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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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Notice of 2013

Annual Meeting

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Proxy Statement

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

Constance H. Lau
President and
Chief Executive Officer

March 22, 201226, 2013

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 9, 2012,8, 2013, at 9:30 a.m., Honolulu time. A map showing the location of the meeting site appears on the last page 75 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 that took place in 20112012 and their impact on you as a shareholder of HEI. HEI officers and Board members will be available before the meeting to talk with you and answer questions.

         Of particular importance, as we did last year, we will be asking you to cast an advisory vote to approve HEI's executive compensation. HEI's executive compensation programs, as well as details of the compensation for HEI's named executive officers, are 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 our appreciation to you for your confidence and support. I look forward to seeing you at the Annual Meeting in Honolulu.

Sincerely,

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Hawaiian Electric Industries, Inc. 900 Richards1001 Bishop Street, Suite 2900 Honolulu, Hawaii 96813

NOTICE OF ANNUAL MEETING

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company performance metrics on which CEO compensation for the three-year period ending on December 31, 2011 was based on two performance metrics—TSRis based. In 2012, CEO realizable pay increased due to HEI's strong core (non-GAAP) results in net income and HEI 3-year return on average common equity (ROACE)—and the Company arrived short of its performance expectations for HEI 3-year ROACE.equity.

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 thesethe charts TDC is comprised ofabove, realizable pay consists of: (1) base salary, for the year,(2) annual incentive compensation received for the year, long-term incentive compensation received for the three-year performance period ending that year andpayouts, (3) restricted stock units awarded, and (4) performance based equity awards (i) paid for cycles wholly contained within the five-year period shown and (ii) estimated for cycles granted in the year.

        Like CEO TDC, which decreased in 2011 compared to 2010five-year period but not yet completed. All equity is valued as illustrated in the charts above, the CEO'sof 12/31/12. A more detailed description of realizable pay, and how it differs from total compensation (shownreported in the Summary Compensation Table, is provided on page 51pages 29-30 of the Proxy Statement) was lower in 2011 than in 2010. TotalStatement.

The Compensation Committee and Board believe that our executive compensation program reflects best practices and is structured to encourage participants to build long-term value in the Summary Compensation Table differs from TDC inCompany for the charts above because it includes the change in pension value, which is affected by interest rates and other actuarial assumptions, and the potential valuebenefit 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.all stakeholders.

		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 9, 2012,8, 2013, at 9:30 a.m., Honolulu 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 22, 2012.26, 2013. The 20112012 Annual Report to Shareholders accompanying this Proxy Statement is not considered proxy soliciting material.

Who can 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 entitlement 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 III directors to serve a three-year term expiring at the 20152016 Annual Meeting of Shareholders.



•

Proposal No 2:  Advisory vote on a resolution approvingto approve HEI's executive compensation.



•

Proposal No 3:  Ratification of the appointment of PricewaterhouseCoopers LLP (PwC) as HEI's independent registered public accounting firm for 2012.2013.

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 22, 2012,26, 2013, a Notice of Internet Availability of Proxy Materials (Notice) will be mailed to certain shareholders and our proxy materials will be posted on the website referenced in the Notice (www.ViewMaterial.com/

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(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 ourHEI's 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 may 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 1, 2012February 28, 2013 (the proxy record date) are entitled to vote.

How many shares are outstanding and entitled to vote?

              On March 1, 2012, 96,222,725February 28, 2013, 98,198,800 shares of HEI Common Stock were outstanding. Each shareholder is entitled to one vote for each share 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 1, 2012February 28, 2013 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 may 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.

              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.



3.

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 on the

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enclosed proxy card vote your shares at the meeting, cross out all three names and insert the name of the 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 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 three 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 HEI 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 HEI 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 HEI Stock Ownership Plan) or the American Savings Bank 401(k) Plan, you will receive instructions explaining how to direct your vote. Your shares will be voted according to your directions. For all of these plans, all shares of HEI Common Stock for which no voting instructions are given will be voted in the same proportion as the shares for which 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. Your 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.matter if a quorum is present.

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Since the votes on executive compensation are advisory only, the 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 the vote when making future executive compensation decisions. Brokers may not vote on this proposal without your instructions because this proposal is considered a nonroutine matter. For this proposal, 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.matter if a quorum is present.

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 card.

Could other matters be decided at the Annual Meeting?

              HEI knows of no business to be presented at the 20122013 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 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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              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 20122013 Annual Meeting as Class III directors to serve until the 20152016 Annual Meeting, or until his or her respective successor shall be duly elected and qualified:

•

Constance H. LauThomas B. Fargo



•

A. Maurice MyersKelvin H. Taketa



•

James K. Scott, Ed.D.Jeffrey N. Watanabe

              Ms. Lau,Admiral Fargo, Mr. MyersTaketa and Dr. ScottMr. Watanabe are all currently incumbent Class III directors of HEI. The Board has determined that Admiral Fargo, Mr. MyersTaketa and Dr. ScottMr. Watanabe 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 20152016 Annual

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Meeting if elected. If a nominee is unable to stand for election at the time of the 20122013 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 III director nominee and for each continuing Class III and III director is provided on pages 6-126-11 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 III DIRECTOR LISTED ABOVE.

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Nominees for Class II Directors Whose Terms Expire at the 2016 Annual Meeting

		Thomas B. Fargo, age 64, director since 2005 Compensation Committee Chair Nominating and Corporate Governance Committee Member Admiral Fargo brings invaluable leadership skills to the HEI Board. Admiral Fargo's experience leading complex organizations, both in Hawaii and on the mainland, provides the Board with significant management expertise. Admiral Fargo has extensive knowledge of the U.S. military (a major customer of HEI's utility subsidiary and key driver of Hawaii's economy) having served as Commander of the U.S. Pacific Command from 2002-2005. Admiral Fargo's leadership, strategic planning and risk assessment skills have proven to be a valuable resource to management and other Board members. Business experience and other public company and HEI affiliate directorships since 2008 • 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 and Audit Committee Member, Matson, Inc., since 2012 • Chairman of the Board and Compensation and Governance Committee Member, Huntington Ingalls Industries, since 2011 • Director, Alexander & Baldwin, Inc., 2011-2012 • 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 and key driver of Hawaii's economy. • 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 58, director since 1993 Nominating and Corporate Governance Committee Chair Mr. Taketa has considerable management experience as an executive leader in Hawaii. Mr. Taketa is one of Hawaii's leading non-profit administrators and has extensive relationships within Hawaii's business and non-profit communities. Having served on the Board for twenty years, Mr. Taketa has contributed significantly to the Board's understanding of Hawaii's distinctive cultural and business environment. Additionally, Mr. Taketa brings the unique ability to build bridges and connect people and organizations, which has made Mr. Taketa a well-respected leader throughout the state of Hawaii. Business experience and other public company and HEI affiliate directorships since 2008 • 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, organizational leadership and leadership development 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 70, director since 1987 Chairman of the Board since 2006 Executive Committee Chair Compensation Committee Member Mr. Watanabe has been one of the most influential figures in Hawaii's business community over the past four decades. His strategic counsel is widely sought by Hawaii's business, political and non-profit leaders, as well as by global businesses seeking to do business in Hawaii. Having served on the Board for over twenty-five years, Mr. Watanabe's in-depth knowledge of HEI significantly contributes to the Board's ability to oversee HEI's operations. As Chairman since 2006, Mr. Watanabe has successfully led HEI through his strategic vision, willingness to make tough decisions, strong consensus-building skills, and communication ability. Mr. Watanabe has been recognized by a number of organizations for his accomplishments, recently being selected as a 2013 Outstanding Director by the Financial Times-Outstanding Directors Exchange. Business experience and other public company and HEI affiliate directorships since 2008 • Managing Partner, Watanabe Ing & Komeiji LLP, 1972-2007 (now retired) • Lead independent director, Alexander & Baldwin, Inc. (A&B) since 2012, director since 2003 and Nominating & Corporate Governance Committee Member • Director, Nominating and Corporate Governance Committee Chair and Compensation Committee Member, Matson, Inc., since 2012 • 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 A&B Nominating & Corporate Governance Committee and the Matson Nominating & Corporate Governance and Compensation Committees. • 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 61, director since 2011 Audit Committee Member Ms. Fowler brings a unique combination of utility and banking knowledge and experience to HEI. Ms. Fowler's prior position as chief executive officer of a NYSE-listed public utility company imparts significant leadership and management expertise to the Board. Additionally, Ms. Fowler's more recent experience of serving on the board of a mainland bank holding company strengthens the Board's capabilities in overseeing the subsidiary bank operations. Business experience and other public company and HEI affiliate directorships since 2008 • Co-Chief Executive Officer, Portland General Electric Company (PGE), 2009 • President and Chief Executive Officer, PGE, 2000-2008 • Director, PGE, 1998-2012 • Chairman of the Board and Executive Committee since 2012 and director since 2009, Umpqua Holdings Corp. • Director and Audit Committee Member, Hawaiian Electric Company, Inc. (HEI subsidiary), 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 CEO. • Environmental 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 wind 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 and analytical 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. • Expertise in financial oversight, regulatory compliance and corporate governance from serving as President (1997-2000), CEO (2000-2008) and Chair (2001-2004) of PGE, as a director for the Portland Branch of the Federal Reserve Bank of San Francisco and as a director and committee member for several private and public companies, including Umpqua Holdings Corporation (publicly traded bank holding company).

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		Keith P. Russell, age 67, director since 2011 Audit Committee Member Mr. Russell has extensive senior management experience in the banking industry. Mr. Russell's many years of executive leadership experience in managing and overseeing bank operations contributes invaluable expertise to the Board. In addition, his prior service as chief risk officer of a large financial institution significantly strengthens the Board's capabilities in overseeing and managing risk within the organization. Mr. Russell also has extensive knowledge and experience from his prior service as an officer of a lender to the electric utility industry. Business experience and other public company and HEI affiliate directorships since 2008 • 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 since 2010, Risk Committee Chair and Audit Committee Member, American Savings Bank, F.S.B. (HEI subsidiary) • Director, Nationwide Health Properties, 2002-2011 • 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.

		Barry K. Taniguchi, age 65, director since 2004 Audit Committee Chair Executive Committee Member Mr. Taniguchi brings to the Board considerable experience as a proven 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 2008 • President and Chief Executive Officer, KTA Super Stores (grocery store chain), since 1989 • President, K. Taniguchi Ltd. (real estate lessor), since 1989 • Director since 2002 and Audit Committee Chair, American Savings Bank, F.S.B. (HEI subsidiary) • Director 2001-2011 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 24 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 2015 Annual Meeting

		Constance H. Lau, age 60,61, 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. DuringOver her more than 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 subsidiaryat both operating company level,subsidiaries, 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 beenbe named to the National Infrastructure Advisory Council (NIAC), which she now chairs, 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 20072008 • Director, since 2004 and Audit Committee Chair and Nominating & Corporate Governance Committee Member, Matson, Inc., since 2012 • Director, Alexander & Baldwin, Inc., 2004-2012
		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 lastfor more than 28 years. • Familiarity with current management and corporate governance practices from her current service as a director, and Audit Committee memberChair and Nominating and Corporate Governance Committee Member for Alexander & Baldwin,Matson, 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 71,72, 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 twenty22 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 20072008 • 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 since 2011and Risk Committee Member, 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 60,61, 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 20072008 • 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 1819 years. • 2728 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 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 60, director since 2011 Audit Committee Member Business experience and other public company and HEI affiliate directorships since 2007 • 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 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 CEO. • Environmental 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 wind 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 and analytical 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. • Expertise in financial oversight, regulatory compliance and corporate governance from serving as President (1997-2000), CEO (2000-2008) and Chair (2001-2004) of PGE, as a director for the Portland Branch of the Federal Reserve Bank of San Francisco and as a director and committee member for several private and public companies, including Umpqua Holdings Corporation (publicly traded bank holding 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 66, director since 2011 Audit Committee Member Business experience and other public company and HEI affiliate directorships since 2007 • 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, 2002-2011 • 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.

		Barry K. Taniguchi, age 64, director since 2004 Audit Committee Chair Executive Committee Member Business experience and other public company and HEI affiliate directorships since 2007 • 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 2001-2011 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 23 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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What are HEI's governance policies and guidelines?

              In 2011,2012, 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 Reserve) and Office of Thrift Supervision (OTS) applicable to HEI as a thriftsavings and loan 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, HEI's bylaws, Corporate Governance Guidelines, Corporate Code of Conduct and charters for the Compensation Executive and Nominating and Corporate Governance Committees were revised as deemed appropriate by the Board. These documents, as most recently revised, as well as other governance documents (such as the charters for the Audit and Executive Committees), 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.

              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;



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



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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;boards and attend meetings of subsidiary board committees;



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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



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ensure and facilitate 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 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". If a Lead Director is designated, the Lead Director's

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responsibilities are to: (i) preside at Board and shareholder meetings when the

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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 growingincreased 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 HEI 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 self-evaluation and facilitates communications between each of these boards and management of the respective subsidiary company as 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 strategic 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 across the HEI 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 HEI'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, 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

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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




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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 encourage employees to take risks that 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 with 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.



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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.



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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 consider changes in the Company's risk profile.



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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. The Hawaiian Electric Company Board has assigned responsibility for ongoing oversight of risk management to its Audit Committee and the American Savings Bank Board has assigned such responsibility to its new Risk Committee effective January 1, 2012.Committee. Under the decentralized ERM structure discussed above, risk management activities at the subsidiary level 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 committees. The information from these subsidiary board and 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 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




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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, considersconsider the qualifications and attributes of incumbent directors and director candidates not only individually but also in the aggregate with all directors 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 renominationre-nomination 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 qualified candidates. The committee's evaluation process does not vary based on whether a candidate is recommended by a shareholder.shareholder, a Board member or a member of management.

              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 and attributes.

              In evaluating the qualifications and attributes of each potential candidate (including incumbent directors) for nomination or 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




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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.




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              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.


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. 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 HEI 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 a person's gender or 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 advantages to 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 suchthe nine directors including a current 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 publicly-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 contribute valuable information about experiences they have had working at or serving on the boards of other public 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.

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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.



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The Board has also adopted Categorical Standards for Director Independence (HEI Categorical Standards), which are 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 circumstances that would preclude independence under the NYSE listing standards, the HEI Categorical Standards provide that a director is not independent if 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 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 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 that all of the nonemployee




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directors and director nominees of HEI (Messrs. Fargo, Myers, Russell, Scott, Taketa, Taniguchi and Watanabe and Ms. Fowler) are independent. The remaining director, Ms. Lau, is the only employee director of HEI and therefore is not independent. In addition, the Board had previously determined that 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 at the 2011 Annual Meeting of Shareholders, were independent.

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With respect to Messrs. Scott, Taketa and Taniguchi, the Board considered 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. None of the amounts paid by 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.




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With respect to Messrs. Scott and Taketa, 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 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). TheIn determining that these charitable donations did not impair the independence of these directors, the Board also considered the fact 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.Committee.



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With respect to Mr. Watanabe,Taketa, the Board considered a preferential rate mortgage loan in effect priormodest fees paid during the last three fiscal years to January 2011 made to him by HEI's subsidiary, American Savings Bank,the charitable foundation for which loan was described under "Other Relationshipshe serves as an executive officer for management of scholarship and Related Person Transactions—Are there any related person transactions with HEI or its subsidiaries?" in the proxy statement for the 2011 Annual Meeting of Shareholders,nonprofit grant programs and determinedconcluded that this loansuch fees did not affect hisMr. Taketa's independence. AsNone of June 30, 2006, American Savings Bank no longer extends preferential rate loans to directors and, since January 2011, nothe fees paid within the last three fiscal years exceeded the threshold in the HEI nonemployeeCategorical Standards that would automatically result in a director has had a preferential rate mortgage loan from American Savings Bank.not being independent (i.e., the greater of $1 million or 2% of such organization's consolidated gross revenues for the last fiscal year).



•

With respect to Messrs. Fargo, Myers, Scott, Taniguchi and Watanabe, the Board considered other director or officer positions held by those directors at entities for which an HEI executive 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 independence under the NYSE listing standards or HEI Categorical Standards.




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How often did the Board meet in 2011?2012?


              In 2011,2012, there were seveneight regular meetings and one special meeting 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 2011,2012, 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?


              EightAll of HEI's nine directors attended the 20112012 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. As 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 withThe nonemployee directors also periodically complete peer 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 Chairman meets with each director individually to provide feedback from the 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 20112012 and the number of meetings each committee held in 2011.2012.

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

		Name				Audit				Compensation				Executive				Nominating and Corporate Governance
		Thomas B. Fargo								X(1)								X
		Peggy Y. Fowler				X
		Constance H. Lau (2)												X
		A. Maurice Myers								X
		Keith P. Russell				X
		James K. Scott																X
		Kelvin H. Taketa																X(1)
		Barry K. Taniguchi				X(1)								X
		Jeffrey N. Watanabe								X				X(1)
		Number of Meetings in 2012				6				5				0				4

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(1)

The service of Messrs. Carroll and Li on the Board and Compensation Committee ended upon expiration of their terms as directors of HEI on May 10, 2011.



(2)

Dr. Daniel resigned from the Board and Audit Committee effective May 10, 2011.



(3)

Committee Chairperson.



(4)

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



(5)(2)

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.



(6)

Dr. Scott ended his service on the Audit Committee on May 10, 2011.



(7)

Mr. Watanabe was appointed to the Compensation Committee in May of 2011.


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




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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. All of the members of the Compensation Committee qualify as "nonemployee directors" as defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934. 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 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 designed 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. Although Ms. Lau is a member of the HEI Board, neither she nor any other executive officer of the Company participates in the determination of nonemployee director compensation.

              The Compensation Committee recommendsreviews nonemployee director compensation no less frequently than once every three years and recommends changes to the Board. In 2010, the committee asked its independent




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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 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, and the Board approved the Compensation Committee's recommendations, to bewhich were effective on January 1, 2011. Although Ms. Lau is a memberDirector compensation for 2012 was unchanged from 2011, except for (i) the establishment of fees for service on the HEI Board, neither she nor any other executive officerAmerican Savings Bank Risk Committee, which began operations in 2012, and (ii) the reduction of fees for service on the American Savings Bank Audit Committee to align with fees for service on the American Savings Bank Risk Committee and Hawaiian Electric Company participated in the determination of nonemployee director compensation.




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              Retainer.    The following is the 20112012 cash retainer schedule for nonemployee directors of HEI, including those who also serve as directors of certain HEI subsidiaries. Cash retainers were paid in quarterly installments. Nonemployee directors of HEI who serve on HEI Board committees received fees for service on such committees in 20112012 as indicated below. No separate fees are paid to HEI directors for service on subsidiary company boards, although the subsidiary companiessubsidiaries pay an allocable portion of the overall fee for an HEI director who serves on the applicable subsidiary board.board and HEI directors who serve on committees of subsidiary boards received fees in 20112012 for such committee service, as shown below.

		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

		Position				2012 Retainer
		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					10,000
		American Savings Bank Audit Committee Member					4,000
		Hawaiian Electric Company Audit Committee Chair					10,000
		Hawaiian Electric Company Audit Committee Member					4,000
		American Savings Bank Risk Committee Chair					10,000
		American Savings Bank Risk 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.

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

              Stock Awards.    On June 30, 2011,29, 2012, each HEI nonemployee director received shares of HEI Common Stock with a value equal to $75,000 as an annual grant under HEI's 2011 Nonemployee Director Stock Plan (2011 Director Plan), which was approved by HEI shareholders on May 10, 2011, for the purpose of further aligning directors' and shareholders' interests. The number of shares issued to each HEI nonemployee director was




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determined based on the closing sales price of HEI Common Stock on the New York Stock Exchange on June 30, 2011.29, 2012. 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 HEIHEI's Nonemployee Director Retirement Plan, on December 17, 1996, previouslywhich provided retirement benefits to nonemployee directors, was terminated in 1996. Directors who were retired directors continuefrom their primary occupation at that time continued to be eligible to receive benefits under the plan based on years of active service as a director until the plan's termination in accordance with1996. Mr. Myers is the terms ofonly current director still eligible to receive benefits under the terminated plan. Upon his retirement from service as a director, Mr. Myers is eligible to receive retirement benefits from the plan in an annual amounttotal of $15,000, paid in quarterly installments, for a period equal to the




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number of years of his active service through December 31, 1996 (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. Nonemployee directors are also eligible to participate in the HEI Deferred Compensation Plan implemented in 2011 (2011 Deferred Compensation Plan) and described under "Compensation Discussion and Analysis—Compensation Elements—May named executive officers participate in nonqualified deferred compensation plans?" below. In 2012, two HEI directors, Messrs. Myers and Taketa, participated in the 2011 Deferred Compensation Plan.

              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 2011.


2011 DIRECTOR COMPENSATION TABLE
2012.

Name		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)		56,991		40,000		—		96,991
Shirley J. Daniel (2)		54,480		40,000		—		94,480
Thomas B. Fargo		84,000		75,000		—		159,000
Peggy Y. Fowler (3)		64,038		75,000		—		139,038
Victor H. Li (1)		25,552		—		—		25,552
A. Maurice Myers		71,000		75,000		5,373		151,373
Keith P. Russell (3)		65,038		75,000		—		140,038
James K. Scott		71,159		75,000		—		146,159
Kelvin H. Taketa		75,000		75,000		—		150,000
Barry K. Taniguchi		93,940		75,000		—		168,940
Jeffrey N. Watanabe, Chairman (4)		318,857		75,000		—		393,857

2012 DIRECTOR COMPENSATION TABLE
		Name				Fees Earned or Paid in Cash ($) (2)				Stock Awards ($) (3)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (4)				Total ($)
		Thomas B. Fargo				84,000				75,000				—				159,000
		Peggy Y. Fowler				75,000				75,000				—				150,000
		A. Maurice Myers (5)				75,000				75,000				5,650				155,650
		Keith P. Russell				85,000				75,000				—				160,000
		James K. Scott				69,000				75,000				—				144,000
		Kelvin H. Taketa (5)				75,000				75,000				—				150,000
		Barry K. Taniguchi				90,000				75,000				—				165,000
		Jeffrey N. Watanabe, Chairman (1)				321,000				75,000				—				396,000

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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. Carroll 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 May 10, 2011 but continued to serve on the American Savings Bank Board after that date. The fees shown for Dr. Daniel above include fees for her 2011 service on the 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 Board and Executive Committee throughout the year, and on the board of Hawaiian Electric Company through May 10, 2011.Committee. As explained above, HEI directors do not receive additional compensation for service on the boards of HEI's subsidiaries.subsidiaries but do receive fees for service on subsidiary committees. His responsibilities are described above under the heading "Corporate Governance—What is the Board's leadership structure?"



(5)(2)

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





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(6)(3)

As discussed above under "Director Compensation—How is director compensation determined?", HEI nonemployee 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.



(4)

As indicated in notes (1) and (2)discussed 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 HEI 2011 Nonemployee Director Stock Plan for directors of HEI subsidiaries who do not also serve on the HEI Board.




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(7)

Pension"Director Compensation—How is director compensation determined?", pension benefits for Mr. Myers were frozen in 1996, when the HEI Nonemployee Director Retirement Plan was terminated. Accordingly, he no longer receivesdoes not receive credit for his service after 1996 under that Plan. The change in pension value reflects only the change in his age and change in actuarial factors, such as discount rate and mortality assumptions.



(5)

In 2012, Messrs. Myers and Taketa each elected to defer 80%, or $60,000, of their fees under the 2011 Deferred Compensation Plan. Neither director had above-market or preferential earnings on nonqualified deferred compensation in 2012.

              The table below shows cash retainers paid to HEI nonemployee directors for board and committee service (including subsidiary boards and committees)committee service) in 2011.2012.

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 ($)			HECO Rep to Comp Comm. Retainer ($)			ASB Board Retainer ($)			ASB Audit Comm. Retainer ($)			Total ($)
Don E. Carroll			23,393			2,159			—			25,714			2,572			1,353			—			1,800			56,991
Shirley J. Daniel			23,393			2,159			—			—			—			—			25,714			3,214			54,480
Thomas B. Fargo			65,000			19,000			—			—			—			—			—			—			84,000
Peggy Y. Fowler			41,786			3,857			—			14,395			4,000			—			—			—			64,038
Victor H. Li			23,393			2,159			—			—			—			—			—			—			25,552
A. Maurice Myers			65,000			6,000			—			—			—			—			—			—			71,000
Keith P. Russell			41,786			3,857			—			—			—			—			14,395			5,000			65,038
James K. Scott			65,000			6,159			—			—			—			—			—			—			71,159
Kelvin H. Taketa			65,000			10,000			—			—			—			—			—			—			75,000
Barry K. Taniguchi			65,000			15,000			—			—			1,440			—			—			12,500			93,940
Jeffrey N. Watanabe, HEI Chairman			65,000			3,857			250,000			—			—			—			—			—			318,857

		Name				HEI Board Retainer ($)				HEI Committee Retainer ($)				HEI Chairman Retainer ($)				HECO Audit Committee Retainer ($)				ASB Audit Committee Retainer ($)				ASB Risk Committee Retainer ($)				Total ($)
		Thomas B. Fargo				65,000				19,000				—				—				—				—				84,000
		Peggy Y. Fowler				65,000				6,000				—				4,000				—				—				75,000
		A. Maurice Myers				65,000				6,000				—				—				—				4,000				75,000
		Keith P. Russell				65,000				6,000				—				—				4,000				10,000				85,000
		James K. Scott				65,000				4,000				—				—				—				—				69,000
		Kelvin H. Taketa				65,000				10,000				—				—				—				—				75,000
		Barry K. Taniguchi				65,000				15,000				—				—				10,000				—				90,000
		Jeffrey N. Watanabe, HEI Chairman				65,000				6,000				250,000				—				—				—				321,000




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Proposal No. 2: Advisory Vote to Approve HEI'SHEI's Executive Compensation

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              Consistent with the advisory vote of our shareholders at the 2011 Annual Meeting of Shareholders, the Board has determined to hold an advisory vote to approve HEI's executive compensation (commonly referred to as a "say-on-pay" vote) each year until the next shareholder advisory vote on the frequency of say-on-pay votes. Under the Dodd-Frank Act, a company must hold such a frequency vote at least once every six years. HEI will hold its next advisory vote on the frequency of say-on-pay votes no later than 2017.

              Like last year, this year's say-on-pay vote gives HEI's shareholders the opportunity to endorse or not endorse the Company's executive compensation program through their voteby voting 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 20122013 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 executive compensation program is properly designed to incentivize a high level of business performance that creates long-term value for shareholders and to attract, motivate and retain the highly qualified executives necessary to generate and sustain such value.

              While the say-on-pay vote is nonbinding, the Board and Compensation Committee willand Board consider the vote results when evaluating HEI's executive compensation program. HEI will continue to engage regularly with shareholders concerned with executive compensation or any other legitimate matter. Shareholders wishing to communicate with the Board or management should visit our website at www.hei.com and view "Contact Information."

              YOUR BOARD AND COMPENSATION COMMITTEE RECOMMEND THAT YOU VOTE"FOR" APPROVAL OF THE 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, has reviewed and discussed with management the Compensation Discussion and Analysis that follows. Based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into HEI's 20112012 Annual Report on Form 10-K.

SUBMITTED BY THE COMPENSATION COMMITTEE OF THE
HEI BOARD OF DIRECTORS
Thomas B. Fargo, Chairperson
A. Maurice Myers
Jeffrey N. Watanabe




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Compensation Discussion and Analysis

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Executive Summary


              The Compensation Committee and Board believe that our executive compensation program, described in this Compensation Discussion and Analysis, reflects best practices and is structured to encourage participants to build long-term value in the Company for the benefit of our shareholders and all stakeholders.

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 in installments 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)performance and manage risk) 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		Link pay to performance		31		27-28
		•		Utilize rigorous performance conditions that encourage long-term value creation				38-44
		•		Balance short-termshort- and long-term compensation to promote sustained performance over time		42		40
		•		Benchmark toward the competitive median in setting compensation levels				36-37
		•		Review tally sheets when making compensation decisions		36		34
		•		Mitigate risk through a clawback policy, retention requirements and multiple performance metrics		34
• Double-trigger change-in-control agreements		48
• Peer benchmarking 33		38
		• Stringent		Maintain double-trigger change-in-control agreements				46
		•		Require significant stock ownership and retention requirements throughout employment with the Company		35, 67
• Compensation Committee use of an independent compensation consultant		3433, 64
		•		Prohibit employees from speculatingpledging and many transactions in Company stock, including selling short, holding securities in a margin account, or trading in options, warrants, puts, calls or similar instruments		67
	64




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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		46
		•		No significant perquisites		49		46-47
		•		No compensation programs that are reasonably likely to create material risk to the Company		34		32
		•		No repricing of underwater stock options equity-based grants				*
		*  No separate page reference.

*

No separate page reference.




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20112012 Program Changes

              The Compensation Committee and Board made the following changes in 20112012 to further strengthen our executive compensation program:

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For employees (including executive officers) who join HEI or its utility subsidiary at any time after May 1, 2011, retirement benefits have been restructuredStrategic initiatives goals, emphasizing progress on projects related to reduce costs overgrowth, community affairs, and people and culture, were added to the long term. The changes include decreasing the benefit under the defined benefit pension planannual incentive goals for Messrs. Ajello and providing for limited matching contributions underRichardson, HEI's 401(k) Plan. This change did not, however, affect anyExecutive Vice President, Chief Financial Officer and Treasurer and HEI's Executive Vice President, General Counsel, Secretary and Chief Administrative Officer, respectively, to promote achievement of the named executive officers, all of whom were employed priorkey milestones related to May 1, 2011.those initiatives.



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OperationsUtility Consolidated Plant Additions and Maintenance Expense Management wasEmployee Engagement were added as a metricto the utility's balanced scorecard of metrics for evaluating annual performance of utility executives. ThisEvaluating the progress in Consolidated Plant Additions during the year incentivizes management to execute the utility's robust plant additions program, which is needed to achieve clean energy goals and maintain reliable service to customers. Considering the Employee Engagement metric is partemphasizes the importance of the utility's balanced scorecardengagement of performanceall employees in achieving utility goals. These new metrics and incentivizes utility executives to seek better methods to perform operations and maintenance projects. This new metric waswere used for purposes ofin determining the compensation ofannual incentive payout for Mr. Rosenblum, who is the only named executive officer who is a utility employee.



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American Savings Bank's Return on Assets (ROA) metric for long-term incentives was converted to a relative measurement, such that the bank's ROA performance over the three-year performance period is compared against the ROA performance of industry peers. This change applied to Mr. Wacker, who is the only named executive officer who is a bank subsidiary employee.

20112012 Performance Highlights

              2011 was a year of significant progress and accomplishment forIn 2012, HEI and its utility and bank subsidiaries.subsidiaries continued their record of strong performance. Highlights of our 20112012 performance include the following:

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Our 2011 total shareholderIn 2012, HEI achieved generally accepted accounting principle (GAAP) earnings of $139 million, GAAP diluted earnings per share (EPS) of $1.42 and GAAP return (TSR)on average common equity (ROACE) of 22.1% exceeded our 2010 TSR8.9%. The 2012 GAAP results included a $24 million after-tax write-down of 15.3% and outperformedutility assets pursuant to a regulatory settlement, which settlement had not yet been approved by the 2011 TSRHawaii Public Utilities Commission as of the S&P 500 Indexdate of printing of this Proxy Statement. Excluding the write-down of utility assets, 2012 core results³ were $163 million in net income, $1.68 EPS and 10.3% ROACE, exceeding HEI's 2011 core net income, EPS and ROACE, representing among HEI's strongest core results in the past decade and reflecting solid performance in HEI's two operating subsidiaries. For a reconciliation of our utilitythe GAAP and banking industry peers, which had TSRs of 2.1%, 20.0% and -5.2%, respectively.non-GAAP results, see Exhibit A.



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³ Core results are non-GAAP measures that exclude after-tax write-downs of utility assets of approximately $24 million in 2012 and approximately $6 million in 2011.
⁴ For compensation purposes and throughout this Proxy Statement, core ROACE (non-GAAP of 10.3% in 2012) is based on core net income divided by average core common equity. In HEI's Form 8-K filed March 4, 2013 containing the 2012 Statistical Supplement and Presentation booklet entitled "Financial Community Meetings, March 4-8, 2013," core ROACE (non-GAAP of 10.4% in 2012) was based on core net income divided by average GAAP common equity. This methodology difference did not impact incentive compensation payouts in 2012. For a reconciliation of the GAAP and non-GAAP results, see Exhibit A.





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We grew HEI's consolidated net income by 21%, earning net income of $138 million, up from $114 millionAfter returning a combined 37% to shareholders in 2010 and resulting2011, our total shareholder return (TSR) lagged in 2011 diluted earnings per share (EPS) of $1.44 compared to $1.21 diluted EPS in 2010.2012. Our 3-year and 5-year TSR remained strong and outperformed the S&P 500 Index, Edison Electric Index and KBW Regional Banking Index.



•

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 2011,2012, Hawaiian Electric Company (HEI's electric utility subsidiary) continued to focus on its critical role in achieving the state's clean energy goals, among the most aggressive in the nation. Hawaiian Electric Company successfully implementedcompleted the conversion of its utilities on all islands to a newdecoupled regulatory model, (called "decoupling") on Oahu. This new modelwhich delinks revenues from kilowatt-hour salesthe volume of kilowatt-hours sold by the utilities and supports the utility'sutilities' efforts to achieve Hawaii's clean energy goals. In July 2011, Hawaiian Electric Company obtained an interim decision in its 2011 rate case, resulting in an annualized revenue increase of $53.2 million, largely to help recover costs and investments to increase the use of clean energy sources and maintain and improve reliable service to its customers. In addition, the utility and its subsidiaries also completed additional power purchase agreements for energy produced from solar, wind and geothermalwaste-to-energy sources and fuel contracts for renewable biofuels to replace fossil fuel in its generating units to help Hawaii achieve its goal of 40% of energy producedelectricity sales from renewable sources by 2030. In addition, the utilities achieved operating efficiencies and continued to reinvest earnings in infrastructure to enhance electric grid reliability and support the move to clean energy.



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In 2011,2012, American Savings Bank (HEI's bank subsidiary) continued its solid performance in a challenging business environment. The bank recorded strong profitability metrics that compare favorably to its high performing peers, including $59.8$58.6 million in net income, return on average equity of 11.7%, a 1.23%1.18% return on assets, a 4.12%3.93% net interest margin and a 57%59% efficiency ratio for the year, as well as grew its loan portfolio by 4.2%.2.6%, which is in line with the bank's target range for loan growth. The bank achieved these results while prudently managing risks and maintaining a quality balance sheet, as reflected by its low net charge-off ratio of 0.49%0.24%.

              Please see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for a more detailed description of our 20112012 results.

Pay for Performance

              Pay for performance is a fundamental principle of our approach to executive compensation. The Compensation Committee views performance-based compensation as an essential means of aligning executive effort with the creation of long-term value for shareholders and customers. For this reason, the Compensation Committee designs the executive compensation program such that a significant portion of executives' pay opportunity is performance-based. As illustrated in the following graph, more than half of ourthe 2012 target total direct compensation opportunity for the HEI CEO, and, on average, for the other executive officers named in the Summary Compensation Table set out on page 48 (collectively with the HEI CEO the named executive officers' (NEO) 2011 target total directofficers or NEOs) depended on achievement of pre-established performance goals.




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compensation (components in chart below) depends on achievement of pre-established performance goals.



              TheNamed executive officer compensation our named executive officers earned for 20112012 reflects alignment with the strong 2012 performance summarized above, as well as with our performance over the three-year period that ended December 31, 2011:2012:

•

HEI consolidated net incomeConsolidated Net Income and HEI returnReturn on average common equityAverage Common Equity (ROACE) were the key metrics for 20112012 annual incentivesincentive metrics for Ms. Lau and Messrs. Ajello and Richardson. Messrs. Ajello and Richardson's annual incentives were also based on strategic initiative goals focused on projects related to growth, community affairs, and people and culture. Performance with respect to HEI Consolidated Net Income and HEI ROACE was at maximum, each as determined based on core (non-GAAP) results. HEI strategic initiative performance was between target and maximum. As a result of these metrics was between minimum and target and resulted in payoutsstrong outcomes for 2012, the annual incentive plan paid out at 88.5%200% of target for these executives.Ms. Lau and 193% of target for Messrs. Ajello and Richardson. Mr. Rosenblum, President and CEO of Hawaiian Electric Company (HECO), and Mr. Wacker, President and CEO of American Savings Bank, had different2012 annual incentive metrics for their 2011 annual incentives.that related to utility and bank operations, respectively. Performance in the applicable metrics for Messrs. Rosenblum and Wacker resulted in payouts at 102.1%114% of target and 131.2%126% of target, respectively, for these executives.respectively. For further detail, please see "What was HEI's 20112012 annual incentive plan and were there any payouts?" below.



•

Long-term incentives comprise a significant portion of each named executive officer's compensation.pay opportunity. For the three-year period that ended December 31, 2011,2012, long-term incentives for Ms. Lau and Messrs. Ajello, Richardson and Rosenblum were based on HEI's three-year ROACE and HEI's three-year total shareholder return3-year Total Shareholder Return (TSR) as compared to that of the Edison Electric Institute.Institute and on HEI's 2-year Average Consolidated Net Income. Mr. Rosenblum also had an additional metric (Hawaiian Electric Company(HECO Consolidated 2-year ROACE) for this performance period. Despite HEI and Hawaiian Electric Company'sHECO's strong 2012 performance, in 2011, the improvement in HEI 2-year Average Consolidated Net Income and Hawaiian Electric CompanyHECO Consolidated 2-year ROACE over the three-year period(each as determined based on core (non-GAAP) results) was slower than originally anticipated and performed below minimum, resulting in performance at below minimumno payout for these performance metrics. HEIThree-year TSR performance was at thebetween minimum level for the performance period.and target. In accordance with these results, 2009-2011 incentivesthe 2010-2012 long-term incentive payout was 40% of target shares for Ms. Lau and Messrs. Ajello and Richardson and 32% of target shares for Mr. Rosenblum paid out at 31.5% of target.(plus compounded dividend equivalents). Mr. Wacker did not participate in the 2009-20112010-2012 long-term incentive plan because he first joined the HEI enterprise in late 2010. For further detail, please see "What was HEI's 2009-20112010-2012 long-term incentive plan and were there any payouts?" below.




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Historical CEO CompensationRealizable Pay and Company Performance Relative to Peer Group

              In order to validate ourThe graph below compares the degree of alignment between the HEI CEO's realizable pay for performance philosophy, the Compensation Committee also looks at historical data on various financial metrics for the Companyand HEI's total shareholder return (TSR) relative to itsHEI's compensation peer group over the 2009 to 2011 period. Further detail regarding the companies in HEI's compensation peer group is provided under "Compensation Elements—How does HEI determine the amount for each element?" below.

              Companies that fall within the shaded range in the following graph are generally viewed as having pay and performance alignment. As shown below, over the 2009 to 2011 period, HEI CEO realizable pay aligned closely with HEI's TSR. We use the three-year period ending in 2011 to maximize the extent to which historical compensation and performance information from other companies with varying fiscal year ends is available for comparison purposes.



*For all companies in the graph above, realizable pay over the 3-year period consists of: (1) base salary earned over the 3-year period, (2) performance-based cash payments earned over the 3-year period, (3) performance-based equity awards earned over the 3-year period based on actual payouts for completed periods and proxy statement estimated performance for periods not completed as of companies.12/31/2011, valued using the 2011 fiscal year end closing price, and (4) time-based equity awards granted over the 3-year period, valued using the 2011 fiscal year end closing price. HEI did not award stock options during the 3-year period; however, to the extent a peer company CEO received stock options in the 3-year period, those options are valued based on the difference between the grant price and the 2011 fiscal year end closing price. HEI's 2011 fiscal year end closing price was $26.48. TSR and realizable pay calculations provided by Pay Governance LLC.

How does Summary Compensation Table total compensation differ from realizable pay?

              The Securities and Exchange Commission's (SEC) calculation of total compensation, as shown in the 2012 Summary Compensation Table on page 48, includes items that are driven by accounting and actuarial assumptions and which are not necessarily reflective of compensation realizable by the named executive officers. In particular, total compensation in the Summary Compensation Table values equity awards based on their fair value on the date granted. This includes long-term incentive compensation opportunities for which the amount to be received by




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The chartexecutives depends on future performance results. Additionally, total compensation in the 2012 Summary Compensation Table includes change in pension value, which can fluctuate significantly from year-to-year based on changes in discount rates and other actuarial assumptions. For example, nearly 80% of the amount reported in the change in pension value and nonqualified deferred compensation earnings column of the 2012 Summary Compensation Table for the HEI CEO was due solely to a change in the discount rate, reflecting historic low interest rates and not any change in the benefit to be received after retirement.

              Due to the aspects of Summary Compensation Table total compensation described above, we have provided below shows HEI's approximate percentile ranking versus peersa graph comparing the HEI CEO's 2012 realizable pay to her total compensation reported in the 2012 Summary Compensation Table. Realizable pay, as used in the graph below, differs substantially from total compensation reported in the 2012 Summary Compensation Table because realizable pay (i) values equity awards based on various metricsthe value as of the end of the measurement period rather than grant date fair value and (ii) excludes amounts from the change in 2010 (the latest period for which information from other companies was available),pension value and nonqualified deferred compensation earnings column of the Summary Compensation Table. For a reconciliation of realizable pay and total compensation as well asreported in the approximate percentile rank of HEI's Chief Executive Officer's total direct compensation versus peers.2012 Summary Compensation Table, see Exhibit B.



*

In

              *In the chart above, CEO Total Direct Compensation is comprised ofabove:

•

Realizable Pay consists of: (1) base salary, for the year,(2) annual incentive compensation received for the year, the target opportunity of long-term incentives granted during the year andpayouts, (3) restricted stock units awarded, and (4) performance-based equity awards (i) paid for cycles wholly contained within the three-year period shown and (ii) estimated for cycles granted in the year.three-year period but not yet completed. All equity is valued using the 12/31/12 closing price of $25.14. Realizable pay calculations provided by Pay Governance LLC.



        The

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Summary Compensation Committee and Board believe that our executive compensation program reflects best practices and is structured to encourage participants to build long-term valueTable Total consists of all items included in the Company for2012 Summary Compensation Table on page 48, which are: (1) base salary, (2) annual incentive payouts, (3) restricted stock units awarded based on grant date fair value, (4) performance-based equity award opportunities based on grant date fair value, (5) change in pension value and change in value of executive death benefits, and (6) any perquisites.