description of our 2011 results.

Pay for Performance

        Pay for performance is a fundamental principle of our approach to experience elevated provisions for loan losses, although such losses wereexecutive compensation. For this reason, more than 30% lower than in 2009, and net loan charge-offs remained low compared to the industry. In the second half of 2010, the banking industry was negatively impacted by Regulation E, a federal regulation that prohibits banks from charging customers overdraft fees for ATM and debit card transactions unless the customer opts in to the overdraft service. As a result, the bank experienced lower fee income in 2010. Despite these challenges, the bank maintained strong capital ratios while continuing to provide a healthy dividend to HEI.